primero 2011 csr final

Focused on SustainabilitySuSTAiNAbiliTy REPORT 2011

About This Report

We at Primero are proud to present our first annual Sustainability Report*, which highlights our achievements and challenges in our first full year operating the San Dimas mine. We acquired San Dimas in August of 2010 from Goldcorp inc., a company with established and respected sustainability practices.

* The 2010 Sustainability Report reported on the five months in 2010 after Primero’s acquisition of the San Dimas property. All currency is in united States dollars (uSD) unless otherwise noted.

PRIMERO SUSTAINABILITY REPORT 2011 1

As we continue along our path to becoming a leading mid-tier gold producer, we are committed to supporting sustainable policies and practices in mine exploration, development and operations. Corporate responsibility is embedded into our daily activities. Our goal is to continuously improve workplace health and safety, and environmental performance, and to share the benefits of mining with our local communities.

A key component of our commitment is transparent, accountable sustainability reporting. Our board of Directors and senior management team have committed to the sustainability reporting process, and are working to improve data collection and to encourage employee engagement in all of our sustainability initiatives.

As a public company, Primero’s financial results are audited annually and reported on a regular basis. Our Annual Reports, Financial Reports and Regulatory Filings are posted on our website. Therefore, economic performance is not emphasized in this report.

GRi DEClARATiON

This report is based on the standards of the Global Reporting initiative (GRi), and is the first step in our target for 2012, which is to achieve a GRi level C standard of sustainability reporting. The GRi is an independent institution that has developed voluntary guidelines for sustainability reporting. We believe that GRi guidelines help us to maintain a high standard of transparency, clarity and comparability, and that applying GRi standards demonstrates our commitment to transparent reporting, especially in those areas that are most important to our stakeholders.

2 PRIMERO SUSTAINABILITY REPORT 2011

Our Sustainability Policy

At Primero, we believe that sustainability is fundamental to our success. Our prosperity depends on our performance—at the corporate level and in our relation to our host communities—in the three pillars of sustainability: economic achievement, community engagement and environmental stewardship.


Economic achievementby maximizing earnings and reducing operating costs, we produce results for our shareholders while also contributing to the economic and social development of our host communities.

Community engagement

We actively engage in meaningful dialogue with local residents, community leaders and organizations to identify opportunities and priorities for economic improvement, better training and social development. We support schools, health care and local infrastructure, and we continually seek development opportunities that will contribute to a self-sustaining economy in the communities surrounding our operations.

Environmental stewardshipAt all times, we seek to operate in a responsible manner and to minimize the impact our operations may cause to the environment. We operate with an awareness of the mine’s life cycle and practice the progressive rehabilitation of areas affected by our activities.


Over this past year, we have maintained the high standards set by Goldcorp, and in some areas, improved on previous practices. In our health and safety performance, for example, the number of reportable incidents declined for the sixth consecutive year. As a result of our efforts, the Mexican Centre for Philanthropy named us an ESR (in English, a Socially Responsible Enterprise). To achieve this sought-after designation, we were evaluated against rigorous standards of quality-of-life, business ethics, community engagement, and environmental stewardship.

Despite the overall improvement in health and safety, I am sorry to report a worker’s death in 2011, and I extend my personal sympathies to his family. We take this incident very seriously, and initiated a thorough investigation. Our experts reviewed our safety training and ensured that everyone, working directly or indirectly for Primero, had their safety training reviewed and refreshed.

For 2012, we have set out a number of CSR objectives. While they are ambitious, I am certain that our teams are capable of meeting every one. Regarding health and safety performance, I want to see the number of workplace accidents reduced by 50%, and of course, zero fatalities. That will only be the first step in making San Dimas a “triple-zero” operation by

i know i speak for everyone at Primero in saying that growth and profitability are not at odds with environmental and community sustainability. in fact, we believe that we can only thrive when our local communities share in the benefits of mining and welcome our presence, and when we act with responsibility, transparency and accountability.

letter from the President and CEO


2014: zero lost time incidents, zero work related medical leaves, and zero staff on modified duties. I also want to see San Dimas win the Silver Helmet, an annual award given by the Mexican government to mines with the best safety records in the industry.

