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ANNUAL INFORMATION FORM

FOR THE YEAR-ENDED DECEMBER 31, 2014







MARCH 31, 2015



PRIMERO MINING CORP. Suite 2100, 79 Wellington Street West
TD South Tower Toronto, Ontario, Canada M5K 1H1







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**TABLE OF CONTENTS**

|INTRODUCTORY
      NOTES                                                                                    |      
|----------------------------------------------------------------------------------------------------------- | -----
|                                                                                                            |      
|CAUTIONARYNOTEREGARDINGFORWARD-LOOKINGSTATEMENTS                                                            | 1    
|CAUTIONARYNOTES TOUNITEDSTATESINVESTORSCONCERNINGESTIMATES OFMEASURED,INDICATED
      ANDINFERRED RESOURCES | 3    
|CURRENCY                                                                                                    | 4    
|GOLD
      AND SILVER PRICES                                                                                | 4    
|                                                                                                            |      
|CORPORATE
      STRUCTURE                                                                                   | 5    
|                                                                                                            |      
|GENERAL
      DEVELOPMENT OF THE BUSINESS                                                                   | **6**
|                                                                                                            |      
|CORPORATESTRATEGY                                                                                           | 6    
|                                                                                                            |      
|THREE
      YEAR HISTORY                                                                                    | 7    
|                                                                                                            |      
|BUSINESS
      OF PRIMERO                                                                                   | 10   
|                                                                                                            |      
|OVERVIEW                                                                                                    | 10   
|PRODUCT
      ANDECONOMICDEPENDENCE                                                                         | 10   
|COMPETITIVECONDITIONS                                                                                       | 10   
|CHANGES
      TOCONTRACTS                                                                                   | 11   
|EMPLOYEES                                                                                                   | 11   
|FOREIGNOPERATIONS                                                                                           | 11   
|ENVIRONMENTALPROTECTION                                                                                     | 11   
|SOCIAL
      ANDENVIRONMENTALPOLICIES                                                                       | 12   
|                                                                                                            |      
|MINERAL
      RESERVES AND RESOURCES                                                                        | 13   
|                                                                                                            |      
|MINING
      ACTIVITIES                                                                                     | 14   
|                                                                                                            |      
|SAN
      DIMAS MINE                                                                                        | 14   
|BLACK
      FOX COMPLEX                                                                                     | 22   
|                                                                                                            |      
|EXPLORATION
      AND DEVELOPMENT                                                                           | 29   
|                                                                                                            |      
|CERRO
      DEL GALLO PROJECT                                                                               | 29   
|RESERVES
      ANDRESOURCES                                                                                 | 31   
|GREY
      FOX PROJECT                                                                                      | 32   
|                                                                                                            |      
|RISK
      FACTORS                                                                                          | 34   
|                                                                                                            |      
|DIVIDENDS                                                                                                   | 47   
|                                                                                                            |      
|CAPITAL
      STRUCTURE                                                                                     | 48   
|                                                                                                            |      
|COMMONSHARES                                                                                                | 48   
|PREFERREDSHARES                                                                                             | 48   
|OPTIONS,
      WARRANTS ANDDEBENTURES                                                                       | 48   
|DIRECTORSPHANTOMSHAREUNITS                                                                                  | 49   
|EMPLOYEEPHANTOMSHAREUNITS                                                                                   | 49   
|                                                                                                            |      
|MARKET
      FOR SECURITIES                                                                                 | 49   
|                                                                                                            |      
|COMMONSHARES                                                                                                | 49   
|COMMONSHAREWARRANTS                                                                                         | 50   
|CONVERTIBLEDEBENTURES                                                                                       | 51   
|                                                                                                            |      
|PRIOR
      SALES                                                                                           | 52   
|                                                                                                            |      
|DIRECTORS
      AND OFFICERS                                                                                | 54   
|                                                                                                            |      
|PRINCIPAL
      OCCUPATIONS AND OTHER INFORMATION ABOUT PRIMEROS DIRECTORS AND EXECUTIVE
      OFFICERS    | 55   
|CEASE
      TRADE ORDERS, BANKRUPTCIES, PENALTIES OR SANCTIONS                                              | 60   
|CONFLICTS
      OF INTEREST                                                                                 | 61   

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- 2 -

|LEGAL
      PROCEEDINGS AND REGULATORY ACTIONS | 62
|---------------------------------------------- | --
|                                               |   
|TRANSFER
      AGENT AND REGISTRAR             | 63
|                                               |   
|MATERIAL
      CONTRACTS                       | 63
|                                               |   
|INTERESTS
      OF EXPERTS                     | 64
|                                               |   
|ADDITIONAL
      INFORMATION                   | 65
|                                               |   
|AUDIT
      COMMITTEE                          | 66
|                                               |   
|SCHEDULE
      A TECHNICAL DEFINITIONS       | 68
|                                               |   
|SCHEDULE
      B MATERIAL MINERAL PROJECTS   | 70

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**INTRODUCTORY NOTES**

**Cautionary Note Regarding Forward-Looking Statements**

Capitalized
terms used in this section are as defined in the following sections of this
annual information form (Annual Information Form or AIF): Corporate
Structure, General Development of the Business and Mining Activities.

This
AIF contains forward-looking information within the meaning of applicable US
and Canadian securities laws. Generally, these forward-looking statements can be
identified by the use of forward-looking terminology such as believes,
intends, may, will, should, plans, anticipates, potential,
expects, estimates, forecasts, budget, likely, goal and similar
expressions or statements that certain actions, events or results may or may not
be achieved or occur in the future. In some cases, forward-looking information
may be stated in the present tense, such as in respect of current matters that
may be continuing, or that may have a future impact or effect. Forward-looking
statements reflect our current expectations and assumptions, and are subject to
a number of known and unknown risks, uncertainties and other factors which may
cause our actual results, performance or achievements to be materially different
from any anticipated future results, performance or achievements expressed or
implied by the forward-looking statements.

Forward-looking
statements in this Annual Information Form include those that relate to: the
ability of the Company to operate and expand production at its existing mines;
the effect of mining techniques and methods such as long-hole mining or changing
labour shifts; the ability of the Company to grow through acquisition; the
payment of taxes based upon the contracted price for silver under the Amended
and Restated Silver Purchase Agreement; the ability to identify new Mineral
Resources and convert Mineral Resources into Mineral Reserves; the impact of
estimation methodologies on mine and production planning; the ability to
generate cash flows that exceed requirements; intentions to become an
intermediate gold producer; the timing and amount of capital expenditures and
costs; the development of new mineral deposits; the Companys ability to
complete future financings to raise additional capital as needed; expected ore
grades, recovery rates and through-put; the ability of the Company to comply
with environmental, safety and other regulatory requirements as well as the
Companys policies in respect thereof; expected or proposed development or
construction activities, and the expected costs thereof; expectations regarding
currency fluctuations; the timing and results of union contract negotiations;
the timing and possible outcome of pending litigation; future prices of precious
and base metals; the ability of the Company to obtain government approvals or
permits in connection with the continued operation and development of its
operations, development project and exploration properties; the impact of the
acquisitions on the business and operations of the Company; and the ability of
the Company to maintain effective internal control over financial reporting.

Such
forward-looking information is based upon factors and assumptions that, while
considered reasonable by the Company as of the date of such statements, are
inherently subject to uncertainties and contingencies, and, if incorrect, could
cause actual future results to be materially different than expressed in the
forward-looking statements. The assumptions and factors which may prove to be
incorrect, include, but are not limited to: the specific assumptions set forth
in this AIF; the expectations and beliefs of management; assumptions relating to
the availability of suitable mining assets for acquisition on reasonable terms;
that there are no significant disruptions affecting operations, whether due to
labour disruptions, supply disruptions, damage to or loss of equipment, whether
as a result of natural occurrences including flooding, political changes, title
issues, intervention by local landowners, loss of permits, or environmental
concerns or otherwise; that development and expansion at its operations and
project proceeds on a basis consistent with current expectations and the Company
does not change its expansion, development and exploration plans; that the exchange rate between the Canadian dollar, the Mexican
peso and the United States dollar remain consistent with current levels or as
set out in this AIF; that prices for gold and silver remain consistent with the
Companys expectations; that prices for key mining supplies, including labour
costs and consumables, remain consistent with the Companys current
expectations; that production meets expectations and is consistent with
estimates; that plant, equipment and processes will operate as anticipated; that
there are no material variations in the current tax and regulatory environment
or the tax positions taken by the Company; that the Company will maintain access
to surface rights; that the Company will be able to obtain and maintain
government approvals or permits in connection with the continued operation and
development of its existing operations, development and exploration activities;
and that the Company can access adequate financing, appropriate equipment and
sufficient labour, all at acceptable rates. No assurance can be given that these
assumptions will prove to be correct. These assumptions should be considered
carefully by readers. Readers are cautioned not to place undue reliance on the
forward-looking information and statements or the assumptions on which the
Companys forward-looking information and statements are based.

---

Forward-looking
information is subject to a variety of risks and uncertainties which could cause
actual events or results to differ from those reflected in the forward-looking
statements. Such risks include, but are not limited to: the volatility of prices
of gold, silver and other metals; uncertainty of Mineral Reserves, Mineral
Resources, Inferred Mineral Resources, inability to realize exploration
potential, mineral grades and mineral recovery estimates; uncertainty of future
production, delays in completion of expansion, exploration and development plans
for any reason including insufficient capital, delays in permitting, and labour
issues; inability to maintain or acquire attractive mining properties on terms
it considers acceptable or at all; other risks inherent with acquisitions
including integration inefficiencies and potential unknown liabilities
associated therewith; the ability of the Company to comply with its obligations
under material agreements including financing agreements; changes to Mexican tax
laws or a reversal by Mexican tax authorities of their favourable ruling
supporting the Companys advance pricing agreement or other changes in tax law
or administration that increases the taxes payable by the Company; the ability
of the Company to achieve projected gold and silver production, and gold and
silver grades; projected cash costs of production, development and exploration,
and capital expenditures may be greater than anticipated; currency fluctuations
beyond those that are typical or anticipated; limitations on insurance coverage;
commercial viability of mineral deposits; inability to complete any development
projects for any reason; risks associated with the adequacy of infrastructure,
including interruptions in power supply; mining risks, including unexpected
formations, cave-ins and voids, which delay operations or prevent extraction of
material; risks associated with competition in the mining industry; risks
associated with the ability to retain key executives and key operating
personnel; risks associated with conflicting legal obligations of directors and
officers of the Company who are directors and/or officers of other companies;
risks associated with foreign operations; adverse changes in labour laws or in
the Companys labour relations, or labour disputes, accidents or other adverse
safety incidents; title disputes or claims; changes in other regulations that
result in increased costs; cost of environmental expenditures and potential
environmental liabilities; dissatisfaction or disputes with local communities or
first nations; failure of plant, equipment or processes to operate as
anticipated. Should one or more of these risks and uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those described in forward-looking statements.

Readers
are advised to carefully review and consider the risk factors identified in this
AIF under the heading Risk Factors for a discussion of the factors that could
cause the Companys actual results, performance and achievements to be
materially different from any anticipated future results, performance or
achievements expressed or implied by the forward-looking statements. Readers are
further cautioned that the foregoing list of assumptions and risk factors is not
exhaustive and it is recommended that prospective investors consult the more
complete discussion of the Companys business, financial condition and prospects
that is included in this AIF. The forward-looking information and statements
contained in this AIF are made as of the date hereof and, accordingly, are
subject to change after such date. The Company does not undertake to update any
forward-looking information, except as, and to the extent, required by
applicable securities laws. The forward-looking statements contained herein are
expressly qualified by this cautionary statement.

2

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**Cautionary Notes to United States Investors
Concerning Estimates of Measured, Indicated and Inferred Resources**

The
disclosure in this AIF uses terms that comply with reporting standards in Canada
and certain estimates are made in accordance with National Instrument 43-101
Standards of Disclosure for Mineral Projects (NI 43-101). NI 43-101 is a
rule developed by the Canadian Securities Administrators that establishes
standards for all public disclosure an issuer makes of scientific and technical
information concerning mineral projects. Unless otherwise indicated, all reserve
and resource estimates contained in or incorporated by reference in this AIF
have been prepared in accordance with NI 43-101. These standards differ
significantly from the requirements of the United States Securities and Exchange
Commission (the SEC), SEC Industry Guide 7 under the United States
Securities and Exchange Act of 1934, as amended (Guide 7) and reserve and
resource information contained herein and incorporated by reference herein may
not be comparable to similar information disclosed by U.S. companies.

This
AIF uses the terms Mineral Reserve, Proven Mineral Reserve and Probable
Mineral Reserve which are terms defined in the Canadian Institute of Mining,
Metallurgy and Petroleum which were adopted by the Canadian Securities
Administrators NI 43-101 (see Schedule A Technical Definitions). Under SEC
standards, mineralization may not be classified as a reserve unless the
determination has been made that the mineralization could be economically and
legally produced or extracted at the time the reserve determination is made.
Among other things, all necessary permits would be required to be in hand or
issuance imminent in order to classify mineralized material as reserves under
the SEC standards. Accordingly, Mineral Reserve estimates contained in this AIF
may not qualify as reserves under SEC standards. In addition, disclosure of
contained ounces is permitted disclosure under Canadian regulations; however,
the SEC only permits issuers to report mineralization as in place tonnage and
grade without reference to unit measures.

This
AIF also uses the terms Measured Mineral Resources, Indicated Mineral
Resources and Inferred Mineral Resources. We advise investors that while such
terms are recognized and required by Canadian securities regulations, the SEC
does not recognize them. Inferred Mineral Resources have a great amount of
uncertainty as to their existence, and great uncertainty as to their economic
and legal feasibility. It cannot be assumed that all or any part of an Inferred
Mineral Resource will ever be upgraded to a higher category. Under Canadian
regulations, estimates of Inferred Mineral Resources may not form the basis of
feasibility or other economic studies, except in limited circumstances. Mineral
Resources that are not Mineral Reserves do not have demonstrated economic
viability. None of the following mineralization has been demonstrated to be ore
nor is considered to be a Mineral Reserve. **Investors are cautioned not
to assume that all or any part of Measured Mineral Resources or Indicated
Mineral Resources will ever be converted into Mineral Reserves. Investors are
also cautioned not to assume that any part or all of an Inferred Mineral
Resource exists, or is economically or legally mineable. See Risk Factors.**

NI
43-101 also permits the inclusion of disclosure regarding the potential quantity
and grade, expressed as ranges, of a target for further exploration provided
that the disclosure (i) states with equal prominence that the potential quantity
and grade is conceptual in nature, that there has been insufficient exploration to define a Mineral Resource and that
it is uncertain if further exploration will result in the target being
delineated as a Mineral Resource, and (ii) states the basis on which the
disclosed potential quantity and grade has been determined. Disclosure regarding
exploration potential has been included in this AIF. United States investors are
cautioned that disclosure of such exploration potential is conceptual in nature
by definition and there is no assurance that exploration of the mineral
potential identified will result in any category of NI 43-101 Mineral Resources
being identified.

3

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For
the above reasons, information contained in this Annual Information Form may not
be comparable to similar information disclosed by U.S. companies subject to the
reporting and disclosure requirements under the United States federal securities
laws and the rules and regulations thereunder.

**Currency**

Unless
otherwise stated, references herein to $ are to the United States dollar.
References to CDN$ are to the Canadian dollar. References to -[amount] pesos
or to pesos are to the Mexican peso. The following table reflects the low and
high rates of exchange for one United States dollar, expressed in Canadian
dollars, during the periods noted, the rates of exchange at the end of such
periods and the average rates of exchange during such periods, based on the Bank
of Canada noon spot rate of exchange.

Year ended December 312014
    
    2013
    
    2012Low for the period
    $1.0614
    
    $0.9839
    
    $0.9710High for the period
    1.1643
    
    1.0697
    
    1.0418Rate at the end of the period
    1.1601
    
    1.0636
    
    0.9949Average noon spot rate for the period
    1.1045
    
    1.0299
    
    0.9996


On
March 30, 2015, the Bank of Canada noon spot rate of exchange was $1.00  1.2689
CDN$.

**Gold and Silver Prices**

**Gold Prices**

The
low, high, average and closing afternoon fixing gold prices in United States
dollars per troy ounce for each of the three years in the period ended December
31, 2014, as quoted by the London Bullion Market Association, were as
follows:

|                       | Year ended December 31
|---------------------- | ----------------------
|                       | 2014                  
|Low for the period     | $1,142                
|High for the period    | 1,385                 
|Average for the period | 1,266                 
|Closing for the period | 1,206                 

On
March 30, 2015, the closing afternoon fixing gold price in United States dollars
per troy ounce, as quoted by the London Bullion Market Association, was
$1,185.50.

4

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**Silver Prices**

The
low, high, average and closing afternoon fixing silver prices in United States
dollars per troy ounce for each of the three years in the period ended December
31, 2014, as quoted by the London Bullion Market Association, were as follows:

|                       | Year ended December 31
|---------------------- | ----------------------
|                       | 2014                  
|Low for the period     | $15.28                
|High for the period    | 22.05                 
|Average for the period | 19.08                 
|Closing for the period | 15.97                 

On
March 30 2015, the closing afternoon fixing silver price in United States
dollars per troy ounce, as quoted by the London Bullion Market Association, was
$16,65.

**CORPORATE STRUCTURE**

Primero
Mining Corp. is incorporated under the British Columbia Business Corporations
Act (the Act). On August 6, 2010, the Company acquired the San Dimas Mine
(the San Dimas Mine), mill and related assets (the San Dimas Assets) from
Desarrollos Mineros San Luis, S.A. de C.V. (DMSL) and the shares of Silver
Trading (Barbados) Limited (Silver Trading) from Goldcorp Silver (Barbados)
Ltd. (GSBL), each indirect, wholly-owned subsidiaries of Goldcorp Inc.
(Goldcorp). On May 22, 2013, Primero acquired a 69.2% interest in the Cerro
del Gallo project (Cerro del Gallo Project) by acquiring all of the shares of
Cerro Resources NL (Cerro), a mining company listed on Australian Securities
Exchange (ASX). On December 19, 2013, the Company acquired the remaining 30.8%
interest in the Cerro del Gallo Project from a subsidiary of Goldcorp. See
General Development of the Business  Three Year History  Acquisition of Cerro
del Gallo.

On
March 5, 2014, the Company acquired the shares of Brigus Gold Corp. (Brigus)
and a 100% interest in the Black Fox complex, mill and related assets (the
Black Fox Complex). See General Development of the Business  Three Year
History  Acquisition of Black Fox Complex.

Effective
January 1, 2015 Primero Mining Corp. and Primero Gold Canada Inc. (formerly
Brigus) amalgamated under the name of Primero Mining Corp.

In
this Annual Information Form, the terms Company or Primero refer to Primero
Mining Corp. and all its subsidiaries together unless the context otherwise
clearly requires. Certain terms used herein are defined in the disclosure to
which the term relates.

Primero
has four principal, wholly-owned subsidiaries  Primero Empresa Minera, S.A. de
C.V. (Primero Empresa), which is incorporated under the laws of Mexico, Silver
Trading, which is incorporated under the laws of Barbados, Primero Mining
Luxembourg s.à.r.l., which is incorporated under the laws of Luxembourg, and San
Anton Resources Corporation, which is incorporated under the laws of Canada. The
following chart shows the organization of Primero and the ownership of its
mineral properties.

5

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|(1) | Eduardo Luna, a director of the Company and a Mexican
      resident, holds one share to meet Mexican corporate legal
    requirements.                                                
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Primero Mining Luxembourg s.à.r.l. is a holding company
      used by the Company to finance its operations.                                                                           
|(3) | Primero Empresa Minera, S.A. de C.V. is the owner and
      operator of the San Dimas Mine.                                                                                            
|(4) | Silver Trading (Barbados) Limited is a trading and
      holding company.                                                                                                              
|(5) | Primero Compañía Minera, S.A. de C.V. is a service
      company.                                                                                                                      
|(6) | Primero Servicios Mineros, S.A. de C.V. is a service
      company.                                                                                                                    
|(7) | Primero Transportes Aéreos, S.A. de C.V. is an air taxi
      service company. The remaining 11.25% of shares are held by a nominee to
      meet Mexican corporate legal requirements.
|(8) | Primero Auxiliares de Administración, S.A. de C.V. is a
      service company.                                                                                                         

The head office of Primero is located at Suite 2100, 79 Wellington Street West,
TD South Tower, Toronto, Ontario, Canada, M5K 1H1, telephone (416) 814-3160,
facsimile (416) 814-3170. The Companys registered office is located at Suite
1500, 1055 West Georgia Street, Vancouver, British Columbia, Canada, V6E 4N7,
telephone (604) 689-9111, facsimile (604) 685-7084. The Companys website
address is www.primeromining.com.

**GENERAL DEVELOPMENT OF THE BUSINESS**

**Corporate Strategy**

Over
the past few years, Primero has transformed from a single-asset gold and silver
producer listed on the Toronto Stock Exchange (the TSX) and the New York Stock
Exchange (NYSE) into a multi-asset, multi-jurisdiction gold and silver producer with
two producing mines, one advanced development property and significant
exploration potential. Effective June 24, 2011, Primero was added to the Russell
Global Index; effective September 16, 2011, Primero was added to the S&P/TSX
SmallCap Index; effective December 24, 2012, Primero was added to the
S&P/TSX Global Gold Index; and effective March 21, 2014 Primero was added to
the NYSE Arca Gold Miners Index and the S&P/TSX Equal Weight Global Gold
Index.

6

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Prior
to 2012, Primero had only one producing asset and one exploration property, both
in Mexico, the San Dimas Mine and the Ventanas property. Since then, Primero has
grown in size and diversity through several acquisitions. In 2013, Primero
acquired an advanced stage development property in Mexico, the Cerro del Gallo
Project in Guanajuato, Mexico. In March 2014, Primero acquired a second
producing asset and exploration property in Canada, the Black Fox Complex.

Since
2012, the Company has also grown its foundation asset by implementing
initiatives to increase production, reduce costs and expand Mineral Reserves and
Mineral Resources at the San Dimas Mine. Through a staged approach, the Company
initially optimized existing operations to bring daily production up to the
mills capacity of 2150 tonnes per day (TPD), which was achieved in early
2013. Following this, the Company undertook a first phase of the expansion of
the San Dimas Mine and mill to 912,500 tonnes per year (TPY) or 2,500 TPD. We
are now in the process of expanding the San Dimas Mine and mill to 1,095,000 TPY
or 3,000 TPD.

Upon
acquiring the Black Fox Complex earlier this year, the Company embarked upon
similar optimization initiatives focusing on reducing costs and increasing
productivity as well as an evaluation of the assets near term potential,
increasing underground exploration and development throughout the year. These
assessments led to a determination that the Black Fox open pit mine would be
depleted earlier than anticipated and the initiation of a scoping study to
determine the full potential of Grey Fox by the end of 2015.

With
the continual optimization and expansion of its San Dimas Mine and the
acquisitions of the Black Fox Complex and the Cerro del Gallo Project; the
Company has created a diversified, growing, competitive-cost precious metals
producer with the capability to deliver on the Companys intention to become a
leading intermediate gold producer in the Americas delivering sustainable,
superior value for all stakeholders through low-risk exposure to gold.

**THREE YEAR HISTORY**

**Recent Developments**

Convertible Debenture Offering

On
February 9, 2015, the Company announced the closing of an offering of $75
million aggregate principal amount of 5.75% convertible unsecured subordinated
debentures (the Debentures), maturing on February 28, 2020. The Debentures are
convertible into Common Shares at a conversion price of approximately $6.55 per
share, representing a conversion rate of 152.6718 Common Shares per $1,000
principal amount of Debentures. Upon conversion, holders will be entitled to
receive accrued and unpaid interest up to, but excluding, the date of
conversion.

7

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Executive Changes; Head Office Consolidation

As part of the Companys evolution and focus on maintaining efficiency as it
continues to grow, the Company made the decision mid-2014 to consolidate its
functions in a Toronto-based head office, initiating the closing of its
Vancouver office where the corporate accounting and reporting team had been
located. As the then Chief Financial Officer (CFO), David Blaiklock, chose not
to relocate, the Company undertook the search for a new CFO, culminating with
Ms. Wendy Kaufman being appointed to the role in September 2014. Also, on
February 2, 2015, the Company announced the appointment of Mr. Ernest Mast, as
President and Chief Operating Officer to fill the position that had been vacant
since mid-October 2014 when the prior Chief Operating Officer resigned to pursue
another opportunity.

Amalgamation

Effective
January 1, 2015, Primero Mining Corp. and Primero Gold Canada Inc. (formerly
Brigus) amalgamated under the name of Primero Mining Corp.

**2014**

New Credit Facility

On
May 26, 2014, the Company announced a new $75 million revolving credit facility
with a syndicate of lenders led by Bank of Montreal, acting as administrative
agent (the New Credit Facility). The New Credit Facility has a three-year term
and bears interest at a floating interest rate equal to LIBOR or the prime
lending rate of Canada or the bankers acceptance rate (depending on the
Companys choice) plus an applicable margin, which was approximately 4.75% per
annum during the year ended December 31, 2014. The Credit Facility is secured by
substantially all of the Companys assets. The Company used funds from the
Credit Facility to repay the outstanding $27 million promissory note held by
Goldcorp bearing interest at a rate of 6% per annum and originally due December
31, 2015. As at December 31, 2014, the Company had drawn $40 million under the
Credit Facility. The Credit Facility was repaid from the proceeds of the 2015
Debentures.

Secondary Offering of Goldcorp-held Common Shares

On
March 5, 2014, Primero announced that it had entered into an agreement with its
shareholder Goldcorp and a syndicate of underwriters to sell, on a bought deal
basis, Goldcorps 31,151,200 Common Shares, then representing approximately
19.8% of the issued and outstanding Common Shares. The closing occurred on March
26, 2014 whereupon Goldcorp ceased to be a shareholder of the Company. The
Company did not receive any proceeds of the offering.

Acquisition of Black Fox Complex

On
March 5, 2014, Primero completed the acquisition of Brigus whereby Primero
acquired all of the issued and outstanding common shares of Brigus by way of a
plan of arrangement under the Canada Business Corporations Act
(the Brigus Acquisition). Brigus owned 100% of the Black Fox Complex, an open
pit and underground mine and nearby mill, as well as associated exploration
properties (Grey Fox and Pike River). The Black Fox Complex is located in the
Timmins mining district in the Province of Ontario. See Mining Activities 
Black Fox Complex. Brigus also owned certain other properties which were spun
into a new company Fortune Bay Corp. (Fortune Bay). The Company has no
interest in Fortune Bay.

8

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Under
the arrangement, shareholders of Brigus received 0.175 of a Primero Common
Share, $0.000001 in cash and 0.1 of a common share of Fortune Bay, for each
common share of Brigus held. In addition, Primero also assumed Brigus
outstanding TSX-listed convertible unsecured subordinated debentures due March
23, 2016 (the Brigus Debentures) and certain TSX-listed common share purchase
warrants. The legacy Brigus common share purchase warrants subsequently expired
and were delisted from the TSX. Following completion of the arrangement, Brigus
was delisted from the TSX and ceased to be a reporting issuer on March 28, 2014.
On March 28, 2014, Brigus changed its name to Primero Gold Canada Inc.

For further details regarding the Brigus Acquisition please refer to the Amended
and Restated Business Acquisition report dated February 3, 2014, filed under the
Companys profile on the System for Electronic Document Analysis and Retrieval
(SEDAR) at www.sedar.com.

**2013**

Acquisition of Cerro Del Gallo Project

On
May 22, 2013, the Company completed the acquisition of Cerro whereby Primero
acquired 100% of the issued and outstanding ordinary shares of Cerro (Cerro
Acquisition) by way of a scheme of arrangement under the Australian
Corporations Act 2001. Cerros principal asset was a 69.2% interest in the
Cerro del Gallo Project. Some non-material assets were transferred to a newly
incorporated entity, Santana Minerals Ltd, in which the Company holds 19.99%
common shares. The Cerro del Gallo Project is a gold-silver deposit with over
0.9 million ounces of gold equivalent Proven Mineral Reserves and Probable
Mineral Reserves and over 2 million ounces of gold equivalent Measured Mineral
Resources and Indicated Mineral Resources (inclusive of Mineral Reserves),
located in the province of Guanajuato, Mexico. See Exploration and Development
 Cerro del Gallo Project.

On
December 19, 2013, Primero acquired the remaining 30.8% interest in the Cerro
del Gallo Project from a subsidiary of Goldcorp for an initial payment of $8
million and future contingent payments based on meeting certain milestones and
market conditions relating to the price of gold. The milestones include
achieving commercial production on the phase I heap leach operation and the
announcement of a decision to construct the carbon-in-leach ("CIL") mill for
phase II. If all of the contingencies are satisfied, the Company will pay an
aggregate amount of $32 million.

Effective May 23, 2013, upon the acquisition of Cerro, Primero was added to the
ASX, and at its request to the ASX, the Company was subsequently delisted on
December 30, 2013. On December 19, 2013, through an internal reorganization,
Companys subsidiaries that were previously held through Cerro were restructured
to be held directly by the Company, and Cerro no longer holds any assets of the
Company.

**2012**

Advance Pricing Agreement Ruling

For
purposes of its financial statements and tax returns for the last five taxation
years, the Company has recorded revenues received from sales of silver at the
contracted price paid to the Company pursuant to the Amended and Restated Silver
Purchase Agreement (See - Mining Activities  San Dimas Mine  Amended and
Restated Silver Purchase Agreement). On October 4, 2012, the Company received an
advance pricing ruling (the APA Ruling) from the Mexican tax authorities which
confirmed the basis on which the Company records revenues it receives from sales
of silver under the Amended and Restated Silver Purchase Agreement. This
APA Ruling was applicable until December 31, 2014. In 2015, the Company intends
to continue to record its revenue from sales of silver under the Amended and
Restated Silver Purchase Agreement in a manner consistent with prior years, the
APA Ruling and applicable Mexican laws. The Company is entitled to file an
application for a new advance pricing ruling in respect of 2015 and the
subsequent four taxation years at any time prior to December 31, 2016. There can
be no assurance that Mexican tax laws applicable to the APA Ruling will not
change, or that the applicable authorities will issue a renewal of the APA
Ruling or a similar advance pricing ruling or that the authorities will continue
to assess the Companys taxes on the basis of its realized prices for silver. To
the extent the Mexican tax authorities determine that the appropriate price of
silver sales under the Amended and Restated Silver Purchase Agreement is
different than the realized price, it could have a material adverse effect on
the results of the Companys operations, financial condition and cash flows. See
Risk Factors  Financial Risks - APA Ruling.

