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Primero Mining Corp
Symbol P
Shares Issued 188,065,612
Close 2016-09-19 C$ 2.05
Market Cap C$ 385,534,505
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Primero Mining drills 5.8 m of 27.9 g/t Au at Black Fox

2016-09-19 11:20 ET - News Release

Mr. Ernest Mast reports

PRIMERO PROVIDES EXPLORATION UPDATE; BLACK FOX DEEP CENTRAL ZONE EXPANDED TO THE WEST; VEIN EXTENSIONS AT SAN DIMAS AND PROMISING LECHUGUILLA CONCESSION RESULTS

Primero Mining Corp. today released the results of successful exploration at the company's Black Fox mine located near Timmins, Ont., Canada, and the San Dimas mine located in Durango, Mexico.

Black Fox highlights:

  • Deep central zone's positive production results: Initial mining of the Black Fox deep central zone has delivered positive production results with long-hole stoping producing 3,885 tonnes grading 8.3 grams per tonne gold to-date. Development in ore has produced an additional 4,350 tonnes grading 10.9 grams per tonne gold. Delineation drilling continues to confirm the high-grade tenure of the deep central zone with drill hole 520-EX346-06 intercepting 27.9 grams per tonne gold over 5.8 metres at 800 metres depth.
  • Mineralization identified west of the deep central zone: Recent exploration drilling west of the Black Fox deep central zone returned positive results with significant gold grades including 28.1 grams per tonne gold over 2.7 metres (520-EX286-05), 4.6 grams per tonne gold over 5.4 metres (520-EX286-01) and 9.1 grams per tonne gold over 1.2 metres (520-EX286-02).

San Dimas highlights:

  • High-grade Victoria vein extended: Exploration drilling at San Dimas continues to target the northeastern extension of the Victoria vein, returning positive results including 208.7 grams per tonne gold and 3,037 grams per tonne silver over 1.3 metres true width (VIC16_379), 11.5 grams per tonne gold and 590 grams per tonne silver over 3.5 metres true width (VIC16_374), and 12.6 grams per tonne gold and 817 grams per tonne silver over 2.3 metres true width (VIC16_378).
  • Discovery of high grades at surface on the Lechuguilla concession: Exploration of the Causitas vein, located on the 30,192-hectare Lechuguilla concession near the main road between Durango and Tayoltita, has been traced at surface over 200 metres of strike length with true widths of up to six metres. Highlights of channel sampling include 7.1 grams per tonne gold equivalent over 4.5 metres true width, including 10.9 grams per tonne gold equivalent over two metres true width (L-05) and five grams per tonne gold equivalent over three metres true width, including 9.8 grams per tonne gold equivalent over 1.2 metres true width (L-02).
  • Other veins identified in the Causitas window: Following the initial success at the Causitas vein, Primero has been investigating nearby outcroppings within the Causitas geological window, this being the area where erosion has exposed the lower volcanic sequence containing mineralized veins. The Causitas window is much more extensive in area than originally indicated, and, to date, Primero has identified two other veins located within close proximity and near the main road.

"I am exceptionally pleased with the results achieved by our Black Fox and San Dimas exploration teams," stated Ernest Mast, president and chief executive officer. "At Black Fox, the deep central zone is now delivering production ore, and we have successfully identified additional high-grade mineralization to the west. At San Dimas, it is reassuring to see that our high-grade veins can continue to be extended with similar or greater widths than currently being mined. And as we look regionally at San Dimas onto our concession not covered by the silver purchase agreement, I am optimistic about the initial results from the Causitas vein, which has the potential to augment current mill feed given its proximity to an existing main road. The Causitas area, located in the Lechuguilla concession, is highly prospective, and I look forward to announcing additional exploration results from a drilling program from this area before year-end."

Black Fox -- Canada

Deep central zone delivers positive production results

The discovery, delineation and now-commencing production from the Black Fox deep central zone are important milestones for the mine. When Primero acquired the Black Fox mine, only two exploration holes had been drilled into the area, and, over the past few years, Primero has successfully expanded, delineated and mined a ramp to access the deep central zone. Current reserves, as at Dec. 31, 2015, total 600,000 tonnes of probable reserves grading 6.2 grams per tonne gold and containing 116,000 ounces.

Following ramp construction completed in early 2016, Primero has developed mining levels on the 640-metre, 660-metre and 680-metre levels ahead of initial long-hole production. Primero has now achieved initial production mining of the deep central zone, which has returned positive results with grades and tonnes reconciling well with the production block model. First long-hole production blasting occurred in early September, and, to date, 3,885 production tonnes have been recovered from stoping between the 640-metre and 660-metre levels with an average grade of 8.3 grams per tonne gold. Long-hole production will continue to ramp up from this area, with underground production expected to average 800 tonnes per day in the fourth quarter of 2016.