For environmental performance, I expect us to obtain “Clean Industry” certification from PROFEPA, the Mexican environmental authority, and I have set this as an annual objective. As you will see noted elsewhere, 2012 began with a tailings pipe leak, which triggered an overhaul of our tailings containment systems. We are also investing nearly one-and-a-half million dollars in new pumps for the tailings facility, and we are evaluating an expansion of our hydroelectric power plant that supplies clean, renewable power for our operations and to the Mexican power grid.

In the area of community relations, we will maintain the high standards that won us the ESR designation, while increasing our

efforts in seeking local economic development opportunities that show the strongest potential for generating income that is independent of mining.

These objectives indicate our commitment to building a corporate culture of continual improvement in Corporate Social Responsibility. And in the interests of transparency, I would like to add one more: in 2012, our Sustainability Report will build on this year’s report, and seek to achieve level C standards of the Global Reporting Initiative (GRI) 3.1 Guidelines.

JOSEPH F. CONWAy President & Chief Executive Officer


Focused on Ethical, Transparent Governance

CORPORATE SOCiAl RESPONSibiliTy Corporate Social Responsibility is key to our company-wide strategy. We have an active Corporate Social Responsibility (CSR) program that guides us in policy and decisions regarding environmental protection, the health and safety of our people, and the socio-economic development of our host communities. We are committed to embedding corporate social responsibility in all our daily actions. Our goal is to continuously improve workplace health and safety and environmental performance, and to share the benefits of mining with local communities.

We strive to instill a safety-first culture among our employees, contractors and visitors. This includes improving working conditions and conserving the health and physical safety of all our employees. It extends to preserving the environment and safeguarding the health of the inhabitants of the communities in which we operate, who in the future could become our employees.

In 2012, we plan to promote and expand our CSR programs, with a focus on building employee and community awareness of health and safety issues and protection of the environment.

CODE OF buSiNESS CONDuCT AND ETHiCSOur operating practices are governed by the principles set out in our Health and Safety Policy and our corporate Code of Business Conduct and Ethics. The Code is applicable to all directors, officers and employees. It embodies the commitment of Primero and our subsidiaries to conduct business in accordance with all applicable laws, rules and regulations and the highest ethical standards. The Code of Business Conduct and Ethics is available on the Primero website.

HEAlTH, SAFETy AND ENviRONMENT COMMiTTEE Sustainability practices are the responsibility of the Board of Directors and the Health, Safety and Environment Committee (HSEC). The HSEC reports to the Board. Its purpose is to review and recommend corporate policies and monitor activities as they relate to health, safety and environmental matters, to review and recommend corporate policies and programs in connection with social issues affecting communities where the Company conducts operations. Internal weekly and quarterly reporting tracks performance indicators including human resources, health and safety performance, environmental monitoring, compliance with permits, materials inputs and outputs, and community relations activities. The complete HSEC guidelines are available on the Primero website.


COllECTivE bARGAiNiNG AND FREEDOM OF ASSOCiATiONAll Primero workers enjoy the right to freedom of association as provided by applicable labour law, and a large percentage of mine workers are trade union members. We do not believe that the right to exercise freedom of association and collective bargaining is at risk at any Primero location.

WORkPlACE DivERSiTy, NON-DiSCRiMiNATiON AND EquiTy At Primero, we do not discriminate on the basis of race, religion, ethnicity, national origin, colour, gender, age, sexual orientation, citizenship, veteran status, marital status or disability. Harassment, including sexual, physical and verbal, is prohibited.

We do not allow any child labour, forced or compulsory labour.

HuMAN RiGHTSPrimero respects internationally proclaimed human rights, and strives to ensure that we are not complicit in human rights abuses.

WHiSTlEblOWER POliCy Our corporate Whistleblower Policy allows any employee to communicate a concern or complaint confidentially and anonymously, with the expectation of a timely response and the assurance that there will be no retribution or negative consequences. We provide a confidential email address ([email protected]) and a toll-free complaint reporting hotline (1-877-508-5716) which is available 24 hours a day, 7 days a week.