9

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**BUSINESS OF PRIMERO**

**Overview**

Primero
is a Canadian-based precious metals producer with operations in Canada and
Mexico. The Company is focused on becoming an intermediate gold producer by
building a portfolio of high quality, low cost precious metals assets in the
Americas. Primero currently has two producing properties, the San Dimas Mine,
located in Mexicos San Dimas district on the border of Durango and Sinaloa
states, and the Black Fox Complex which is located in the Timmins mining
district in Ontario, Canada. In addition, Primero has one exploration property
in Mexico (Ventanas, located in Durango state, Mexico) and an advanced stage
development property (the Cerro del Gallo Project located in Guanajuato state,
Mexico) and exploration properties associated with the Black Fox Complex (known
as Grey Fox and Pike River).

**Product and Economic Dependence**

The
Companys principal products are gold and silver. There are worldwide gold and
silver markets into which the Company can sell its products. The Company is not
dependent on a particular purchaser with regard to the sale of gold. A
significant portion of its silver produced at the San Dimas Mine is sold to SW
Caymans under the Amended and Restated Silver Purchase Agreement. In addition,
8% of the gold produced at the Black Fox mine is sold to Sandstorm Resources
Ltd. (Sandstorm) under a gold streaming agreement. See Mining Activities 
San Dimas Mine - Amended and Restated Silver Purchase Agreement and Mining
Activities  Black Fox Complex  Sandstorm Goldstream Agreement.

**Specialized Skills and Knowledge**

Various
aspects of the business of the Company require specialized skills and knowledge
in the areas of international business, geology, engineering, exploration and
development, environmental, and corporate social responsibility. The Company has
adequate employees with extensive experience in these specialized areas, both in
Mexico and Canada to support the conduct of its business.

**Competitive Conditions**

The
mining industry is competitive in all of its aspects. Primero faces strong
competition from other mining companies in connection with the acquisition of
properties producing, or capable of producing, precious and base metals. Many of
these companies have greater financial resources, operational experience or
technical capabilities than Primero. In addition, the Company also competes with its competitors over sourcing raw materials and supplies
used in connection with its mining operations, as well as for skilled experience
workers. See Risk Factors  Operational Risks  Competition

10

---

**Changes to Contracts**

As
at December 31, 2014, Primero had 694unionized employees at the San
Dimas Mine who are members of two sections of one union: Sindicato Nacional de
Trabajadores Mineros and Metalúrgicos, Siderúrgicos y Similares de la República
Mexicana. The union contracts are renegotiated every two years, except for the
compensation aspects, which are reviewed every year. The full contracts will be
negotiated through the first half of 2015. Primeros current relations with its
employees and the union are good and the effects of the contract negotiations in
2015 should be in line with its budgets. See Business of Primero  Employees
and Risk Factors  Labour and Employment Matters.

**Employees**

As
at December 31, 2014, the Company had the following employees and contractors:

Full- Time
    
    HourlyLocation
    
    Salaried
    
    (Union)
    
    Contractors
    
    TotalMexico City Office
    
    12
    
    Nil
    
    Nil
    
    12San Dimas Mine (including Durango office and Truchas)
    
    534
    
    694
    
    92
    
    1,320Black Fox Complex
    
    356
    
    Nil
    
    73
    
    429Cerro del Gallo Project
    
    17
    
    Nil
    
    2
    
    19Vancouver Office
    
    6
    
    Nil
    
    0
    
    6Toronto Office
    
    29
    
    Nil
    
    2
    
    31Total
    
    954
    
    694
    
    169
    
    1,817


**Foreign Operations**

A
significant portion of the Companys mining and mineral exploration operations
are conducted in Mexico, and as such Primeros operations are exposed to various
levels of foreign political, economic and other risks and uncertainties. See
Risk Factors  Use of Ejido-owned Land and Risk Factors  Foreign Operations
Risks  Mexico.

**Environmental Protection**

The
activities of the Company are subject to environmental laws and regulations.
Environmental laws and regulations are evolving in a manner that will require
stricter standards and enforcement, increased fines and penalties for
non-compliance, more stringent environmental assessment of proposed projects and
an increased degree of responsibility for companies and their officers,
directors and employees.

In
particular, the Companys mining, exploration and development activities are
subject to various levels of Mexican and Canadian federal and state/provincial
laws and regulations relating to the protection of the environment, including requirements for
closure and reclamation of mining properties, with which the Company is
currently in material compliance. During the year ended December 31, 2014, the
Company spent at San Dimas $3.6 million on capital projects related to
environmental protection, and $0.24 million at the Black Fox Complex.
Additionally, the Company accounted for its asset retirement obligations,
consisting of reclamation and closure costs of its mining properties in its
financial statements. See “Mining Activities – San Dimas
Mine – Environmental Matters”, “Mining Activities
– Black Fox Complex – Environmental Matters” and
“Risk Factors – Environmental Risks and Hazards”.

11

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**Social and Environmental Policies**

Primeros
operating practices are governed by the principles set out in its Health and
Safety Policy, Environment and Social Responsibility Policy and Code of Business
Conduct and Ethics. The Corporate Responsibility Committee of the Companys
board of directors (the Board) provides oversight in occupational health and
safety, community relations, and environmental management. Internal weekly and
quarterly reporting tracks performance indicators including human resources
metrics, health and safety, environmental monitoring, compliance with permits,
materials inputs and outputs, and community relations activities. Primeros
Board and senior management team have committed to the sustainability reporting
process and report publicly on performance through the Annual Sustainability
Report and the Companys website.

Although
the Company is pleased with its year over year reduction in overall accident
frequency, it regretfully reported a fatality at its San Dimas Mine in 2014. The
Company continues to strive to achieve a zero-incident work environment with a
strong safety culture. The Company is particularly proud of a letter of
recognition presented by the Durango Secretary of labor and social welfare in
regard to the safety performance at San Dimas. The Black Fox mine celebrated
more than one year without any lost time injury.

The
Company plans to continue to promote and expand the corporate responsibility
programs and stakeholder engagement that have been implemented in 2014. In
Tayoltita the Activa Tayoltita year-long cultural and recreational activities
included educational and sporting events and construction of new recreational
parks. The ongoing implementation of written agreements with local ejidos in
Mexico and Impact Benefit Agreement (IBA) with our Wahgoshig First Nation
neighbour in Canada have generated new employment and business opportunities in
their respective communities. In 2015, the Companys commitment to its diverse
stakeholder base was reflected in the adoption of a Diversity Policy, which can
be found on the Companys website www.primeromining.com, under Board Guidelines.

As
part of the 2014 annual environmental awareness programs at San Dimas, this
years workshops in the local educational institutions surpassed the 2013
program by providing lectures on environmental awareness to a total of 1,500
students from pre-school through high school levels. Discussions included
recycling and managing domestic waste, educational videos on environmental
protection, dissemination of global environmental day and introductions to flora
and fauna of the area.

In
March 2015, for the fourth consecutive year, the Company was awarded the
Distintivo ESR (designation as a Socially Responsible Business) by the
Mexican Center for Philanthropy (CEMEFI). The award is given to companies
operating in Mexico that are committed to sustainable economic, social and
environmental operations in all areas of corporate life, including business
ethics, involvement with the community and preservation of the environment.

12

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**MINERAL RESERVES AND RESOURCES**

Primeros
total Mineral Resources and Mineral Reserves at December 31, 2014, is shown in
the tables below, and is qualified by the more detailed disclosure set out in
the following sections.

**Total
Mineral Reserves and Mineral Resources as at December 31, 2014.**

Classification
    Property
    Tonnage (million
      tonnes)
    Gold Grade (g/t)
    Silver Grade (g/t)
    Contained Gold (000
      ounces)
    Contained Silver (000
      ounces)Mineral ReservesProven & Probable
    San Dimas
    4.5
    5.7
    352
    818
    50,510Proven & Probable
    Black Fox
    3.0
    4.0
    
    393Proven & Probable
    Cerro
    32.2
    0.7
    15
    712
    15,335Total Proven & Probable
    
    
    
    
    1,923
    65,845Mineral ResourcesMeasured & Indicated
    San Dimas
    4.6
    6.6
    415
    970
    60,700Measured & Indicated
    Black Fox
    3.6
    5.3
    
    608Measured & Indicated
    Grey Fox
    4.7
    4.4
    
    668Measured & Indicated
    Cerro
    47.9
    0.6
    13
    923
    20,546Measured & Indicated
    Ventanas
    0.2
    2.5
    258
    12
    1,286Total Measured & Indicated
    
    
    
    
    3,181
    82,536Inferred Resources
    San Dimas
    6.5
    3.8
    293
    786
    61,310Inferred Resources
    Black Fox
    0.3
    8.3
    
    68Inferred Resources
    Grey Fox
    1.3
    4.2
    
    174Inferred Resources
    Ventanas
    0.2
    2.3
    412
    17
    3,039Total Inferred Resources
    
    
    
    
    1,045
    64,350


13

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**MINING ACTIVITIES**

**SAN DIMAS MINE**

Except
as indicated below, the following description of the San Dimas Mine has been
summarized from the technical report entitled “San Dimas Property, San
Dimas District, Durango and Sinaloa States, Mexico, Technical Report for Primero
Mining Corp.” dated April 18, 2014 (the “San Dimas Technical
Report”), prepared in accordance with NI 43-101 by Mr. J. Morton
Shannon, P. Geo., Mr. Rodney Webster, M.AIG, and Mr. G. Voicu, P. Geo, each a
“Qualified Person” for the purposes of NI 43-101. Mr. Voicu
is not independent of the Company. Readers should consult the San Dimas
Technical Report to obtain further particulars regarding the San Dimas Mine. The
San Dimas Technical Report is available for review under the Company’s
profile on SEDAR at www.sedar.com.

The
scientific and technical information after April 18, 2014 under the heading
Mining Activities  San Dimas Mine is based on information prepared by or
under the supervision Mr. Gabriel Voicu, P. Geo., Vice President, Geology and
Exploration for Primero.

**Amended and Restated Silver Purchase Agreement**

As
part of the San Dimas Acquisition, Primero assumed the second amended and
restated silver purchase agreement among Silver Trading, SW Caymans, DMSL and
Silver Wheaton, originally dated as of October 15, 2004, restated as of March
30, 2006, amended and restated as of August 6, 2010 (the Amended and Restated
Silver Purchase Agreement). The Amended and Restated Silver Purchase Agreement
governs purchases of silver produced from the San Dimas Mine by SW Caymans.
After meeting its contractual obligations to SW Caymans, Primero is free to sell
all other produced silver at market prices. The following is a summary of the
material terms of the Amended and Restated Silver Purchase Agreement:

| | - | The term of the Amended and Restated Silver Purchase
      Agreement is for the life of the San Dimas Mine, with an initial term
      expiring October 15, 2029, and automatic renewals for additional terms of
      ten years each, subject to SW Caymans right to terminate;                                                                                                                                                                                                                   
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | Silver Trading sells annually (a Contract Year) to SW
      Caymans an amount of refined silver (the Refined Silver);                                                                                                                                                                                                                                                                                                                                                                           
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | The purchase price for the Refined Silver is equal to the
      lesser of (a) a fixed price of $4.04 plus an increase of one percent
      annually ($4.20 commencing in August 2014 plus an annual one percent
      increase) and (b) the market price of Refined Silver at the time of sale;                                                                                                                                                                                                     
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | If, by October 15, 2031, 215 million ounces of Refined
      Silver (the Minimum Silver Amount) have not been sold and delivered to
      SW Caymans by Silver Trading under the Amended and Restated Silver
      Purchase Agreement (including amounts produced under predecessor
      agreements equal to approximately 37.25 million ounces as at April 30,
      2010), then Silver Trading will be obligated to pay to SW Caymans an
      amount (the Minimum Silver Payment), equal to:

| | o | Minimum Silver Amount, less the number of ounces of
      Refined Silver actually sold and delivered to SW Caymans by October 15,
      2031;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                              
| |   | Multiplied by                                                                                                                                

14

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| | o | $0.50 per ounce;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |   | Provided that (a) default in payment of the Minimum
      Silver Payment will not constitute an Event in Default under the
      Amended and Restated Silver Purchase Agreement, and (b) Goldcorp will
      indemnify Silver Trading for, and accordingly will be ultimately
      responsible for, any amount paid in respect of the Minimum Silver Payment
      under an indemnity agreement executed between Primero and Goldcorp, except
      to the extent that the deficiency payment arises because Silver Trading
      did not comply with its obligations to sell and deliver to SW Caymans
      silver required to be sold and delivered under the Amended and Restated
      Silver Purchase Agreement (other than with respect to the failure of
      Silver Trading to sell and deliver the Minimum Silver Amount).

For
additional information about the Amended and Restated Silver Purchase Agreement,
go to the Companys profile on SEDAR at www.sedar.com.

**Historical Production**

Historical
mill production for the San Dimas Mine from 2003 to 2014 is summarized in the
following table:

**San Dimas Mine Production**

Year
    
    
    Grade
    
    Contained OuncesTonnes
    
    Au
    
    Ag
    
    Au
    
    Ag(M t)
    
    (g/t) (1)
    
    (g/t)
    
    (K oz)
    
    (K oz)2003
    0.424
    
    5.3
    
    428
    
    71
    
    5,8252004
    0.398
    
    6.9
    
    525
    
    88
    
    6,7172005
    0.508
    
    7.4
    
    497
    
    121
    
    8,1152006
    0.689
    
    7.8
    
    438
    
    172
    
    9,7062007
    0.685
    
    6.3
    
    341
    
    138
    
    7,5012008
    0.657
    
    4.3
    
    259
    
    90
    
    5,4792009
    0.673
    
    5.4
    
    247
    
    116
    
    5,3562010(2)
    0.612
    
    4.5
    
    244
    
    88
    
    4,8032011
    0.663
    
    3.9
    
    226
    
    80
    
    4,6032012
    0.721
    
    3.9
    
    234
    
    88
    
    5,1342013
    0.767
    
    4.7
    
    258
    
    115
    
    6,3622014
    0.898
    
    4.7
    
    232
    
    134
    
    6,606


|(1) | Grams per tonne.                                          
|--- | ----------------------------------------------------------
|(2) | Primero acquired the San Dimas Mine on August 6,
    2010.

**Drilling**

All
drilling was previously termed exploration drilling and was intended to collect
data well away from the underground development that was intensively tested by
channel sampling. Commencing in 2011 drilling campaigns were designed to convert
Inferred Mineral Resources to Indicated Mineral Resources with new test targets
designated as exploration drilling. The drilling conducted in 2014 is shown in
the following table.

15

---

Number ofArea
    
    Drill Holes
    
    MetresCentral Block
    
    157
    
    30,483Sinaloa Graben
    
    69
    
    22,133Tayoltita
    
    18
    
    1,617Santa Rita
    
    19
    
    3,057West Block
    
    26
    
    4,555Total
    
    289
    
    66,724


Drill
holes are typically drilled to get the best intersection possible such that the
intersected width is as close as possible to the true width, while giving
vertical coverage. Drilling underground is achieved by drilling from one vein
development to another, or from specific drill stations. Holes are typically 200
to 250 metres long and generally between +/- 50° in dip, while
surface drilling can be up to 700 metres deep. Generally, fans are drilled on
multiple sections from one set up. Since October 2011, samples have been sent
for analysis to the SGS laboratory in Durango and bulk density measurements have
been systematically taken on core samples.

Mr.
Voicu has reviewed the appropriate reports, and is of the opinion that the data
verification programs undertaken on the data collected from the San Dimas Mine
adequately support the geological interpretations, the analytical and database
quality, and therefore support the use of the data in Mineral Resource and
Mineral Reserve estimation, and in mine planning.

**2015 Exploration Program**

The
San Dimas $5.0 million delineation and mine exploration program for 2015 targets
8 veins and consists of 71 DDHs for 22,750 metres of diamond drilling, most of
them allocated for delineation and, as well as 1,900 metres of exploration
drifting and drilling pads. This San Dimas regional exploration program for 2015
includes approximately 2,700 metres of diamond drilling targeting 3 veins.

The
current main production area is located in a prolific central corridor that runs
south-west to north-east across the property. This central corridor historically
contains vein systems that are noted for their high-grade nature, above average
thickness and significant lateral extensions, although it is expected that a
higher percentage of production will come from Alexa and Victoria in the Sinaloa
Graben Block.

The
main target of the 2015 underground mine delineation and exploration program is
to replace the depleted Mineral Reserves. The largest portion of the delineation
drilling was planned for the Jessica, Perez, Victoria and Alexa vein systems in
the Central Block and Sinaloa Graben Block.

**Mining Operations**

The
San Dimas Mine operation includes four underground gold and silver mining areas:
the West Block (San Antonio mine); the Sinaloa Graben Block; the Central Block
and the Arana Block (the Santa Rita mine). Vein thickness varies from 0.1 metres
to 8 metres with the average approximately 1.9 metres. Some veins have a strike
length of more than 1,500 metres. Vein dips vary from about 35° to
sub-vertical, the latter being decidedly more prevalent. The
general mining recovery factor is about 95%, while that for sill mining is about
75%.

16

---

Typical
mining of the vein systems is by mechanized cut-and-fill and long-hole, using
drill jumbos or jacklegs, pneumatic long-hole drills and load-haul-dump
machines, with primary access provided by adits and internal ramps from an
extensive tunnel system under the steep, mountainous terrain.

Ground
conditions throughout most of the San Dimas operations are good. The need for
installation of ground support is assessed on an on-going basis as development
and stoping progresses. In flatter-dip vein areas where the stopes tend to be
wider, rock bolts and screen may be installed and low-grade pillars left for
support.

The
basis for ore haulage at San Dimas is load-haul-dump (LHD) equipment feeding
either truck or rail haulage to the mill at Tayoltita. Development waste is
generally moved to stopes as fill.

There
is one milling facility at Tayoltita to process the production from the active
mining areas in San Dimas. The Tayoltita mill has a conventional Merrill Crowe
process flowsheet that employs crushing and grinding followed by cyanidation and
zinc precipitation for recovery of gold and silver. San Dimas operates a dry
stack tailings deposition facility, which has a minimum of 10 year life at the
current processing rate.

**Recent Operating History for the San Dimas Mine**

Since
2012 the Company has implemented a number of initiatives at San Dimas to
increase production, reduce costs and expand Mineral Reserves and Mineral
Resources. In the three years to December 2014, gold equivalent production
increased by 58%, as a result of increased ore production and higher grades.
Initiatives designed to increase production, the introduction of long-hole
mining method, improving productivity per man shift, controlling mining
dilution, accelerating mine development to increase the number of working faces,
completing strategic tunnel connections and enhancing mine planning.

During
the year ended December 31, 2014, San Dimas produced 161,170 gold equivalent
ounces, meeting the Companys guidance range of 155,000 to 165,000 gold
equivalent ounces. The Company produced 126,059 ounces of gold and 6.15 million
ounces of silver, 13% and 2% higher, respectively, than 2013. Production at San
Dimas in 2014 was higher than 2013 primarily as a result of mining and
processing more ore. Throughput in 2014 increased by approximately 17% over
2013, averaging 2,462 TPD (based on 365 day availability), as a result of
increasing long-hole production (23% of total production), combined with the
Companys mining optimization program that was initiated in 2012. The
optimization program has been successful at reducing process inefficiencies,
increasing throughput and improving mining dilution.

The
Company generated strong operating cash flow and continued to invest in the San
Dimas Mine with capital and exploration expenditures during 2014 of
approximately $61 million.

**2015 Development Plans**

The
Company is currently in the engineering and procurement stages of the 3,000 TPD
expansion with construction planned to start late in the first quarter of 2015.
Given that the first phase of the expansion of the San Dimas Mine resulted in
operating beyond its nameplate capacity of 2,500 TPD (in the fourth quarter of
2014 the mill operated in excess of 2,750 TPD), management is confident that the expansion to 3,000 TPD could be completed earlier than
the originally anticipated date of mid-2016.

17

---

The
San Dimas underground development plan for 2015 assumes a similar development
rate and number of metres of advance as was achieved in 2014, being about 23
kilometres of drifting.

In
2015, San Dimas expects to produce between 175,000 and 185,000 gold equivalent
ounces up to 15% higher than 2014, achieved mainly on higher throughput.
Production is expected to ramp-up during the fourth quarter when milling
capacity of 2,900 TPD is expected to be achieved.

Capital
expenditures during 2015 are expected to total approximately $41.4 million
excluding capitalized exploration costs. Underground development capital and
sustaining capital are expected to remain at similar levels to 2014 at
approximately $26 million. The 2015 project capital includes the expenditure for
the mill expansion to 3,000 TPD ($8.5 million), investments in the site security
system ($1.5 million), improvements to the tailings pipeline containment system
($1.4 million) and other projects ($4.0 million).

**Environmental Matters**

During
the year ended December 31, 2014, the Company spent $3.6 million on capital
projects related to environmental protection, being the continued improvements
to the tailings pipeline, construction of a new waste rock dump, the
installation of a potable water treatment system in San Dimas and the
construction of a hazardous waste storage warehouse in Durango. Ultragen,
engineering consultants specialized in mechanical and piping designs, reviewed
the tailings pipelines condition and original design and recommended a series of
modifications in order to improve the safety and durability of the pipelines.
The implementation of these measures was started in late 2014 and will continue
into 2015. In 2014 a Technical Review and Risk Assessment of the Cupias tailing
storage facility was performed by Amec Foster Wheeler. The final assessment will
be delivered in early 2015.

The
San Dimas property is subject to a full closure plan and reclamation of the site
upon cessation of operations, which would involve all facilities currently being
used (mill, hydro plant, mines, surface infrastructure, power line, roads, dry
tailings). The Company has accrued a decommissioning liability consisting of
reclamation and closure costs for the San Dimas Mine. The undiscounted cash flow
amount of the obligation was $31.1 million at December 31, 2014 and the present
value of the obligation was estimated at $9.4 million, calculated using a
discount rate of 7.75% and reflecting payments made during and at the end of the
mine life, which for the purpose of this calculation, the Company has assumed is
19 years. In respect of the decommissioning liability, San Dimas Mine expects to
incur $2.1 million in 2016 and $1.9 million in 2017 to remediate the historical
San Antonio tailings, with the remainder of the expenditures to be incurred
mainly at the end of the mine life.

Primero
is currently dealing with two past environmental liabilities: reclamation of old
San Antonio milling facilities and closure/reclamation of old San Antonio
(Contraestacas) tailings facilities. All work is expected to be completed in
2017.

**San Antonio Tailings**

Due primarily to the exhausted capacity of the tailings dam, the San Antonio
mill was closed in 2003. The tailings dam site is located in a sharp curve in a
steep walled river canyon downstream of the mill operation. The river has been
diverted through two tunnels which have been excavated in the canyon wall on the
inside of the river bend. A third tunnel for road access has been excavated and
also serves as an additional channel for the river in high flow
periods. In the 2002 due diligence by Wheaton River, the San Antonio tailings
dam was identified as a risk to failure due to a low safety factor in the dam,
risk associated with an unknown hydrostatic head in the active tailings
deposition area and possible erosion due to a flood event in the adjacent river.

18

---

Since
the shutdown of the San Antonio mill operations, some of the risk has been
removed by elimination of the hydrostatic head in the dam and diversion of a
local drainage channel. It has been proposed that the dam safety factor be
increased by extending the concrete wall on the upstream side of the dam and
protection of the downstream side by covering it with mine waste rock. These
measures would also decrease the erosion potential of the tailings. Some of this
work was initiated while options to close and reclaim the tailings dam were
studied. DMSL received approval to reclaim the San Antonio dam by stabilizing
the tailings in their current location after the submission of an environmental
assessment, which demonstrated the validity of the plan. A scale model was
developed that through a series of tests, determined the best design from the
hydraulic aspect and to determine if some of the design features needed to be
augmented. During 2007, in agreement with the design by Knight Piésold
(international geotechnical consultant), the emplacement of a rock filled berm
began with about 60% completed, however, the rains and lack of an access road
significantly affected progress. Further work was done in 2008 and subsequent
years.

Full
closure of the San Antonio old tailings facilities, which consists of completing
a downstream berm and spillway, will be completed in 2017.

See
Risk Factors  San Dimas Tailings Management Risks.

Reserves and Resources

Mr.
H. Brisson, PhD, Eng is the Qualified Person for the San Dimas Mineral Resource
estimate and Mr. Clifford Lafleur, P.Eng, is the Qualified Person for the San
Dimas Mineral Reserve estimate.

The
San Dimas Mine is an established property with a long operating history and a
record of Mineral Reserve replacement, Mineral Resource conversion and
exploration success.

As
part of the Mineral Resource and Mineral Reserve estimation Harold Brisson and
Clifford Lafleur assisted Primero site geologists and engineers to apply the
most appropriate estimation methods currently applicable at San Dimas and
completed the Mineral Resource and Mineral Reserve estimate. The vein wireframes
were modeled along the vein contacts, and were defined by structural geology,
quartz veining mineral alteration and channel and drill hole samples.

Prior
to year-end 2011, Primero and the previous owners of the San Dimas Mine had
estimated all Mineral Resources and Mineral Reserves by polygonal methods, which
were then listed into a resource database. Many of these entries had not been
critically reviewed for some time and were not easily manipulated nor tracked
for mining purposes.

In
the first quarter of 2012, the Company completed a review of the Mineral Reserve
and Mineral Resource estimation methodology used at San Dimas in order to assess
whether the use of other estimation methodologies might allow Primero to improve
mine planning and more accurately predict actual grade and, therefore,
production. As a result of this review, the Company changed its estimation
methodology from a polygonal to a block modeling approach for the main producing
veins, resulting in a reduction of the estimated Mineral Reserves and Mineral
Resources and the reclassification of a substantial portion of Inferred Mineral
Resources to exploration potential.

19

---

To
better assist mine planning, Primero utilized the block modeling approach for
the main producing and newly discovered veins (18 veins in total at year-end
2012). These veins, located in the Central Block and Sinaloa Graben, were
removed from the resource database for block modeling, which at year-end 2012
results in a total of 236 entries remaining in the database. These remaining
entries, comprised of polygonal estimates and broad extrapolations, were
initially reviewed jointly by AMC and Primero and now make up a portion of the
Inferred Mineral Resources. As of end of 2013 there were 40 veins modelled into
block models. In 2014, an additional 17 veins were modelled for a total of 57
veins.

In
2014, the block modelling approach was carried out with ordinary kriging
interpolation for the main vein systems and inverse distance squared
interpolation for the minor veins. The remaining veins outside of Mineral
Reserves were estimated using a polygonal method and included in Inferred
Resources. The Mineral Reserves and associated Mineral Resources were
constrained in 57 individual geological models based on wireframes for the
various veins. These wireframes were modelled along the vein contacts, and were
defined by gold and silver grades, structural geology, quartz veining and
mineral alteration. Grade estimation was performed on 3 metre long by 3 metre
high by 0.5 metre wide blocks. Grade capping was applied for some veins
supported by statistical analysis. Primero used a constant bulk density of 2.6
t/m3 for the estimation of the tonnes for all veins, which is 0.1
t/m3 lower than the bulk density used in the previous years (2.7
t/m3).

Due
to the poor QA/QC results in 2011 and 2012, AMC was unable to classify any of
the Mineral Resources as a Measured Mineral Resource, but improved QA/QC methods
and practices commenced in 2012 and continued into 2013 and 2014 have allowed
for Measured Mineral Resources commencing with the 2013 Mineral Resources
estimate. The Company utilize an external laboratory for all drill samples and
the channel samples that are used in Mineral Resources and Reserve estimates.
For the block-modelled veins in 2014, Measured and Indicated Mineral Resources
were defined by combining several criteria such as a minimum of four drill holes
within 15 metres and 30 metres respectively, whereas Inferred Mineral Resources
were estimated with a minimum of 2 drill holes within 45 metres.

The
QA/QC process involves assaying in an external laboratory (SGS in Durango), the
regular insertion of standard reference materials and the regular insertion of
blank materials. Diamond drill core of BTW, BQ and NQ diameter is cut in half
and one half is submitted to SGS, which is an ISO certified independent
laboratory. Sample intervals have an average length of 0.7 metres and, in
general, they are no longer than 1.5 metres, although occasionally slightly
longer intervals were used. In the laboratory, the samples are dried, crushed
and pulverized to 85% of the sample passing a 75 μm sieve. Gold is analyzed by
30g fire assay with atomic absorption finish. Above 10g/t Au fire assay the gold
is analyzed with gravimetric finished. Silver is analyzed by atomic absorption.
Above 300g/t fire assay Ag is analyzed with gravimetric finish. For exploration
drilling an extra assay of ICP-OES 34 elements aqua regia digestion is done.

To
convert Mineral Resources to Mineral Reserves, mining cut-off grades are
employed, mining dilution is added and mining recovery factors applied on an
individual vein basis. Only Measured and Indicated Mineral Resources have been
used for Mineral Reserves estimation.

Primero
has assumed that the current drill-jumbo and jackleg cut and fill mining methods
continue to be practised at San Dimas, with respective minimum mining widths of
3 metres and 1 metre. San Dimas has introduced the use of long-hole mining
method rather than cut and fill on an increasing scale, with a minimum mining
width of 1.5 metres. Unplanned mining dilution on each side of the planned
mining width is assumed to be 0.2 metres for cut and fill and 0.3 metres for
long-hole mining. For each mining method, 0.2 metres of fill floor dilution has
been assumed. Overall average dilution, planned and unplanned, is estimated at 41%. For the
veins upon which the year-end 2014 Mineral Reserve estimate is based, the
respective mined tonnes from jumbo, jackleg and long-hole mining are estimated
at 19%, 43% and 36%, respectively. Other than for sill mining, average recovery
throughout each mining block for both cut and fill and long-hole mining has been
assumed to be 95%. For sill pillars, which in the modelling process have been
assumed to be the 3 metres thickness at the top of the mining block and
immediately below the sill drive, a factor of 75% has been used.

