Mr. Joseph Conway reports

PRIMERO ANNOUNCES $75 MILLION TERM LOAN REFINANCING AND ORGANIZATIONAL REVIEW

Primero Mining Corp. has entered into a binding term sheet with Sprott Resource Lending Partnership for a $75-million three-year term loan. The debt facility is intended to refinance the company's existing $75-million revolving credit facility (RCF), of which $50-million is currently drawn, and partly for general corporate purposes. Sprott has concluded technical due diligence and the binding term sheet is subject to execution of definitive transaction documents, all regulatory and other third party approvals and satisfaction of other customary conditions precedent, the debt facility is expected to be closed this quarter. Please note that all dollar amounts in this news release are expressed in U.S. dollars unless otherwise indicated.

Given the company's 2016 results, Primero has undertaken the following actions to streamline its organization and improve shareholder value.

Organizational change highlights:

• San Dimas operations reset to reduce complexity and increase profitability: Primero is working to reduce the complexity and scale of San Dimas operations in 2017. This is expected to result in significant decreases to the San Dimas work force and other overhead costs which will enable the return to profitability and long-term sustainability of the mine.
• Black Fox must deliver positive cash flow in 2017: The 2017 Black Fox mine plan shows improved grades, which would result in positive cash flows at current gold prices. Management will closely monitor the short-term operating results and cash flow to ensure the Black Fox mine delivers as planned, and will take necessary corrective actions if required.
• Reduced general and administrative costs: Primero has initiated actions to significantly reduce its general and administrative (G&A) costs in 2017. The company has reduced its corporate office head count by 30 per cent, and will be downsizing its corporate office space and reducing directors' expenses.
• Strategic review process under way: The company's board of directors has commenced a strategic review process to explore alternatives to improve shareholder value. The alternatives could include such things as strategic investments, joint ventures or asset sales.

"We are taking the decisive action necessary in order to address the challenges currently faced by our company," said Joseph F. Conway, interim president and chief executive officer. "Securing the three-year term debt facility with Sprott is a critical part of that. The priority now is to bring our company back to profitability by reducing complexity, improving planning and delivering positive operating results at both of our mines. This has been a difficult period for the company and for our shareholders. I am personally committed to leading Primero until we have returned the company to profitability and financial stability."

$75-million term loan

The company has entered into a binding term sheet with Sprott for a $75-million three-year term loan to replace its existing revolving credit facility, due to mature on May 23, 2017. Sprott has concluded technical due diligence and the binding term sheet is subject to execution of definitive transaction documents, all regulatory and other third party approvals, and satisfaction of other customary conditions precedent; the debt facility is expected to be closed this quarter.

Management believes the new debt facility more appropriately matches the company's asset base and cash flows. In addition to repaying current RCF lenders the currently drawn $50-million, the debt facility will provide the company with approximately $25-million of additional liquidity, intended for general corporate purposes.

Streamlining operations and corporate cost cutting

Primero has launched an extensive, company-wide cost reduction program. During the 2017 budgeting process, operating cost savings were identified which are expected to sustainably reduce operating and G&A costs. In light of the current position of the company, management has set a target to sustainably reduce unit operating costs by a further 15 per cent from the original 2017 budget.

Primero is streamlining its operations to improve profitability and operating flexibility which includes the implementation of broad cost-cutting measures across both operating assets and a reduction to the number of contractors, staff and unionized employees. With decreased overhead fixed costs, the company expects to be able to increase profitability and cash flow from both operations.

Concurrently, the company has commenced a program to reduce G&A costs. The company has reduced its corporate office employees by 30 per cent and is in the process of downsizing corporate office space and reducing directors' expenses. Primero is committed to bringing corporate expenses in line or below mining industry peers in 2017.

San Dimas working with union to reset operations

As announced on Feb. 15, 2017, there has been a complete stoppage of mining and milling activities at San Dimas when the company failed to reach agreement with the union on the critical changes needed to the collective bargaining agreement (CBA) in order to return San Dimas to profitability.

Primero's goal is to find ways of reducing the complexity and scale of San Dimas operations and increase productivity to ensure the long-term profitability and sustainability of the mine. The company has started preparing a detailed vein-by-vein mining plan which will result in a phased restart of mining activities to ensure strict adherence to best practices mining techniques and compliance with mine plans, within a safe operating environment. Additionally, during the work stoppage, Primero will take the opportunity to train site management and supervisors in the changes needed to return San Dimas to profitability.

Primero is committed to working with the union to achieve its cost reduction goals, realign the short-term bonus system and match the labour force with the more focused, efficient operation. Through this effort, Primero expects to return San Dimas to profitability and positive cash flow, which will ensure that the mine continues to be a source of employment for the community of Tayoltita.

Black Fox must deliver positive cash flow in 2017

The 2017 Black Fox mine plan shows improved grades, which would result in positive cash flows at current gold prices. Management will closely monitor the short-term operating results and cash flow to ensure the Black Fox mine delivers as planned, and will take necessary corrective actions if required.

Mexican tax update

Primero continues to defend its advance pricing agreement (APA) from the legal claim initiated by the Mexican tax authority (SAT) in February, 2016. While the legal proceedings regarding the APA are continuing, the company has had discussions with stakeholders in the government of Mexico, and in Canada, to seek a reasonable and timely resolution to the matter. Primero is also focused on ensuring the SAT refunds the approximately $42-million in VAT (value-added tax) and income taxes receivable which was outstanding to the company at Dec. 31, 2016. Advancing international arbitration proceedings under the North American Free Trade Agreement (NAFTA) remains an available option.

Strategic review process

The company's board of directors has commenced a strategic review process to explore alternatives to improve shareholder value. The alternatives could include, but are not limited to, strategic investments, joint ventures and asset sales. The company will provide updates to these continuing initiatives as necessary.

About Primero Mining Corp.

Primero 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. Primero offers immediate exposure to unhedged, below-average-cash-cost gold production with a substantial resource base in politically stable jurisdictions. The company is focused on becoming a leading intermediate gold producer by building a portfolio of high-quality, low-cost precious metals assets in the Americas.

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