Development in ore is under way on the 680 level ahead of long-hole stoping production between the 660 and 680 levels. Currently, 91 metres of lateral development have been completed, containing 4,350 tonnes of ore with an average grade of 10.9 grams per tonne gold in muck samples (cut at 30 grams per tonne).

Further at depth, recent exploration drilling has reconfirmed the high-grade tenure of the deep central zone with drill hole 520-EX346-06 intercepting 27.9 grams per tonne gold over 5.8 metres at approximately 800 metres depth. Deep drilling efforts remain continuing, and results from 800 metres to 1,000 metres depth are expected before year-end.

Details from hole 520-EX346-06 are shown in the attached table.

BLACK FOX DEEP CENTRAL ZONE -- HIGHLIGHTED EXPLORATION DRILLING RESULTS
 
Hole            From (m)    To (m)    Core length (m)    Gold grade (g/t)
 
520-EX346-06      355.6     361.4                5.8                27.9   

Deep central zone extended to the west

After successfully expanding and delineating the Black Fox deep central zone, Primero has shifted focus to other priority target areas located to the west and at depth. Recent exploration of the west targets has returned positive results with significant gold grades including 28.1 grams per tonne gold over 2.7 metres (520-EX286-05), 4.6 grams per tonne gold over 5.4 metres (520-EX286-01) and 9.1 grams per tonne gold over 1.2 metres (520-EX286-02).

Drill hole 520-EX286-05 was drilled to test an extension of the W1 High Quartz target, which remains open at depth. Holes 520-EX286-01 and 520-EX286-02 have identified the W5 Far West target, which requires further infill exploration and remains open at depth.

Highlighted drill results from the deep west targets are shown in the attached table.

BLACK FOX DEEP WEST TARGETS -- HIGHLIGHTED EXPLORATION DRILLING RESULTS

Hole            From (m)    To (m)    Core length (m)    Gold grade (g/t)

520-EX286-01      454.0     459.4                5.4                 4.6    
520-EX286-02      497.2     498.4                1.2                 9.1    
Including         497.2     497.8                0.6                15.2   
520-EX286-05      376.0     378.7                2.7                28.1   

Three underground diamond drill rigs are now active on the 520-level exploration drift, and will continue to target mineralization located down plunge and to the west of the Black Fox deep central zone. In addition, two surface drill rigs continue to test for other areas of Froome-like mineralization.

San Dimas -- Mexico

High-grade Victoria vein extended

As described in early 2016, Primero has assembled a new structural model for the Victoria vein based on new information received from drilling completed in 2015. This model includes a detailed interpretation of the principal and secondary faults that displace the vein principally along strike. A combination of the structural and geochemical characterizations has allowed the exploration team to better understand the plunge of the ore zone and to identify a possible extension of the known mineralization to the northeast of the vein.

Follow-up exploration drilling has continued to build on the positive results released in February, 2016 (refer to Primero's news release dated Feb. 29, 2016) and has extended the high-grade mineralization farther to the northeast. Highlighted results from this step-out drilling include 208.7 grams per tonne gold and 3,037 grams per tonne silver over 1.3 metres true width (VIC16_379), 11.5 grams per tonne gold and 590 grams per tonne silver over 3.5 metres true width (VIC16_374), and 12.6 grams per tonne gold and 817 grams per tonne silver over 2.3 metres true width (VIC16_378). The company plans to commence delineation drilling of this new area before the end of September. The Victoria vein continues to remain open to the northeast.

Highlighted drill results from the Victoria vein are shown in the attached table.

               SAN DIMAS VICTORIA VEIN -- HIGHLIGHTED DRILLING RESULTS
 
                                          Core        True          Gold        Silver
Hole            From (m)    To (m)   length (m)   width (m)   grade (g/t)   grade (g/t)

VIC16_370         370.2     377.5          7.3         6.1          3.7            174    
VIC16_372         419.9     428.1          8.1         6.6          4.2            288    
VIC16_374         410.1     414.7          4.6         3.5         11.5            590    
VIC16_376         416.5     418.3          1.9         1.4          5.2            337    
VIC16_378         393.2     396.5          3.4         2.3         12.6            817    
VIC16_379         390.3     391.8          1.5         1.3        208.7          3,037   

Economic mineralization discovered in extended Lechuguilla concession

Following positive grab samples reported in early August, Primero has undertaken a program of channel sampling and detailed mapping of the Causitas vein located on the large-scale Lechuguilla concession approximately 18 kilometres south of the San Dimas mill. The vein has been outlined at surface over 200 metres of strike length with true widths of up to six metres. The vein is located close to the main road running between Tayoltita and Durango.