20

---

A
mine cut-off grade of 2.94 g/t gold equivalent (AuEq) was calculated based on
total operating cost of $110.06, silver recovery factor of 94%, gold recovery
factor of 97%, silver price of $18 per troy ounce, gold price of $1,200 per troy
ounce and exchange rate of 13 Pesos per $1.00. This cut-off grade requires that
the material in question carry all mine operating and selling costs.

The
average Mineral Reserve for gold grades at December 31, 2014 was approximately
21% higher than reported mined grades for 2014.

Reserve
tonnes were 2% lower than Measured and Indicated Resource tonnes, and Reserve
grades of gold and silver were 14% lower than Resource grades, largely due to
mining dilution. Reserve ounces of gold and silver were 16% less than Resource
ounces; this is mainly a reflection of stope design and areas that are not
economically viable under the Reserve cost and price parameters because of grade
and/or location.

The
2014 year-end Mineral Reserves estimate for San Dimas Mine show that Proven and
Probable Gold Mineral Reserves decreased 6% over year-end 2013, to 818,000
ounces, at a 4% higher grade. Measured and Indicated Gold Mineral Resources
decreased 3% over year-end 2013 to 970,000 ounces (inclusive of Mineral
Reserves).

The
results of the estimation work are shown in the table below, which shows a
summary of the Mineral Resources and Mineral Reserves at December 31, 2014. As
noted above, the Inferred Mineral Resource is a mix of block modeled and
polygonal estimates. The relevant cut off and price data are shown in the
footnotes.

21

---

San Dimas Mine Mineral Reserves and Mineral Resources as at
December 31, 2014.

Gold
    Silver
    Contained
    ContainedTonnage
    Grade
    Grade
    Gold
    SilverClassification
    (K
      tonnes)
    (g/t)
    (g/t)
    (koz)
    (koz)Mineral ReservesProven
    1,230
    7.0
    411
    279
    16,282Probable
    3,230
    5.2
    329
    539
    34,228Proven & Probable
    4,470
    5.7
    352
    818
    50,510Mineral ResourcesMeasured & 
      Indicated
    4,554
    6.6
    415
    970
    60,700Inferred
    6,514
    3.8
    293
    786
    61,310


**Notes to Mineral Reserve Statement:**

|1. | Assumed gold price of US$1,200 per troy ounce and silver
      price of US$18 per troy ounce.                                                                                                                                                                  
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | San Dimas cut-off grade of 2.94 grams per tonne (g/t)
      gold equivalent (AuEq) based on total operating cost of US$110.06/t.
      Metal supply contract obligations have been referenced in determining
      overall vein reserve estimate viability.
|3. | Assumed processing recovery factors at San Dimas for gold
      of 97% and silver of 94%.                                                                                                                                                                      
|4. | Exchange rate assumed is 13 pesos/US$1.00.                                                                                                                                                                                                                     
|5. | The Mineral Reserve estimates were prepared under the
      supervision of Mr. Clifford Lafleur, P.Eng., Director of Technical
      Services, Primero and a QP for the purposes of NI 43-101.                                                                 
|6. | Figures may not add due to
rounding.                                                                                                                                                                                                                           

**Notes to Mineral Resource Statement:**

|1. | Mineral Resources are total and include those resources
      converted to Mineral Reserves.                                                                                                        
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | Assumed gold price of US$1,200 per troy ounce and silver
      price of US$18 per troy ounce.                                                                                                       
|3. | San Dimas cut-off grade of 2.0 g/t AuEq was
    applied.                                                                                                                                            
|4. | At San Dimas a constant bulk density of 2.6
      tonnes/m3has been used.                                                                                                                           
|5. | The Mineral Resource estimates for San Dimas were
      prepared under the supervision of Mr. Harold Brisson PhD, Eng., Resource
      Manager of Primero and a QP for the purposes of NI 43
  -101.

Other
than as described herein, Primero is not aware of any known environmental,
permitting, legal, title, taxation, socio-economic, marketing, political or
other relevant factors that may materially affect the Mineral Resources.

**BLACK FOX COMPLEX**

The
following description of the Black Fox Complex has been summarized from the
technical report entitled Technical Report on the Mineral Resource and Mineral
Reserve Estimates for the Black Fox Complex (compliant with National Instrument
43-101 and Form 43-101F1) dated June 30, 2014 (the Black Fox Complex Technical
Report). Mr. Harold Brisson, PhD, Eng., Resources Manager for Primero,
supervised, and took overall responsibility as QP for the entire Black Fox
Complex Technical Report. Readers should consult the Black Fox Complex Technical
Report to obtain further particulars regarding the Black Fox Complex. The Black
Fox Complex Technical Report is available for review under the Companys profile
on SEDAR at www.sedar.com.

The
scientific and technical information after June 30, 2014 under the heading
Mining Activities  Black Fox Complex is based on information prepared by or
under the supervision Mr. Harold Brisson, Eng., Resource Manager for Primero and
Clifford Lafleur, P.Eng., Director Technical Services for Primero.

22

---

On February 12, 2015, the Company announced a non-cash
impairment amounting to $174.0 million, comprised of a $99.0 million of goodwill
as a result of share price appreciation from the announcement date of the Brigus
Acquisition to the close date, and a further $75 million impairment of Black Fox
due to the early depletion of the open pit.

**Sandstorm Goldstream Agreement**

On
November 9, 2010, Brigus entered into the Goldstream Agreement with Sandstorm
pursuant to which Sandstorm agreed to purchase 12% of the gold production from
the Black Fox mine beginning in January 2011 and 10% of future production from
the Black Fox extension covering a portion of the adjoining Pike River property.
Sandstorm made an upfront payment of $56.3 million of which Brigus used a
portion to effectively settle the balance of its forward gold sales contracts
eliminating the obligation to deliver 99,409 ounces from October 2011 to March
2013. Sandstorm will also pay Brigus ongoing per ounce payments of $500 subject
to an inflationary adjustment beginning in 2013, not to exceed 2% per annum.
Brigus had the option, for a 24 month period, to reduce the Goldstream Agreement
to a minimum of 6% of production from the Black Fox mine and 4.5% of production
from the Black Fox Extension for a payment of US$36.6 million.

On
November 5, 2012, Brigus elected to exercise the option and repurchased 4% of
the Goldstream for $24.4 million. This reduced Sandstorms portion of future
production at Black Fox to 8% and the Black Fox extension to 6.3%.

**Historical Production**

The
former Glimmer underground gold mine operated on the Black Fox property over the
period 1997-2001, and produced approximately 211,000 ounce of gold by contract
milling. Underground mining extended to depths of approximately 200 to 215
metres below the surface before operations were suspended due to low gold prices
in May of 2001.

**Black Fox Mill Production**

Year
    Tonnes (M t)
    Au (g/t)
      (1)
    Au (K oz)2010
    0.721
    3.16
    732011
    0.725
    2.54
    592012
    0.735
    3.43
    812013
    0.752
    4.34
    1052014(1)
    0.803
    3.00
    77


(1)Primero acquired the Black Fox Complex on March
5, 2014.

**2015 Exploration Program**

The
2015 Primero delineation and exploration drilling program at the Black Fox mine
is to expand the known resources along strike and down dip at depth. Drilling
will be conducted both from surface and from an underground exploration drift
located 520 metres below surface. Approximately 37,800 metres of delineation and
exploration drilling is planned. A total budget of approximately $4.5 million is
contemplated for the 2015 Black Fox mine exploration activities.

At
the Grey Fox property, approximately 50,000 metres of surface exploration
drilling is planned in 2015 to further expand and infill drill the resource on
the 147, Contact and Grey Fox South gold deposits. In addition, as part of a regional exploration
program, the Company will conduct a 4,200 metres drill program to test
geophysical targets to discover new gold zones and test historical surface gold
showings on the Pike River property that is located between the Black Fox mine
and the Grey Fox gold deposits. An additional 12,500 metres will be drilled in
the Stock mine area. A total budget of approximately $7.3 million, financed via
a flow-through financing, is contemplated for the 2015 regional exploration
activities.

23

---

**Mining Operations**

The
Black Fox mine is an open pit and underground mining operation with significant
exploration upside. Open pit mining of ore and waste at Black Fox is conducted
24 hours a day, seven days a week, subject to weather conditions and scheduled
maintenance.

Underground
ore is mined using long-hole, mechanized cut-and-fill, and narrow vein mining
methods. The ore is accessed from a series of declines off of the main ramp and
hauled to surface using articulated dump trucks. The maximum depth of mining is
currently approximately 560 metres below surface in the Eastern zone, 350 metres
in the Western zone and 460 metres in the Central zone, however the ore body is
open along strike and at depth and other underground mines in the Timmins
vicinity typically extend more than 1,000 metres below surface.

The
mining of ore, waste and overburden from the open pit is performed by three
excavators, six CAT 777 90-tonne haul trucks and three drills in addition to
ancillary equipment. The pit is currently in the final phase of mining, Phase 3.

Ore
from the open pit and underground mine is crushed at the mine site and is
transported to the Black Fox mill (Black Fox Mill) by a fleet of highway
haulage trucks. The mill uses grinding circuit and conventional leaching to
recover 90% to 95% of gold feed.

The
Black Fox operations are fully permitted. The Black Fox mine and the Black Fox
Mill were previously held under separate ownership and, therefore, the
facilities were permitted separately. The permits for these facilities were
acquired with the properties and have been amended as the operations have
evolved, maintaining the separate permitting for the sites.

**Recent Operating History for the Black Fox Mine**

During
the year ended December 31, 2014, Black Fox produced 73,715 ounces of gold a 32%
decrease from 2013. For the period of March 5 to December 31, 2014, Black Fox
produced 63,884 ounces of gold, which fell just short of the Companys guidance
range of 65,000 to 75,000 gold ounces. This production shortfall was caused by a
lack of underground inventory.

In
2014, 9,406,149 tonnes of material were mined from the open pit of which 891,524
tonnes were ore tonnes, 7,355,221 tonnes were waste rock, 1,159,404 tonnes were
related to production stripping. This resulted in an operating strip ratio of
8.1:1. Open-pit production increased 35% over 2013 due to a lower strip ratio.

A
total of 5,938 metres of underground development was completed in 2014.
Underground ore production averaged 412 TPD (based on 365 day operation), a 49%
decrease over 2013 as a result of the Company focusing on building underground
stope inventory for 2015.

24

---

For
the period March 5 to December 31, 2014, $4.5 million was spent on sustaining
capital, $7.9 million was spent on the open pit for capital stripping and
overburden removal, $7.8 million for underground sustaining capital and $6.5
million on other equipment and projects.

**2015 Development Plans**

Primero
plans to mine the open pit to completion in 2015 while it develops known
underground Mineral Reserves identified during the 2014 drilling campaign. The
open pit is planned to be completed in the third quarter of 2015 at which time
the underground mining is planned to reach and be sustained at 1,000 TPD. Ore
will be reclaimed from a one million tonnes stockpile averaging 1.1 g/t after
completion of open pit mining to supplement underground production and maintain
mill throughput at 2,300 TPD.

It
is planned that 90% of underground mine production will come from long-hole
stopes, while 10% will come from mechanized cut and fill or other conventional
narrow vein mining methods.

Capital
expenditures during 2015 for the Black Fox mine and mill, excluding capitalized
exploration costs are expected to total approximately $21 million. The total
capital requirements for underground development, mining equipment and
sustaining projects is expected to be approximately $18 million. No sustaining
capital spending is planned for the open pit as the pit will close near the end
of third quarter. Other sustaining capital requirements for milling, tailings,
water management and general infrastructures are estimated at $3.4 million.

**Environmental Matters**

During
the year ended December 31, 2014, the Company spent $0.24 million on capital
projects related to environmental protection, being the phase 7 tailings dam and
water management pond expansions at the mill site.

As
at December 31, 2014, the undiscounted obligations, adjusted for inflation,
associated with the site closure costs related to the Black Fox mine and mill
and Grey Fox exploration project were $26 million and the present value of these
obligations was estimated at $23 million, using a discount rate of 2%. Primero
holds $17.6 million of cash in favour of the Ontario Ministry of Northern
Development to secure these site closure cost obligations.

Primeros
mining, exploration, development and production activities in Ontario are
subject to extensive regulation at the federal, provincial and local levels.
These regulations relate to, among other things, prospecting, development,
mining, production, exports, taxes, labour standards, occupational health, waste
disposal, protection of the environment, mine safety, hazardous substances and
other matters. These laws are continually changing and, in general, are becoming
more restrictive.

On
May 2nd and May 5th, 2014 there were non-compliance events
regarding mill effluent discharge quality. Samples taken at the final effluent
discharge at the mill exceeded the Environmental Compliance Approval daily
concentration limit for nickel of 1.0mg/l for each of those days which also
resulted in the monthly average limit of 0.5mg/l being exceeded. In February
2015, The Ontario Ministry of the Environment and Climate Change delivered a
notice of Intention to issue an environmental penalty in the amount of
CDN$4,140.

Primero
expects to make in the future, significant expenditures to comply with such laws
and regulations. Changes to current local, provincial or federal laws and
regulations could require additional capital expenditures and result in an
increase in Primeros operating and/or reclamation and closure costs. Although Primero is unable to predict what
additional legislation, if any, might be proposed or enacted, additional
regulatory requirements could impact the economics of Black Fox Complex.

25

---

At
the Black Fox mine and mill, the primary enabling environmental permits
necessary for the continuing development and operation of the mine and mill
include:

| | 1. | Permit to Take Water  for the withdrawal of surface or
      ground water quantities in excess of 50 m3/day  including mine
      underground or open pit dewatering.          
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                  
| | 2. | Environmental Compliance Approval/Certificate of
      Approval/Air  for treatment and discharge of emissions to air, including
      management of dust and noise in emissions.
| |    |                                                                                                                                                                                  
| | 3. | Environmental Compliance Approval/Certificate of
      Approval/Industrial Sewage Works  for collection, treatment, and
      discharge of wastewaters.                         
| |    |                                                                                                                                                                                  
| | 4. | Filed Closure Plan including posting of financial
      assurance for closure.                                                                                                   

The
existing tailings impoundment facility has been developed in phases since
initial start-up in 1989. The construction of Phase 7 was completed in December
2014. The Phase 8A raise is scheduled for the summer 2015 and will include the
raising of the west, south and east perimeter dams from elevation 276 metres to
277 metres, by constructing a tailings berm along the existing dam alignment The
Phase 8A will extend the life on the impoundment by an additional year. The
design of additional phases 8B thru 8E and an additional storage area
immediately to the west of the existing facility will start in 2015 for
construction in 2016 and continue over several years.

The
water management pond (WMP), located to the north of the tailings impoundment
area was built in 2010. The raise of the WMP was started in 2014 and will be
completed in mid-February 2015. This pond will allow for a volume of water
available for processing to last through the winter.

To
the best knowledge of Primero, neither the Black Fox mine nor the mill has any
known legacy environmental liabilities.

**First Nations Considerations**

Primero
is committed to maintaining a positive, cooperative and a mutually beneficial
relationship with the local First Nations community and all of its neighbours in
the community around the Black Fox Complex.

On
June 3, 2011, the Company signed an IBA with the Wahgoshig First Nation of
Ontario. There is a Wahgoshig Community Liaison on full time staff at site and a
joint Implementation Committee exists as a forum for communication and
cooperation to address provisions relating to employment, training, workplace
conditions and business and contracting opportunities among others. The IBA
provides a framework for how the parties work together during the construction,
development and operations of the Black Fox Complex.

**Reserves and Resources**

The December 2014 Mineral Resource Estimate for Black Fox was performed by
Primero under the supervision of Mr. Harold Brisson PhD, Eng., Resource Manager
of Primero. The Mineral Resource estimate includes open-pit resources,
underground resources, and stockpile resources.

26

---

The
Black Fox Mineral Reserve estimate was prepared under the supervision of Mr.
Clifford Lafleur, P.Eng., Director of Technical Services, Primero and Mr. Karl
Dessureault, P.Eng., Chief Mine Engineer Black Fox, Primero, both a QP for the
purposes of NI 43-101.

Open-pit
and underground Mineral Resources are classified as Indicated or Inferred
Resources, based on the density of the processed data, the search ellipse
criteria, and the specific interpolation parameters. The stockpiles are
classified as Measured Resources. The open-pit Mineral Resources are constrained
to the final Phase 3 pit design for the main zone and a satellite pit at the
Tamarac Zone which was constrained to a pit optimization shell. A minimum mining
width of 3 metres (true width) and cut-off grades of 0.9 g/t (open pit
potential) and 3.4 g/t Au (underground potential) were used in the Mineral
Resource estimation.

The
Black Fox Mineral Reserves and associated Mineral Resources were estimated using
a block modelling approach with inverse distance squared interpolation. Grade
estimation was performed on 3 metre long by 3 metre high by 3 metre wide blocks.
Grade capping was applied supported by statistical analysis. Indicated Mineral
Resources were defined by combining several criteria such as a minimum of 2
drill holes with the closest being within 20 metres. Primero estimates that the
Black Fox mine has a Measured Resource of 904,000 tonnes grading 1.1 g/t Au
(31,000 ounces of gold), an Indicated Resource of 2,674,000 tonnes grading 6.7
g/t Au (577,000 ounces of gold), and an Inferred Resource of 255,000 tonnes
grading 8.3 g/t Au (68,000 ounces of gold). The Mineral Resource is presented
inclusive of Mineral Reserves.

Mineral
Resources are converted to Mineral Reserves by applying mining cut-off grades,
mining dilution, and mining recovery factors. Open-pit and underground Indicated
Resources have been converted to Probable Reserves and stockpile Measured
Resources have been converted to Proven Reserves.

Mine
cut-off grades of 0.9 and 3.7 g/t Au were used for open pit and underground
Mineral Reserve estimates respectively.

Open
pit Mineral Reserves are based on the current life-of-mine pit design and
because the pit is expected to be depleted in 2015, the Mineral Reserves match
with the Black Fox Complex 2015 budget. The open pit Mineral Reserves assume 20%
dilution of resources and any block that contains more than 30% voids, from
historic underground workings, has been omitted from the Mineral Reserves
estimate.

For
underground Mineral Resources below the 235 Level, stope outlines were created
on north-south sections at 3 metres intervals. In the creation of the outlines,
Primeros engineers took into account the mining method, existing level
development and access, minimum pillar requirements between adjacent lenses,
minimum mining widths, minimum footwall dip, and continuity of the ore along
strike. The outlines for each lens and each level were then linked into separate
wireframes and evaluated against the block model.

At
December 31, 2014, Black Fox had approximately 0.393 million ounces of gold
contained within 3,022 million tonnes at an average gold grade of 4.0 g/t in
Proven and Probable Reserves.

27

---

Estimated Gold Mineral Proven and Probable Reserves, as of
December 31, 2014

Black Fox 
      Mine
    Proven Reserves
    Probable Reserves
    Proven & Probable ReservesKTonnes
    Gold 
      Grade 
      (g/t)
    Gold 
      (koz)
    K Tonnes
    Gold 
      Grade 
      (g/t)
    Gold 
      (koz)
    KTonnes
    Gold 
      Grade 
      (g/t)
    Gold 
      (koz)Open Pit Underground Stockpile
    
    
    
    879
    2.2
    61
    879
    2.2
    611,239
    7.5
    300
    1,239
    7.5
    300904
    1.1
    31
    
    
    
    904
    1.1
    31Total
    904
    1.1
    31
    2,118
    5.3
    361
    3,022
    4.0
    393


**Estimated Gold Measured and Indicated Mine ral
Resources, Including Reserves, as of December 31, 2014**

Black Fox 
      Mine
    Measured 
      Resource
    Indicated Resource
    Measured & Indicated 
      Resources,
      Including 
      ReservesKTonnes
    Gold 
      Grade 
      (g/t)
    Gold 
      (koz)
    KTonnes
    Gold 
      Grade 
      (g/t)
    Gold 
      (koz)
    KTonnes
    Gold 
      Grade 
      (g/t)
    Gold 
      (koz)Open Pit Underground Stockpile
    
    
    
    864
    2.2
    61
    864
    2.2
    611,810
    8.9
    516
    1,810
    8.9
    516904
    1.1
    31
    
    
    
    904
    1.1
    31Total
    904
    1.1
    31
    2,674
    6.7
    577
    3,578
    5.3
    608


**Estimated Gold Inferred Mineral Resource as of December
31, 2014**

Black Fox Mine
    Inferred ResourcesKTonnes
    Gold 
      Grade 
      (g/t)
    Gold 
      (koz)Open Pit UG
    182 72
    8.7 7.4
    51 17Total
    255
    8.3
    68


|1. | The average gold grade for Proven and Probable Reserves
      is adjusted for dilution while Measured and Indicated Resources are not.
      Contained metal in estimated reserves remains subject to metallurgical
      recovery losses.                                                                                                                                                                                                                                                                                                            
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | Black Fox reserves and resources are based on US$1,200/oz
      Au for 92% of production and US$500/oz Au for gold sold through the
      Sandstorm gold stream agreement. The Black Fox open pit reserves and
      resources are reported at 0.90 gpt cutoff, the underground reserves are
      reported at 3.7 gpt cutoff, and the underground resources are reported at
      3.4 gpt cutoff.                                                                                                                                                    
|3. | An exchange rate of US$1.00=C $1.10 was used in the gold
      cut-off grade calculations.                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|4. | The Mineral Resource estimates for San Dimas and Black
      Fox were prepared under the supervision of Mr. Harold Brisson PhD, Eng.,
      Resource Manager of Primero and a QP for the purposes of National
      Instrument 43-101 (NI 43-101). The Black Fox Mineral Reserve estimate
      was prepared under the supervision of Mr. Clifford Lafleur, P.Eng.,
      Director of Technical Services, Primero and Mr. Karl Dessureault, P.Eng.,
      Chief Mine Engineer Black Fox, Primero, and both a QP for the purposes of
      NI 43-101.

28

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**EXPLORATION AND DEVELOPMENT**

**CERRO DEL GALLO PROJECT**

Except
as indicated below, the following description of the Cerro del Gallo Project is
taken from the summary contained in the technical report entitled Technical
Report, First Stage Heap Leach Feasibility Study, Cerro del Gallo Gold Silver
Project, Guanajuato, Mexico dated May 11, 2012 (the CDG Technical Report)
prepared in accordance with NI 43-101 by Timothy Carew, P.Geo. of Reserva
International LLC, Thomas Dyer, P.E. of Mine Development Associates, Peter
Hayward, F.AusIMM of Sedgman Ltd., and John Skeet, F.AusIMM, Chief Operating
Officer of Cerro, which summary has been updated and conformed to be consistent
with other disclosure in this AIF.

Reference
should be made to the full text of the CDG Technical Report, which is available
for review under the Companys profile on SEDAR at www.sedar.com.

The
scientific and technical information under the heading Exploration and
Development  Cerro Del Gallo Project after May 11, 2012, is based on
information prepared by or under the supervision of Mr. Gabriel Voicu, P. Geo.,
Vice President, Geology and Exploration for Primero and Louis Toner, Vice
President, Project Development and Construction.

Cerro
del Gallo is an attractive long-life project that significantly increases
Primeros Mineral Reserves and Measured and Indicated Resources and could
diversify the Companys future production profile with an anticipated additional
95,000 gold equivalent (silver and copper as by-products) ounces per year.

The May 2012 CDG Definitive Feasibility Study ("DFS") on the project
contemplated only a phase one ("Phase I") heap leach of 4.5 million tonnes per
year of weathered and partially oxidized ore for 7.2 years of production. The
May 2012 DFS superseded an earlier preliminary assessment in May 2011, that
identified a potential phase two addition of CIL processing of fresh rock
commencing in the fifth year.

The
development of the Phase I consists of cyanide heap leaching of approximately
35Mt of weathered and partially oxidized ore from open pit mining. The
processing design for a 4.5 Mt/a facility will consist of the following:

- Crushing, screening and conveying, using conventional crushing and HPGR
  technology to produce a 8 millimetre fine product;
- Agglomeration and leaching of the stacked ore using a cyanide solution;
- Use of Sulphidization, acidification, recycling and thickening technology
  (SART)for the recovery of the copper and silver from pregnant solution, and
  recycling of cyanide to leaching pads;
- Elution of the loaded carbon with electrowinning and gold recovery in a
  gold room facility.

*Recent
Development Activities*

In
2014 Primero continued its project development plans in order to advance the
project to a decision and to optimize the mining and milling processes. The main
activities in 2014 were:

29

---

- Land purchased increased from approximately 60% to 89% of the total site
  requirements;
- Continued work on the preparation of the environmental impact assessment
  (MIA) and change in land use permits (ETJ) by PH Consultores of Durango,
  Mexico;
- Sedgman S.A. of Santiago Chile completed the basic engineering and updated
  the capital and operating cost estimates of the mining facilities with support
  from Golder Associates Ltd.;
- Golder Associates was hired in February 2014 to provide geotechnical
  services and the basic design of the leach pads, waste dump, solutions ponds
  and the emergency ponds. This work was done to support the permitting
  activities by PH Consultores and to support the basic design of the plant and
  infrastructure being done by Sedgman S.A.;
- Using cores drilled in 2013, Primero conducted an extensive metallurgical
  testing program at the SGS Laboratory in Lakefield, Ontario. Approximately 44
  intermittent bottle roll tests (IBR) were completed on various ore samples
  from different parts of the deposits reflecting the proposed mining sequence,
  different ore types (weathered, high/medium oxidised and low oxidised) and
  lithologies. Furthermore, humidity cell tests were conducted on leached ores
  and on waste rock to determine the long term acid generating kinetics. These
  tests will be concluded at the beginning of Q2 2015;
- Two high level stakeholder mapping exercises were completed.

2015 Development Plans

Activities
planned for 2015 on the Cerro del Gallo Phase I project will be reduced as the
Company decided to defer construction decision due to current economic
conditions. This decision resulted in the Company recording a non-cash
impairment charge of $35.0 million in 2014. The activities in 2015 will focus on
closing the land deals already initiated, testing of 2 water wells, continuing
permitting efforts, the completion of the metallurgical testing work initiated
in 2014 and a community outreach including a much more detailed Stakeholder 360
mapping exercise. The Companys 2015 budget for Cerro del Gallo is $3.1 million,
including approximately $0.45 million to continue geological surface mapping and
sampling.

Recent Exploration Activities

Primero
resumed the exploration program in 2013. Approximately $2 million was spent on
geophysical compilation and diamond drilling. In 2013, 15,179 meters were
drilled, including infill, condemnation and regional exploration drilling, as
well as geotechnical drilling for metallurgical tests and AMD assessment. The
infill drilling program was designed to convert inferred resources into
indicated resources in the central part of the CDG mineralized zone. The
condemnation drilling program was designed to sterilize areas for future
infrastructure, including the waste dumps and leach pads.

The
2014 exploration program consisted of mapping, soil and stream sediment
geochemistry and 1,600 metres of diamond drilling that targeted
Carmen-Providencia vein.

30

---

**2015 Exploration Program**

The
exploration program including Cerro del Gallo deposit and regional exploration
targets will continue in 2015. Approximately $0.45 million is budgeted for
surface mapping, sampling and soil geochemistry.

For more information about the Cerro del Gallo
Project, refer to the Cerro del Gallo section in Schedule B of this AIF.

**Reserves and Resources**

**  Timothy
Carew, P.Geo. of Reserva International LLC, Thomas Dyer, P.E. of Mine
Development Associates, Peter Hayward, F.AusIMM of Sedgman Ltd., and John Skeet,
F.AusIMM, Chief Operating Officer of Cerro, are the Qualified Persons who
prepared the Cerro Del Gallo Mineral Reserve and Mineral Resource estimates and
Gabriel Voicu, P. Geo., Vice President, Geology and Exploration of Primero,
reviewed and approved the CDG Technical Report on behalf of Primero as a
Qualified Person.

** Measured
Mineral Resources and Indicated Mineral Resources, excluding Proven Mineral
Reserves and Probable Mineral Reserves, are shown below in Table 1-1 at December
31, 2014.

**Table 1-1 First Stage Heap Leach Mineral Resources
(Excluding Proven Mineral Reserves and Probable Mineral Reserves), December 31,
2014**

TotalgK
    
    Au/t
    
    K Ozs
    
    g Ag/t
    
    K Ozs
    
    Cu
    
    K lbsCategory
    
    Tonnes
    
    
    
    Au
    
    
    
    Ag
    
    %
    
    CuMeasured Mineral Resources
    
    39,863
    
    0.61
    
    781
    
    13.8
    
    17,714
    
    0.10
    
    88,790Indicated Mineral Resources
    
    8,015
    
    0.55
    
    142
    
    11.0
    
    2,832
    
    0.08
    
    14,608Measured Mineral Resources &
      Indicated Mineral Resources
    
    47,878
    
    0.60
    
    923
    
    13.3
    
    20,546
    
    0.10
    
  103,398


|1. | Based on gold price of US$1,020 per ounce and silver
      price of US$16.40 per ounce.                                                            
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                    
|2. | These resources are reported using internal cut-off
      grades of 0.24 and 0.29 gAuEq/t for weathered and partially oxidized,
      respectively.

**The Proven Mineral Reserve and Probable Mineral Reserve estimates for Cerro
del Gallo Stage 1 Heap Leach are summarized below in Table 1-2.

31

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**Table 1-2 First Stage Heap Leach Proven Mineral Reserve
and Probable Mineral Reserve Estimate, December 31, 2014**

TotalK
    
    g Au/t
    
    K Ozs
    
    g Ag/t
    
    K Ozs
    
    Cu
    
    K lbsCategory
    
    Tonnes
    
    
    
    Au
    
    
    
    Ag
    
    %
    
    CuProven Mineral Reserve
    
    28,223
    
    0.71
    
    643
    
    15.05
    
    13,655
    
    0.08
    
    50,247Provable Mineral Reserve
    
    3,956
    
    0.54
    
    69
    
    13.20
    
    1,679
    
    0.07
    
    6,197Proven Mineral Reserve &
      Probable Mineral Reserve
    
    32,219
    
    0.69
    
    712
    
    14.82
    
    15,335
    
    0.08
    
  56,443


|1. | Based on gold price of US$1,020 per ounce and silver
      price of US$16.40 per ounce.                                                                                                                                                                                                            
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                    
|2. | Proven and probable reserves are reported using gold
      equivalent cut-off grades of 0.24 and 0.29 for weathered and partially
      oxidized material respectively. Cut-off grades were applied to gold
      equivalent grades which include both gold:silver price and recovery
      ratios.

