TORONTO, ONTARIO, Mar 05, 2014 (Menafn – Marketwired via COMTEX) –Primero Mining Corp. (“Primero” or the “Company”) PPP today announced year-end Mineral Reserves and Mineral Resourcesfor its San Dimas mine in Mexico. The Company reported that Provenand Probable Gold Mineral Reserves increased 32% over year-end 2012,to 870,000 ounces, at a 23% higher grade. Measured and Indicated GoldMineral Resources increased 28% over year-end 2012 to 997,000 ounces(inclusive of Mineral Reserves).
“Primero has been very successful at consistently increasing reservesand resources and expanding the mine life of its San Dimas mine”stated Mr. Joseph F. Conway, President and Chief Executive Officer,”Importantly we were also successful at defining higher grademineralization, with a 23% increase in the Gold Mineral Reserve gradeand an 18% increase in the Silver Mineral Reserve grade. The 2013exploration program significantly expanded one of the new high-gradeveins, Victoria, that was discovered in 2012. The Victoria vein is aprime example of the value we see at San Dimas. The vein was unknownat the beginning of 2012, contributed approximately 45,000 ounces tothe 2012 year end Gold Mineral Reserves, provided meaningfulproduction in 2013 and through drilling has now expanded to 195,000ounces at 11.5 g/t of gold in the 2013 year end Mineral Reserveestimate. Due to close proximity to infrastructure we expect toaccess the highest grade portion of the Victoria vein within the next18 months. Primero’s continued exploration success at San Dimas ledus to expand the mill to 2,500 tonnes per day. With the mine andmill expected to be operating at 2,500 tonnes per day by the end ofthis quarter, the Company expects to increase production in 2014 tobetween 155,000 and 165,000 gold equivalent ounces. Our focus is nowon ensuring we have sufficient Mineral Reserves in order to justify apotential further mill expansion to 3,000 tonnes per day. Ourexploration team is focused on identifying new ounces in closeproximity to existing infrastructure. The discovery of an additionalmineable high-grade vein system, or the expansion of the use oflong-hole mining at San Dimas would likely be enough to support adecision to expand the mine to 3,000 tonnes per day.”
As at December 31, 2013, the Company reported adding 311 thousandounces of gold to the Proven and Probable Mineral Reserves at SanDimas, before depleting 102 thousand ounces during the year. Thisequates to replacing the 12 month gold depletion by 305%.
The following is Primero’s accounting of the Company’s San Dimasmine’s Mineral Reserve changes since year-end 2012:
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GoldSilver
(‘000 ounces)(‘000 ounces)
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Probable Mineral Reserves as at December 31,
201266039,377
Mining depletion during 2013(i)(102)(6,172)
Proven and Probable Mineral Reserve ounce
increase during 2013(ii)31116,274
Proven and Probable Mineral Reserves as at
December 31, 201387049,479
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(i) 2013 production and depletion included ounces outside MineralReserves.
(ii) Includes an impact due to metal price and cut-off grade changes.Reserve metal prices changed from 1,400 per ounce of gold and 25per ounce of silver in 2012 to 1,250 per ounce of gold and 20 perounce of silver in 2013; cut-off grade changed from 2.4 g/t in 2012to 2.7 g/t in 2013.
Mineral Reserves and Mineral Resources
The Company retained AMC Mining Consultants (Canada) Ltd. (“AMC”) forits year-end 2013 Mineral Resource update and completed its year-end2013 Mineral Reserve estimation in-house. The Company’s MineralReserves and associated Mineral Resources were estimated using ablock modelling approach with ordinary kriging interpolation. Theremaining veins outside of Mineral Reserves were estimated using apolygonal method and included in Inferred Resources. The MineralReserves and associated Mineral Resources were constrained in 40individual geological models (18 individual geological models in2012) based on wireframes of the various veins. These wireframes weremodelled along the vein contacts, and were defined by gold and silvergrades, structural geology, quartz veining and mineral alteration.Block dimensions were based on grade estimation blocks of 9 metres by9 metres by vein width. Grade capping was applied for some veinsbased on the results of log probability plots of the accumulated goldand silver grades. To convert Mineral Resources to Mineral Reserves,mining dilution was added and mining recovery factors were applied onan individual vein basis and respecting mining methodology. For theblock-modelled veins, Measured and Indicated Mineral Resources wereestimated using a search ellipsoid of between 15 metres and 30 metresand Inferred Mineral Resources were estimated with a search ellipsoidof between 30 metres and 45 metres. The Company continues to utilizean external laboratory for all drill samples.
Table 1: San Dimas Mine Mineral Reserves and Mineral Resources as atDecember 31, 2013.
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TonnageContainedContained
(million Gold Grade Silver GradeGoldSilver
Classificationtonnes)(g/t)(g/t) (000 ounces) (000 ounces)
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Mineral
Reserves
Proven0.9245.634516610,256
Probable3.9705.530770439,223
Proven &
Probable4.8935.531587049,479
Mineral
Resources
Measured0.7687.445718211,284
Indicated3.5147.241181446,429
Measured &
Indicated4.2827.241999757,713
Inferred7.3334.231099872,647
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Notes to Mineral Reserve Statement:
1.Cutoff grade of 2.7 grams per tonne (“g/t”) gold equivalent (“AuEq”)
based on total operating cost of US104.97/t. Metal prices assumed are
gold US1,250 per troy ounce and silver US20 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/US1.00.