Focused on Production: the San Dimas Mine

The San Dimas mine is located in central west Mexico, in the State of Durango, approximately 150 km west of Durango and 125 km northeast of Mazatlán. The mine is 100% owned by Primero. The San Dimas gold-silver deposit is one of the most significant precious metal deposits in Mexico in a very large mining district.


SAN DiMAS 2011 FACTS San Dimas Staff (as of end of year 2011)

102,200 Oz 79,600 Oz 4.6M Oz 1,055 131 100%Gold equivalent* Gold Silver Employees Contractors Employees &

Contractors who are Mexican nationals

As we continue along our path to becoming a leading mid-tier gold producer, we are committed to supporting sustainable policies and practices in mine exploration, development and operations. Corporate responsibility is embedded into our daily activities. Our goal is to continuously improve workplace health and safety, and environmental performance, and to share the benefits of mining with our local communities.

A key component of our commitment is transparent, accountable sustainability reporting. Our board of Directors and senior management team have committed to the sustainability reporting process, and are working to improve data collection and to encourage employee engagement in all of our sustainability initiatives.

As a public company, Primero’s financial results are audited annually and reported on a regular basis. Our Annual Reports, Financial Reports and Regulatory Filings are posted on our website. Therefore, economic performance is not emphasized in this report.

* Gold equivalent ounces include silver produced and converted to a gold equivalent, based on average commodity prices received in the period.


Focused on our People

Our people, both employees and contractors, are our greatest asset. Our success depends on the skilled, hard-working people who work in the San Dimas operation, and in return we seek to maintain a culture of safety in which everyone is continually reminded of the importance of keeping themselves and their colleagues healthy and injury-free. We treat people fairly and without discrimination, with full regard for their human rights.


HEAlTH AND SAFETy PERFORMANCE At San Dimas, we are committed to the safety, health and welfare of our employees, contractors and visitors to the worksite, and our commitment extends to the residents of nearby communities. We strive to ensure an injury-free workplace though education and training, and policies and procedures that consistently promote safety. Employees are recognized for their safety awareness each month as a way to encourage safe practices.

Our Health and Safety Administration system is guided by our Central Safety Committee, which is chaired by the mine’s General Manager and includes management, department heads and employee representatives. The committee meets on a monthly basis and discusses safety-related issues including accident investigations, observations, prevention, and more.

A number of committees, subcommittees and working groups are dedicated to preventing accidents, including the Preventive Observations Subcommittee, which detects and reports unsafe acts or conditions, and “Prevention Circles” that discuss and seek to minimize specific dangers. The Subcommittee on Accident and Incident Investigation analyzes risks and investigates incidents that occur.

We run monthly campaigns focused on health or safety issues, such as defensive driving, safe handling of sodium cyanide and security in high altitude work. In 2011, we participated in a Self-Management Program for Safety and Health at Work, in conjunction with the Mexican Ministry of Labour. Compliance with our workplace Health and Safety regulations was measured at 93%.

WORkPlACE iNJuRiESWe regret to report that a tragic accident occurred in 2011, resulting in the death of a mine worker. We extend our deepest sympathies to the family and friends of our employee. As a result of the accident we conducted a thorough assessment of the incident and reviewed our safety training policies. Throughout San Dimas, workers were given safety refreshers and safe work practices were given added emphasis.

Despite this fatality, we achieved a reduction in overall accident frequency, marking the sixth consecutive year in which injuries have declined.

In 2012, we hope to earn the Silver Helmet Award, an annual award given by the Mexican government in recognition of the best safety records in the mining industry.


EMPlOyEE AND COMMuNiTy HEAlTH In addition to injury prevention, the San Dimas mine’s Integral Safety System is intended to improve the health and welfare of our workers, their families and the surrounding communities. The system seeks to identify and prevent sickness through ongoing monitoring and checkups, including:

• illness prevention programs

• epidemiological disease-detection programs for all employees exposed to noise, dust, hazardous chemical substances etc.

• frequent medical checkups

• anti-doping and alcohol tests

San Dimas maintains on-site hospital facilities with x-ray, ultrasound, a surgery room and clinical lab, which are available for all employees and contractors.