**GREY FOX PROJECT**

**     The
Independent and Qualified Person for the Mineral Resource Estimate i s Mr.
Rodney Webster MAusIMM, MAIG of AMC Mining Consultants (Canada) Ltd. and a QP
for the purposes of NI 43-101. The result of the study is a single Mineral
Resource Estimate for all mineralized zones at Grey Fox, with Indicated and
Inferred Resources, for both a Whittle-optimized in-pit volume and a
complementary underground volume.

**     For
more information about the Grey Fox project, refer to the Black Fox Complex
section in Schedule B of this AIF.

**The
Companys Grey Fox Mineral Reserves and associated Mineral Resources were
estimated using a block modelling approach with ordinary kriging interpolation.
Grade estimation was performed on 5 metre long by 5 metre high by 5 metre wide
blocks and a bulk density of 2.87 tonnes/m3. Grade capping was
applied supported by statistical analysis. Indicated Mineral Resources were
defined by combining several criteria such as continuation drill-hole locations
and continuation of geology and mineralization and location of drilling. The
database used for the estimate contained diamond drill core composites and
assays. The estimate is based on 999 diamond drill holes (351,789 m) drilled
from 20013 to 2014. A minimum true thickness of 5.0 metres was applied, using
the grade of the adjacent material when assayed or a value of zero when not
assayed.

**Mineral Resource Estimate results for the Grey Fox
project, as of December 31, 2014**

Resource 
      Class
    Cut off 
      Grade
    Potential Material
    Tonnes
    Au 
      (g/t)
    Contained 
      Au (oz)Indicated
    >3.00
    Underground
    1,715,000
    5.86
    323, 000>0.90
    Open Pit
    2,966,000
    3.62
    344,900Total
    4, 681,000
    4.40
    668,000Inferred
    >3.00
    Underground
    1, 009,000
    4.57
    148,000>0.90
    Open Pit
    280, 000
    2.88
    26,000Total
    1,289,000
    4.20
  174,000


32

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| | 1.  | The Independent and Qualified Person for the Mineral
      Resource Estimate, as defined by NI 43-101, is Rodney Webster BAppSc.
      MAusIMM, MAIG (Principal Geologist AMC Consultants Canada (AMC)), and the
      effective date of the estimate is December 31, 2014.                                                                                                                                               
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2.  | CIM definitions and guidelines were followed for Mineral
      Resources.                                                                                                                                                                                                                                                                                                                                                 
| | 3.  | The quantity and grade of the reported Inferred resources
      in this estimate are uncertain in nature. There has been insufficient
      exploration to define these resources as Indicated or Measured and it is
      uncertain whether further exploration would result in upgrading any of the
      Inferred resource to an Indicated or Measured category.                                                       
| | 4.  | The Indicated category is defined by combination of
      drill-hole locations and continuity of the gold grades and the
    geology.                                                                                                                                                                                                                                                                                     
| | 5.  | While the results are presented undiluted and in situ,
      the reported mineral resources are considered to have reasonable prospects
      for economic extraction.                                                                                                                                                                                                                                                    
| | 6.  | The resource was estimated using Datamine CAE Mining
      Software. The database used for the estimate contained diamond drill core
      composites and assays. The estimate is based on 999 diamond drill holes
      (351,789 m) drilled from 1993 to 2014. A minimum true thickness of 5.0
      metres was applied, using the grade of the adjacent material when assayed
      or a value of zero when not assayed.
| | 7.  | Supported by statistical analysis the high grade
      distribution within the deposit was top-capped for gold grades ranging
      from 10 g/t to 200 g/t after compositing for interpolation into model
      blocks using Ordinary Kriging based on 1m composites within a 5m East x 5m
      North x 5m Vertical block model.                                                                                         
| | 8.  | Ounce (troy) = metric tons x grade / 31.10348.
      Calculations used metric units (metres, tonnes and g/t).                                                                                                                                                                                                                                                                                                             
| | 9.  | The number of metric tons was rounded to the nearest ten
      thousand. Any discrepancies in the totals are due to rounding
    effects.                                                                                                                                                                                                                                                                                 
| | 10. | AMC is not aware of any environmental, permitting, legal,
      title-related, taxation, socio-political or marketing issues or any other
      relevant issue that could materially affect the mineral resource
      estimate.                                                                                                                                                                                          

33

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**RISK FACTORS**

**   The
operations of the Company are speculative due to the high-risk nature of its
business which is the acquisition, financing, exploration, development and
operation of precious metals properties. The below risk factors, as well as
other risks discussed in this annual information form, could materially affect
the Companys future operating results and could cause actual events to differ
materially from those described in forward-looking statements relating to the
Company. These risks are broadly classified into these categories, financial and
operational risks and are not the only ones faced by the Company. Additional
risks and uncertainties not presently known to us or that we currently consider
immaterial may also impair our business operations. If any of these events
actually occur, our business, prospects, financial condition, cash flows and
operating results could be materially harmed.

**    While
the Company has developed an enterprise risk management policy and procedures to
maintain risks within an acceptable range and the Board maintains direct
oversight of the enterprise risk management process, there is no assurance that
such measures will prevent risks from adversely affecting the Companys
business. Before deciding to invest in securities of the Company, investors
should consider carefully such risks and uncertainties.

**Financial Risks**

Commodity Prices

**     The
price of the Common Shares, Primeros financial results and its exploration,
development and mining activities are significantly adversely affected by
declines in the price of gold and, to a lesser extent, silver. Gold and silver
prices fluctuate widely and are affected by numerous factors beyond Primeros
control such as the sale or purchase of metals by various central banks and
financial institutions, interest rates, exchange rates, inflation or deflation,
fluctuations in the value of the United States dollar and foreign currencies,
global and regional supply and demand, and the political and economic conditions
of major metals-producing countries throughout the world. The price of gold and
silver has fluctuated widely in recent years, and future significant price
declines could cause continued development of, and commercial production from,
Primeros properties to be uneconomic. Depending on the price of gold and
silver, cash flow from mining operations may not be sufficient and Primero could
be forced to discontinue production and may lose its interest in, or may be
forced to sell, some of its properties. Future production from Primeros
properties is dependent on gold and silver prices that are adequate to make
these properties economic.

**   In
addition, Mineral Reserve calculations and life-of-mine plans using
significantly lower gold and silver prices could result in material write-downs
of Primeros investments in its mining properties and increased amortization,
reclamation and closure charges.

APA Ruling

**  Under
Mexican tax law, an APA ruling is generally applicable for up to a five year
period. Primeros APA applies to its fiscal years 2010 to 2014. Assuming Primero
continues to sell silver under the Amended and Restated Silver Purchase
Agreement on the same terms and there are no changes in the application of
Mexican tax laws relative to the APA Ruling, the Company expects to record
revenues and pay taxes based on realized prices for the life of the San Dimas
Mine. There can be no assurance that Mexican tax laws applicable to the APA
Ruling will not change or that the applicable authorities will issue a renewal
of the APA Ruling or a similar advance pricing Ruling or that the Mexican tax
authorities will not change their views on the appropriate price for the sale of
silver under the Amended and Restated Silver Purchase Agreement. If the
Mexican tax authorities determine that the appropriate price of silver sales
under the silver purchase agreement is different than the realized price,
Primeros cash flows and earnings could be significantly adversely impacted.

34

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Additional Capital

**     The
mining, processing, development and exploration of Primeros properties,
including the Cerro del Gallo Project and the Black Fox Complex, may require
substantial additional financing. Failure to obtain sufficient financing may
result in the delay or indefinite postponement of exploration, development or
production on any or all of Primeros properties or even a loss of property
interest. There can be no assurance that additional capital or other types of
financing will be available if needed or that, if available, the terms of such
financing will be attractive to Primero. Restrictions on incurring additional
indebtedness in the Amended and Restated Silver Purchase Agreement, and in other
agreements with existing or future lenders including the New Credit Facility,
may limit the ability of the Company to borrow to finance acquisitions. Declines
in gold and silver prices could have the result of making additional capital
unavailable to Primero.

Exchange Rate Fluctuations

**     Exchange
rate fluctuations may affect the costs incurred in the Companys operations.
Gold is sold in U.S. dollars and costs are incurred principally in U.S. dollars,
Canadian dollars and Mexican pesos. The appreciation of the Mexican peso or the
Canadian dollar against the U.S. dollar can increase the costs of gold
production and capital expenditures in U.S. dollar terms. The Company also holds
cash that is denominated in Canadian dollars and Mexican pesos which are subject
to currency risk. The Companys head office general and administrative expenses
are mainly denominated in Canadian dollars and are translated to US dollars at
the average rate during the period, as such if the US dollar appreciates as
compared to the Canadian dollar, the costs of the Company would decrease in US
dollar terms. The Company is further exposed to currency risk through
non-monetary assets and liabilities of its Mexican and Canadian entities whose
taxable profit or loss is denominated in a non-US dollar currency.

Capital Cost and Operational Cost Estimates

**  The
Company prepares budgets and estimates of cash costs and capital costs of
production for its operations and its main costs relating to material costs,
personnel and contractor costs, and energy costs. However, despite the Companys
efforts to budget and estimate such costs, as a result of the substantial
expenditures involved in the development of mineral projects and the fluctuation
of costs over time, development projects may be prone to material cost overruns.
The Companys actual costs may vary from estimates for a variety of reasons,
including: short-term operating factors; revisions to mine plans; risks and
hazards associated with mining; natural phenomena, such as inclement weather
conditions, water availability, floods, and earthquakes; and unexpected labour
shortages or strikes. Operational costs may also be affected by a variety of
factors, including: changing waste-to-ore ratios, ore grade metallurgy, labour
costs, the cost of commodities, general inflationary pressures and currency
exchange rates. Many of these factors are beyond the Companys control. Failure
to achieve estimates or material increases in costs could have an adverse impact
on the Companys future cash flows, business, results of operations and
financial condition.

**     Furthermore,
delays in the construction and commissioning of mining projects or other
technical difficulties may result in additional capital expenditures being
required. Any delay in the development of a project or cost overruns or
operational difficulties once the project is fully developed may have a material adverse effect on the Companys business,
results of operations and financial condition.

35

---

Indebtedness

**     As
at December 31, 2014, Primeros aggregate indebtedness was comprised of $48.1
million assumed on the assumption by Primero of the Brigus Debentures, which
bear 6.5% interest and mature March 31, 2016, $40 million under the New Credit
Facility which has a three year term and bears interest at a floating interest
rate equal to LIBOR or the prime rate of Canada or the bankers acceptance rate
(depending on the choice of credit available by the Company) plus an applicable
margin and $11.2 million of finance lease liabilities.

**     On
January 20, 2015 the Company entered into an agreement with a syndicate of
underwriters pursuant to which the underwriters agreed to purchase $75 million
Debentures, which offering closed on February 9, 2015. The New Credit Facility
was repaid from the proceeds of the 2015 Debentures.

**     As
a result of this indebtedness, Primero is required to use a portion of its cash
flow to service principal and interest on its debt, which limits the cash flow
available for other business opportunities. The Companys exposure to interest
rate risk is limited to the credit facility, which is subject to a floating
interest rate, but as noted above was fully repaid in the first quarter of 2015.
There can also be no assurance that Primero will generate cash flow in amounts
sufficient to pay outstanding indebtedness or to fund any other liquidity needs.
If any indebtedness becomes repayable due to an inability to comply with
covenants, or if Primero is unable to extend the terms of any of its
indebtedness at time of maturity or renewal, such failure or failures could have
an adverse effect on Primeros financial position.

**    Primeros
indebtedness could limit its ability to borrow additional amounts for working
capital, capital expenditures, debt service requirements, execution of Primeros
growth strategy or other purposes or to capitalize on business opportunities and
to react to competitive pressures and adverse changes in government regulation.
The Companys ability to incur additional indebtedness is limited under
the New Credit Facility and the Amended and Restated Silver Purchase Agreement
and depends on the satisfaction of certain financial tests, which are typical
for a company such as Primero. These limitations restrict the additional
indebtedness that the Company may incur, with the result that the Company may
not be able to pursue capital expansions, additional exploration programs,
acquisitions, or other components of its future business plans.

Current Global Financial Condition

**     After
a period of lower volatility, following stabilization after the 2008-2009 global
financial crisis, several disruptions to the international equities markets,
credit markets, and other financial systems caused renewed volatility in 2014.
Recent events, such as the collapse in global oil prices, ongoing geopolitical
turmoil in the Middle East and Eastern Europe, softer Chinese economic growth
outlook, and weak growth and deflationary pressures in the euro zone, have
perpetuated significant instability in commodity prices.

**     Despite
a recently strengthening U.S. economy, the extent of recovery remains uncertain.
In addition, uncertainty related to the timing of impending interest rate
increases by the U.S. Federal Reserve continues to cause waves in the financial
markets, in turn, putting significant pressure on gold as an inflationary
hedge, and by extension gold-focused equities.

36

---

**  This
seeks to illustrate the degree in which events outside of the Companys control
may affect commodity prices, demand for metals, including gold, silver, copper,
lead and zinc, availability of credit, investor confidence, and general
financial market liquidity, all of which may impact the Companys business.

**    The
Company is also exposed to liquidity and various counterparty risks including,
but not limited to: (i) financial institutions that hold the Companys cash;
(ii) the Companys insurance providers; (iii) the Companys lenders; and (iv)
the Companys other banking counterparties. The Company is also exposed to
liquidity risks in meeting its capital expenditure requirements in instances
where cash positions are unable to be maintained or appropriate financing is
unavailable. These factors may impact the ability of the Company to obtain loans
and other credit facilities in the future and, if obtained, on terms attractive
to the Company. As a result of this uncertainty, and the uncertainty of the
recent market volatility, the Companys planned growth could either be adversely
or positively impacted and the trading price of the Companys securities could
either be adversely or positively affected.

Effectiveness of Internal Control Over Financial Reporting

** The
Company is required to maintain and evaluate the effectiveness of its internal
control over financial reporting under National Instrument 52-109 
Certification of Disclosure in Issuers Annual and Interim Filings in
Canada and under the Exchange Act in the United States. There is no assurance
that the Company will be able to achieve and maintain the adequacy of its
internal control over financial reporting as such standards are modified,
supplemented, or amended from time to time, and the Company may not be able to
ensure that it can conclude on an ongoing basis that its internal control over
financial reporting is effective. The Companys failure to establish and
maintain effective internal control over financial reporting could result in the
loss of investor confidence in the reliability of its financial statements. In
addition, any failure to implement required new or improved controls, or
difficulties encountered in their implementation, could result in the Companys
inability to meet its reporting obligations. There can be no assurance that the
Company will be able to remediate material weaknesses, if any, identified in
future periods, or maintain all of the controls necessary for continued
compliance, and there can be no assurance that the Company will be able to
retain sufficient skilled finance and accounting personnel. No evaluation can
provide complete assurance that the Companys internal control over financial
reporting will detect or uncover all failures of persons within the Company to
disclose material information otherwise required to be reported. In 2014, the
Company documented and tested its internal control procedures in order to
satisfy the requirements of the Sabarnes-Oxley Act, Primeros auditor
delivered an attestation report on managements assessment of the effectiveness
of Primeros internal control over financial reporting as at December 31, 2014.

Insurance and Uninsured Risks

**    Mining
operations are subject to a number of risks and hazards generally, including
adverse environmental conditions, industrial accidents, labour disputes, unusual
or unexpected geological conditions, ground or slope failures, cave-ins, changes
in the regulatory environment and natural phenomena such as inclement weather
conditions, floods, hurricanes and earthquakes. Such occurrences could result in
damage to mineral properties or production facilities, personal injury or death,
environmental damage to Primeros properties or the properties of others, delays
in mining, monetary losses and possible legal liability.

**  Although
Primero plans to maintain insurance to protect against certain risks in such
amounts as it considers reasonable, its insurance will not cover all the
potential risks associated with a mining Companys operations. Primero may also
be unable to maintain insurance to cover these risks at economically feasible premiums. Insurance coverage may not
continue to be available or may not be adequate to cover any resulting
liability. Moreover, insurance against risks such as loss of title to mineral
property, environmental pollution, or other hazards as a result of exploration
and production is not generally available to Primero or to other companies in
the mining industry on acceptable terms. Primero might also become subject to
liability for pollution or other hazards for which it may not be able or, due to
the high cost of premiums, desirable to buy insurance. Losses from these events
may cause Primero to incur significant costs that could have a material adverse
effect upon its financial performance and results of operations.

37

---

**Operational Risks**

Exploration, Development and Operating Risk

**Primeros current activities are primarily directed towards mining
operations and exploration projects at the San Dimas Mine, the Black Fox Complex
and the Cerro Del Gallo Project. Mining operations generally involve a high
degree of risk. Primeros operations are subject to all the hazards and risks
normally encountered in the exploration, development and production of gold and
silver including unusual and unexpected geologic formations, seismic activity,
rock bursts, cave-ins, flooding and other conditions involved in the drilling
and removal of material, any of which could result in damage to, or destruction
of, mines and other producing facilities, causing delay or indefinite
postponement of exploration, development or production, damage to life or
property, environmental damage and possible legal liability. Although
appropriate precautions to mitigate these risks are taken, mining operations are
subject to hazards such as equipment failure or failure of retaining dams around
tailings disposal areas which may result in environmental pollution and
consequent liability.

**The exploration for and development of mineral deposits involves
significant risks which even a combination of careful evaluation, experience and
knowledge may not eliminate. While the discovery of an ore body may result in
substantial rewards, few properties which are explored are ultimately developed
into producing mines. Major expenses may be required to locate and establish
Mineral Reserves, to develop metallurgical processes and to construct mining and
processing facilities at a particular site. It is difficult to ensure that the
exploration or development programs planned by Primero will result in a
profitable commercial mining operation. Whether a mineral deposit will be
commercially viable depends on a number of factors, some of which are: the
particular attributes of the deposit, such as size, grade, metallurgy and
proximity to infrastructure; metal prices which are highly cyclical; and
government regulations, including regulations relating to prices, taxes,
royalties, land tenure, land use, importing and exporting of minerals and
environmental protection.

**  The
exact effect of these factors cannot be accurately predicted, but the
combination of any of these factors may result in Primero not receiving an
adequate return on invested capital. There is no certainty that the expenditures
made by Primero towards the search and evaluation of mineral deposits will
result in discoveries of commercial quantities of ore.

Uncertainty in the Estimation of Reserves and Mineral
Resources

**   The
figures for Mineral Reserves and Mineral Resources contained in this Annual
Information Form and used in the Companys mine models and as presented for the
San Dimas Mine, Cerro del Gallo Project and the Black Fox Complex are estimates
only and no assurance can be given that the anticipated tonnages and grades will
be achieved, that the indicated level of recovery will be realized or that
Mineral Reserves can be mined or processed profitably. There are numerous
uncertainties inherent in estimating Mineral Reserves and Mineral Resources,
including many factors beyond Primeros control. Such estimation is a subjective
process, and the accuracy of any Mineral Reserve or Mineral Resource estimate is a function of the quantity and
quality of available data and of the assumptions made and judgments used in
engineering and geological interpretation. Short-term operating factors relating
to the Mineral Reserves, such as the need for orderly development of the ore
bodies or the processing of new or different ore grades, may cause the mining
operation to be unprofitable in any particular period. In addition, there can be
no assurance that gold or silver recoveries in small scale laboratory tests will
be duplicated in larger scale tests under on-site conditions or during
production. Fluctuation in gold and, to a lesser extent, silver prices, results
of drilling, metallurgical testing and production and the evaluation of mine
plans subsequent to the date of any estimate may require revision of such
estimate. The volume and grade of Mineral Reserves mined and processed and
recovery rates may not be the same as currently anticipated. Any material
reductions in estimates of Mineral Reserves and Mineral Resources, or of
Primeros ability to extract these Mineral Reserves, could have a material
adverse effect on Primeros results of operations and financial condition
including, without limitation, an impairment loss and a write down of Primeros
mining properties, discontinuance of production, and loss of interest in, or
sale of, some of Primeros properties. In addition to other adverse
consequences, recording an impairment loss and a write-down may result in
Primero breaching certain tangible net worth financial covenants under the New
Credit Facility that could constitute an event of default. See Introductory
Notes  Cautionary Notes to United States Investors.

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Uncertainty Relating to Inferred Mineral Resources and
Exploration Potential

**   Inferred
Mineral Resources that are not Mineral Reserves do not have demonstrated
economic viability. Due to the uncertainty which may attach to Inferred Mineral
Resources, there is no assurance that Inferred Mineral Resources will be
upgraded to Mineral Resources with sufficient geological continuity to
constitute Proven and Probable Mineral Reserves as a result of continued
exploration. Exploration potential is conceptual in nature by definition and
there is no assurance that exploration of the mineral potential identified will
result in any category of Mineral Resources being identified.

**     Fluctuations
in the prices of gold and silver, results of drilling, metallurgical testing and
production, and the evaluation of studies, reports and plans subsequent to the
date of any estimate may require revision of such estimate. Any material
reductions in estimates of Mineral Resources or Mineral Reserves could have a
material adverse effect on the results of the Companys operations and financial
condition.

Need for Additional Mineral Reserves

**   Since
all mines have limited lives based on Probable Mineral Reserves, Primero will be
required to continually replace and expand its Mineral Reserves as its mines
produce gold and silver. Primeros ability to maintain or increase its annual
production of gold and silver will be dependent in significant part on its
ability to expand Mineral Reserves at existing mines, to bring new mines into
production and to complete acquisitions.

Title to Property

**Title to mineral properties involves certain inherent risks due to the
difficulties of determining the validity of certain claims, as well as the
potential for problems arising from the frequently ambiguous conveyance history
characteristic of many mineral properties. There is no guarantee that title to
Primeros properties will not be challenged or impugned. Mineral property
interests may be subject to prior unrecorded agreements or transfers or the
claims of local people and title may be affected by undetected defects. There
may be valid challenges to the title of these properties which, if successful,
could require the Company to modify its operations or plans for development.

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**     There
can be no assurance that the Company will be able to secure the grant or the
renewal of mining concessions on terms satisfactory to it, or that governments
in the jurisdictions in which Primeros properties are situated will not revoke
or significantly alter such permits or other tenures or that such mining
concessions will not be challenged or impugned. Third parties may have valid
claims underlying portions of the Companys interests and the mining concessions
may be subject to prior unregistered agreements or transfers and title may be
affected by undetected defects. If a title defect exists, it is possible that
the Company may lose all or part of its interest in the properties.

Use of Ejido-owned Land

**     An
Ejido is a communal ownership of land recognized by the federal laws in Mexico.
While mineral rights are administered by the federal government through
federally issued mining concessions, access to surface rights is also required
for mining operations. An Ejido controls surface rights over its communal
property through a board of directors. An Ejido may sell or lease lands directly
to a private entity and it may also allow individual members of the Ejido to
obtain title to specific parcels of land and thus the right to sell or lease the
land.

**  The
San Dimas Mine uses Ejidos lands pursuant to written agreements with Ejidos.
Some of these agreements may be subject to renegotiation and changes to the
existing agreements may increase operating costs or have an impact on
operations. In cases where access to land is required for operations and an
agreement cannot be reached with the land owner, Primero may seek access under
Mexican law which provides for priority rights for mining activities.

**  Three
of the properties included in the San Dimas Mine and for which Primero holds
legal title are subject to legal proceedings commenced by Ejidos seeking title
to the property. None of the proceedings name Primero as a party and Primero
therefore has no standing to participate in them. In all cases, the defendants
are previous owners of the properties, either deceased individuals who,
according to certain public deeds, owned the properties more than 80 years ago,
corporate entities that are no longer in existence, or Goldcorp companies. The
proceedings also name the Tayoltita Property Public Registry as
co-defendant.

**  While
Primero cannot intervene in these proceedings, in the event that a final
decision is rendered in favour of the Ejido, Primero may seek to annul the
decision or commence an action as an affected third party on the basis that it
is the legitimate owner and is in possession of the property. If Primero is not
successful in its challenge, the San Dimas Mine could face higher costs
associated with agreed or mandated payments that would be payable to the Ejidos
for use of the properties.

Indigenous Peoples and Local Communities

** There
are numerous international and national laws, codes, resolutions, conventions,
guidelines, policies and other statements addressing the rights of indigenous
peoples. The Company operates in some areas presently or previously used by
indigenous peoples. Many of the laws or statements impose obligations on
government in respect of the rights of indigenous people and some mandate or
suggest consultation with indigenous people regarding government actions which
may affect them, including the approval or grant of mining rights or permits.
The obligations of government and private parties to indigenous people continue
to evolve. The Companys current and future operations are subject to a risk
that one or more groups of indigenous people may oppose continued operation,
further development, or new development of the Companys projects or
operations.

**   Surrounding
communities and landowners are also stakeholders who may seek to interfere with
the Companys operations and development activities. Such opposition may be
directed through legal or administrative proceedings, or expressed in
manifestations such as protests, roadblocks or other forms of public expression
against the Companys activities.

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Government Regulations, Consents and Approvals

Exploration and development
activities and mining operations are subject to laws and regulations governing
health and work safety, employment standards, environmental matters, mine
development, prospecting, mineral production, exports, taxes, labour standards,
reclamation obligations and other matters. It is possible that future changes in
applicable laws, regulations, agreements or changes in their enforcement or
regulatory interpretation could result in changes in legal requirements or in
the terms of permits and agreements applicable to the Company or its properties
which could have a material adverse impact on the Companys operations and
exploration program and future development projects. Where required, obtaining
necessary permits and licences can be a complex, time consuming process and
there can be no assurance that required permits will be obtainable on acceptable
terms, in a timely manner or at all. The costs and delays associated with
obtaining permits and complying with these permits and applicable laws and
regulations could stop or materially delay or restrict the Company from
proceeding with the development of an exploration project or the operation or
further development of a mine. Any failure to comply with applicable laws and
regulations or permits, even if inadvertent, could result in interruption or
closure of exploration, development or mining operations or material fines,
penalties or other liabilities, which could have an adverse effect on the
business, financial condition or results of operation of the Company. Due to
stringent government regulation, the Company may experience difficulties in
obtaining permits for the use of explosives in Mexico and these difficulties
could interrupt its operations.

Environmental Risks and Hazards

**     Government
approvals and permits are currently, and may in the future be, required in
connection with the Companys mining operations. To the extent such approvals
are required and not obtained, Primero may be curtailed or prohibited from
continuing its mining operations or from proceeding with planned exploration or
development of mineral properties.

**   Failure
to comply with applicable laws, regulations and permitting requirements may
result in enforcement actions thereunder, including orders issued by regulatory
or judicial authorities causing operations to cease or be curtailed, and may
include corrective measures requiring capital expenditures, installation of
additional equipment, or remedial actions. Parties engaged in mining operations
or in the exploration or development of mineral properties may be required to
compensate those suffering loss or damage by reason of the mining activities and
may have civil or criminal fines or penalties imposed for violations of
applicable laws or regulations.

**   Amendments
to current laws, regulations and permits governing operations and activities of
mining and exploration companies, or more stringent implementation thereof,
could have a material adverse impact on Primero and its results of operations
and cause increases in exploration expenses, capital expenditures or production
costs or reduction in levels of production at producing properties or require
abandonment or delays in development of new mining properties.

**   Primeros
operations may cause damage to the environment, which could lead to government
environmental authorities imposing fines, total or partial closures,
compensatory measures or mandated investment in infrastructure. Examples of
environmental damage that could result from operations include, but are not
limited to, industrial fires, forest fires, oil spills, tailings dam spills,
unforeseen emissions to the atmosphere and hazardous material soil
filtrations.

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**The potential exposure to environmental risks may be significant and could
have a material adverse effect on the Company. Primero has $30 million of sudden
and accidental pollution coverage in its commercial general liability program.
The policy can be activated if the pollution is discovered and reported within
10 days. The policy provides protection for third party bodily injury and/or
property damage but not first party losses. In addition, the policy does not
cover any fines or penalties or any costs of government mandated clean-up. All
of the Company's exploration, development and production activities are subject
to regulation under one or more of the various federal and provincial
environmental laws and regulations in Canada. Many of the regulations require
the Company to obtain permits for its activities. The Company must update and
review its permits from time to time, and is subject to environmental impact
analyses and public review processes prior to approval of the additional
activities. It is possible that future changes in applicable laws, regulations
and permits or changes in their enforcement or regulatory interpretation could
have a significant impact on some portion of its business, causing those
activities to be economically re-evaluated at that time. Those risks include,
but are not limited to, the risk that regulatory authorities may increase
bonding requirements beyond the Company's financial capabilities. See Risk
Factors- Financial Risks  Insurance and Uninsured Risks.

Environmental
Risks and Hazards - Mexico

**     Primeros
mining operations are subject to Mexican and applicable state environmental
regulations. These regulations mandate, among other things, the maintenance of
air and water quality standards and land reclamation. They also establish
limitations on the generation, transportation, storage and disposal of solid and
hazardous waste. Environmental legislation is evolving in a manner which will
likely require stricter standards and enforcement, increased fines and penalties
for non-compliance, more stringent environmental assessments of proposed
projects and a heightened degree of responsibility for companies and their
officers, directors and employees. There is no assurance that future changes in
environmental regulation, if any, will not adversely affect Primeros results of
operations. Environmental hazards may exist at the Companys properties which
are unknown to Primero at present and which have been caused by previous or
existing owners or operators of the properties. Primero did not complete an
environmental audit or other comparable environmental due diligence in
connection with the acquisition of the San Dimas Mine.

Environmental
Risks and Hazards - Canada

**  The
Canadian mining industry is subject to federal and provincial environmental
protection legislation. This legislation imposes strict standards on the mining
industry in order to reduce or eliminate the effects of waste generated by
extraction and processing operations and subsequently emitted into the air or
water. Consequently, drilling, refining, extracting and milling are all subject
to the restrictions imposed by this legislation. In addition, the construction
and commercial operation of a mine typically entail compliance with applicable
environmental legislation and review processes, as well as the obtaining of
permits, particularly for the use of the land, permits for the use of water, and
similar authorizations from various government bodies. Canadian federal,
provincial, and local laws and regulations relating to the exploration for and
development, production and marketing of mineral production, as well as
environmental and safety matters have generally become more stringent in recent
years, often imposing greater liability on a larger number of potentially
responsible parties. Because the requirements imposed by such laws and
regulations are frequently changed, the Company is unable to predict the
ultimate cost of compliance with such requirements. There is no assurance that
environmental laws and regulations enacted in the future will not adversely
affect the Company's financial condition and results of operations.