4.The Mineral Reserve estimates were prepared under the supervision of Mr.
Gabriel Voicu P.Geo., Vice President, Geology and Exploration, Primero
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 AuEq cutoff grade is applied and the gold equivalent is
calculated at a gold price of US1,300 per troy ounce and a silver price
of US20 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.
There is significant exploration potential at San Dimas beyond thestated Mineral Resources and Mineral Reserves. The scale of theidentified targets was not thoroughly reviewed at December 31, 2013,but is expected to remain in the order of 6-10 million tonnes atgrade ranges of 3-5 grams per tonne of gold and 200-400 grams pertonne of silver, as estimated at December 31, 2011. This potentialmineralization has been estimated by Primero from geological andgrade modelling. It should be noted that these targets are conceptualin nature. There has been insufficient exploration to define anassociated Mineral Resource and it is uncertain if furtherexploration will result in the targets being delineated as a MineralResource.
About Primero
Primero Mining Corp. is a Canadian-based precious metals producerthat owns 100% of the San Dimas gold-silver mine and the Cerro delGallo gold-silver-copper development project in Mexico and now 100%of the Black Fox mine and Grey Fox exploration property in Timmins,Ontario. Primero offers immediate exposure to un-hedged, low cashcost gold production with a substantial resource base in politicallystable jurisdictions. The Company is focused on becoming a leadingintermediate gold producer by building a portfolio of high quality,low cost precious metals assets in the Americas.
Primero’s website is www.primeromining.com.
TECHNICAL INFORMATION AND QUALIFIED PERSON/QUALITY CONTROL NOTES
The Mineral Reserve and Mineral Resource estimates for the San Dimasmine have been prepared by Mr. Rodney Webster MAusIMM, MAIG and Mr.J. Morton Shannon P.Geo, all of AMC and all Qualified Persons (“QP”)for the purposes of National Instrument 43-101 (“NI 43-101”). Mr.Webster and Mr. Shannon are independent of the Company. All of theabove QPs have reviewed and approved the contents of this newsrelease with respect to the Mineral Reserves and Mineral Resourcesestimates section.
The scientific and technical information regarding explorationresults contained herein is based on information prepared by or underthe supervision of Mr. Gabriel Voicu P.Geo., Vice President, Geologyand Exploration, Primero, who is a QP for the purposes of NI 43-101.Mr. Voicu has reviewed and approved the contents of this news releasewith respect to the scientific and technical information regardingexploration results.
CAUTIONARY NOTE TO UNITED STATES INVESTORS CONCERNING ESTIMATES OFMEASURED, INDICATED AND INFERRED RESOURCES AND RESERVE ESTIMATES
This news release has been prepared in accordance with therequirements of Canadian provincial securities laws which differ fromthe requirements of U.S. securities laws. Unless otherwise indicated,all mineral reserve and resource estimates included in this newsrelease have been prepared in accordance with Canadian NationalInstrument 43-101 Standards of Disclosure for Mineral Projects (“NI43-101”) and the Canadian Institute of Mining, Metallurgy andPetroleum classification systems. NI 43-101 is a rule developed bythe Canadian Securities Administrators that establishes standards forall public disclosure an issuer makes of scientific and technicalinformation concerning mineral projects. These standards differsignificantly from the requirements of the United States Securitiesand Exchange Commission (the “SEC”), and reserve and resourceestimates disclosed in this news release may not be comparable tosimilar information disclosed by U.S. companies.
The mineral reserve estimates in this news release have been preparedin accordance with NI 43-101, as required by Canadian securitiesregulatory authorities. For United States reporting purposes, SECIndustry Guide 7 under the United States Securities Exchange Act of1934, as amended, as interpreted by Staff of the SEC, appliesdifferent standards in order to classify mineralization as a reserve.As a result, the definition of “proven and probable reserves” used inNI 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 themineralization could be economically and legally produced orextracted at the time the reserve determination is made. Among otherthings, all necessary permits would be required to be in hand orissuance imminent in order to classify mineralized material asreserves under the SEC standards. Accordingly, mineral reserveestimates contained in this news release may not qualify as”reserves” under SEC standards.
In addition, this news release uses the terms “measured and indicatedresources” and “inferred resources” to comply with the reportingstandards in Canada. The Company advises United States investors thatwhile those terms are recognized and required by Canadianregulations, the SEC does not recognize them. United States investorsare cautioned not to assume that any part or all of the mineraldeposits in these categories will ever be converted into mineralreserves. Further, “inferred resources” have a great amount ofuncertainty as to their existence and as to whether they can be minedlegally or economically. Therefore, United States investors are alsocautioned not to assume that all or any part of the “inferredresources” exist. In accordance with Canadian securities laws,estimates of “inferred resources” cannot form the basis offeasibility or other economic studies. It cannot be assumed that allor any part of “measured and indicated resources” or “inferredresources” will ever be upgraded to a higher category or areeconomically or legally mineable. In addition, disclosure of”contained ounces” is permitted disclosure under Canadian securitieslaws; however, the SEC only permits issuers to report mineralizationas in place tonnage and grade without reference to unit measures.