OuR WORkFORCE & lAbOuR PRACTiCESThroughout Primero we foster a culture of inclusivity and acceptance of gender, race, cultural background, age, religion and disability. At the San Dimas operation we are continuing the culture of respect that was well established by the mine’s previous owner. In this traditional

mining region, and everywhere we operate, we seek to be recognized as an employer of choice by offering competitive wages, above-average benefits, as well as by preferentially hiring locally and recognizing and rewarding employee performance.

We are committed to fair and equitable labour practices in every operation and office. A large proportion of our workforce is unionized—in fact, in April of 2011, a strike by the union of millworkers stopped production for a month. Currently, relations with employees and the unions are good.

EMERGENCy RESPONSE PlANSThe San Dimas mine has a history of strong emergency-preparedness practices. Our rescue teams are trained and equipped to handle nearly any type of emergency that could occur in an underground mine. They receive specialized training in first aid, mine rescue and rope rescues including rappelling and vertical rescue.

As an indication of their high standards, the San Dimas rescue team won first place in the National Competition of Rescue Squads organized by the Mining Chamber of Mexico, for the sixth consecutive year.


SAN DiMAS REGiONAl HiRiNG

78% 9% 4% 7% 2%

Durango State Sinaloa State Zacatecas State Guanajuato State Otros State

iNJuRy FREquENCy, 2011

Lost time injuries

Total reportable injuries

Significant potential incidents Fatalities LTIFR AIFR

3 27 65 1 0.18 1.84

STAFF bREAkDOWN

Full-Time Employees Hourly (Union) Contractors Total

Mexico City Office 13 Nil Nil 13

San Dimas Mine 488 567 131 1,186

Vancouver Office 5 Nil 1 6

Toronto Office 7 Nil Nil 7

TOTAl 513 567 132 1,212

6

06 07 08 09 10 11

9 9

3

7

3

65

06 07 08 09 10 11

6153

31 29 30

0.39

06 07 08 09 10 11

0.53 0.55

0.21

0.47

0.18

7.08

06 07 08 09 10 11

4.97

3.232.14 1.96 1.84

lOST TiME iNCiDENTS

All iNCiDENTS

lTi iNDEx

All FREquENCy iNDEx


Focused on our Communities

The San Dimas mine has invested in significant infrastructure upgrades, in the form of improvements to roads, electrical and communication systems and medical facilities—which, though developed to serve our mining operations, are shared by the entire community. In addition to those benefits, we actively contribute to a broad range of social and community initiatives, often in collaboration with local and regional authorities.

We support education and training, though subsidizing teachers’ salaries, building classrooms and helping to pay the tuition for hundreds of students from pre-school through secondary school. We subsidize technical training for future miners. We have contributed to the construction of sports facilities for the community’s benefit. We support local health care facilities and subsidize childcare, to help our working-parent employees and the communities at large. And we promote the growth of a self-sustaining local economy by helping to develop new, non-mining businesses.

In 2011, we began planning a bimonthly magazine that will serve as a communication channel to the workers of San Dimas and their community, and promote the community’s personal and socio-cultural growth. The first issue was published in early 2012.

ESR RECOGNiTiONIn March of 2012, CEMEFI, the Mexican Centre for Philanthropy (Centro Mexicano para la Filantropia) designated us an ESR, a “Socially Responsible Enterprise”. While we received the award in 2012, it is in recognition of our corporate social performance in 2011. An ESR designation means that a company is committed to sustainability in economic, social and environmental spheres, and is in compliance with rigorous standards of quality-of-life, business ethics, community engagement, and environmental stewardship. Fewer than 690 companies across Mexico have earned the ESR designation.

COMMuNiTy DEvElOPMENTAs a critical step in establishing our presence as the new owner of the San Dimas mine, we carried out a community-wide economic, social and cultural development survey in the local area. Nearly 1,000 surveys were distributed (covering 95% of households in the community) requesting general information on their family and living conditions, relationships and health. The results will assist us in developing future community support programs.