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**  The
Company is subject to potential risks and liabilities associated with
environmental compliance and the disposal of waste rock and materials that could
occur as a result of the Company's mineral exploration and production. In
certain circumstances, the potential liabilities can include liability for costs
of remediation and cleanup of mines which the Company owned or operated in the
past, but no longer owns or operates. To the extent that the Company is subject
to environmental liabilities, the payment of such liabilities or the costs that
the Company may incur to remedy any non-compliance with environmental laws would
reduce funds otherwise available to it and could have a material adverse effect
on the Company's financial condition or results of operations. If the Company is
unable to fully remedy an environmental problem, it might be required to suspend
operations or enter into interim compliance measures pending completion of the
required remedy.

San Dimas Tailings Management Risks

**    Tailings
containment sites which existed at the time of DMSLs acquisition of the San
Dimas Mine were not subjected to comprehensive geotechnical investigation before
construction, normal safety factors in dam design, seepage monitoring or
control, or controls on public or wildlife access to cyanide solution ponds or
pumping installations. Work was undertaken to address the deficiencies with the
tailings management aspect of the operations and capital investments were
carried out to upgrade the containment structures and tailings operations and to
remediate the Tayoltita tailings dam. In 2014 a Technical Review and Risk
Assessment of the Cupis tailing storage facility was performed by Amec Foster
Wheeler. The final assessment will be delivered in early 2015.

**   The
Company anticipates that further expenditures will be required to maintain
compliance with applicable environmental regulations, which are becoming more
stringent and can be expected to become more aligned with international
guidelines in the future. The Company will incur environmental liability for
mining activities conducted both before and after it acquired ownership of the
San Dimas Mine. To the extent that the Company is subject to unfunded or
uninsured environmental liabilities, the payment for such liabilities would
reduce funds otherwise available and could have a material adverse effect on the
Company. Should the Company be unable to fund fully the cost of remedying an
environmental problem, the Company may be required to suspend operations or
enter into interim compliance measures pending completion of required
remediation, which could have a material adverse effect on the Company.

**     The
asset purchase agreement entered into in connection with the acquisition of the
San Dimas Mine does not provide for any indemnities from DMSL against any
potential environmental liabilities, including, but not limited to, those that
may arise from possible failure of the San Antonio tailings dam. Primero has
indemnified DMSL for any future environmental claims or liabilities. See Mining
Activities  San Dimas Mine  Environmental Matters.

Labour and Employment Matters

**    The
Companys current relations with employees and the unions are good. Union
contracts for the San Dimas Mine are renegotiated every two years, except for
the compensation aspects, which are reviewed annually. See Business of Primero
 Changes to Contracts. Production at the Companys properties will continue to
be dependent upon the ability of Primero to continue to maintain good relations
with its employees and the unions. In addition, relations between Primero and
its employees may be impacted by changes in the scheme of labour relations which
may be introduced by the relevant governmental authorities. Adverse changes in
such legislation or in the relationship between Primero with its employees and
unions may have a material adverse effect on Primeros business, results of
operations and financial condition.

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Foreign Operations Risks  Mexico

**    A
portion of the Companys mining and mineral exploration operations are currently
conducted in Mexico, and as such Primeros operations are exposed to various
levels of political, economic and other risks and uncertainties. These risks and
uncertainties include, but are not limited to, terrorism; organized crime;
kidnapping and hostage taking; extortion; military repression; theft;
expropriation; extreme fluctuations in currency exchange rates; high rates of
inflation; labour unrest; the risks of war or civil unrest; renegotiation or
nullification of existing concessions, licenses, permits and contracts; delays
in obtaining or the inability to obtain or maintain necessary governmental
permits, opposition to mining from environmental or other non-governmental
organizations (whether or not grounded in law, rule or non-binding statement of
principles) in the form of legal challenges, protest or activity targeted
against the Company; illegal mining, trespass and associated security threats
and unsafe activities; changes in royalty and taxation regimes; restrictions on
foreign exchange and repatriation; and changing political conditions, currency
controls and governmental regulations that favour or require the awarding of
contracts to local contractors or require foreign contractors to employ citizens
of, or purchase supplies from, a particular jurisdiction.

**    The
Company has taken a variety of measures to protect its employees, contractors,
property and facilities against safety and security risks such as crime, illegal
mining, kidnapping, theft, vandalism and trespass. However, there can be no
assurance that such measures will be effective or that incidents of criminal
activity, illegal mining, theft, vandalism or trespass will not have an adverse
impact on the Companys operations, property or facilities, including the
potential for harm to people or property, increased costs, and disruptions to
production and the Companys ability to meet production goals.

**   Changes,
if any, in mining, taxation or investment policies, or shifts in political
attitude in Mexico may adversely affect Primeros operations or profitability.
Operations may be affected in varying degrees by government regulations with
respect to, but not limited to, restrictions on production, price controls,
export controls, currency remittance, income taxes, royalties, expropriation of
property, foreign investment, maintenance of claims, environmental legislation,
land use, land claims of local people, water use and mine safety.

**     Failure
to comply strictly with applicable laws, regulations and local practices
relating to mineral right applications and tenure, could result in loss,
reduction or expropriation of entitlements, or the imposition of additional
local or foreign parties as joint venture partners with carried or other
interests. The occurrence of these various factors and uncertainties cannot be
accurately predicted and could have an adverse effect on Primeros operations or
profitability.

**   Further,
following Enrique Peña Nietos election as President in 2012, the Congreso
General de los Estados Unidos Mexicanos(Mexican Congress) became
politically divided, as his political party Partido Revolucionario
Institucional, or PRI, does not have majority in the Mexican Congress. The lack
of alignment between the Mexican Congress and the President could result in a
deadlock and prevent the timely implementation of political and economic
reforms, which in turn could have a material adverse effect on Mexican economic
policy.

**    Mexico
is a developing country and obtaining financing or finding or hiring qualified
people or obtaining all necessary services for the Companys operations in
Mexico may be difficult. Mexicos status as a developing country may make it
more difficult for the Company to attract investors or obtain any required
financing for its mining projects. The Company also hires some of its employees
or consultants in Mexico to assist it in conducting its operations in accordance
with Mexican laws and purchases certain supplies and retains the services of
various companies in Mexico to meet its business plans. It may be difficult to find or hire qualified
people in the mining industry who are situated in Mexico or to obtain all the
necessary services or expertise in Mexico or to conduct operations on its
projects at reasonable rates. If qualified people and services or expertise
cannot be obtained in Mexico, the Company may need to seek and obtain those
services from people located outside Mexico, which will require work permits and
compliance with applicable laws and could result in delays and higher costs to
the Company to conduct its operations in Mexico.

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Infrastructure

**   Mining,
processing, development and exploration activities depend, to one degree or
another, on adequate infrastructure. Reliable roads, bridges, power sources and
water supply are important determinants which affect capital and operating
costs. Unusual or infrequent weather phenomena, terrorism, sabotage, government
or other interference in the maintenance or provision of such infrastructure
could adversely affect the Companys operations, financial condition and results
of operations. Any interruption in power supply or any interruption in water
supply due to, inter alia, periods of drought or low rainfall could
adversely impact the Companys operations. As part of the ongoing effort to
optimize the design of the proposed Cerro del Gallo installations, particular
attention has been given to locating a reliable water source for operations and
to install a reliable electrical connection to the national grid

Competition

**   The
mining industry is competitive in all of its phases. Primero faces strong
competition from other mining companies in connection with the acquisition of
properties producing, or capable of producing, precious and base metals. Many of
these companies have greater financial resources, operational experience and
technical capabilities than Primero. The ability of the Company to acquire
mineral properties in the future will depend not only on its ability to develop
its present properties, but also on its ability to select and acquire suitable
producing properties or prospects for development or mineral exploration. In
addition, the Company also competes with its competitors over sourcing raw
materials, supplies and services used in connection with its mining operations,
including skilled experience workers and management.

Acquisitions

**     The
Company is actively pursuing the acquisition of exploration, development and
production assets consistent with its acquisition and growth strategy. There is
no assurance, however, that the Company will be able to identify projects or
companies that are suitable or that are available for sale at reasonable prices
or that it will be able to consummate any acquisition, or integrate any acquired
business into its operations successfully. Acquisition transactions and the
operation of acquired properties, involve inherent risks, including but not
limited to: accurately assessing the value, strengths, weaknesses, contingent
and other liabilities and potential profitability of acquisition candidates;
ability to achieve identified and anticipated operating and financial synergies;
unanticipated costs; diversion of management attention from existing business;
potential loss of the Companys key employees or key employees of any business
acquired; unanticipated changes in business, industry or general economic
conditions that affect the assumptions underlying the acquisition; and decline
in the value of acquired properties, companies or securities. Any one or more of
these factors or other risks could cause the Company not to realize the
anticipated benefits of an acquisition of properties or companies, and could
have a material adverse effect on the Companys financial condition.

45

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**   To
acquire properties and companies, the Company may be required to use available
cash, incur debt, issue additional Common Shares or other securities, or a
combination of any one or more of these. This could affect the Companys future
flexibility and ability to raise capital, to operate, explore and develop its
properties and could dilute existing shareholders and decrease the trading price
of the Common Shares. There is no assurance that the Company will be able to
raise additional capital if necessary to complete an acquisition or to develop
or operate the acquired asset thereafter (see Risk Factors  Operational Risks
 Additional Capital). There is no assurance that when evaluating a possible
acquisition, the Company will correctly identify and manage the risks and costs
inherent in the business to be acquired. Restrictions on incurring additional
indebtedness in the Amended and Restated Silver Purchase Agreement may limit the
ability of the Company to borrow to finance acquisitions.

**   The
San Dimas Assets and the shares of Silver Trading acquired on August 6, 2010,
were acquired on an as is, where is basis and the representations and
warranties and indemnities provided by DMSL and GSBL (together the San Dimas
Vendors) in respect of the San Dimas Assets are limited. Consequently, the
recourse the Company may have against the San Dimas Vendors is limited. Further,
there may be liabilities that the Company failed to discover or was unable to
quantify in its due diligence. The Company may not be indemnified for some or
all of these liabilities.

Permitting

**    The
Companys operations are subject to receiving and maintaining permits (including
environmental permits) from appropriate governmental authorities. Although the
Companys mining operations currently have all required permits for their
operations as currently conducted, there is no assurance that delays will not
occur in connection with obtaining all necessary renewals of such permits for
the existing operations, additional permits for any possible future changes to
operations, or additional permits associated with new legislation. Furthermore,
prior to any development on any of its properties, the Company must receive
permits from appropriate governmental authorities. There can be no assurance
that the Company will continue to hold or obtain, if required to, all permits
necessary to develop or continue operating at any particular property

Development of New Projects

**     The
Company has projects at various stages of evaluation and development. There are
inherent development, construction and permitting-related risks to the
development of all new mining projects. These risks include the ability to
assemble all required land and other usage rights in a cost effective manner;
availability and delivery of critical equipment; the hiring of key personnel
(including outside consultants) for construction, commissioning and operations
and the supervision of that personnel; delays associated with the work of
third-party contractors; and budget overruns and currency fluctuations. The
Company will be required to rely upon outside consultants, engineers and others
for additional construction expertise in respect of its development projects. In
addition, delays in the commencement of mineral production often occur.
Accordingly, there can be no assurance that the Companys activities will result
in profitable mining operations at its development projects.

Key Personnel

**   The
Companys ability to successfully operate its mining properties and execute on
its business strategy depends on its key executives and on certain operating
personnel in Canada and Mexico. The Companys ability to manage administration,
production, exploration and development activities and acquisition strategies,
and hence its success, will depend in large part on the efforts of these
individuals. The Company cannot be certain that it will be able to retain such
personnel or attract a high calibre of personnel in the future. As such, the loss of
any key officer of the Company could have an adverse impact on the Company, its
business and its financial position. The Company has not purchased any key-man
insurance with respect to any of its directors or officers as of the date
hereof. The Company faces intense competition for qualified personnel, and the
loss of the services of one or more of such key personnel could have a material
adverse effect on the Companys business or operations.

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Conflicts of Interest

**   The
directors and officers of the Company are directors and officers of other
companies, some of which are in the same business as the Company. In particular,
Mr. Wade Nesmith and Mr. Eduardo Luna are each directors of Silver Wheaton, with
which the Company has entered into the Amended and Restated Silver Purchase
Agreement, and Mr. Rohan Hazelton is an officer of Goldcorp, from which the
Company acquired the San Dimas Mine. The directors and officers of the Company
are required by law to act in the best interests of the Company. They have the
same obligations to the other companies in respect of which they act as
directors and officers. Discharge by the directors and officers of their
obligations to the Company may result in a breach of their obligations to the
other companies and, in certain circumstances, this could expose the Company to
liability to those companies. Similarly, discharge by the directors and officers
of their obligations to the other companies could result in a breach of their
obligation to act in the best interests of the Company. Such conflicting legal
obligations may expose the Company to liability to others and impair its ability
to achieve its business objectives.

Subsidiaries

**     Primero
conducts operations through Canadian and foreign (Barbadian, Luxembourger and
Mexican) subsidiaries, and a significant portion of its assets are held in such
entities. Accordingly, any limitation on the transfer of cash or other assets
between the parent corporation and such entities, or among such entities, could
restrict Primeros ability to fund its operations efficiently. Any such
limitations, or the perception that such limitations may exist now or in the
future, could have an adverse impact on Primeros valuation and stock price.

Litigation

**   The
Company may be, from time to time, involved in various claims, legal proceedings
and complaints arising in the ordinary course of business. The Company cannot
reasonably predict the likelihood or outcome of these actions. If the Company is
unable to resolve these disputes favourably, it may have a material adverse
impact on the Companys financial performance, cash flow and results of
operations. See Risk Factors  Operational Risks  Use of Ejido Owned Land

**DIVIDENDS**

**     The
Company has not paid dividends since its incorporation. The future payment of
dividends or distributions will be dependent upon the financial requirements to
fund future growth, the financial condition of the Company and other factors the
Board may consider appropriate in the circumstances. The Company is not aware of
any restrictions that could prevent the paying of dividends or distributions.

47

---

**CAPITAL STRUCTURE**

**     Primeros
authorized share capital consists of an unlimited number of common shares
without par value (Common Shares) and an unlimited number of preferred shares
without par value. As of December 31, 2014, there were 161,555,875 Common Shares
issued and outstanding as fully paid and non-assessable and no preferred shares
issued and outstanding. As of the date of this AIF, 162,224,886 Common Shares
are issued and outstanding and no preferred shares are issued and
outstanding.

**Common Shares**

****     Subject
to the rights of the holders of the preferred shares of the Company, holders of
Common Shares of the Company are entitled to dividends if, as and when declared
by the directors. Holders of Common Shares of the Company are entitled to one
vote per Common Share at meetings of shareholders except at meetings at which
only holders of a specified class of shares are entitled to vote. Upon
liquidation, dissolution or winding-up of the Company, subject to the rights of
holders of preferred shares, holders of Common Shares of the Company are to
share rateably in the remaining assets of the Company as are distributable to
holders of Common Shares. The Common Shares are not subject to call or
assessment rights, redemption rights, rights regarding purchase for cancellation
or surrender, or any pre-emptive or conversion rights.

**Preferred Shares**

**  Preferred
shares may be issued from time to time in one or more series, ranking equally on
winding-up, to repayment of the amount paid up on such shares, and to carry and
be subject to, as a class, the following special rights and restrictions
pertaining to (but not limited to) dividends, redemption or purchase rights,
rights of retraction, rights of conversion, terms and conditions of any share
purchase plan or sinking fund, rights upon dissolution of the Company, and
voting, as the directors of the Company may, from time to time, determine by
resolution. Currently the preferred shares rank in priority over Common Shares
as to dividends and return of paid up capital upon dissolution or winding up of
the Company. Holders of preferred shares are not entitled to notice or to vote
at meetings of shareholders (except where holders of a specified class or series
are entitled to a separate vote in accordance with the Act). The Company may at
any time purchase for cancellation or redeem the preferred shares that may be
issued and holders of preferred shares may require the Company to retract such
shares in accordance with the terms upon which such have been issued.

**Options, Warrants and Debentures**

**     As
of the date of this AIF, the Company also had outstanding obligations to issue
up to 31,241,281 Common Shares in respect of options and warrants as follows:

- stock options to purchase 8,134,084 Common Shares at a price ranging from
  $2.60 to $7.95 expiring between August 6, 2015 and February 17, 2020, all of
  which are governed by the Companys amended and restated 10% rolling stock
  option plan, which was approved by shareholders on June 28, 2010 and became
  effective on August 19, 2010, amended and restated May 8, 2013;
- stock options issued to former stock option holders of Cerro to purchase an
  aggregate of 460,000 Common Shares at a price ranging from $7.53 to $8.70
  expiring on November 3, 2015, all which are governed by the terms of the Cerro
  stock option plan as assumed by Primero following the acquisition;

48

---

- stock options issued to former stock option holders of Brigus to purchase
  1,847,197 Common Shares at a price ranging from $3.98 to $15.09 expiring
  between August 5, 2015 and May 24, 2020, all of which are governed by the
  terms of the Brigus stock option plan as assumed by the Company following the
  acquisition; and
- warrants to purchase an aggregate of 20,800,000 Common Shares at a price of
  $8.00, expiring on July 20, 2015.

In addition, as of the date of
this AIF, the Company also had outstanding obligations to issue up to 14,882,239
Common Shares in respect of convertible debentures as follows:

- the Brigus Debentures, which are convertible into an aggregate of 3,436,857
  Common Shares.
- the Debentures, which are convertible into an aggregate of 11,450,382
  Common Shares.

**Directors Phantom Share Units**

**   On
March 27, 2012, the Board approved the adoption of a directors phantom share
unit plan (the Directors PSU Plan), which subsequently received shareholder
approval on May 28, 2012. The Directors PSU Plan is subject to renewal by
shareholders at Primeros 2015 annual general and special meeting. Members of
the Board, other than a member who is an officer or employee of Primero or
Primeros subsidiaries, are eligible to participate in the Directors PSU Plan.
A person holding a phantom share unit (a Director PSU) under the Directors
PSU Plan is entitled to elect to receive, at vesting (subject to blackout
periods), either (a) cash in an amount equal to the volume weighted average
trading price per Common Share over the five preceding trading days, or (b)
Common shares in number equal to the number of Directors PSUs. If no election
is made, the Company will pay out such Directors PSUs in cash. As of the date
of this AIF, the Company had outstanding 409,946 Director PSUs, vesting between
December 1, 2015 and December 1, 2017 and expiring between December 31, 2015 and
December 31, 2017.

**Employee Phantom Share Units**

**     On
March 28, 2013, the Board approved the adoption of an employee phantom share
unit plan (the 2013 PSU Plan), which subsequently received shareholder
approval on May 8, 2013. Employees and officers of Primero, or Primeros
subsidiaries, are eligible to participate in the 2013 PSU Plan. The Company can
elect to pay a person holding a phantom share unit (a 2013 PSU) under the 2013
PSU Plan, at vesting (subject to blackout periods), either (a) cash in an amount
equal to the volume weighted average trading price per Common Share over the
five preceding trading days, or (b) Common shares in number equal to the number
of 2013 PSUs. As of the date of this AIF, the Company had outstanding 2,114,024
Employee PSUs, vesting between May 10, 2015 and February 18, 2018 and expiring
between December 31, 2015 and December 31, 2018.

**MARKET FOR SECURITIES**

**Common Shares**

** The
Companys Common Shares are traded on the TSX under the symbol P. Commencing
on August 15, 2011, the Companys Common Shares began trading on the NYSE under
the symbol PPP. The following table shows the high and low trading prices and
monthly trading volume of the Common Shares of Primero on the TSX for the
periods listed:

49

---

|                    | High   | Low    |           
|------------------- | ------ | ------ | ----------
|Period              | (CDN$) | (CDN$) | Volume    
|2014                |        |        |           
|January             | 6.39   | 4.8    | 11,003,955
|February            | 7.61   | 5.95   | 14,553,332
|March               | 9.04   | 6.93   | 39,030,016
|April               | 8.24   | 6.46   | 11,485,521
|May                 | 7.54   | 6.68   | 8,575,657 
|June                | 8.6    | 6.85   | 30,142,458
|July                | 9.05   | 7.96   | 11,499,160
|August              | 8.7    | 7.01   | 10,247,861
|September           | 7.34   | 5.44   | 19,246,100
|October             | 5.68   | 3.78   | 12,858,259
|November            | 5.29   | 3.25   | 16,185,626
|December            | 5.26   | 3.6    | 17,618,188
|2015                |        |        |           
|January             | 6.06   | 4.27   | 19,736,396
|February            | 5.14   | 3.92   | 12,756,984
|March 1 to
      30 | 4.66   | 3.51   | 9,976,937 

**Common Share Warrants**

** The
Companys common share warrants are traded on the TSX under the symbol P.WT.
The following table shows the high and low trading prices and monthly trading
volume of the common share warrants of Primero on the TSX for the periods
listed:

|Period    | High   | Low    | Volume   
|--------- | ------ | ------ | ---------
|          | (CDN$) | (CDN$) |          
|2014      |        |        |          
|January   | 0.99   | 0.64   | 295,210  
|February  | 1.42   | 0.79   | 888,469  
|March     | 1.85   | 1.04   | 2,030,474
|April     | 1.46   | 0.70   | 487,690  
|May       | 1.13   | 0.76   | 242,770  
|June      | 1.55   | 0.81   | 563,330  
|July      | 1.75   | 1.22   | 764,385  
|August    | 1.47   | 0.83   | 389,390  
|September | 0.91   | 0.32   | 734,793  
|October   | 0.40   | 0.09   | 551,845  
|November  | 0.30   | 0.08   | 521,868  
|December  | 0.26   | 0.11   | 865,262  

50

---

|Period        | High   | Low    | Volume 
|------------- | ------ | ------ | -------
|              | (CDN$) | (CDN$) |        
|2015          |        |        |        
|January       | 0.34   | 0.12   | 406,448
|February      | 0.14   | 0.05   | 282,980
|March 1 to 30 | 0.08   | 0.03   | 659,600

**Convertible Debentures**

**The Companys Brigus Debentures and Debentures are traded on the TSX under
the symbols P.DB.U and P.DB.V, respectively. The following table shows the
high and low trading prices and monthly trading volume of the convertible
debentures of Primero on the TSX for the periods listed:

|P.DB.U        |             |            |        
|------------- | ----------- | ---------- | -------
|Period        | High (CDN$) | Low (CDN$) | Volume 
|              |             |            |        
|2014          |             |            |        
|March         | 102.00      | 100.00     | 131,390
|April         | 102.40      | 101.76     | 40,900 
|May           | 102.75      | 101.75     | 2,340  
|June          | 103.38      | 100.00     | 40,490 
|July          | 103.80      | 102.00     | 1,680  
|August        | 102.06      | 101.00     | 4,260  
|September     | 102.50      | 102.00     | 37,970 
|October       | 102.00      | 98.00      | 14,530 
|November      | 100.00      | 96.25      | 350    
|December      | 100.00      | 98.00      | 2,250  
|2015          |             |            |        
|January       | 100.00      | 98.01      | 7,090  
|February      | 100.00      | 98.99      | 17,630 
|March 1 to 30 | 99.97       | 98.25      | 5,720  

|P.DB.U        |             |            |       
|------------- | ----------- | ---------- | ------
|Period        | High (CDN$) | Low (CDN$) | Volume
|              |             |            |       
|February      | 94.25       | 86.00      | 57,200
|March 1 to 30 | 91.00       | 84.00      | 23,970

51

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**PRIOR SALES**

**     During
the financial year ended December 31, 2014, Primero issued or granted the
following Common Shares or securities convertible into Common Shares:

|                       |  | Number and Type                  |  | Issue or Exercise 
|---------------------- |  | -------------------------------- |  | ------------------
|Date of
      Issuance |  | of
      Securities Issued       |  | Price Per Security
|                       |  |                                  |  | CDN$              
|December 31, 2014      |  | 81,477 Common
      Shares(1)    |  | $4.98             
|December 22, 2014      |  | 1,481,482 Common Shares(2)       |  | $3.79             
|November 21, 2014      |  | 4,790 Common
      Shares(3)     |  | $10.98            
|November 19, 2014      |  | 10,000 Common Shares(1)          |  | $2.70             
|November 10, 2014      |  | 208,521 2013
      PSUs(4)       |  | $3.71             
|November 10, 2014      |  | 164,757 stock options            |  | $4.11(5)          
|September 3, 2014      |  | 5,750 Common
      Shares(6)     |  | $5.31             
|August 20, 2014        |  | 5,250 Common Shares(6)           |  | $6.24(7)          
|August 13, 2014        |  | 5,750 Common
      Shares(6)     |  | $7.49             
|August 11, 2014        |  | 3,678 2013 PSUs(4)               |  | $7.79             
|July 28, 2014          |  | 4,789 Common
      Shares(6)     |  | $5.73             
|July 15, 2014          |  | 13,125 Common Shares(6)          |  | $6.49             
|July 11, 2014          |  | 8,750 Common
      Shares(6)     |  | $6.75             
|July 9, 2014           |  | 35,000 Common Shares(6)          |  | $5.26             
|July 8, 2014           |  | 15,000 Common
      Shares(6)    |  | $5.26             
|June 30, 2014          |  | 61,400 Common Shares(6)          |  | $6.08(7)          
|June 26, 2014          |  | 100,000 Common
      Shares(6)   |  | $5.26             
|June 23, 2014          |  | 1,796 Common Shares(6)           |  | $5.73             
|June 20, 2014          |  | 21,000 Common
      Shares(6)    |  | $6.25(7)          
|June 19, 2014          |  | 10,000 Common Shares(6)          |  | $6.43             
|June 18, 2014          |  | 50,000 Common
      Shares(6)    |  | $5.26             
|June 16, 2014          |  | 46,140 2013 PSUs(4)              |  | $7.66             
|June 16, 2014          |  | 2,395 Common
      Shares(6)     |  | $5.73             
|June 13, 2014          |  | 12,140 Common Shares(6)          |  | $5.63(7)          
|June 12, 2014          |  | 3,500 Common
      Shares(6)     |  | $5.21(7)          
|May 27, 2014           |  | 2,332 Common Shares(6)           |  | $6.12(7)          
|May 21, 2014           |  | 5,250 Common
      Shares(6)     |  | $6.74             
|May 14, 2014           |  | 40,000 Common Shares(6)          |  | $5.26             
|May 12, 2014           |  | 65,853 2013 PSUs(4)              |  | $7.12             
|May 12, 2014           |  | 14,045 Directors PSUs(10)       |  | $7.12             
|April 4, 2014          |  | 11,975 Common
      Shares(6)    |  | $4.38             
|March 28, 2014         |  | 211,768 2013 PSUs(4)             |  | $8.10             
|March 28, 2014         |  | 58,816 stock options             |  | $7.95(5)          
|March 28, 2014         |  | 30,000 Common Shares(6)          |  | $6.43             
|March 25, 2014         |  | 80,000 Common
      Shares(6)    |  | $6.43             
|March 24, 2014         |  | 150,000 Common Shares(6)         |  | $5.65(7)          
|March 24, 2014         |  | 1,000,000 Common
      Shares(2) |  | $7.97             
|March 21, 2014         |  | 101,000 Common Shares(6)         |  | $5.57(7)          

52

---

|March 20, 2014    |  | 96,040 Common
      Shares(6)     |  | $6.42(7)
|----------------- |  | --------------------------------- |  | --------
|March 19, 2014    |  | 50,000 Common Shares(6)           |  | $5.26   
|March 18, 2014    |  | 40,250 Common
      Shares(6)     |  | $7.20(7)
|March 14, 2014    |  | 71,135 Common Shares(6)           |  | $6.29(7)
|March 13, 2014    |  | 55,250 Common
      Shares(6)     |  | $6.24(7)
|March 11, 2014    |  | 61,250 Common Shares(6)           |  | $5.49   
|March 7, 2014     |  | 28,957 Common
      Shares(6)     |  | $5.16(7)
|March 6, 2014     |  | 367,660 Common Shares(6)          |  | $4.82(7)
|March 5, 2014     |  | 50,000 Common
      Shares(6)     |  | $5.26   
|March 5, 2014     |  | 2,708,488 stock options(8)        |  | $6.67(7)
|March 5, 2014     |  | 41,340,347 Common
      Shares(9) |  | $7.46   
|February 26, 2014 |  | 40,000 Common Shares(6)           |  | $5.26   
|February 25, 2014 |  | 75,000 Common
      Shares(6)     |  | $5.26   
|February 24, 2014 |  | 100,000 Common Shares(6)          |  | $5.26   
|February 18, 2014 |  | 750,332 stock options             |  | $7.40(5)
|February 18, 2014 |  | 172,296 Director PSUs(10)         |  | $7.40   
|February 18, 2014 |  | 433,918 2013
      PSUs(4)        |  | $7.40   
|January 29, 2014  |  | 100,000 Common Shares(6)          |  | $5.26   

Notes:

| | (1)  | Issued as consideration for awards issued under the
      Directors PSU Plan.                                                                                                                                                                                                                       
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                      
| | (2)  | Common Shares issued pursuant to a flow-through
      agreement.                                                                                                                                                                                                                                     
| |      |                                                                                                                                                                                                                                                                                                      
| | (3)  | Common Shares issued on the exercise of warrants acquired
      pursuant to the Brigus Acquisition.                                                                                                                                                                                                  
| |      |                                                                                                                                                                                                                                                                                                      
| | (4)  | Units issued to employees and officers for which the
      Company may elect to make the applicable payout under the 2013 PSU Plan in
      the form of cash or Common Shares. Each 2013 PSU was priced based on the
      closing price of the Common Shares on the TSX on the date of
    issuance.
| |      |                                                                                                                                                                                                                                                                                                      
| | (5)  | Reflects the exercise price of stock options.                                                                                                                                                                                                                                                        
| |      |                                                                                                                                                                                                                                                                                                      
| | (6)  | Common Shares issued on the exercise of stock
    options.                                                                                                                                                                                                                                           
| |      |                                                                                                                                                                                                                                                                                                      
| | (7)  | Reflects the weighted average exercise price of stock
      options.                                                                                                                                                                                                                                 
| |      |                                                                                                                                                                                                                                                                                                      
| | (8)  | These stock options were issued to the former holders of
      Brigus options pursuant to the Brigus Acquisition.                                                                                                                                                                                    
| |      |                                                                                                                                                                                                                                                                                                      
| | (9)  | These Common Shares were issued by the Company to the
      former shareholders of Brigus pursuant to the Brigus
Acquisition.                                                                                                                                                                        
| |      |                                                                                                                                                                                                                                                                                                      
| | (10) | Units issued to non- executive directors who may elect to
      receive the applicable payout under the Directors PSU Plan in the form of
      cash or Common Shares. Each Director PSU was priced based on the closing
      price of the Common Shares on the TSX on the date of
  issuance.     

