The Black Fox mine (formerly the “Glimmer” mine) is located in the well-established Timmins Gold Mining Camp in Northern Ontario, Canada. It is positioned approximately 10 kilometres east of the town of Matheson, 65 kilometres east of the city of Timmins, and adjacent to Provincial Highway 101. The 1,750 hectares of contiguous land covers a significant section of the Destor Porcupine Fault Zone (“DPFZ”) which has a total strike length of approximately 200 kilometres and hosts many of Ontario’s richest gold mines.

The Black Fox mine is the key component of the Black Fox Complex which also includes the Black Fox mill, the Grey Fox development project, and the Pike River exploration property. Commercial production from the open pit mine began in May 2009 (depleted in September 2015) and underground mining commenced in October 2011. Primero acquired the Black Fox Complex following a takeover of Brigus Gold Corp. completed in March 2014.

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Existing infrastructure was upgraded in 2010 to facilitate modern mine development which included construction of a new truck shop, laboratory, administration building, firewater/freshwater pump house, and other ancillary buildings. Given the mine’s close proximity to the town of Matheson and the city of Timmins, and that this region’s primary industries are mining and forestry, local supplies and services are easily available and can be typically delivered within 12 hours.

Water at Black Fox is supplied via an on-site fresh water well, and water produced from dewatering activities is channelled to the holding pond for process recycling and/or discharge through the Black Fox water treatment facility. The Black Fox mill site is located at the past-producing Stock mine, 28 kilometres by road from the Black Fox mine site. Electricity is supplied to the mill from a local 27 kilovolt power line.

Geology and Mineralization

The Black Fox mineralization is an Archean age, lode gold deposit located within the Abitibi greenstone belt. The characteristics of this deposit type include; greenstone host rocks, and gold-bearing quartz-carbonate veins. The veins occur as two main types. The first are arrays and stockworks along faults and shear-zones with a quartz-carbonate laminated fault-fill. The second are widely distributed extensional veins within carbonatized metamorphosed greenstone rocks. These deposits are typically associated with crustal scale compressional faults with a vertical extent of less than 2 kilometres and limited metallic zoning (Dubé and Geosselin, 2007).

The Black Fox deposit lies along the Destor Porcupine Fault Zone (“DPFZ”), a major, east-west trending, deep-seated, crustal fault zone. The DPFZ and its numerous splays are associated with many past and current producing gold mines and gold deposits in the Porcupine Camp. The Stock and Aquarius gold deposits are located immediately west of Black Fox and the Holloway and Holt-McDermott Mines are located immediately to the east. Each of these deposits hosts approximately 800,000 to 1 million ounces of gold. The Black Fox deposit is situated midway between two major mines: Dome-Hoyle Pond and Holt-Holloway. The Dome-Hoyle Pond deposits, located within the same structural regime 65 km west, have shown that gold bearing structures can be traced to 1,600 metres below surface where they remain open at depth. The Holt- Holloway mine, located approximately 45 kilometres to the east, has been developed down to 1,200 metres below surface.

There are several different styles of mineralization in the deposits associated with the DPFZ. Gold mineralization is structurally controlled, in a variety of geological settings. Alteration types include pyritic ankerite-sericite ± silica-albite altered mafic volcanics, green carbonate fuchsitic altered ultramafic volcanics with quartz stockworks, pyritic, porphyritic to syenitic felsic intrusives and multiple stages of quartz veins with free gold. Much of this variation is found at the Black Fox mine.

Mining and Processing

Open pit mining commenced at Black Fox in May 2009 and subsequently depleted in September 2015. Commercial production from the underground mine began in October 2011. Underground ore is produced using a combination of long hole stoping, cut and fill, and narrow vein mining methods. Ore is accessed from a series of declines branching off from the main ramp to surface. The underground mine at Black Fox begins at bottom of the open pit (approximately 200 metres below surface) and is expected to extend to more than 800 m in depth below surface. Backfilling is done with a combination of mine waste rock mixed with a Portland cement slurry mix.

Ore mined at Black Fox is initially crushed on-site and transported by road trucks to the Black Fox mill site located 28 kilometres away, and fed via a conveyor system to the mill’s crushing circuit. The crushed product is transferred to a 1,500 tonne fine ore surge bin, and then fed into a 2,400 tonnes per day grinding circuit which includes two stages of closed circuit ball milling. Soluble gold is recovered by adsorption upon granular activated carbon in CIC, CIL, and CIP trains with a process efficiency of 90% to 95%. Gold is removed from the carbon in a high temperature strip vessel in a closed circuit with electro-winning deposition. Gold plate is further refined by induction smelting and cast in 1,000 ounce molds before shipment to the refinery. After extraction of the gold, the residue is discharged into the designated tailing impoundment area.

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Sandstorm Streaming Agreement

On November 9, 2010, the previous owner of the Black Fox entered into a gold streaming agreement with Sandstorm Resources Ltd. pursuant to which Sandstorm agreed to purchase 12% of the gold production from the Black Fox mine beginning in January 2011 and 10% of future production from the Black Fox Extension, covering a portion of the adjoining Pike River property. Sandstorm made an upfront payment of $56.3 million and agreed to $500 per ounce ongoing payments, subject to an inflationary adjustment commencing in 2013 and not exceeding 2% per year. On November 5, 2012, the previous owner of the Black Fox mine elected to exercise the option to repurchase 4% of the Gold Stream for $24.4 million, this effectively reduced Sandstorm’s portion of future production to 8% at Black Fox and to 6.3% at the Black Fox Extension.

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