We at Primero are constantly aware that every action we take has an effect on nearby communities. We are grateful that we are welcomed among them and strive to continue to improve conditions for local communities where possible.


lOCAl EDuCATiON AND TRAiNiNGIn 2011, we provided a 75% tuition subsidy to all 220 students (pre-school through secondary school) attending the local school, whether they are our employees’ children or not.

The CONALEP trade school in Tayoltita was originally established by the San Dimas mine to improve the career prospects for local youth, and provide a source of trained young professionals for the mine. Out of all the Metallurgical Mining and Electromechanical graduates of 2011, nine are current company employees and 25 are from the community.

In collaboration with Youth Integration Centers, we held school-based talks and workshops on addiction which were attended by 1,500 students. We supported “Health Week” in Tayoltita, in which the municipality along with educational and health institutions, promoted tobacco, alcohol and drug prevention.

CHilD CAREIn partnership with the Ministry of Social Development for Tayoltita, we renovated the town’s Child Care building, providing a safe educational environment for up to 35 under-4-year-old children of working parents.

CulTuRE AND RECREATiON In collaboration with the community’s Youth Integration Centers, we ran a series of sports, cultural and recreational activities for 50 community children from 4 to 12 years of age.

ADulT EDuCATiONIn response to employee requests for greater career opportunities and skills development, we teamed up with the Mexican government and launched an Adult Education Program for employees, families and residents. Since 2006, 268 students have graduated from the program.

TRAiNiNG WOMENThe “Miner Women” project aims to increase the number of women employed in all areas of the San Dimas operation, and to elevate their status and improve their quality of life. Women have been recruited and trained as specialized machinery operators, especially large, heavy-duty equipment and electro-hydraulic jumbos. Graduates of the program become significant financial contributors, and in some cases, are their family’s sole income earner.

In collaboration with SEMARNAT (the Mexican environmental authority) we delivered a workshop on “Product manufacturing using solid wastes” to 40 women from the Las Truchas community. The women then benefited from a three-week temporary employment program.

ENviRONMENTAl AWARENESS In 2011, we delivered a number of campaigns to increase environmental awareness, including:

• organizing schools, the municipality and its workforce to clear up the debris along the Piaxtla River (16 tons of garbage were removed), complemented by talks to encourage respect for the environment

• a community campaign to collect and dispose of outdated household appliances: three tons were sent to Durango for proper disposal

• support for the global “Earth Hour” campaign that encourages everyone on the planet to turn off their lights from 8:30 pm to 9:30 pm on the 30th of March, to build awareness of energy saving and the environmental impact of CO2 in the atmosphere

• providing talks to students on water care, energy and the environment, as part of the “School always open” program (in collaboration with the Ministry of Education and the Youth Integration Centre)

• giving environmental awareness talks to 778 employees and more than 1,200 children from local primary schools


At Primero, our environmental focus is to act with responsibility and transparency in developing mining projects, and to proactively seek to minimize the footprint of our operations. Precautionary measures are taken to avoid damage to ecosystems wherever possible. When adverse impacts occur, integrated programs are implemented to promote the recovery of the affected ecosystems.

Focused on the Environment


For years, San Dimas has been “Clean Industry” certified by the Mexican environmental authority, the Procuraduria Federal de Protección al Ambiente (PROFEPA). We are pleased to report that again in 2011, we received “Clean Industry” certification.

MANAGEMENT APPROACH TO ENviRONMENTAl RESPONSibiliTyAt San Dimas, our mining, exploration and development activities are subject to the applicable Mexican laws and regulations relating to the protection of the environment, including planning for the eventual closure of the mine, and reclaiming the mining properties after mining and processing has ceased.

The Environmental Management System (EMS) in place at San Dimas is widely respected for its effectiveness in identifying and avoiding, reducing or eliminating the environmental impacts of mining and processing. Our aim at San Dimas is to meet the environmental standards of the leading gold and copper producing countries.

For many years the San Dimas operation has engaged in a voluntary self-evaluation program, to improve performance by identifying deficiencies, measuring performance and implementing improvement programs to remain in compliance with all of the relevant regulations.

As Mexican laws and regulations evolve and become more closely aligned with world standards, we at Primero are committed to remaining in compliance.