53

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**DIRECTORS AND OFFICERS**

**   The
following table is as at the date of the AIF and sets out the name,
province/state of residence, positions and/or offices held with the Company, and
principal occupations of each person who is a director and/or an executive
officer of the Company, as well as the period during which each person, if
applicable, has been a director of the Company.

**The term of office of each director of the Company ends immediately before
the election of directors at the annual meeting of shareholders each year.

|                                                    |  | Position(s) with the                                          |  |                                                                         |  |                 
|--------------------------------------------------- |  | ------------------------------------------------------------- |  | ----------------------------------------------------------------------- |  | ----------------
|Name and
      Residence                            |  | Company                                                       |  | Principal Occupation                                                    |  | Director Since  
|                                                    |  |                                                               |  |                                                                         |  |                 
|DAVID DEMERS(3)(4)(5)British Columbia, Canada       |  | Director                                                      |  | Chief Executive Officer of
      Westport Innovations Inc.              |  | October 29, 2008
|                                                    |  |                                                               |  |                                                                         |  |                 
|GRANT EDEY(4)(5)Ontario,
      Canada               |  | Director                                                      |  | President and Chief Executive
      Officer of Khan Resources Inc.      |  | June 28, 2010   
|                                                    |  |                                                               |  |                                                                         |  |                 
|ROHAN HAZELTON(2)(5)British
      Columbia, Canada  |  | Director                                                      |  | Vice President, Strategy of
      Goldcorp                              |  | August 25, 2010 
|                                                    |  |                                                               |  |                                                                         |  |                 
|EDUARDO LUNA(2)Mexico
      State, Mexico           |  | Director                                                      |  | President and Chief Executive
      Officer of Rochester Resources Ltd. |  | October 29, 2008
|                                                    |  |                                                               |  |                                                                         |  |                 
|BRAD MARCHANT(2)British
      Columbia, Canada      |  | Director                                                      |  | President and CEO of Enterra
      Feed Corporation                     |  | June 26, 2013   
|                                                    |  |                                                               |  |                                                                         |  |                 
|WADE NESMITH British Columbia, Canada               |  | Chairman and Director                                         |  | Chairman of the Company                                                 |  | October 29, 2008
|                                                    |  |                                                               |  |                                                                         |  |                 
|ROBERT A. QUARTERMAIN(3)(4)British Columbia, Canada |  | Director                                                      |  | President and Chief Executive
      Officer of Pretium Resources Inc.   |  | June 28, 2010   
|                                                    |  |                                                               |  |                                                                         |  |                 
|MICHAEL RILEY(3)(5)British
      Columbia, Canada   |  | Director                                                      |  | Director of the Company                                                 |  | April 22, 2010  
|                                                    |  |                                                               |  |                                                                         |  |                 
|TAMARA BROWN(1)Ontario,
      Canada                |  | Vice-President, Investor
      Relations                      |  | Vice-President, Investor
      Relations of the Company                 |  | N/A             
|                                                    |  |                                                               |  |                                                                         |  |                 
|JOSEPH CONWAY(1)(2)Ontario,
      Canada            |  | Chief Executive Officer and
      Director                    |  | Chief Executive Officer of the
      Company                            |  | June 28, 2010   
|                                                    |  |                                                               |  |                                                                         |  |                 
|WENDY KAUFMAN(1)Ontario,
      Canada               |  | Chief Financial Officer                                       |  | Chief Financial Officer of the
      Company                            |  | N/A             
|                                                    |  |                                                               |  |                                                                         |  |                 
|H. MAURA LENDON(1)Ontario,
      Canada             |  | Vice-President, General Counsel
      and Corporate Secretary |  | Chief General Counsel and
      Corporate Secretary of the Company      |  | N/A             

54

---

|                                                    |  | Position(s) with the                                       |  |                                                              |  |               
|--------------------------------------------------- |  | ---------------------------------------------------------- |  | ------------------------------------------------------------ |  | --------------
|Name and
      Residence                            |  | Company                                                    |  | Principal Occupation                                         |  | Director Since
|                                                    |  |                                                            |  |                                                              |  |               
|JAMES MALLORY, Ontario, Canada                      |  | Vice-President, Corporate
      Responsibility             |  | Vice-President,
      Corporate Responsibility               |  | N/A           
|                                                    |  |                                                            |  |                                                              |  |               
|ERNEST MAST British Columbia, Canada                |  | President and Chief Operating
      Officer                |  | President and
      Chief Operating Officer of the Company   |  | N/A           
|                                                    |  |                                                            |  |                                                              |  |               
|DAVID SANDISON Ontario, Canada                      |  | Vice-President, Corporate
      Development                |  | Vice-President,
      Corporate Development of the Company   |  | N/A           
|                                                    |  |                                                            |  |                                                              |  |               
|MARIA-LUISA SINCLAIR British Columbia,
      Canada |  | Vice-President, Human Resources                            |  | Vice-President,
      Human Resources of the Company         |  | N/A           
|                                                    |  |                                                            |  |                                                              |  |               
|LOUIS TONER Quebec, Canada                          |  | Vice-President, Project
      Development and Construction |  | Vice-President,
      Project Development and Construction   |  | N/A           
|                                                    |  |                                                            |  |                                                              |  |               
|GABRIEL VOICU Ontario, Canada                       |  | Vice-President, Geology and
      Exploration              |  | Vice President,
      Geology and Exploration of the Company |  | N/A           

|(1) | Member of the Disclosure Committee.                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                        
|(2) | Member of the Corporate Responsibility Committee. Mr.
      Hazelton is the Chair of the Corporate Responsibility Committee.                                                           
|    |                                                                                                                                                                                        
|(3) | Member of the Human Resources Committee. Mr. Demers is
      the Chair of the Human Resources Committee. Mr. Riley was appointed to the
      Human Resources Committee on May 7, 2014.
|    |                                                                                                                                                                                        
|(4) | Member of the Governance and Nominating Committee. Mr.
      Edey is the Chair of the Governance and Nominating Committee.                                                             
|    |                                                                                                                                                                                        
|(5) | Member of the Audit Committee. Mr. Riley is the Chair of
      the Audit Committee. Mr. Hazelton resigned from the Audit Committee on
      August 6, 2014.                            

**As of the date of this AIF, the directors and executive officers of the
Company, as a group, beneficially own, directly or indirectly, or exercise
control or direction over 1,394,633 Common Shares, being 0.86% of the issued
Common Shares on a non-diluted basis. The statement as to the number of Common
Shares beneficially owned, directly or indirectly, or over which control or
direction is exercised by the directors and executive officers of the Company,
as a group, is based upon information furnished by the directors and executive
officers.

**Principal Occupations and Other Information about
Primeros Directors and Executive Officers**

** The
principal occupations of each of the Companys directors and executive officers
within the past five years are disclosed in the biographies set forth below.

**David Demers  Director**

**Mr.
Demers has been a director of the Company since October 28, 2008. He was one of
the founding members of Westport Innovations, a University of British Columbia
spinoff company that has grown into a world leader as the transportation
industry shifts from oil-based fuels like gasoline and diesel fuel to natural
gas. Mr. Demers has been Chief Executive Officer and a Director of Westport
since it was formed. Westport was listed on the TSX in 1999 and on NASDAQ in
2008. Mr. Demers has worked as a Director of a number of technology startups,
including EnWave (TSX:ENW) as it was spun out of the University of British
Columbia until it completed its initial public offering, and was Chair of
BrightSide when it was sold to Dolby. He also served as a Director of Clean
Energy Fuels through its NASDAQ listing. Mr. Demers obtained a Bachelor of
Science (Physics) in 1976 and a Juris Doctor in 1978, both from the University
of Saskatchewan. He started his career as a midnight shift computer systems
operator at IBMs state of the art (at the time) System 360/65 data centre in
Calgary and joined IBM Canada Ltd. (IBM) in 1979 as a Systems Engineer. While
at IBM he worked with the first time sharing and email systems, with the first
relational database products, the IBM PC, laser printing technology and the
first voice/data networking systems.

55

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**Grant Edey  Director**

**Mr.
Edey has been a director of the Company since June 28, 2010, and has been the
President and Chief Executive Officer of Khan Resources Inc., since July 2010
and a director of Khan Resources Inc. since February 2007. Mr. Edey was Chief
Financial Officer of IAMGOLD from 2002 until August 2007. From 1996 until 2002,
he was the Vice President, Finance, Chief Financial Officer and Corporate
Secretary of Repadre Capital Corporation. Before joining Repadre Capital
Corporation, Mr. Edey held senior positions with Strathcona Mineral Services
Limited, TransCanada Pipelines Limited, Eldorado Nuclear Limited, Rio Algom
Limited and INCO Limited. Mr. Edey has a Masters degree in Business
Administration from the Ivey School of Business, University of Western Ontario
and a Bachelor of Science (Mining Engineering) degree from Queens University.

**Rohan Hazelton  Director**

**Mr.
Hazelton has been a director of the Company since August 25, 2010. Mr. Hazelton
is a Chartered Accountant with over 15 years of finance experience, ten of those
years at senior positions within the mining industry. Mr. Hazelton has been the
Vice President, Strategy at Goldcorp since July 2012. From March 2006 to July
2012, he was the Vice President, Finance at Goldcorp. He was formerly Corporate
Controller for Goldcorp and, before Goldcorps merger with Wheaton River, he was
a key member of Wheatons management team. Mr. Hazelton was also previously
director of Gryphon Gold Corp. from July 2005 to December 2008, and he was the
director of Terrane Metals Corporation from August 2008 to October 2010. Mr.
Hazelton worked for Deloitte & Touche LLP and Arthur Andersen LLP from
September 1999 to November 2002 as a senior auditor. From October 1996 to
January 1998, he was a commercial loans officer for Dialog Bank in Moscow,
Russia. Mr. Hazelton has a B.A. in Math and Economics from Harvard University.

**Eduardo Luna  Director****Mr.
Luna has been a director of the Company since October 29, 2008 and was Executive
Vice President and President (Mexico) of the Company from June 1, 2010 to
November 30, 2011. He was Co-Chair of the Company from November 2008 until June
1, 2010, and President and Chief Operating Officer of the Company from September
28, 2009 until June 1, 2010. From July 2008 until December 2009, he was a
director of 0777551 B.C. Ltd., a private company that was a predecessor to the
Company. Mr. Luna was Chairman of Silver Wheaton Corp. from October 2004 to
April 2009 and its Chief Executive Officer from October 2004 to April 2006;
Executive Vice President of Wheaton River from June 2002 to April 2005,
Executive Vice President of Goldcorp from March 2005 to September 2007, and
President of Luismin, S.A. de C.V. from 1991 until 2007. He is the President and
Chief Executive Officer and director of Rochester Resources Ltd since January
2009. He holds a degree in Advanced Management from Harvard University, a Master
of Business Administration degree from Instituto Tecnólogico de Estudios
Superiores de Monterrey and a Bachelor of Science degree in Mining Engineering
from Universidad de Guanajuato. He held various executive positions with Minera
Autlán for seven years and with Industrias Peñoles for five years. He
was on two occasions President of the Mexican Mining Chamber and he was also a
former President of the Silver Institute. He serves as Chairman of the Advisory
Board of the Faculty of Mines at the University of Guanajuato and of the Mineral
Resources Council in Mexico.

56

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**Brad Marchant  Director**

**Mr.
Marchant has been a director of the Company since June 2013. He is co-founder of
Triton Mining Corporation and successfully took the Limon mine in Nicaragua from
exploration through to production and expansion. Mr. Marchant has over 30 years
of experience in the mining and environmental industry both in management and as
a director. He has worked with numerous mining and technology companies
including Coastech Research Inc., Triton Mining Corporation, Placer Dome Ltd.,
Equity Silver Mines Ltd., Enterra Feed Corporation and Wabush Mines Ltd. He also
founded a new water treatment company, BioteQ Environmental Technologies Inc.,
which is focused on finding water treatment solutions for mining companies
experiencing metallurgical and environmental challenges. Mr. Marchant has a
B.Sc. in Biochemistry from the University of New Brunswick and a M.A.Sc. in
Mining and Mineral Process Engineering from the University of British Columbia.

**Wade Nesmith  Director and Chairman of the Board**

**   Mr.
Nesmith is the founder of the Company, Chairman of the Board, and a director of
Primero. He acted as President from October 29, 2008 to September 28, 2009, and
Chief Executive Officer from October 29, 2008 to June 1, 2010, at which time he
was appointed Executive Chairman of the Board. On March 15, 2012, Mr. Nesmith
resigned as Executive Chairman of the Board and was appointed Chairman of the
Board. He was the President, Chief Executive Officer, Chief Financial Officer
and a director of 0777551 B.C. Ltd., a private company that was a predecessor to
the Company, from December 2006 to December 2009. Mr. Nesmith obtained his
Bachelor of Law degree from York University  Osgoode Hall, Ontario in 1977. He
is the former Superintendent of Brokers for the Province of British Columbia
from 1989 until 1992. He was a senior partner, specializing in securities law,
with Lang Michener LLP (now McMillan LLP) from 1993 until 1998, and an Associate
Counsel at Lang Michener LLP (now McMillan LLP) from January 2004 to December
2007. He was an executive with Westport Innovations Inc. (Westport
Innovations) from 1998 until 2003, helping to lead their public markets
activities and retiring as President, Westport Europe. He is a founding director
and remains a director of Silver Wheaton Corp. (TSX, NYSE).

**Robert A. Quartermain  Director**

**Dr.
Quartermain, D.Sc., has been a director of the Company since June 28, 2010. He
has been the President and Chief Executive Officer and a director of Pretium
Resources Inc. since October 2010. He served as President and Chief Executive
Officer of Silver Standard Resources Inc. from January 1985 until January 2010.
Dr. Quartermain worked for the Geological Survey of Canada and in private
industry on mapping and exploration programs from 1976 until 1981. He also
worked for Teck Corp. from 1981 to 1984 before becoming President of Silver
Standard Resources Inc. in 1985. Dr. Quartermain has a Bachelor of Science
degree in geology from the University of New Brunswick, and a Master of Science
degree in mineral exploration from Queens University. He was awarded an
honorary Doctor of Science degree from the University of New Brunswick in May
2009.

**Michael Riley  Director**

**Mr.
Riley has been a director since April 2010. He retired as a senior auditor
partner from Ernst & Young LLP in September 2006 after more than 25 years
with the firm. He became a partner in the firms Montreal office in 1985, where he worked with clients in
the retail, pharmaceutical, manufacturing and resource industries. He relocated
to the firms Vancouver office in 1995, where his responsibilities included
serving as the lead audit engagement partner for the offices largest Canadian
and US listed public company clients in mining, transportation and banking.
During that time, he also lead the offices M&A due diligence practice for 2
years. Prior to Ernst & Young, Mr. Riley's professional background also
included working for Bell Canada (now BCE), and his early years as an articling
student and Chartered Accountant with Peat, Marwick, Mitchell & Co (now KPMG
LLP). He has previously been a director for several organizations, including the
British Columbia Lottery Corporation, CanAlaska Uranium Ltd., Seacliff
Construction Corp., the Vancouver Symphony Society, The Heart & Stroke
Foundation of British Columbia & Yukon, the BCAA Road Safety Foundation. Mr.
Riley has been a Chartered Accountant (recently changed to Chartered
Professional Accountant) since 1978 and is a member of both CPA Bodies in
British Columbia and Quebec. He graduated with a Bachelor of Commerce Degree
from Concordia University in 1975 majoring in operations research and
quantitative methods. He also holds a graduate diploma in public accounting from
McGill University attained in 1977.

57

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**Tamara Brown  Vice President, Investor Relations**

**    Ms.
Brown has been Vice President, Investor Relations of the Company since June 1,
2010. From April 2009 to April 2010, Ms. Brown was Director of Investor
Relations for IAMGOLD where she was responsible for all aspects of investor
relations including being a member of its disclosure committee. Previously, Ms.
Brown was an investor relations consultant for several junior exploration
companies, partner of a boutique investment banking firm and a professional
engineer in the mining industry. She graduated with a Bachelor of Engineering
degree from Curtin University in Australia and has completed the Chartered
Business Valuator course at York University.

**Joseph Conway  Chief Executive Officer and Director**

** Mr.
Conway was appointed President and Chief Executive Officer of the Company on
June 1, 2010 and has been a director of the Company since June 28, 2010. Mr.
Conway ceased to be President of Primero on February 2, 2015. He is a director
of Orezone Gold Corporation since October 2014. Mr. Conway is also a
non-executive director of Santana Mineral Limited since June 2013. Mr. Conway
was a director of Dalradian Resources Inc. from June 2010 to May 2013. He served
as President and Chief Executive Officer and a director of IAMGOLD Corporation
(IAMGOLD) from January 2003 until January 2010. and was a director of IAMGOLD
from January 2004 until December 2009. Mr. Conway was President, Chief Executive
Officer and a director of Repadre Capital Corporation from September 1995 until
January 2003. From 1989 until 1995, he was Vice President and a director of
Nesbitt Burns, a Canadian investment dealer. He was a stock analyst with Walwyn
Stodgell Cochran and Murray from 1987 to 1989, and a mine and exploration
geologist from 1981 to 1985. Mr. Conway has a Bachelor of Science degree from
Memorial University and a Master of Business Administration degree from
Dalhousie University.

**Wendy Kaufman, Chief Financial Officer**

**Ms. Kaufman was appointed Chief Financial officer on September 29, 2014.
Ms. Kaufman brings 20 years of public company financial and executive management
experience from the mining sector. She has served in a variety of senior
executive positions, most recently as Vice President, Finance and Treasury at
Inmet Mining Corporation, a Canadian-based global copper producer, where she led
the global financial strategy including attainment of financing for a
significant mine development project. Ms. Kaufman has broad finance experience
in strategic development, statutory and management reporting, international
taxation, acquisitions, and controls. She is a Canadian Chartered Professional Accountant and holds a Bachelor of
Business Administration from Wilfrid Laurier University.

58

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**H. Maura Lendon Chief General Counsel and Corporate
Secretary**

**   Ms.
Lendon has been Chief General Counsel and Corporate Secretary of the Company
since March 29, 2012. From May 2011 until March 2012, Ms. Lendon was President
of Aurah Advisory Services Inc., during which time she provided strategic and
governance advisory services to diverse businesses. From April 2008 to May 2011
she was Senior Vice President, Corporate Services, Chief Legal Officer and
Corporate Secretary of HudBay Minerals Inc. From 2004 to April 2008, she was
Chief Counsel, Canada and Chief Privacy Officer Canada of AT&T. Ms. Lendon
holds a Master of Laws from Osgoode Hall Law School, a Master of Business
Administration from the Richard Ivey School of Business and a Bachelor of Laws
from University of Western Ontario. She has been a member of the Ontario Bar
since 1990.

**James Mallory  Vice President, Corporate
Responsibility**

**     Mr.
Mallory was appointed Vice President Corporate Responsibility of the Company on
March 1, 2014. From April 2011 to July 2013, Mr. Mallory was Vice-President,
Operations & Social Responsibility at South American Silver, during which
time he was responsible for social responsibility programs in Bolivia and Chile.
From May 2009 to March 2011 he was Vice President Sustainability for Silver
Standard Resources overseeing environmental and community relations initiatives
for projects in Mexico, Argentina and Peru. Previously from June 2006 to January
2009 Mr. Mallory was General Manager with Nova Gold Resources responsible for
relations with the BC First Nations (2006-2007) and later as General Manager of
Operations in Nome, Alaska. Mr. Mallory started his career with Placer Dome and
has more than 35 years of mining industry experience including 13 years of
international service in Chile.

**Ernest Mast  President and Chief Operating Officer**

**    Mr.
Mast was appointed President and Chief Operating Officer of the Company on
February 2, 2015. Mr. Mast is a metallurgical engineer and brings to Primero
over 25 years of international mining experience. Mr. Mast previously held
leadership positions including Vice President of Corporate Development at Copper
Mountain Mining, owner of the 35,000 tonnes per day Copper Mountain mine in
British Columbia, Vice President of Operations at New Gold Inc. where he was
responsible for overseeing approximately 1,600 employees at 4 mines producing a
combined 400,000 ounces per year of gold and substantial silver and copper
by-products. Mr. Mast was also the President and CEO of Minera Panama, a
subsidiary of Inmet Mining (now First Quantum), during the development of Cobre
Panama, a 290,000 tonnes per year copper project. In addition, he was President
and General Manager of the large-scale Falcondo ferronickel operations in the
Dominican Republic, now owned by Glencore. In addition he was Technical Director
for Norandas South American Operations based out of Chile. Mr. Mast has a
Masters degree in Metallurgical Engineering from McGill University and is a
graduate of the Advanced Management Program at Henley College in the UK. He is a
registered professional engineer and fluent in English, Spanish and French.

**David Sandison  Vice President, Corporate
Development**

**   Mr.
Sandison has been Vice-President, Corporate Development of the Company since
October 18, 2010. From January 2010 to September 2010, he was Vice-President,
Corporate Development of Clarity Minerals, a private company with investments in
Canadian and African gold mining and exploration. From February 2009 to December
2009, he was a mining consultant. From June 1984 to January 2009, he worked in senior management capacities with
the Noranda Group of Companies (subsequently Falconbridge and Xstrata plc). From
September 2006 to January 2009, he was Director Corporate Development of Xstrata
Zinc Canada. From February 2005 through September 2006, he was Vice-President of
Novicourt Inc., a public Noranda subsidiary. From July 2001 through August 2006,
he was Director Corporate Development for Noranda Inc. Before this he held
senior management positions with Noranda subsidiaries in Chile and the United
States. Mr. Sandison has a Bachelor of Applied Science (Geological Engineering 
1982) degree from The University of Toronto and a Master of Business
Administration (1984) degree from Queens University.

59

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**Maria-Luisa Sinclair, Vice President, Human
Resources**

**   Ms.
Sinclair first joined Primero in February 2013 as a Human Resources consultant,
and in May 2014, joined full-time as Director, Human Resources. Ms. Sinclair has
played an integral role in filling key senior management positions, providing
guidance to our Mexican Human Resources team, and building collaborative
relationships with the management teams at San Dimas and Black Fox. She has over
25 years of international Human Resources experience in the mining sector with
particular expertise in Latin America, having previously held key positions with
Baja Mining, Skye Resources, Placer Dome, and Pan American Silver. Ms. Sinclair
has a Masters degree from Royal Roads University in Victoria, British Columbia,
and was a faculty member of the McRae Institute of International Management at
Capilano University.

**Louis Toner  Vice President, Project Development
and Construction**

**   Mr.
Toner was appointed Vice President, Project Development and Construction of the
Company on July 29, 2013. He brings over 30 years of engineering and
construction management experience ranging from small and medium sized
brownfield projects to large-scale greenfield projects. Previously, Mr. Toner
worked with BBA Inc., Lafarge Canada Inc., and SNC-Lavalin International Inc.
Mr. Toner holds a B.Eng. Civil Engineering from McGill and is a member of the
Ordre des ingénieurs du Québec (OIQ) and the Association of Professional
Engineers and Geoscientists of New Brunswick.

**Gabriel Voicu  Vice President, Geology and
Exploration**

**    Mr.
Voicu was appointed Vice President, Geology and Exploration in November 2012.
Mr. Voicu brings 25 years of mineral deposit exploration and mining experience,
including holding senior technical and exploration positions with a number of
intermediate gold producers. Much of his experience was gained in the Americas
in such countries as Suriname, Guyana and Canada and he also worked for 9 years
in Romania. Between 2009 and 2012, he was the Technical Services Manager at the
IAMGOLDs Rosebel Gold Mine in Suriname. Previously, he worked as a Scientific
Researcher with CONSOREM, a Quebec-based research group in mineral exploration,
and at Cambior Inc.s Omai Gold Mine in Guyana. He was also consultant for
several junior exploration companies. Mr. Voicu holds a PhD in Mineral Resources
from the Université du Québec à Montréal, and a BSc (Geological Engineering)
from the University of Bucharest, Romania. Mr. Voicu is also an Adjunct
Professor of Economic Geology with the Université du Québec à Montréal.

**Cease Trade Orders, Bankruptcies, Penalties or
Sanctions**

**Cease Trade Orders**

**    No
director or executive officer of Primero is, as at the date of this AIF, or has
been, within the last ten years before the date of this AIF, a director, chief
executive officer, or chief financial officer of any company (including Primero)
that was:

60

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| | (a) | subject to an order that was issued while the director or
      executive officer was acting in the capacity as director, chief executive
      officer or chief financial officer; or                                                                                                                                                      
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                             
| | (b) | subject to an order that was issued after the director or
      executive officer ceased to be a director, chief executive officer or
      chief financial officer and which resulted from an event that occurred
      while that person was acting in the capacity as director, chief executive
      officer or chief financial officer.

**  For
the purpose of the above paragraph, order means (a) a cease trade order, (b)
an order similar to a cease trade order, or (c) an order that denied the
relevant company access to any exemption under securities legislation, that was
in effect for a period of more than 30 days.

**Bankruptcy**

**    No
director or executive officer of Primero, or a shareholder holding a sufficient
number of securities of Primero to affect materially the control of Primero is,
as at the date of this AIF, or has been, within ten years before the date of
this AIF, a director or executive officer of any company (including Primero)
that:

| | (a) | while that person was acting in that capacity, or within
      a year of ceasing to act in that capacity, became bankrupt, made a
      proposal under any legislation relating to bankruptcy or insolvency, or
      was subject to or instituted any proceedings, arrangement or compromise
      with creditors, or had a receiver, receiver manager or trustee appointed
      to hold its assets; or
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                          
| | (b) | became bankrupt, made a proposal under any legislation
      relating to bankruptcy or insolvency, or become subject to or instituted
      any proceedings, arrangement or compromise with creditors, or had a
      receiver, receiver manager, or trustee appointed to hold the assets of the
      director, executive officer or shareholder.                                                       

**Sanctions**

** No
director or executive officer of Primero, or a shareholder holding a sufficient
number of securities of Primero to affect materially the control of Primero has
been subject to:

| | (a) | any penalties or sanctions imposed by a court relating to
      securities legislation or by a securities regulatory authority or has
      entered into a settlement agreement with a securities regulatory
      authority; or
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                 
| | (b) | any other penalties or sanctions imposed by a court or
      regulatory body that would likely be considered important to a reasonable
      investor in making an investment decision.                                         

**Conflicts of Interest**

**     Several
directors of Primero also serve as directors of one or more other resource
companies involved in mineral exploration and/or development. It may occur from
time to time that as a consequence of his activity in the mineral industry and
serving on such other boards that a director may become aware of potential
resource property opportunities which are of interest to more than one of the
companies on whose boards that person serves. Accordingly, situations may arise
in the ordinary course that involve a director in an actual or potential
conflict of interest as well as issues in connection with the general obligation of a director to make
corporate opportunities available to the company on which the director serves.
In all such events, any director who might have a disclosable financial interest
in a contract or transaction by virtue of office, employment or security
holdings or other such interest in another company or in a property interest
under consideration by the Primero Board, would be obliged to abstain from
voting as a Primero director in respect of any transaction involving that other
company(s) or in respect of any property in which an interest is held by him.
The directors will use their best business judgment to help avoid situations
where conflicts or corporate opportunity issues might arise and they must at all
times fulfill their duties to act honestly and in the best interests of Primero.
At this time the Board is not aware of any existing or potential material
conflict of interest between the Company or a subsidiary of the Company and any
director. See Risk Factors  Conflicts of Interest.

61

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**LEGAL PROCEEDINGS AND REGULATORY ACTIONS**

**Ejidos**

**    An
Ejido is a communal ownership of land recognized by the federal laws in Mexico.
While mineral rights are administered by the federal government through
federally issued mining concessions, access to surface rights is also required
for mining operations. An Ejido controls surface rights over its communal
property through a board of directors. An Ejido may sell or lease lands directly
to a private entity and it may also allow individual members of the Ejido to
obtain title to specific parcels of land and thus the right to sell or lease the
land.

**     The
San Dimas Mine uses Ejidos lands pursuant to written agreements with Ejidos.
Some of these agreements may be subject to renegotiation and changes to the
existing agreements may increase operating costs or have an impact on
operations. In cases where access to land is required for operations and an
agreement cannot be reached with the land owner, Primero may seek access under
Mexican law which provides for priority rights for mining activities.

**    Three
of the properties included in the San Dimas Mine and for which Primero holds
legal title are subject to legal proceedings commenced by Ejidos seeking title
to the property. None of the proceedings name Primero as a party and Primero
therefore has no standing to participate in them. In all cases, the defendants
are previous owners of the properties, either deceased individuals who,
according to certain public deeds, owned the properties more than 80 years ago,
corporate entities that are no longer in existence, or Goldcorp companies. Three
of the proceedings also name the Tayoltita Property Public Registry as
co-defendant.

**     While
Primero cannot intervene in these proceedings, in the event that a final
decision is rendered in favour of the Ejido, Primero may seek to annul the
decision or commence an action as an affected third party on the basis that it
is the legitimate owner and is in possession of the property. If Primero is not
successful in its challenge, the San Dimas Mine could face higher costs
associated with agreed or mandated payments that would be payable to the Ejidos
for use of the properties.

