Mr. Joseph Conway reports

PRIMERO TO RESUME OPERATIONS AT SAN DIMAS

Primero Mining Corp. has resolved the work stoppage of unionized employees that began on Feb. 15, 2017. Operations are expected to resume at Primero's San Dimas mine in Mexico on April 18, 2017.

The company is also pleased to announce that it has a new collective bargaining agreement (CBA) with the National Union of Mine, Metal, Steel and Allied Workers of the Mexican Republic (Sindicato Nacional de Trabajadores Mineros, Metalurgicos, Siderurgicos y Similares de la Republica Mexicana). The agreement provides a formal structure for regulating all aspects of the relationship between the company and its unionized employees. The company considers the new CBA to be both fair and equitable to all parties, and the CBA provides Primero with a competitive cost structure aligned to the future success of San Dimas operations.

Highlights:

• New CBA structure to benefit all parties: The new CBA includes adjustments that benefit both the company and its unionized employees, including an increase in base salary and a realignment of short-term bonus structures. The CBA will be subject to future review in 2019.
• More continuous mine shifts to improve productivity: Significant productivity gains are expected with the underground operation transitioning to two 10.5-hour shifts per day and continuous seven-day-per-week operations. The productivity improvements will be gained by eliminating a daily shift change, from three per day to two, adding nearly 80 operating days per year and reducing total time lost by commuting to and from the working faces. This will be coupled with significant improvements expected to be gained through greater alignment with the company's objectives in the new bonus structure for the underground workers.
• Phased restart to commence: Primero's goal in 2017 is to reduce the scale and complexity of the San Dimas operation to increase productivity and return the mine to positive cash flow. Work is expected to resume on April 18, 2017, and the company will implement a phased restart of operations.

"We are very pleased to have negotiated amendments to the San Dimas CBA that will benefit our work force, the company and the community by improving the long-term sustainability of the mine," stated Joseph F. Conway, interim president and chief executive officer. "We remained steadfast in our commitment to respecting our work force while improving productivity and reducing costs. We believe that the new bonus structure, combined with a more continuous work roster, will allow for significant cost reductions at the San Dimas mine."

New CBA structure to benefit all parties, including realigned bonus structure

The new CBA includes adjustments to base salaries and short-term production bonuses to the benefit of both Primero and all unionized employees. Unionized employees will receive an increase in their base salaries of 7.5 per cent in Mexican pesos, consistent with recent increases in the Mexican mining industry. The new production bonus structure for mine workers is better aligned with key performance indicators, such as ounces produced, development metres achieved and employee absenteeism. For mill workers, the short-term bonus is based on compliance to plan with a weighting for gold and silver ounces produced according to Primero's revenue.

Primero does not expect to see a reduction in individual worker compensation, and workers could see increases to individual pay provided that plans are achieved or exceeded and company performance improves. The CBA will be subject to future review in 2019.

More continuous mine shifts will lead to improved productivity

The San Dimas mine historically operated on a shift structure with three eight-hour shifts per day and 5.5 days per week. All underground miner workers will now transition to two 10.5-hour shifts per day and continuous seven-day-per-week operations. With the more continuous operations, the company will gain nearly 80 effective operating days per year. All underground workers will now operate on a four days on, two days off, work roster.

As the San Dimas mine expanded and higher-grade veins were brought into production located farther away from the mill and mine portals, the commute times to and from the working faces have increased. This has led to a reduction in per-shift productivity as a result of increased transportation time. By eliminating a daily shift change, from three per day to two, the mine will gain productivity improvements from reduced commuting time lost.

Phased restart to commence

Primero's goal in 2017 is to reduce the scale and complexity of the San Dimas operation to increase productivity and return the mine to positive cash flow. To that end, the total work force at San Dimas has been reduced by 17 per cent since December, 2016, which includes 238 contractors, 48 unionized employees and 68 non-unionized employees. The company will continue to explore opportunities to make further reductions to the work force.

On-site work is expected to resume on April 18, 2017, and Primero will implement a phased restart of the San Dimas operations with a focus on achieving productivity gains in highest-priority areas first.

About Primero Mining Corp.

Primero Mining is a Canadian-based precious metal 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 and 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-metal assets in the Americas.

We seek Safe Harbor.