In 2011, a series of improvements were completed (which began in 2008, on the recommendation of international consultants) related to tailings management and the stability of the tailings dams. The upgraded tailings containment sites are now fully operational and comply with international regulations.

WATER uSE

Water Used (raw process water)

2011

Total used by plant 574,891 m3

Amount recycled 501,300 m3 (87%)


WASTE MANAGEMENT (PROCESS AND NON-PROCESS)Tailings management at San Dimas is challenged by the district’s rugged terrain and steep canyons. Following a number of improvements relating to the stability of the dams and the management of our tailings, our tailings sites now comply with international guidelines.

At the Tayoltita tailings operation, significant capital improvements have been made in recent years. Pumps and pumping systems have been upgraded. Spill containment systems have been improved and a spill recovery trough installed. The tailings dam area was fenced to prevent access by people and animals, and further improvements to the dam and operating practices are planned.

In the Piaxtla river, downstream of the Tayoltita tailings deposits, water quality monitoring has not shown any environmental impact, although in periods of heavy rain, the suspended solids in the water increase.

In 2011, we completed the installation of a third tailings filter, bringing the combined capacity of the three-filter system to 410,400 tonnes per year. With the new filter, San Dimas has achieved 85% efficiency in the tailings filtering process. In the first five months that the new filter was operating, we were able to recover an average of 43,000 tonnes of solution per month, which was recycled into the leaching process.

ENERGy CONSuMPTiON AND GREENHOuSE GAS EMiSSiONSEnergy use and GHG emissions are significantly minimized by our use of hydroelectric power, most of which is generated by the Las Truchas Hydroelectric plant, which is owned and operated by Primero.

The Las Truchas dam and power plant harnesses the power potential of the Las Truchas basin to provide the mine with economical, reliable and clean power. The 34 kVA power line runs 42 km from the dam to the San Dimas mine. Beginning in 2005, the plant went though Phase I of a major expansion and efficiency upgrade, and in 2010 the plant was connected to the Mexican Federal Power Commission’s supply system.

We are currently reviewing a Phase II expansion of the Las Truchas facility that would, if approved, increase capacity from its current 50 GWh up to approximately 150 GWh. This would support mine expansion and allow excess power to be sold into the Mexican national energy grid.

biODivERSiTy AND AT-RiSk SPECiESIn 2011, a thorough study was made of aquatic life in the Piaxtla river upstream and downstream from the San Dimas mine, to measure the abundance and diversity of life, including endangered species.

MiNE ClOSuRE AND REClAMATiONAs a responsible mine operator we always take into consideration the fact that every mine has a finite life. As mining progresses at San Dimas we continue to update our plans for the mine’s closure plan. In our financial statements we have accounted for the reclamation and closure costs for the mine, which ensure that the lands and water will be returned to a safe and environmentally sound state on termination of mining.

While operations continue, we practice progressive reclamation of any lands that are no longer used for mining activities. We have reclaimed three of the older tailings dams near the Tayoltita mill, whose land has been reclaimed for use as a soccer field, a softball field, and a garden nursery.

In 2011 reclamation proceeded on the tailings facilities of the San Antonio Mill, which was closed in 2003. This reclamation project will be complete in 2012.

ENviRONMENTAl REGulATORy COMPliANCE The San Dimas Mine is presently involved in an environmental certification process (as a Primero-owned company). Progress in 2011 included:

• SEMARNAT (the Mexican environmental authority) assigned San Dimas an Environmental Registry Number

• San Dimas surrendered the operating permit related to the previous owner

• San Dimas was granted an Environmental License (LAU) to operate mine and processing facilities

• seeking approval for an Environmental Impact Assessment, San Dimas submitted a project proposal for the Rio Piaxtla diversion and a related waste rock deposit

AiR quAliTy MEASuREMENTIn 2011, we engaged a third-party contactor (On-Site Analítica de México, S. A de C.V.) to carry out an atmospheric study of the San Dimas operation. The study confirmed that:

• particulates from mining processes were in compliance with regulations (NOM-043-SEMARNAT-1993)

• emissions from the plant’s burners were in compliance with regulations (NOM-085 - SEMARNAT-1994, for burners with heating capacity of less than 5250 Mj/h)