**Calais**

**     On
March 4, 2014, Calais Resources, Inc. and Calais Resources Colorado, Inc.
(collectively, Calais) filed a lawsuit in the district court for the city and
county of Denver, Colorado, USA, against Brigus, now Primero. In the lawsuit,
Calais makes certain allegations against Brigus concerning a January 2011
forbearance agreement and two subsequent extension agreements related to certain
promissory notes acquired by Brigus when it acquired Apollo Gold, Inc.
(Apollo). Apollo had sold one of its subsidiaries to Elkhorn Goldfields, LLC
(Elkhorn), and in return Elkhorn conveyed to Apollo certain promissory notes evidencing debt owed by Calais to
Elkhorn (the notes) and related security interests. Subsequently, Brigus (as
successor to Apollo), entered into a forbearance agreement with Calais pursuant
to which Brigus agreed to forebear from foreclosing on the collateral securing
the notes, despite the fact that numerous payments In 2012, Brigus sold the
notes, and the underlying security interests, to New West Minerals, LLC (New
West).

62

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**     In
its lawsuit Action, Calais seeks damages, including $1.2 million in payments
made pursuant to the forbearance agreement and extension agreements and lost
profits related to lost financing opportunities, based upon allegations of
either fraud or negligent misrepresentation. The Company disputes all of the
allegations made by Calais in Action, and intends to vigorously defend itself in
that proceeding.

**TRANSFER AGENT AND REGISTRAR**

**   The
transfer agent and registrar for the Common Shares in Canada is Computershare
Investor Services Inc. at its principal office in Toronto, Ontario. The transfer
agent and registrar for the Common Shares in the United States is Computershare
Trust Company, Inc. at its principal office in Canton, Massachusetts.

**MATERIAL CONTRACTS**

**   The
material contracts entered into by the Company within the financial year ended
December 31, 2014 or before such time that is still in effect, other than in the
ordinary course of business, are the following:

| | (a) | Trust Indenture, dated February 9, 2015, between the
      Company and Computershare Trust Company of Canada;                                                                                                                                                                                                                                                                                            
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                          
| | (b) | Supplemental Convertible Debenture Indenture, dated March
      5, 2014, among the Company, Brigus, Fortune Bay, and Computershare Trust
      Company of Canada;                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                          
| | (c) | Purchase agreement between Brigus and Sandstorm (the
      Sandstorm Agreement), dated November 9, 2010, for the sale of a
      percentage of the gold produced from the Black Fox mine. The term of the
      agreement is 80 years, renewable for subsequent 10 year terms unless
      terminated by Sandstorm. See Mining Activities  Black Fox Complex 
      Sandstorm Goldstream Agreement;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                          
| | (d) | Second amended and restated silver purchase agreement
      among Silver Trading, SW Caymans, the Company and Silver Wheaton,
      originally dated as of October 15, 2004, restated as of March 30, 2006,
      amended and restated as of August 6, 2010. See Mining Activities  San
      Dimas Mine  Amended and Restated Silver Purchase Agreement;                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                          
| | (e) | Deed of indemnity among Silver Trading, the Company and
      Goldcorp, made as of August 6, 2010. See Mining Activities  San Dimas
      Mine  Amended and Restated Silver Purchase Agreement; and                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                          
| | (f) | Common share purchase warrant indenture, dated July 20,
      2010, and supplemental warrant indenture, dated July 28, 2010, between the
      Company and Computershare Trust Company of Canada. See General
      Development of the Business  Three Year History  Acquisition of San
      Dimas Mine.                                                                                            

63

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**INTERESTS OF EXPERTS**

** The
following is a list of the persons or companies named as having prepared or
certified a report, valuation, statement or opinion described or included in a
filing, or referred to in a filing, made under National Instrument 51-102 -
Continuous Disclosure Obligations by Primero during, or relating to,
Primeros most recently completed financial year, and whose profession or
business gives authority to the report, valuation, statement or opinion made by
the person or company:

| |  | J. Morton Shannon, P. Geo., Rodney Webster, M.AIG,
      Herbert A. Smith, P.Eng and Alan Riles, M.AIG, all of AMC Mining
      Consultants (Canada) Ltd. who authored the Technical Report.                                                                                                                                                                             
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                          
| |  | Mr. Timothy Carew, P. Geo of Reserva International LLC,
      Mr. Thomas Dyer, P.E. of Mine Development Associates, Mr. Peter Hayward,
      F.AusIMM of Sedgman Ltd., and Mr. John Skeet, F.AudIMM, Chief Operating
      Officer of Cerro, who authored the CDG Technical Report.                                                                                      
| |   |                                                                                                                                                                                                                                                                                                                                                                          
| |  | Mr. Gabriel Voicu, P.Geo, Vice President, Geology and
      Exploration of Primero, reviewed the CDG Technical Report on behalf of
      Primero.                                                                                                                                                                                                                        
| |   |                                                                                                                                                                                                                                                                                                                                                                          
| |  | Mr. Harold Brisson, Resource Manager of Primero, who
      authored the Black Fox Complex Technical Report.                                                                                                                                                                                                                                                              
| |   |                                                                                                                                                                                                                                                                                                                                                                          
| |  | Mr. Harold Brisson, Resource Manager of Primero, Mr.
      Clifford Lafleur, P.Eng., Director Technical Services for Primero, Mr.
      Karl Dessureault, P.Eng., Chief Mine Engineer Black Fox, Primero and Mr.
      Rodney Webster, M.AIG, of AMC Mining Consultants (Canada) who acted as QPs
      for the Black Fox Complex Mineral Resource and Reserve estimates.
| |   |                                                                                                                                                                                                                                                                                                                                                                          
| |  | Mr. Harold Brisson, Resource Manager of Primero and Mr.
      Clifford Lafleur, Director Technical Services for Primero, who acted as
      QPs for the San Dimas Mineral Resource and Reserve estimates.                                                                                                                                                                

**     To
the Companys knowledge, each of the aforementioned firms or persons held less
than 1% of the outstanding securities of the Company or of any associate or
affiliate of the Company when they prepared the reports referred to above or
following the preparation of such reports. None of the aforementioned firms or
persons received any direct or indirect interest in any securities of the
Company or of any associate or affiliate of the Company in connection with the
preparation of such reports.

**   Based
on information provided by the relevant persons, none of the aforementioned
firms or persons, nor any directors, officers or employees of such firms, is
currently expected to be elected, appointed or employed as a director, officer
or employee of the Company or of any associate or affiliate of the Company
except for Mr. Brisson, who is the Resource Manager of the Company, and Mr.
Voicu, who is the Vice President, Geology and Exploration of the Company.

**  The
Companys auditor for the 2014 fiscal year was Deloitte LLP, who had been the
Companys independent auditor since 2008. Primeros Audit Committee and the
Board have approved the engagement of KPMG LLP as the Companys auditor for the
2015 fiscal year, subject to ratification by shareholders at the Companys
annual general and special meeting of shareholders to be held on May 6, 2015
(the Meeting). Additional information regarding the rotation of Primeros
auditors is contained under Management Information Circular  Business of the
Meeting; Appointment of Auditor as well as in Schedule A - Change of Auditor
Notification Package in the Companys Management Information Circular
(Information Circular).

64

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**ADDITIONAL INFORMATION**

**Additional
information relating to the Company may be found on SEDAR at
www.sedar.com.

**    Additional
information, including directors and officers remuneration and indebtedness,
principal holders of the Companys securities, and securities authorized for
issuance under equity compensation plans is contained in the Information
Circular for Primeros Meeting, which is available on SEDAR at
www.sedar.com.

**     Additional
financial information is also provided in Primeros audited consolidated
financial statements and Managements Discussion and Analysis for the year ended
December 31, 2014, which may also be found on SEDAR at www.sedar.com.

65

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AUDIT COMMITTEE

Audit Committee Charter

**   The
Audit Committee is ultimately responsible for the policies and practices
relating to integrity of financial and regulatory reporting, as well as internal
controls to achieve the objectives of safeguarding of corporate assets;
reliability of information; and compliance with policies and laws.

**  The
Audit Committees charter sets out its mandate and responsibilities, and can be
found in the Companys management information circular or on the Companys
website www.primeromining.com.

Composition of Audit Committee

**  The
Audit Committee is currently comprised of three directors, Michael Riley, Grant
Edey and David Demers, all of whom are both independent and financially literate
according to the Boards independence standards as set out in the Companys
Board Guidelines and applicable Canadian and US securities laws and regulations.
Michael Riley, the Chair of the Audit Committee, is also an audit committee
financial expert under the U.S. Securities and Exchange Act regulations.

**Relevant Education and Experience**

** For
a description of the education and experience of each audit committee member
that is relevant to the performance of his responsibilities as an audit
committee member, see Directors and Officers  Principal Occupations and Other
Information about Primeros Directors and Executive Officers. Such education
and experience provides each member with:

- an understanding of the accounting principles used by the Company to
  prepare its financial statements;
- the ability to assess the general application of such accounting principles
  in connection with the accounting for estimates, accruals and reserves;
- experience preparing, auditing, analyzing or evaluating financial
  statements that present a breadth and level of complexity of accounting issues
  that are generally comparable to the breadth and complexity of issues that can
  reasonably be expected to be raised by the Companys financial statements, and
- an understanding of internal controls and procedures for financial
  reporting.

**Pre-Approval Policies and Procedures**

**   The
Audit Committees charter sets out responsibilities regarding the provision of
non-audit services by the Companys external auditor. This policy encourages
consideration of whether the provision of services other than audit services is
compatible with maintaining the auditors independence and requires Audit
Committee pre-approval of permitted audit and audit-related services.

**External Auditor Service Fees**

**     For
the financial years ended December 31, 2014 and 2013, the Company paid the
external auditor, Deloitte LLP, CDN$1,316,256 and CDN$443,635, respectively, as
detailed below:

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|                         |  |   | Year Ended December 31 | 
|------------------------ |  | - | ---------------------- | 
|                         |  |   |                        | 
|Nature of
      Services |  |   | 2014(1)                | 
|Audit Fees(2)            |  |   | 1,003,799              | 
|Audit-Related Fees(3)    |  |   | 312,457                | 
|Tax Fees(4)              |  |   | 0                      | 
|All Other Fees(5)        |  |   | 0                      | 
|Total                    |  | $ | 1,316,256              | 

**[NTD: Finance to confirm notes]**

| | (1) | All amounts in Canadian dollars.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (2) | Audit fees represent the aggregate fees billed for each
      of the last two fiscal years for professional services rendered by the
      principal accountant for the audit of the Companys annual financial
      statements, review of interim financial statements or services that are
      normally provided by the accountant in connection with statutory and
      regulatory filings or engagements for those fiscal years. 2014 Audit fees
      reflect an increase from 2013 due to the acquisition of Brigus and the
      requirement of the Companys internal control over financial
    reporting.                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (3) | Audit related fees represent the aggregate fees billed in
      each of the last two fiscal years for assurance and related services by
      the principal accountant that are reasonably related to the performance of
      the audit or review of the Companys financial statements and are not
      reported under Audit Fees above.These audit-related services
      include review of letters to regulatory authorities, consent and comfort
      letters in relation to prospectus filings, regulatory fees billed by the
      independent registered public accounting firm to the Company, accounting
      consultations on proposed transactions, and services provided on the
      completion of the acquisitions of Brigus and Cerro.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (4) | Tax fees represent the aggregate fees billed in each of
      the last two fiscal years for professional services rendered by the
      principal accountant for tax compliance, tax advice, and tax planning.
      These professional services included tax compliance assistance in
    2013.                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (5) | Other fees in 2013 related to transaction related
      services.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

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**SCHEDULE A TECHNICAL DEFINITIONS**

The
estimated Mineral Reserves and Mineral Resources for the Companys properties
have been prepared in accordance with the Canadian Institute of Mining,
Metallurgy and Petroleum (CIM)  Definitions (the CIM Standards) adopted by
the Canadian Securities Administrators in National Instrument 43-101 -
Standards of Disclosure for Mineral Projects(NI 43-101). The following
definitions are reproduced from the CIM Standards:

The
term **Preliminary Feasibility Study** means a comprehensive
study of the viability of a mineral project that has advanced to a stage where
the mining method, in the case of underground mining, or the pit configuration,
in the case of an open pit, has been established and an effective method of
mineral processing has been determined, and includes a financial analysis based
on reasonable assumptions of technical, engineering, legal, operating, economic,
social, and environmental factors and the evaluation of other relevant factors
which are sufficient for a Qualified Person, acting reasonably, to determine if
all or part of the Mineral Resource may be classified as a Mineral Reserve.

The
term **Mineral Resource**means a concentration or
occurrence of diamonds, natural solid inorganic material, or natural solid
fossilized organic material including base and precious metals, coal, and
industrial minerals in or on the Earths crust in such form and quantity and of
such a grade or quality that it has reasonable prospects for economic
extraction. The location, quantity, grade, geological characteristics and
continuity of a Mineral Resource are known, estimated or interpreted from
specific geological evidence and knowledge. Mineral Resources are sub-divided,
in order of increasing geological confidence, into Inferred, Indicated and
Measured categories.

The
term **Inferred Mineral Resource**means that part of a
Mineral Resource for which quantity and grade or quality can be estimated on the
basis of geological evidence and limited sampling and reasonably assumed, but
not verified, geological and grade continuity. The estimate is based on limited
information and sampling gathered through appropriate techniques from locations
such as outcrops, trenches, pits, workings and drill holes.

The
term **Indicated Mineral Resource**means that part of a
Mineral Resource for which quantity, grade or quality, densities, shape and
physical characteristics, can be estimated with a level of confidence sufficient
to allow the appropriate application of technical and economic parameters, to
support mine planning and evaluation of the economic viability of the deposit.
The estimate is based on detailed and reliable exploration and testing
information gathered through appropriate techniques from locations such as
outcrops, trenches, pits, workings and drill holes that are spaced closely
enough for geological and grade continuity to be reasonably assumed.

The
term **Measured Mineral Resource**means that part
of a Mineral Resource for which quantity, grade or quality, densities, shape,
physical characteristics are so well established that they can be estimated with
confidence sufficient to allow the appropriate application of technical and
economic parameters, to support production planning and evaluation of the
economic viability of the deposit. The estimate is based on detailed and
reliable exploration, sampling and testing information gathered through
appropriate techniques from locations such as outcrops, trenches, pits, workings
and drill holes that are spaced closely enough to confirm both geological and
grade continuity.

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The
term **Mineral Reserve**means the economically
mineable part of a Measured or Indicated Mineral Resource demonstrated by at
least a Preliminary Feasibility Study. This study must include adequate
information on mining, processing, metallurgical, economic and other relevant
factors that demonstrate, at the time of reporting, that economic extraction can
be justified. A Mineral Reserve includes diluting materials and allowances for
losses that may occur when the material is mined.

The
term **Probable Mineral Reserve**means the
economically mineable part of an Indicated Mineral Resource and, in some
circumstances, a Measured Mineral Resource demonstrated by at least a
Preliminary Feasibility Study. This study must include adequate information on
mining, processing, metallurgical, economic and other relevant factors that
demonstrate, at the time of reporting, that economic extraction can be
justified.

The
term Prov**en Mineral Reserve**means the
economically mineable part of a Measured Mineral Resource demonstrated by at
least a Preliminary Feasibility Study. This study must include adequate
information on mining, processing, metallurgical, economic and other relevant
factors that demonstrate, at the time of reporting, that economic extraction is
justified.

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SCHEDULE B MATERIAL MINERAL PROJECTS

**SAN DIMAS**

**Property Description and Location**

The
San Dimas Mine is located on the borders of the Durango and Sinaloa states,
approximately 125 km north-east of Mazatlán, Sinaloa and 150 kilometres (km)
west of the city of Durango, Durango, in Mexico. The property is centered on
latitude 24°06N and longitude 105°56W.

The
San Dimas property consists of 66 contiguous concessions covering 24,966
hectares, having expiry dates ranging from 2019 to 2060. As per Mexican
requirements for grant of tenure, the concessions comprising the San Dimas Mine
have been surveyed on the ground by a licensed surveyor. All appropriate
payments have been made to the relevant authorities and the licenses are in good
standing. Primero has secured surface rights by either acquisition of private
and public land or by entering into temporary occupation agreements with
surrounding communities.

In
2013, the Mexican federal government introduced a mining royalty, effective
January 1, 2014, based on 7.5% of taxable earnings before interest and
depreciation. In addition, precious metals mining companies must pay a 0.5%
royalty on revenues from gold, silver and platinum.

Primero
holds the appropriate permits under local, State and Federal laws to allow
mining operations at the San Dimas Mine. The main environmental permit is the
Licencia Ambiental Única under which the mine operates its industrial
facilities. The mine and mill expansion of the San Dimas Mine is also covered
by this permit. Other significant permits are those related to water supply and
water discharge rights. A waste pad project was commenced in 2013 for which both
the environmental impact study and the technical justification were approved by
the Secretaría de Medio Ambiente y Recursos Naturales and the Mexican
environmental protection agency. In addition, permits were received from the
Comisión Nacional de Agua regarding the Piaxtla River diversion that is part of
this waste pad project. As of March 2014 the rivers course has been diverted
through the new canal and the aquatic life recovery had been achieved. The new
waste pad construction was completed in May 2014.

**Access, Climate, Local Resources, Infrastructure and
Physiography**

Access

Access
to the San Dimas area is by air or road from the city of Durango. By road the
trip requires approximately 10 hours. Primero maintains a de Havilland Twin
Otter aircraft and a helicopter, both of which are based at Tayoltita. Travel
from either Mazatlán or Durango to Tayoltita requires an approximate half hour
flight in the Twin Otter aircraft. Most of the personnel and light supplies for
the San Dimas Mine arrive on Primeros regular flights from Mazatlán and
Durango. Heavy equipment and supplies are brought in by road from Durango.

Climate

The
climate of the San Dimas area is semi-tropical, characterized by relatively high
temperatures and humidity, with hot summers (maximum about 35° C) and mild
winters. At higher elevations in the Sierra, frosty nights occur in the winter
(November to March). The majority of the precipitation occurs in the summer (June through September);
however, tropical rainstorms during October to January can result in
considerable additional rainfall. The total average annual rainfall varies from
about 66 to 108 cm. Weather does not affect the operations and mining is carried
out throughout the year.

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Local Resources and Infrastructure

Mining
at the San Dimas Mine is done by a mixture of contract mining and Primero
personnel. Tayoltita is the most important population centre in the region with
approximately 8,000 inhabitants, including mining personnel, and the population
outside of this centre is sparse. Subsistence farming, ranching, mining and
timber cutting are the predominant activities of the regions population.

Water
for the mining operations is obtained from wells and from the Piaxtla River.
Water is also supplied by Primero to the town of Tayoltita from an underground
thermal spring at the Santa Rita mine.

Electrical
power is provided by a combination of Primeros own hydro generation system 
Las Truchas  and the Mexican Federal Power Authority (MFPA). Primero operates
hydroelectric and back-up diesel generators, which are interconnected with the
MFPA. Since the completion of the Las Truchas phase 2A expansion in August 2014,
the hydroelectric facility provides about 90% of the total requirement of the
San Dimas Mine during four months of the year. During the remaining eight months
of the year, corresponding to the dry season, the hydroelectric facility
provides approximately 50% of the San Dimas power requirements for operations
and the rest is supplied by the FPCSS. The recent Las Truchas phase 2A expansion
has increased the power generation of the Las Truchas facility from 50 GW to 75
GW per year.

The
main infrastructure of the San Dimas district consists of roads, a townsite, an
airport, the crushing and processing facilities of the Tayoltita mill, the old
San Antonio mill, the Tayoltita/Cupias and San Antonio tailings facilities, the
Las Truchas hydro generation facilities, a diesel power plant and the San Dimas
Mine, which is divided into five blocks: West Block (San Antonio Mine), Sinaloa
Graben Block, Central Block, the Tayoltita and Arana Blocks (Santa Rita Mine).
The San Antonio mill and tailings facilities are currently under reclamation.
Primero holds sufficient surface rights to support the San Dimas mine
operations, and associated infrastructure. Environmental permits are required
from various federal, provincial, and municipal agencies, and are in place for
all current operations. No new permits are currently required for current
exploration activity and mining operations, but existing permit amendments are
required from time to time.

Physiography and Vegetation

The
San Dimas district is located in the central part of the Sierra Madre
Occidental, a mountain range characterized by very rugged topography with steep,
often vertical walled valleys and narrow canyons. Elevations vary from 2,400
metres above mean sea level (amsl) on the high peaks to elevations of 400
metres amsl in the valley floor of the Piaxtla River. Vegetation is dominated by
pines, junipers and, to a lesser extent, oaks at higher elevations while lower
slopes and valleys are covered with thick brush, cacti and grass.

71

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**History**

Prior Ownership

The
San Dimas property contains a series of epithermal gold silver veins that have
been mined intermittently since 1757. Modern mining began in the 1880s, when the
American San Luis Mining Company acquired the Tayoltita mine and American
Colonel Daniel Burns took control of the Candelaria mine and began working in
the area, and has continued under different owners to the present. By 1940, the
San Luis Mining Company had acquired the Candelaria and the Contraestaca mines.

A
mining law introduced in 1959 in Mexico required the majority of a Mexican
mining company to be held by a Mexican entity and forced the sale of 51% of the
shares of the San Luis Mining Company to Mexicans. In 1961, the Minas de San
Luis S.A. de C.V. was formed and assumed operations of the mine. In 1978, the
remaining 49% interest was obtained by Luismin S.A. de C.V (Luismin).

In
2002, Wheaton River Minerals Ltd. (Wheaton River) acquired the property and,
in 2005, Wheaton River merged with Goldcorp. Through its wholly-owned
subsidiary, Primero Empresa, Primero acquired the San Dimas Mine from
subsidiaries of Goldcorp in August 2010. See General Development of the
Business  Three Year History  Acquisition of San Dimas Mine.

Historical Exploration and Development Work

In
the San Dimas mining district there are historical records that mention workings
since 1757, but it was not until 1890 that there were formal operations by the
San Luis Mining Company and Mexican Candelaria Company. In 1904, the first
cyanide mill in Mexico was built at Tayoltita. By 1940, the Candelaria mine had
been mined out.

In
the 1960s, higher grade discoveries led to the first deep drilling campaigns and
to the initial long tunnels. In 1975, the first 4.5 kilometre tunnel (deepest in
the district) was completed in the Tayoltita mine, this being an area where ore
discoveries such as the San Luis vein had taken place following the Favourable
Zone concept described under Deposits and Mineralization below, aided by
field geology. In the 1980s, American and Mexican groups commenced operations
that led to the first geophysical and geochemical exploration in the east
Tayoltita-Santa Rita block.

By
the late 1980s and early 1990s, the Favourable Zone concept and Ag/Au ratios
supported by fluid inclusion and thermal fusion studies led to discovery of the
San Antonio and Santa Rita deposits. After acquisition of the whole property by
the Mexican group there was a significant reduction in exploration activities
throughout the whole mining district

In
2002, foreign investment (mainly Canadian) returned and the operation was
acquired as a whole, which resulted in a substantial increase in drilling long
drill-holes combined with the development of long tunnels perpendicular to the
general trend of veins. Examples of these tunnels include San Luis, Santa Anita
and Sinaloa Graben, where significant intersections and new high grade veins,
such as the Elia, Aranza, Victoria and Alexa, were discovered.

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**Geological Setting**

Regional Geology

The
general geological setting of the San Dimas district includes two major volcanic
successions totalling approximately 3,500 metres in thickness, which have been
described the Lower Volcanic Group (LVG) and the Upper Volcanic Group (UVG)
and are separated by an erosional and depositional unconformity.

The
LVG is of Eocene age predominantly composed of andesites and rhyolitic flows and
tuffs and has been locally divided into six units. The LVG outcrops along the
canyons formed by major westward drainage systems and has been intruded by
younger members of the batholith complex of granitic to granodioritic
composition.

The
Socavón rhyolite is the oldest volcanic unit in the district, its lower contact
destroyed by the intrusion of the Piaxtla granite.

The
overlying Productive Andesite is more than 750 metres in thickness and has been
divided into two varieties based on grain size, but of identical mineralogy. One
variety is fragmental (varying from a lapilli tuff to coarse agglomerate), and
the other has a porphyritic texture (1 to 2 millimetres plagioclase
phenocrysts).

Above
the Productive Andesite, the overlying Camichin unit, composed of purple to red
interbedded rhyolitic and andesite tuffs and flows, is more than 300 metres
thick. It is the host rock of most of the productive ore shoots of Patricia,
Patricia 2, Santa Rita and other lesser veins in the Santa Rita mine.

The
Las Palmas Formation, at the top of the LVG, consists of green conglomerates at
the base and red arkoses and shales at the top, with a total thickness of
approximately 300 metres. This unit outcrops extensively in the Tayoltita area.
The lower contact between the LVG and the underlying Productive Andesite is
unconformable.

The
predominant plutonic events in the district resulted in intrusion of the LVG by
granitic to granodioritic intrusives, part of the Sinaloa composite batholith.

Other
intrusives cutting the LVG include the Intrusive Andesite, the Elena aplite and
the Santa Rita dacitic dikes. The even younger Bolaños rhyolite dike and the
basic dikes intrude both the LVG and UVG. Intrusive activity in the western
portion of the Sierra Madre Occidental has been dated continuously from 102 to
43 million years. The UVG overlies the eroded surface of the LVG unconformably.

Local and Property Geology

In
the San Dimas district, the UVG is divided into a subordinate lower unit
composed mainly of lavas of intermediate composition called Guarisamey Andesite
and an upper unit called the Capping Rhyolite. The Capping Rhyolite is mainly
composed of rhyolitic ash flows and air-fall tuffs and is up to 1,500 metres
thick in the eastern part of the district; however, within most of the district
it is about 1,000 metres thick. The San Dimas district lies within an area of
complex normal faulting along the western edge of the Sierra Madre Occidental.
Compressive forces first formed predominantly east-west and east-northeast
tension gashes that were later cut by transgressive north-northwest striking
slip faults. The strike-slip movements caused the development
of secondary north-northeast faults, with right lateral displacement.

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**Deposits and Mineralization**

Deposits

The
deposits of the San Dimas district are high grade, silver-gold-epithermal vein
deposits characterized by low sulphidation and adularia-sericitic alteration.
They were formed during the final stages of igneous and hydrothermal activity
from quartz-monzonitic and andesitic intrusions.

Typical
of epithermal systems, the gold and silver mineralization at the San Dimas Mine
exhibits a vertical zonation with a distinct top and bottom that the prior owner
of the mine termed the Favourable Zone. At the time of deposition, this
Favourable Zone was deposited in a horizontal position paralleling the erosional
surface of the LVG on which the UVG was extruded.

This
favourable, or productive, zone at San Dimas Mine is some 300 metres to 600
metres in vertical extent and can be correlated, based both on stratigraphic and
geochronologic relationships, from vein system to vein system and from fault
block to fault block.

Mineralization

The mineralization is typical of epithermal vein structures with banded and
drusy textures. Within the San Dimas district, the veins occupy east-west
trending fractures except in the southern part of Tayoltita where they strike
mainly northeast and in the Santa Rita mine where they strike north-northwest.
The veins were formed in two different systems. The east-west striking veins
were the first system developed, followed by a second system of north-northeast
striking veins. Veins pinch and swell and commonly exhibit bifurcation,
horse-tailing and sigmoidal structures. The veins vary from a fraction of a
centimetre in width to 8 metres, but average 1.5 metres. They have been followed
underground from a few metres in strike length to more than 1,500 metres.

Three
major stages of mineralization have been recognized in the district: (1) early
stage; (2) ore forming stage; and (3) late stage quartz. Three distinct
sub-stages of the ore forming stage also have been identified, each
characterized by distinctive mineral assemblages with ore grade mineralization
always occurring in the three sub-stages: (1) quartz-chlorite-adularia; (2)
quartz-rhodonite; and (3) quartz-calcite.

The
minerals characteristic of the ore forming stage are composed mainly of white,
to light grey, medium to coarse grained crystalline quartz with intergrowths of
base metal sulphides (sphalerite, chalcopyrite and galena) as well as pyrite,
argentite, polybasite, stromeyerite, native silver and electrum.

The
ore shoots within the veins have variable strike lengths (5 to 600 metres);
however, most average 150 metres in strike length. Down-dip extensions of ore
shoots are up to 200 metres but are generally less than the strike length.

**Exploration and Drilling**

Historically,
exploration of the Favourable Zone at San Dimas Mine has been done both by
diamond drilling and by underground development work. Diamond drilling is
predominantly done from underground stations as both the rugged topography (i.e. access
to surface drill stations) and the great drilling distance from the surface
locations to the target(s) makes surface drilling both challenging and
expensive. All exploration drilling and the exploration underground development
work are done both in-house and by use of contractors.

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Channel Sampling

While
drilling and drifting are now the predominant methods of exploration,
underground channel sampling plays a large role in the estimation of current
Mineral Resources.

Channel
samples are routinely taken every three metres in all development in vein, and
stoping is sampled every two rounds (6 metres). Sample limits within the vein
are based on texture and mineralogy changes. No sample is more than 1.2 metres
in length and the minimum sample width is 0.2 metres. A second cut is taken
across the vein as a validation and the results averaged for grade control
purposes. A tarpaulin is laid down below the sample line. The samples are taken
as a rough channel along the marked line, ensuring that the unit is sampled in a
representative fashion, with large slabs being broken and sub-sampled. The total
sample which has collected on the tarpaulin is broken with a hammer, mixed and
quartered such that a 2 kilogram sample is bagged and labelled with sample
number and location details. Samples are dispatched to the Primero Tayoltita
Mine Laboratory (the TAY Lab) and samples received by 1:00 p.m. are reported
that day. Sketches of the face sampled are filed, showing samples physical
locations from surveying and the measured width of each sample. Since January
2012, approximately 1/3 of all channel samples and 100% of drillcore samples
were sent to the independent SGS laboratory in Durango. These samples had QA/QC
procedures applied and were of a standard that can be reliably used for
estimation of Mineral Resources. The vein mapping and channel sampling is
continually plotted on plans and both used for grade control and for Mineral
Resource estimation. In 2013 all channel samples collected and sent to SGS
laboratory in Durango (approximately 1/3) were subjected to QA/QC
procedures.

In
the opinion of Mr. Voicu, the sampling methods are acceptable, meet
industry-standard practice, and are acceptable for Mineral Resource and Mineral
Reserve estimation and mine planning purposes.