Highlights from the recent Causitas vein channel sampling include 7.1 grams per tonne gold equivalent over 4.5 metres true width, including 10.9 grams per tonne AuEq over two metres true width (L-05) and five grams per tonne AuEq over three metres true width, including 9.8 grams per tonne AuEq over 1.2 metres true width (L-02).

Channel sample results from the Causitas vein are shown in the attached table.

Primero's geologists are still working to improve their preliminary interpretation of the Causitas vein, but the initial results show a regular distribution of gold and silver values along the vein. The vein is located near the surface contact between the lower volcanic and upper volcanic groups. This observation suggests that erosion in the Causitas area was less extensive and infers that the exposed vein at surface is near the top of the favourable horizon, where the precious metals deposits form. To test the Causitas vein at depth, Primero will be mobilizing a drill rig expected to be on location at the Causitas vein in October, 2016.

Following the initial success at the Causitas vein, Primero has been investigating nearby outcroppings within the nearly unexplored Causitas geological window, this being the area where erosion has exposed the lower volcanic sequence containing mineralized veins. The Causitas window is much more extensive in area than originally indicated, and, to date, Primero has identified two other veins located within close proximity: the Los Pajaritos vein located one kilometre to the northwest and the El Tablon vein located 3.8 kilometres to the southeast. Primero's geologists have identified other minor structures and alteration within the area which will be subject to more-detailed exploration.

                  LECHUGUILLA CAUSITAS VEIN -- SURFACE CHANNEL SAMPLE RESULTS
 
                 From       To       Sample        True       AuEq (1)         Gold        Silver 
Channel sample     (m)      (m)   length (m)   width (m)   grade (g/t)   grade (g/t)   grade (g/t) 
                                                 
L-01               2.2     4.3          2.1         2.1           1.6           1.0            46   
L-02               0.0     3.0          3.0         3.0           5.0           2.5           178  
Including          1.8     3.0          1.2         1.2           9.8           5.3           325  
L-03               0.0     5.8          5.8         5.8           1.3           0.5            58   
L-04               0.0     5.6          5.6         5.6           2.1           0.8            99   
L-05               0.9     5.4          4.5         4.5           7.1           1.2           422  
Including          2.8     4.8          2.0         2.0          10.9           1.0           720  
L-06               3.6     4.2          0.6         0.6           2.6           0.3           165  
L-07               2.9     5.5          2.6         2.6           1.1           0.3            59   
L-09               4.9     6.8          1.9         1.9           4.6           2.7           139  
Including          4.9     5.8          0.9         0.9           5.2           4.4            59   
L-10               7.0     7.8          0.8         0.8           1.1           0.1            67   
L-11               0.0     1.9          1.9         1.9           1.5           0.9            44   
L-12              12.0    12.8          0.8         0.8           2.4           1.2            86   
L-13               3.5     6.0          2.5         2.5           2.2           1.0            90   
L-14               5.4     7.4          2.0         2.0           1.3           0.5            65   

(1) Gold-equivalent grade is calculated using a gold price of $1,300 per ounce and a silver price
of $18 per ounce.

Qualified person

The scientific and technical content of this news release has been reviewed by David Laudrum, PGeo, senior resource manager for Primero, who is a qualified person as defined by National Instrument 43-101, standards of disclosure for mineral projects.

Quality control

Black Fox complex drilling was conducted by Norex Drilling, supervised by Primero's exploration team. All exploration drill core samples at the Black Fox complex are half core, and analyses reported herein were performed by the independent laboratories: Accurassay Laboratories, which is ISO/IEC 17025 certified, and ALS Laboratories, which is ISO 9001/IEC17025 certified. Samples from development and production completed within the Black Fox mine are assayed at Primero's on-site laboratory. Primero's quality control program includes systematic insertion of blanks, standard reference material and duplicates to ensure laboratory accuracy.

San Dimas and Lechuguilla drilling and sampling were conducted by Primero's exploration team. All drill hole samples at San Dimas and Lechuguilla are half core, and analyses reported herein were performed in ISO-certified independent laboratory SGS Servicios Minerales in Durango, Mexico, using fire assay with atomic absorption finish or gravimetric finish for values over 10 grams per tonne gold. Intercepts cited represent true widths, and drilling is generally intersecting interpreted mineralized zones at a high angle. Primero's quality control program includes systematic insertion of blanks, standard reference material, and 5 per cent of rejects are reassayed to ensure laboratory accuracy. Generally, in a block of 20 samples, one will be a standard, and one will be a blank.

About Primero

Primero Mining is a Canadian-based precious metals producer that owns 100 per cent of the San Dimas gold-silver mine and the Cerro del Gallo gold-silver-copper development project in Mexico, and 100 per cent of the Black Fox mine and adjoining properties in the township of Black River-Matheson near Timmins, Ont., Canada.

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