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Gold: 1,201.42 +6.75 +0.57% Volume: Pricing Delayed 20 Minutes November 21, 2014

Operations

Location and District Geology

Primero owns the Ventanas property in the Ventanas Mining District or southern part of the San Dimas District along the western flank of the Sierra Madre Occidental mountain range in Durango State, Mexico. The Ventanas property is composed of 28 near-contiguous mining concessions covering approximately 3,470 hectares or 35 square kilometres that are centered near coordinates 23°54’06”N latitude and 105°44’58”W longitude; near the border of Sinaloa and Durango states and 120 kilometres west of the city of Durango, the capital of Durango State.

The Ventanas property is considered to be a mid-stage exploration project containing multiple low to intermediate sulphidation epithermal veins systems. The property is divided into three vein areas: the Mala Noche, Ventanas and San Cayetano areas. Each has numerous previously explored and worked veins that have a style of mineralization that is similar to the productive Tayoltita District 32 kilometres to the north. The property contains 17 old mines and workings. Despite the amount of historical work, many parts of the Ventanas property remain relatively under-explored.

Property History

Desarrollos Mineros San Luis, S.A. de C.V. ("San Luis"), acquired the Ventanas property in 1979. From then until 2000, San Luis and its parent company, Luismin S.A. de C.V., carried out extensive exploration and sampling work with the intent to establish sufficient mineral resources to restart production. San Luis did not resume production, preferring instead to grant a succession of options to a variety of companies.

In 2007, Primero (then Mala Noche), entered into an option agreement with San Luis to acquire up to a 70% interest in the Ventanas property and immediately became the operator. 100% of the Ventanas property was then acquired by Primero as part of the San Dimas acquisition in August 2010.

Exploration Program

Primero’s (then Mala Noche) goal was to assess the potential of the Ventanas property as a viable silver and gold producer, similar in nature to the operations at Tayoltita. The Company initiated exploration activities on the property in late 2007, when it completed a chip-channel sampling program to verify earlier surface sample results of other companies and, in preparation for its field work and diamond drilling, carried out a significant amount of road rehabilitation and building and drill pad preparation. The Company’s drilling program commenced in September 2008 utilizing two drill rigs; one operating at the Valenciana vein and the other at the Mala Noche vein. Five holes totaling 1,469 metres were drilled, surveyed and sampled.

The 2008 work program is summarized in the NI 43-101 compliant technical report dated January 27, 2009 prepared by A.C.A. Howe International Limited. Fire assays of mineralized samples from the diamond drilling program at the Mala Noche vein returned grades ranging from 0.45 g/t Au and 29 g/t Ag over a core length of 1.90 metres to 4.43 g/t Au and 200 g/t Ag over a core length of 3.60 metres, which included a 1.6 metre interval averaging 7.42 g/t Au and 207 g/t Ag. Other significant intersections included a core interval of 8.77 metres grading 2.81 g/t Au and 193 g/t Ag. Note that the mineralized intervals are core lengths, not the true widths which remain to be confirmed.

During November - December 2008, Howe carried out a detailed audit of Luismin's historic April 1998 Mineral Resource estimate originally disclosed in Luismin's Mineral Resource report dated May 30, 1998 for the purpose of verifying the calculations of the Luismin estimate and reclassifying the Luismin estimate into current NI 43-101 compliant categories.

When conducting its audit, Howe reviewed the parameters, assumptions and methods of estimation and classification of the Luismin estimates, and recalculated grade, width and tonnage of each individual estimate using data and methods tabulated in the Luismin report. The Howe audit recalculated the Luismin estimate into current NI 43-101 compliant mineral resources shown in the table below.

Classification Tonnes Au
(g/tonne)
Ag
(g/tonne)
Au
(grams)
Ag
(grams)
Au
(ounces)
Ag
(ounces)
Total Indicated 155,000 2.49 258 386,000 39,990,000 12,000 1,286,000
Total Inferred 229,400 2.31 412 530,000 94,513,000 17,000 3,039,000

Details on the key assumptions, methods and parameters used to estimate the Company's current resources, as well as information on data verification is available in the Technical Report and the Company's Annual Information Form dated October 19, 2009, both filed on Sedar at www.sedar.com.

For the Technical Report on the Ventanas Epithermal Silver-Gold Property click here.

DESIGNED BLENDER