Mr. Ernest Mast reports

PRIMERO ACHIEVES 2016 REVISED PRODUCTION AND COST GUIDANCE

Primero Mining Corp. has released its preliminary fourth quarter and full-year 2016 operating results. The company's fourth quarter and full-year 2016 financial results will be released on March 15, 2017, and 2017 production guidance will be released in mid-February. Please note that all dollar amounts in this news release are expressed in U.S. dollars unless otherwise indicated.

Highlights:

• Revised production guidance achieved: Fourth quarter production of 45,794 gold-equivalent ounces (1) resulted in annual 2016 production of 176,139 gold-equivalent ounces within the company's 2016 revised production guidance range of 170,000 to 190,000 gold-equivalent ounces. Annual production totalled 156,052 ounces of gold and 5.3 million ounces of silver from the San Dimas and Black Fox mines.
• Cash costs within revised guidance range: Preliminary 2016 consolidated total cash costs (2) (4) are expected to be $865 per gold-equivalent ounce, and preliminary consolidated all-in sustaining costs (3) (4) (AISC) including corporate G&A (general and administrative expenses) are expected to be $1,326 per gold ounce, slightly better than the company's revised 2016 guidance range.
• San Dimas focused on improving productivity and grades: San Dimas produced 28,282 gold-equivalent ounces in the fourth quarter resulting in 113,968 gold-equivalent ounces for full year 2016 (93,881 ounces of gold and 5.3 million ounces of silver) at total cash costs of $856 per gold-equivalent ounce and AISC of $1,117 per gold ounce. Production levels in 2016 were impacted by a series of factors that were identified and improved upon during the course of the year, as discussed below.
• Black Fox benefited from high-grade deep central zone production: Black Fox produced 17,512 ounces of gold in the fourth quarter resulting in 62,171 ounces of gold in 2016 at total cash costs of $881 per ounce and AISC of $1,291 per ounce. The underground mine achieved increased production rates averaging 641 tonnes per day (tpd), representing a 66-per-cent improvement over 2015. Production from the deep central zone has ramped up since initial stoping activities began in September, and mining is now progressing on three levels in four working faces delivering 800 tpd of ore production in the fourth quarter of 2016.
• Streamlined operations to significantly improve cash flows in 2017: Primero has streamlined its operations, focusing on productivity improvements, rightsizing of operations, and strong adherence to mine plans. Furthermore, the company is implementing broad cost-control measures at both mines in 2017. Primero expects to provide 2017 guidance in mid-February, and anticipates 2017 production levels will be in line with 2016 but at reduced costs, resulting in improved cash flows from operations in 2017.

"While Primero faced a number of significant challenges in 2016, I believe the changes we have already made, and will continue to make, will result in a considerable improvement in our 2017 results," stated Ernest Mast, president and chief executive officer. "We have recently strengthened our management team with the addition of an experienced chief operating officer and chief financial officer, and expect to see marked improvement in the near term as we work to reduce costs, increase production and simplify the way we mine. These key steps will lay the foundations of Primero's return to sustainable profitability."

Revised guidance achieved

Primero produced 45,794 gold-equivalent ounces during the fourth quarter of 2016 (23,162 ounces of gold and 1.4 million ounces of silver from San Dimas, and 17,512 ounces of gold from Black Fox), resulting in annual production for the company of 176,139 gold-equivalent ounces in 2016 (93,881 ounces of gold and 5.3 million ounces of silver from San Dimas, and 62,171 ounces of gold from Black Fox) within the company's revised production guidance range.

Preliminary consolidated total cash costs for the fourth quarter of 2016 are expected to be $777 per gold-equivalent ounce, with preliminary AISC including corporate G&A of $1,133 per ounce. For the full year 2016, preliminary consolidated total cash costs were $865 per gold-equivalent ounce, within the revised guidance range of $850 to $900 per gold-equivalent ounce. Preliminary consolidated AISC including corporate G&A of $1,326 per ounce was slightly better than the cost guidance range of $1,350 to $1,400 per ounce. Costs were affected by reduced production levels at both the San Dimas and Black Fox mines and lower silver spot sales realized during the year.

San Dimas produced 28,282 gold-equivalent ounces during the fourth quarter at preliminary cash costs of $746 per gold-equivalent ounce and preliminary AISC of $994 per gold ounce. This resulted annual production of 113,968 gold-equivalent ounces at preliminary cash costs of $856 per gold-equivalent ounce and preliminary AISC of $1,117 per gold ounce, slightly better than the revised 2016 guidance range of $1,125 to $1,175 per ounce. Production at San Dimas was impacted by the implementation of enhanced ground support in early 2016, and later by high unplanned worker absences and lack of compliance to the mine plans. This resulted in reduced underground development rates and ventilation restrictions which reduced mine productivity. In late 2016, San Dimas began to reduce the complexity of the mining operation by prioritizing work in the higher production areas. With increased work force engagement in November and December, the mine experienced minimal production impact due to labour-related issues during these months. Mining development during the fourth quarter was the highest quarterly total since the second quarter of 2015 and an indication that stopes will begin to be scheduled in an improved manner. San Dimas mill throughput in 2016 averaged 2,074 tpd (based on 366-day availability).