NI 43-101 also permits the inclusion of disclosure regarding thepotential quantity and grade, expressed as ranges, of a target forfurther exploration provided that the disclosure (i) states withequal prominence that the potential quantity and grade is conceptualin nature, that there has been insufficient exploration to define amineral resource and that it is uncertain if further exploration willresult in the target being delineated as a mineral resources, and(ii) states the basis on which the disclosed potential quantity andgrade has been determined. Disclosure regarding exploration potentialhas been included in this news release. United States investors arecautioned that disclosure of such exploration potential is conceptualin nature by definition and there is no assurance that explorationwill result in any category of NI 43-101 mineral resources beingidentified.
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
This news release contains “forward-looking statements”, within themeaning of the United States Private Securities Litigation Reform Actof 1995 and applicable Canadian securities legislation, concerningthe business and operations of Primero Mining Corp. and itsconsolidated subsidiaries (collectively, “Primero” or the “Company”).All statements, other than statements of historical fact, areforward-looking statements. Generally, forward-looking statements canbe identified by the use of forward-looking terminology such as”plans”, “expect”, “is expected”, “in order to”, “is focused on” (afuture event), , “estimates”, “forecasts”, “intends”, “anticipates”,”believes” or variations of such words and phrases or statements thatcertain actions, events or results “may”, “could”, “would”, or thenegative connotation thereof. Forward-looking statements include, butare not limited to, statements regarding the Company’s estimation ofmineral reserves and resources and the realization of mineral reserveestimates (including all assumptions), the ability to identify newresources and convert resources and exploration potential intoreserves and resources, the ability to access ore in the Victoriavein, the timing, nature and success of exploration activities, thediscovery of additional ounces close to infrastructure that wouldlead to a decision for a mill expansion to 3,000 tonnes per day andthe potential results of such decision, the future potential todiscover new economic veins at San Dimas, that such veins or theexpansion of long-hole mining would support a decision to expand themine to 3,000 tonnes per day, and intentions to becoming anintermediate gold producer. The assumptions made by the Company inpreparing the forward-looking information contained in this newsrelease, which may prove to be incorrect, include, but are notlimited to: the expectations and beliefs of management; the specificassumptions set forth above in this news release; that there are nosignificant disruptions affecting operations; that the Company doesnot change its development and exploration plans; that prices forgold and silver remain consistent with the Company’s expectations;that the Company identifies new veins and extensions of existingveins, that Company’s current estimates of mineral reserves, mineralresources, mineral grades and mineral recovery are accurate, thediscovery of additional ounces close to infrastructure and that milland mine development progress as planned.
Forward-looking statements are subject to known and unknown risks,uncertainties and other important factors that may cause the actualresults, performance or achievements of Primero to be materiallydifferent from those expressed or implied by such forward-lookingstatements, including: the ability to achieve planned productionlevels; the ability to fund exploration and development expendituresand for the expenditures to discover mineralization in minablequantities ; possible variations in ore reserves, grade or recoveryrates, mine development and operating risks; and the ability to builda portfolio of precious metals assets in the Americas that there areno significant disruptions affecting operations, whether due tolabour disruptions, supply disruptions, damage to or loss ofequipment, whether as a result of natural occurrences includingflooding, political changes, title issues, intervention by locallandowners, loss of permits, or environmental concerns or otherwise;uncertainty of mineral reserves, mineral resources, mineral gradesand mineral recovery estimates; uncertainty of future production,delays in completion of the mill expansion, exploration anddevelopment plans; mining risks, including unexpected formations andcave-ins, which delay operations or prevent extraction of material;risks associated with foreign operations; governmental andenvironmental regulation; landowner dissatisfaction and disputes;damage to equipment; and labour disruptions. Certain of these factorsare discussed in greater detail in Primero’s registration statementon Form 40-F on file with the U.S. Securities and ExchangeCommission, and its most recent Annual Information Form on file withthe Canadian provincial securities regulatory authorities andavailable at www.sedar.com.
Should one or more of these risks and uncertainties materialize, orshould underlying assumptions prove incorrect, actual results mayvary materially from those described in forward-looking statements.In addition, although Primero has attempted to identify importantfactors that could cause actual actions, events or results to differmaterially from those described in forward-looking statements, theremay be other factors that cause actions, events or results not to beas anticipated, estimated or intended. There can be no assurance thatsuch statements will prove to be accurate, as actual results andfuture events could differ materially from those anticipated in suchstatements. Accordingly, readers should not place undue reliance onforward-looking statements. Forward-looking statements are made as ofthe date hereof and accordingly are subject to change after suchdate. Forward-looking statements are provided for the purpose ofproviding information about management’s current expectations andplans and allowing investors and others to get a better understandingof our operating environment. Primero does not undertake to updateany 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
[email protected]
SOURCE: Primero Mining Corp.