WASTE

Process Waste(000s tonnes) 2011

Waste Rock 1,038 76% within mine, 24% outside mine

Tailings 663

Hazardous Waste(tonnes) 2011

Used oilFinal Disposition: SARA AbiGAil 48

Oil-impregnated solids Final Disposition: iNDuSTRiAl WASTE DiSPOSAl 31

Used grease 6

Hazardous wastes (in containers) 2

Contaminated soil 21

Sludge from pits with hydrocarbons 5

Fluorescent lamps 0.2 (ton/year)

Diesel 0.9

Filtered tailings Final Disposition: TAiliNGS DAM 700,740

Solution coming from tailings filtrationFinal Disposition: RETuRNED TO THE PROCESS 456,300

WATER quAliTy

Station VA- 04 (Upstream)

lower (EPT):

Station VA- 05 (8km downstream from Tayoltita)

better (EPT):

AquATiC HAbiTAT quAliTy


Marginal

Station VA- 03Downstream from the San Luis mine entrance

Marginal


Marginal

Station VA- 06Below the Cupias bridge

Sub-optimal

FiSH SPECiES Diversity Endangered species found**


lower abundance Catostomus plebeius (all seasons)

Station VA- 03Downstream from the San Luis mine entrance

Major diversityictalurus priceiPoeciliopsis latidens (all seasons)


ictalurus priceiPoeciliopsis latidens (all seasons)

Station VA- 06Below the Cupias bridge

Greater abundanceictalurus priceiPoeciliopsis latidens (all seasons)

ENERGy CONSuMPTiON, 2011

Diesel Consumption (000s litres)

Gasoline Consumption (000s litres)

Power Purchased(diesel generators)

Power Purchased(Las Truchas)

Power Purchased(Mexican Federal Power Commission)

2,485 114 1,397 MWhrs 39,546 MWhrs 18,455 MWhrs

GREENHOuSE GAS EMiSSiONS*, 2011

Diesel (as tonnes of CO2)

Gasoline (as tonnes of CO2)

Power (as tonnes of CO2)

6,524 272 8,396

* calculated using National Greenhouse Accounts Factors (2011)** defined as endangered Mexico-native species of flora and fauna-risk in “NOM-059-SEMARNAT-2010”


As a relatively new company operating a long established mine, Primero finds itself in a fortunate position. We inherited a strong safety record, solid environmental policies and practices, a motivated workforce and well-established relationships to the local community where mining has been a way of life for hundreds of years.

in Closing


For the near future, our primary concerns and objectives focus on improving our environmental practices. While we have always been in compliance with the regulations that are in force, we are advancing our standards. i feel it is important to report a recent tailings spill that occurred in early 2012, after the period covered by this report. Although the spill was minor, the result of a leak in the pipeline feeding the dry tailings facility, it triggered a thorough review of our containment systems. We have taken a series of corrective actions and ran a preliminary assessment to confirm that there has been no residual impact on the aquatic life of the Piaxtla River. in 2012 we will improve the containment structures for the tailings pipe and conduct an external assessment of the river.

We will continue to maintain a culture of safety at Primero and i am confident that we can achieve our aggressive goal of a further 50% reduction in workplace accidents in 2012.

i would like to take this opportunity to thank everyone at Primero who has contributed to our collective efforts in health, safety, environmental stewardship and socio-economic sustainability. Through 2012 and beyond, i look forward to continued development and improvements to our corporate culture of safety, respect and responsibility to each other, our communities and the environment.

JOSEPH F. CONWAy President & Chief Executive Officer

www.primeromining.com

This report is written for Primero employees and their families, our host communities, legislators and government officials, analysts, civic, special-interest and non-governmental advocacy organisations (NGOs) and other stakeholders. We invite sustainability-related comments and suggestions, and maintain a dedicated email address: [email protected].

Primero Mining Richmond Adelaide Centre 120 Adelaide Street West, Suite 1202 Toronto, ON M5H 1T1 T: 416 814 3160 F: 416 814 3170 TF: 1 877 619 3160 E: [email protected]