Black Fox produced 17,512 ounces of gold during the fourth quarter of 2016 at preliminary cash costs of $828 per ounce and preliminary AISC of $1,101 per ounce. For the full year 2016, the mine produced 62,171 ounces at preliminary cash costs of $881 per ounce. Preliminary AISC was $1,291 per ounce, in line with the 2016 revised cost-guidance range. The Black Fox underground mine achieved increased production rates averaging 641 tpd in 2016 at average grades of five grams per tonne gold, representing a 66-per-cent and 4-per-cent improvement, respectively, over 2015. Production from the deep central zone has ramped up since initial stoping activities began in September, and mining is now progressing on three levels (660-, 680- and 700-metre levels). There are a total of four active working faces on these levels that delivered 800 tonnes per day of ore production in the fourth quarter of 2016. Black Fox mill throughput in 2016 established a new record averaging 2,495 tpd (based on 366-day availability).

Streamlined operations expected to generate significantly improved cash flows in 2017

Primero has streamlined its operations, focusing on productivity improvements, rightsizing of operations and strong adherence to mine plans. Furthermore, the company is implementing broad cost-control measures at both mines in 2017. The company expects to provide 2017 production and cost guidance in mid-February.

Primero anticipates 2017 production levels will be in line with 2016 but at reduced unit costs. Total capital expenditures are also expected be reduced on an overall basis, but year-over-year spending will increase in specific focus areas such as mine development and near-mine exploration.

Current liquidity position

The company's total liquidity position at Dec. 31, 2016, totalled $45-million, comprising approximately $20-million in cash and $25-million available under its line of credit. Primero has been in discussions with lenders to refinance or extend its line of credit facility which matures in May, 2017. The company also amended its financial covenants associated with its line of credit during the period ending Dec. 31, 2016.

Conference call details

Primero plans to release its fourth quarter and full-year 2016 financial results before the market opens on Wednesday, March 15, 2017. A conference call will also be held on the same day at 10 a.m. Eastern Time to discuss these results.

Participants may join the call by dialling North America toll-free 1-888-789-9572 or 416-695-7806 for calls outside Canada and the United States, and entering the participant pass code 1092106.

A live and archived webcast of the conference call will also be available at the company's website under the news and events section.

A recorded playback of the third quarter 2015 results call will be available until July 1, 2017, by dialling: 1-800-408-3053 or 905-694-9451 and entering the callback pass code 5641196.

Notes

(1) Gold-equivalent ounces include silver ounces produced, and converted to a gold equivalent based on a ratio of the average commodity prices realized for each period. The ratio for the fourth quarter 2016 was 278:1 based on the average realized prices of $1,208 per ounce of gold and $4.34 per ounce of silver. The ratio for full year 2016 was 266:1 based on the average realized prices of $1,246 per ounce of gold and $4.68 per ounce of silver.

(2) Total cash costs per gold-equivalent ounce and total cash costs per gold ounce on a byproduct basis are non-GAAP (generally accepted accounting principles) measures. Total cash costs per gold-equivalent ounce are defined as costs of production (including refining costs) divided by the total number of gold-equivalent ounces produced. Total cash costs per gold ounce on a byproduct basis are calculated by deducting the byproduct silver credits from operating costs and dividing by the total number of gold ounces produced. The company reports total cash costs on a production basis. In the gold-mining industry, these are common performance measures but do not have any standardized meaning, and are non-GAAP measures. As such, they are unlikely to be comparable with similar measures presented by other issuers. In reporting total cash costs per gold-equivalent ounce and total cash costs per gold ounce on a byproduct basis, the company follows the recommendations of the Gold Institute standard. The company believes that, in addition to conventional measures, prepared in accordance with GAAP, certain investors use this information to evaluate the company's performance and ability to generate cash flow. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Refer to the company's third quarter 2016 MD&A (management's discussion and analysis) for a reconciliation of cash costs per gold ounce on both a byproduct and gold-equivalent basis to reported operating expenses (the most directly comparable GAAP measure).

(3) The company, in conjunction with an initiative undertaken within the gold-mining industry, has adopted an all-in sustaining cost non-GAAP performance measure that the company believes more fully defines the total cost associated with producing gold; however, this performance measure has no standardized meaning. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The company reports this measure on a gold-ounce-produced basis. For the purposes of calculating all-in sustaining costs at individual mine sites, the company does not include corporate general and administrative expenses. Corporate general and administrative expenses are included in the computation of all-in sustaining costs per consolidated gold ounce. Refer to the company's third quarter 2016 MD&A for a reconciliation of all-in sustaining costs per gold ounce.

(4) The preliminary cash-cost information provided in this news release is approximate and may differ from the final results included in the company's 2016 annual audited financial statements and MD&A.

About Primero

Primero Mining 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. Primero offers immediate exposure to unhedged, below-average-cash-cost gold production with a substantial resource base in politically stable jurisdictions.

We seek Safe Harbor.