Name: San Dimas mine.

Location: The San Dimas mine is located on the borders of the Durango and Sinaloa states, Mexico.

Controlling Company: Primero Mining owns 100% of the San Dimas property through its subsidiary, Primero Empresa Minera, SA de CV. It acquired the property under a definitive asset purchase agreement entered into with subsidiaries of Goldcorp.

Brief History: Modern mining began in 1883 when the San Luis Mining Company began working in the area, and it has continued under different owners. On October 15, 2004, the previous owner of the San Dimas mine entered into a silver purchase agreement to sell 100% of the payable silver produced for 25 years to a subsidiary of Silver Wheaton Corp. In August 2010, Primero Mining bought the property. On Primero’s acquisition of the San Dimas mine, the silver purchase agreement was amended. Primero assumed the obligation to sell the first 3.5-million ounces of payable silver produced a year, plus 50% of any excess, at $4.04/oz (plus 1% inflation) until August 5, 2014, to Silver Wheaton. From August 6, 2014, to the end of the mine life, Primero will sell the first six-million ounces of payable silver produced a year, plus 50% of any excess, at $4.20/oz (plus 1% inflation) to Silver Wheaton. The silver purchase agreement provides that a minimum of 215-million cumulative silver ounces be delivered to Silver Wheaton by the end of 2031 and any shortfall is the obligation of Goldcorp, which will be required to make a payment of $0.50/oz should delivery be below 215-million ounces.

Brief Description: The San Dimas deposit is one of the most significant precious metals deposits in Mexico.

Mining Method: Underground, using mechanised cut-and-fill methods.

Products: Gold and silver.

Major Infrastructure and Equipment: The San Dimas mining areas are accessed through adits and internal ramps.

The Tayoltita mine is the oldest operating mine in the San Dimas area and is 400 m away from the process plant and town site of Tayoltita. The main access is through the 4 km Tayoltita tunnel from a portal about 3 km to the north-east of the Tayoltita mill site. Ore is moved from stopes by load-haul dumpers (LHDs) and then by rail haulage to surface through the main access tunnel.

The West Block mine is located 7 km west of the Tayoltita mine. The mine is accessed from Tayoltita through a 3 km road parallel to the Piaxtla river to the portal of the San Luis tunnel.

The Central Block area, currently the main mining area at San Dimas, is located 2 km north-west of Tayoltita. It is linked to Tayoltita by the San Luis tunnel. It is also connected by underground development to the West Block mining area. Ore haulage is achieved using LHD equipment and trucks, which travel through the San Francisco tunnel and onwards by road to the Tayoltita mill.

The Santa Rita mine main access is by adit, about 3 km north-east of the Tayoltita mill site. Ore is hauled by LHD to either an internal shaft or directly to rail haulage in the main access tunnel. The shaft has a double drum hoist with 2.2 t skips. The Santa Rita mine is currently not in operation.

The Sinaloa Graben mine has recently been brought into production, with major exploration and growth expected; it is located about 1 km from the Central Block mine.

The San Dimas ventilation system is set up in four main circuits – the Graben-Sinaloa, Central Block, Tayoltita and Santa Rita. The four systems operate independently of one another.

Dewatering systems, comprising main and auxiliary pumps, are in place at each of the mine areas.

Water for the mining operations is obtained from recycled underground water (Central Block), wells and the Piaxtla river.

Electrical power is provided by a combination of Primero’s own hydrogeneration system – Las Tranchas – and the Federal Power Commission Supply System.

Fifteen compressors supply compressed air to the San Dimas operations – five are diesel-powered and ten are electrically powered.

The main powder magazine for the San Dimas operation is located on surface.

Geology/Mineralisation: The San Dimas deposit occurs in the central part of the Sierra Madre Occidental volcanic pile, which contains rocks reflecting two separate periods of magmatism that were active between 45-million and 100-million years ago and 23-million and 32-million years ago. The veins are contained within rhyolitic, andesitic and granodioritic rocks of the older magmatic episode.

Mineralisation is typical of epithermal vein structures with banded and drussy textures.

The ore deposits are typically found in what is referred to as the Favourable Zone, analogous to the boiling zones. The strike length of these Favourable Zones can exceed 2 000 m and dip length can exceed 300 m. Exploration generally relies on a combination of structural geology, geochemistry and fluid-inclusion studies to identify the Favourable Zone. Historical reconciliation has shown that, once the Favourable Zone is defined, more than 30% of the vein material contained within the zone will be classified as ore.

Reserves: Total proven and probable reserves as at June 30, 2012, were 3.785-million tons, grading at 4.8 g/t gold and 290 g/t silver.

Resources: Total indicated reserves as at June 30, 2012, were 3.193- million tons, grading at 6.6 g/t gold and 400 g/t silver. Total inferred resources were 6.685-million tons, grading at 4 g/t gold and 300 g/t silver.

Prospects: The mine is currently being expanded to 2 500 t/d. This is expected to be completed by the end of the first quarter of 2014. There is potential to expand the operation to 3 000 t/d. A decision is expected in the second half of 2013.

Contact Person: Investor contact, Tamara Brown.

Contact Details:
Primero Mining, tel +1 416 814 3168, fax +1 416 814 3170, email info@primeromining.com, and
website:www.primeromining.com

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