BLACK FOX COMPLEX

Property Description and Location

The
Black Fox Complex is located in the Timmins Mining District in the Province of
Ontario. The Black Fox Complex is situated 11 kilometres (km) east of
Matheson, Ontario and the Black Fox Mill is 20 km west of Matheson, Ontario. The
Black Fox open pit mine and the Black Fox Mill have been in operation since May
2009 and commercial production from the underground mine commenced in October
2011.

The
Black Fox mine and the two adjacent exploration properties, Grey Fox and Pike
River, comprise the Black Fox Complex. The Black Fox Complex has a contiguous
land package of 1,750.27 ha extending over a 6.5 km strike of the
Destor-Porcupine Fault Zone. The Black Fox Mill property, which hosts the
historic Stock Mine deposit, covers 24.7 square km and is located 31 km west of
the Black Fox mine. The mill property extends over 6.0 km of the
Destor-Porcupine Fault Zone.

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**Access, Climate, Local Resources, Infrastructure and
Physiography**

Access

Access
to the Black Fox Complex is via Highway 101 East. The Black Fox mine and its
facilities and the Grey Fox exploration project are located on the south side of
Highway 101 East 11 km east of Matheson and the Black Fox Mill is located on the
North side of Highway 101 20 km west of Matheson.

Climate

The
minimum and maximum mean annual temperatures in the region are -4.8°C and +7°C.
July and January average temperatures are 17.3°C and -17.3°C, respectively. The
mean annual rainfall for the region is 857 mm (www.worldclimate.com). Rapid melting of accumulated
snowfall can produce local flooding on the property for short periods during the
spring months. Average monthly wind speeds for the region are 11 to 15 km/h
(Dyck, 2007). It is possible to conduct exploration activities year round.

Local Resources and Infrastructure

Much
of the old mine infrastructure was upgraded in 2010 to facilitate mine
development. New infrastructure to support open pit and underground mine
operations include a truck shop, laboratory, administration building, the
firewater/ freshwater pump house, and ancillary buildings.

The
Black Fox Mill is fed from an existing 27 kilovolt (kV) power line to the mill
site. Power is distributed at the plant site from this 27 kV power line, a 5
mega volt ampere (MVA), 4,160 volt (V), 3 phase, 60 hertz (Hz) distribution
transformer.

The
Black Fox mine is being supplied with fresh water from a well. Water from
dewatering of the mine site is channelled to the mines holding pond for
recycling and /or discharge through the Black Fox water treatment facility.
Excess water is treated during the spring and summer months for discharge to the
environment through the water treatment system.

Supplies
and services are available in Matheson or Timmins and can be delivered with a
12-hour turnaround. Primero holds sufficient rights to support the Black Fox
Complex operations, and associated infrastructure. Environmental permits are
required by various federal, provincial, and municipal agencies, and are in
place for all current operations. No new permits are currently required for
current exploration activity and mining operations, but existing permits
amendments are required from time to time.

Physiography and Vegetation

The
property is located in a Boreal Shield ecosystem. The topography is moderate and
averages about 280 metre amsl. Secondary-growth forest covers about 75% of the
property and rock outcrops are sparse, comprising only 5% of the property
physiography. The thick clay-rich overburden found across the property is
typically 20 to 30 metres thick.

**History**

The
property was first explored by Dominion Gulf in 1952 and then by Hollinger in
1962. In 1988, Glimmer Mine Inc. put together the property package using a
combination of crown and private lands. In 1989, Noranda Exploration Company Ltd. (Noranda)
entered into a joint venture agreement with Glimmer. As a result of this
agreement, Noranda held a 60% interest in the property. During their ownership,
Noranda merged with Hemlo Gold Mines Inc. (Hemlo). Exall purchased the property
from Hemlo in April 1996, obtaining approximately 60% interest in the property
with Glimmer retaining 40%. Apollo Gold acquired a 100% ownership in the fall of
2002 and renamed the property Black Fox (Prenn, 2006). In June 2010 Apollo and
Linear Gold Corporation (Linear) merged to form Brigus.

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Historical Exploration and Development Work

Beyond
the known Mineral Reserves and Mineral Resources, upside potential exists for
resource additions from ongoing exploration drilling at the Black Fox Complex
and Black Fox Mill property. The Black Fox Complex ore bodies remain open at
depth and along strike.

Apollo
Gold began exploration of the Black Fox mine site in 2003. From 2003 to 2013,
Apollo and Brigus conducted several drilling programs, during which 504 surface
core drill holes totalling 149,548 metres and 396 underground holes totalling
78,644 metres were completed.

In
2008 and 2009, Apollo drilled 69 holes for a total of 13,651 metres on the Grey
Fox and Pike River properties, which are adjacent to the Black Fox mine site.
The 2008 drilling program of 16 core holes was successful in intersecting gold
mineralization in rocks similar to the host rocks of the Black Fox ore on the
Destor-Porcupine Fault Zone. Apollo called this north-south mineral structure
the Contact Zone. The 2008 drilling program also hit very high grade gold
mineralization in a silicified breccia within the Contact Zone.

The
2009 drilling program completed 53 holes at the Contact Zone and the Grey Fox
and Pike River properties. Drilling results continued to show gold
mineralization continuity in multiple shallow, mineralized zones.

In
2010, an IP ground-based geophysical program was completed over the Black Fox
Complex with a total of 38.9 line-kilometres, including the Grey Fox property.
The survey, which is designed to detect conductive mineralization, disseminated
mineralization, alteration, structure and geology, generated 12 high-priority
drill targets and 14 secondary targets. The 2010 drilling program of Brigus
(formed by Apollo and Linear Gold merger) followed-up on historical data and
also tested new gold occurrences on the project. Three drill rigs were used to
explore the Contact Zone and the Gibson, Grey Fox South, Hislop North and 147
Zone targets. Drilling was performed by Norex Drilling and the core was of NQ
diameter. The 2010 exploration drilling program completed 69 drill holes (26,805
metres) at the Grey Fox and Pike River properties that included 34 drill holes
(12,703 metres) on the Contact Zone, 14 drill holes (5,123 metres) on the Gibson
deposit/shear, 3 drill holes (1,503 metres) on the Grey Fox South Zone, 11 drill
holes (4,336 metres) on the Hislop North target, and 7 drill holes (3,139
metres) on the future 147 Zone. Drilling results continued to show gold
mineralization continuity in multiple mineralized zones on the Contact Zone. In
September 2010, Scott Hogg & Associates Ltd. was commissioned by Brigus to
perform a helicopter-borne aeromagnetic gradient survey over the Black Fox mine
block, which included the project area and the Black Fox Mill block. The survey
was performed using a Wisk Air Bell 206 LR helicopter and a total of 1,074
line-kilometres of data was collected. Of this, 490 kilometres were from the
Black Fox mine block, and 584 kilometres were from the Black Fox Mill block.
Final geophysical survey reports were delivered in December 2010.

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In
January 2011, Brigus discovered the 147 gold zone located approximately 400
metres to the south of the Contact Zone on the Grey Fox property. During Brigus
2011 drill program, two drill rigs were used for infill drilling and testing
along strike and down-dip on the Contact Zone. Two or three other drill rigs
were used to expand the 147 Zone, and one drill rig was used to test other known
gold-bearing structures and targets that were identified from the induced
polarization and magnetic geophysical survey. Drilling was conducted by Norex
Drilling and Laframboise Drilling Inc. All core samples were of NQ diameter. The
2011 exploration drilling program completed 247 drill holes (92,273 metres) at
the Grey Fox and Pike River properties that included 79 drill holes (27,881
metres) on the Contact Zone, 28 drill holes (8,798 metres) on the Gibson
deposit/shear, 2 drill holes (883 m) on the Grey Fox South Zone and 138 drill
holes (54,710 metres) on the 147 Zone. Drilling results continued to show gold
mineralization continuity in multiple shallow, mineralized zones on the Contact
Zone and the newly discovered 147 Zone.

The
2012 exploration drilling program completed 261 drill holes (76,566 metres) at
the Grey Fox and Pike River properties that included 64 drill holes (20,285
metres) on the Contact Zone, 140 drill holes (33,902 metres) on the 147 Zone, 1
drill hole (260 metres) on the new Whiskey Jack Zone and 56 drill holes (22,119
metres) on the newly discovered Grey Fox South. The bulk of the Contact and 147
Zone drilling program was focused on converting the inferred resources to the
indicated category. Drilling results continued to show gold mineralization
continuity in multiple mineralized zones on the Contact, 147 and Grey Fox South
zones.

Apart
from the Black Fox mine deposit mineralization, the majority of known gold
mineralization defined to date at the Black Fox Complex occurs within the
Contact Zone and 147 Zone on the Grey Fox-Pike River properties. Previous
drilling by Apollo and Brigus on the Contact Zone and 147 Zone highlighted the
potential for significant gold resources with the possibility of underground
mining. Following drilling completed in 2012, the Contact Zone has been extended
for at least 1,200 m, however the core zone of gold mineralization of interest
is approximately 450 metres in strike length and remains open to the north and
at depth. Most of the 2009 to 2012 drilling was relatively shallow, concentrated
within 200m of bedrock.

The
2013 Brigus Gold drilling program focused on expanding and infill-drilling the
147, Contact and Grey Fox South zones. A total of 139 drill holes for 62,918
metres were drilled on the Grey Fox deposit area in 2013.

No
hole was drilled between January 1 and March 5, 2014. From March 5 to December
31, 2014, Primero drilled, logged and sampled 90,084 metres on Grey Fox, Pike
River and Stock Projects.

**Geological Setting**

The
Black Fox Complex lies within the Abitibi Subprovince (Abitibi Greenstone Belt)
of the Archean Superior craton, in eastern Canada along the northern margin of
the Destor-Porcupine Deformation Zone. The Destor-Porcupine Zone is the known
host structure of the Black Fox Complex and many other occurrences of gold and
gold mines in the Timmins Mining District. The system regionally strikes
east-west and dips variably to the south. Black Fox lies on the southern limb of
a large scale fold on a flexure in the Destor-Porcupine Fault where the strike
changes from east-west to southeast. Folded and altered ultramafic and mafic are
the host rocks for mineralization. Gold occurs as free gold in quartz veining
and stockworks in altered ultramafics and in gold associated with pyrite in altered tholeiitic basalts. The Timmins Mining District was
first discovered in the early 1900s and has been a prolific producer of gold and
other metals.

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**Deposits and Mineralization**

Deposits            The
Black Fox Complex is located with other gold deposits near the Destor-Porcupine
Deformation Zone. The auriferous zones seem to be associated with an orogenic
gold occurrence related to longitudinal shear zones (greenstone-hosted
quartz-carbonate vein deposit). They correspond to structurally controlled,
complex epigenetic deposits hosted in deformed metamorphosed terranes. Black Fox
is being mined as an open pit and underground mining operation. Black Fox
commenced mining from the open pit in May 2009 and achieved commercial
production from the underground operations in October 2011.

Although
the gold zones of Grey Fox are readily integrated in an orogenic model, they
could also be associated with a low sulphidation epithermal gold model.
Extensional, pull-apart basins formed between regional strike-slip faults, or at
transitions between these faults, provide favourable sites for intrusions and
epithermal deposits.

Mineralization   
        Gold mineralization at the Black
Fox mine occurs in several different geological environments within the main
ankerite alteration zone, which has a strike length of over 1000 metres and a
variable true width ranging from 20 metres to over 100 metres. This mineralized
envelope occurs primarily within komatiitic ultramafics and lesser mafic
volcanics within the outer boundaries of the PDDZ. The auriferous zones have
several modes of occurrence, from concordant zones that follow lithological
contacts and have been subsequently deformed, to slightly discordant zones
associated with syenitic sills and quartz veins or stockworks.

Work
carried out to date has identified four different styles of mineralization
within the mineralized envelope at the Black Fox mine. These are:

- Free gold associated with shallow dipping (20-50°) quartz veins and
  stockworks in green carbonate and ankerite altered ultramafic rocks (U0, BO,
  B2, and Al structures);
- Gold-bearing pyrite associated with syenitic sill-like bodies (JO, RO/Ri
  structures);
- Gold associated with fine-grained pyrite within bleached ankerite-sericite
  altered mafic volcanic rocks (CO structure);
- Free gold in steeply dipping sigmoidal quartz veins associated with shear
  zones within green carbonate alteration zones (SO/S1 structures) (Hoxha and
  James, 1998).

More
than 15 separate mineralized structures have been identified to date within the
ankerite envelope. The two main auriferous zones are the Al at the hanging wall
contact and the CO located at the footwall contact. The many other smaller zones
between them generally have less continuity and width and represent parallel
mineralized shears and faults. From previous underground work, it appears that
the subhorizontal zones along the structure often have the greatest thickness,
on the order of 10 to 15 metres (33-49 ft), and the highest grades. This
subhorizontal zones are interpreted as dilation zones formed during episodes of
folding and structural movements. The majority of other mineralized zones and
quartz veins range in width from 1 to 5 metres (3-16 ft).

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More
than three generations of quartz veining have been identified in the Black Fox
mine workings. Shear/fault zones paralleling the main mineralized envelope are
responsible for the localized formation of these quartz vein and stockwork
zones. The presence of sigmoidal vein structures, multiple quartz injections and
re-sheared vein material with chloritic slips indicate complex and repeated
structural movements at the time of formation. Visible gold commonly occurs as
fracture-fillings within the veined zones associated with chloritic slips. Gold
mineralization is erratic in places within the quartz stockwork zones, probably
due to the fact that only certain vein sets carry gold while others are barren.

Mineralized
zones at the Grey Fox deposit occur along and adjacent to the eastern end of the
Timiskaming lens, which in the area of the mineralized zones trends northerly
and dips steeply to the east. Drilling suggests that east of the
mafic-sedimentary contact, the stratigraphy in the mafic volcanic sequence also
trends north and dips steeply east. The sequence comprises alternating massive,
pillowed and variolitic mafic units, and local thin volcano sedimentary
horizons. Drill core observations show that the sequence is generally weakly
foliated, despite proximity to the intense ductile strands of the PDDZ fault
system to the north, although some lithologies including sedimentary horizons
and contacts may have localized displacement, as suggested by cataclastic
breccias and narrow semi-brittle shear zones associated with mineralization.

**Sample Preparation, Analyses and
QA/QC**

Black Fox
Mine            The
drill core was boxed, covered and sealed at the drill rigs, and transported by
drilling employees to the logging facility where Brigus Gold personnel would
take over the core handling. The core was logged and sampled by or under the
supervision of Brigus Gold geologists at the core shack of the Black Fox mine.
Each sample was tagged.

Drill
core samples were bagged by technicians and then grouped in batches. The sample
batches were shipped to one of the five following laboratories in Ontario during
the period of reference: Black Fox Mill Laboratory located between Matheson and
Timmins; Cattarello Assayers (Cattarello) in Timmins; Accurassay Laboratories
(Accurassay) in Thunder Bay; ALS Laboratory (ALS) in Thunder Bay; and
PolyMet Labs (PolyMet) in Cobalt. They were prepared according to each
laboratorys sample preparation protocol for the given analytical procedure. The
decision of where to send a batch was based on several reasons, including pickup
schedules and turnaround time.

The
sampling and assay QA/QC protocol consisted of an in-field component managed by
Brigus Gold logging and sampling personnel and an in-laboratory component
managed by the laboratories. The in-field QA/QC consisted of inserting blanks
and certified reference standards. Reject and pulp duplicates (prep
duplicates) were also inserted by Brigus Gold staff, but no field duplicates
were prepared before September 2013. Core samples were placed in sealed bags and
sent for analysis.

*Grey Fox
Deposit*            The
drill core was boxed, covered and sealed at the drill rigs, and transported by
drilling employees to the logging facility where Brigus Gold personnel would
take over the core handling. The core was logged and sampled by or under the
supervision of Brigus Gold geologists at the Grey Fox core shack. Each sample
was tagged with a unique number.

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Drill
core samples were cut by technicians and then bagged and sealed before being
grouped in batches. The sample batches were shipped to PolyMet Labs (PolyMet)
in Cobalt, SGS Canada Laboratory (SGS) in Cochrane, or Agat Laboratory
(Agat) in Mississauga where they were prepared according to each laboratorys
sample preparation protocol for the given analytical procedure. The decision of
where to send a batch was based on pickup schedules and turnaround time.

The
sampling and assay QA/QC protocol consisted of an in-field component managed by
Brigus Gold logging and sampling personnel and an in-laboratory component
managed by Polymet, SGS and Agat. The in-field QA/QC consisted of inserting
blanks, certified reference standards, and field duplicates consisting of the
second half of core samples.

CERRO DEL GALLO PROJECT

Property Description and Location

The
Cerro del Gallo Project (San Antón Property) is located in the state of
Guanajuato in central Mexico, approximately 270 kilometres northwest of Mexico
City. The San Antón Property fully incorporates the San Antón de las Minas
mining district, centred 23 kilometres east northeast of Guanajuato city and the
historic Guanajuato Mining District where production from 1700 to 2004 is
reported to be 1.14 billion ounces of silver and 6.5 million ounces of gold.
Although the Guanajuato Mining District has a long history of silver and gold
mining and production extending back to 1558, production records at San Antón
only date back to the 1860s, however mining is reported from Spanish colonial
times. San Antón lies within the central-southern segment of the world-class
Mexican Gold-Silver Belt.

The
San Antón Property covers an area of 25,269 hectares (approximately 15
kilometres north-south by 16 kilometres east-west) and consists of a total of
twelve granted, contiguous mining concessions all owned by San Antón de las
Minas S.A. de C.V. (SAM). The concessions entirely cover the San Antón de las
Minas mining district, including the old mines formerly worked for high grade
vein-hosted gold-silver mineralization. The Company holds sufficient exploration
rights to support the Cerro Del Gallo Project exploration activities.
Environmental permits are required by various federal, state, and municipal
agencies, and are in place for current exploration activities. For future
exploration activities, existing permit amendments may be required from time to
time.

The
San Antón Property is wholly owned by SAM, a resident Mexican company
wholly-owned by the Company, after it completed its acquisition of the remaining
30.8% interest from a subsidiary of Goldcorp, effective December 19, 2013.

**Access, Climate, Local Resources, Infrastructure and
Physiography**

Access

The
principal access route to the area is by sealed Federal Highway 110, then 14 km
on a well maintained all-weather good quality gravel road. The journey by road
takes approximately 20 minutes to complete from Dolores Hidalgo and
approximately 1 hour from Guanajuato. There is an international airport at Leon,
30 minutes from Guanajuato along a four lane toll freeway. An inland port
facility will integrate the international airport and is currently under
construction by the state government. In addition to the international airport
at Leon there are five local airports and one interstate airport within a 3 hour
drive of the property area. Rail services are available within 20 km of Cerro
del Gallo.

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Climate

The
municipality of Dolores Hidalgo is classified as semi-arid. The climate is
generally dry with sporadic, often violent rainstorms in the hot, summer months.
Average annual precipitation is 564 mm mainly from May to September. The winter
months are cool and dry. Temperatures range from a maximum of 36.5°C in summer
to a minimum of 3.8°C in winter. The average yearly temperature is 17.4°C

Local Resources and Infrastructure

The
San Antón Property is located within a region of well-established
infrastructure. The property area is well serviced by road, rail, and air
services, power and water supplies, and skilled and semiskilled local labor.
Surrounding cities are capable of providing most of the services required for
supporting a major mining operation. Guanajuato municipality has a population of
153,364 inhabitants (official Instituto Nacional de Estadistica y Geografia
(INEGI) projection, 2008) while Dolores Hidalgo C.N.I. has a population of
134,641 inhabitants (official INEGI projection, 2007). The community of San
Antón de las Minas covers an area of 2,167 hectares. From 2005 INEGI records,
the San Antón de las Minas community has a population of 473 inhabitants living
in 78 dwellings at an occupancy rate of 6.1 people per house. San Antón de las
Minas community facilities consist of a public primary school, a public
secondary school, health center, a Catholic church, and four small general
stores that satisfy local consumption. A plentiful supply of semi-skilled and
unskilled labor is available in the local community. Subsistence agriculture is
the principal activity of adults in the property area with the main crops being
maize, beans and chilies. Electricity is supplied to the San Antón de las Minas
community through a 13.8 kV, three phase power line operated by the Comisión
Federal de Electricidad (Mexican Federal Power Authority), which passes over the
southern flank of the Cerro del Gallo deposit and can be easily upgraded. Power
supply is generally reliable and comes from the main Dolores Hidalgo to
Guanajuato power line.

There
are a number of potential sources of water in the area, including groundwater
from aquifers and local streams that drain the property area. Several large dams
have been constructed in the surrounding area; including the Peñuelitas Dam that
has a capacity of 23.8 Mm3 located 15 km from Cerro del Gallo near
the city of Dolores Hidalgo.

Physiography and Vegetation

Property
is situated in the physiographic region known as the Sierra Madre Oriental.
Elevations in the area range from 1,800 metres to 2,670 metres, with the top of
Cerro del Gallo having an elevation of 2,310 m. Cerro del Gallo is located along
the flank of the San Antonio Mountain Range which trends generally 20° NW. Along
the western side of the property spurs from the rugged Guanajuato Mountain Range
extend into the property area.

History

The
Consejo de Recursos Minerales, the Mexican equivalent of a Department of Mines,
commenced an assessment of the San Antón de las Minas area in March 1977 as part
of a combined federal and state government program to encourage new investment
in the mining industry. Work by the Consejo de Recursos Minerales consisted
mainly of regional geological mapping and stream sediment geochemistry, prospect
evaluation, and airborne magnetics. The Consejo de Recursos Minerales reported
disseminated copper mineralization averaging 0.4% in a quartz monzonite stock at
Cerro del Gallo. SAM was formed with the signing of a joint
venture agreement between Kings Minerals and Luismin on 22 July 2004.

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On
May 22, 2013, the Company acquired all of the issued and outstanding ordinary
shares of Cerro Resources NL (Cerro) by way of a scheme of arrangement under
the Australian Corporations Act 2001. Cerro was an exploration and
development company whose principal asset was 69.2% of the feasibility stage
Cerro Del Gallo project, a gold-silver-copper deposit located in the province of
Guanajuato, Mexico. On December 19, 2013, the Company acquired the remaining
30.8% interest in the Cerro del Gallo project from a subsidiary of Goldcorp.

Historical Exploration and Development Work

The
Cooperative was the first company to explore the area in recent times with work
commencing in 1982. The company held an interest in the area until 2004 when it
sold the project to Luismin S.A. de C.V. (Luismin), however no work was
completed in their last 4 years of ownership. The Cooperativa concentrated their
work on the Carmen-Providencia vein system where they rehabilitated the Dolores
shaft to the 90m level, re-opened the La Mora adit, and commenced development of
the Carmen adit along a section of the Carmen vein near the Dolores shaft. Only
2 truckloads of ore totaling 20.9 tons and estimated to average 82g/t Ag and
2.15g/t Au were mined from the Dolores underground workings. The company also
completed a regional geological mapping program covering the Carmen-Providencia
vein system and Cerro del Gallo. Trenching was completed along the
Carmen-Providencia vein system and at Cerro del Gallo. The Cooperative drilled 6
diamond core holes for a total of 1,571.10m and excavated 2 shallow trenches at
Cerro del Gallo.

Luismin
commenced exploration at San Antón in about 1994 on 2 small contiguous claim
blocks totaling 110ha surrounded entirely by tenure owned by the Cooperative.
The claims covered half of Cerro del Gallo and the Ave de Gracia epithermal vein
system. Most of their work was completed between 1996 and 2000 and all work was
focused on Cerro del Gallo. Luismin completed a program of rock chip sampling
(616 samples), trenching (10 trenches), 3 lines of dipole-dipole IP surveying
(70.6km), and drilling (15 holes for 3,551.3m). Declining metal prices from
2000 and subsequent years resulted in exploration budget constraints and the
demise of work at Cerro del Gallo.

The
metallurgical test work that was carried out for the feasibility study commenced
in 2006 and was performed on drill core samples and RC chip samples, by three
Australian metallurgical laboratories. Phase 1 was conducted by Independent
Metallurgical Laboratories, Welshpool, Western Australia, Phases 2, 3 and 5 were
conducted by SGS Lakefield Oretest Pty Ltd, Malaga, Western Australia and phase
4 was conducted by ALS AMMTEC, Balcatta, Western Australia. JKTech of Brisbane
Queensland was also used to determine comminution characteristics. Polysius
Australia Pty Ltd of Henderson, Western Australia was used to evaluate the
suitability of high pressure grinding rolls (HPGR) for the crushing of the
Cerro del Gallo ores.

Following
the acquisition of the property in 2013, Primero embarked on a drilling program
(described below) for infilling of the main Cerro del Gallo ore body,
condemnation and for regional exploration. In early 2014, approximately 40 tons
of core were shipped the SGS laboratory in Lakefield, Onario to conduct an
advanced metallurgical and geochemistry testing program. The goals of this
program are to close the gaps identified in the due diligence effort at the
acquisition and to improve management confidence in the metallurgical recovery
of the ore, particularly in the transition ores which vary in levels of
oxidation; to provide a more accurate cyanide consumptions value, to do
additional percolation tests, to optimize cement additions during
agglomerations, to establish stacking loading capacity, to evaluate leach pad stability, to improve
understanding of the geochemical characteristics of the leached ores and the
waste rock and to conduct further SART process tests. Testing was started in
late Q2, 2014 and is continuing into 2015. The metallurgical testing program is
being coordinated by BBA with support from BIOTEQ for the SART process.

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Geological Setting

The
San Antón Property is located within the Mesozoic Sierra Madre Oriental terrane
and 80 km north of the west northwest trending Trans-Mexico Neovolcanic Belt.
The Sierra Madre Oriental terrane is a thin skinned fold-thrust belt of Laramide
age (Late Cretaceous-Early Tertiary). High level felsic intrusions emplaced into
the western two thirds of the terrane provided the mechanism for hydrothermal
activity and mineral deposition.

The
oldest rocks in the Cerro del Gallo area are a deformed and regionally
metamorphosed volcano-sedimentary sequence of Triassic to Cretaceous age
referred to as the Esperanza Formation. Around Cerro del Gallo the Esperanza
Formation consists of layered sediments of argillaceous, silty argillaceous and
arenaceous composition, and fragmental volcanic rocks of broadly intermediate
composition. These sedimentary and volcanic rocks form an inlier referred to in
this report as the Esperanza Inlier which is surrounded by Tertiary age
fragmental volcanic rocks of rhyolitic composition. The Esperanza Formation has
been affected by lower greenschist facies regional metamorphism. A crenulation
cleavage overprinting an earlier cleavage in phyllite confirms the stratigraphic
sequence has been subjected to at least two periods of regional deformation.

Deposits and Mineralization

The
San Antón Property is known to host a variety of styles of mineral deposits,
including porphyry copper-gold deposits, intrusion-related gold deposits,
epithermal silver-gold deposits, and gold-copper skarn deposits. All of these
styles of mineralization are known to occur within the property concessions held
by SAM. Historic mining within the San Antón de las Minas area was concentrated
on epithermal veins, however, the main area of present interest is the large low
grade bulk mineable copper-gold-silver deposit at Cerro del Gallo where a
significant mineral resource has been identified. The Cerro del Gallo
copper-gold-silver deposit lies within an inlier of a conformable sequence of
siliclastic sediments and fragmental volcanogenic rocks. At Cerro del Gallo a
sequence of fragmental volcanogenic rocks of intermediate bulk composition has
been intruded by a small elongated upright felsic stock of granodioritic to
monzogranitic composition.

The
Cerro del Gallo copper-gold-silver deposit can be considered to be a member of a
distinct subclass of reduced porphyry-style copper-gold mineralization. These
reduced porphyry copper-gold deposits lack primary hematite, magnetite and
sulphate minerals, but contain abundant hypogene pyrrhotite, commonly have
carbonic ore fluids, and are associated with ilmenite-bearing, reduced I-type
granitoids.

Hydrothermalalteration
is zoned concentrically around the main felsic intrusive and intensity decreases
outwards from the central intrusive. Potassic alteration is the dominant style
of alteration in the core of the hydrothermal system which centered on the main
felsic intrusive. Hydrothermal propylitic alteration overprints potassic
alteration within both the felsic intrusives and wallrocks, and extends
laterally beyond the zone of potassic alteration surrounding Cerro del Gallo.
Propylitic alteration extends over a radius of up to 1km from the peak of Cerro
del Gallo. It is more extensive on the western side of Cerro del Gallo.

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Environmental Matters

As
part of the development plan for the San Antón Property, a surface water
baseline study commenced in October 2005 and was updated in August 2006. This
study conforms to federal government standard NOM-127- SSAL1-1994; which is the
most comprehensive national standard, and has the most stringent limits.
Sampling points were selected across an area ranging from upstream of the San
Antón Project to downstream at the Peñuelitas dam near the city of Dolores
Hidalgo. The primary objective of the study was to record the physio-chemical
characteristics of the quality of surface water at the commencement of
exploration in the area and prior to potential development of the property.

Subsequent
to the first surface water sampling program a surface water monitoring program
has been developed to Mexican national standards in order to monitor seasonal
water flow and water quality at strategic points throughout the property area.
Additional baseline environmental studies included air quality dust monitoring
which commenced in February 2008 and with the installation of a weather station
(VAISALA WXT510) in January 2008. Further to the earlier water sampling and
monitoring programs, an additional surface water sampling monitoring program was
initiated in 2013 in order to add to the existing body of data and to meet
specific permitting requirements. This monitoring program will continue into
2015 and 2016.

Exploration and Drilling

The
exploration activities at the San Antón property have consisted of drilling
(reverse circulation and diamond core) and several sampling programs; including
stream sediment, BLEG, Niton® soil and conventional soil sampling. The majority
of the exploration work has focussed on the Cerro del Gallo deposit.

San
Anton de las Minas (SAM) completed a limited RC drilling program in December
2004. The main objective of this drill program was to validate and verify
previous exploration results and concurrently evaluate the postulated optimum
drill direction at the Cerro del Gallo deposit.

SAM
commenced resource definition drilling at Cerro del Gallo in April 2005 with the
objective of testing coincident multi-element geochemical and geophysical
anomalies extending beyond the boundaries of the initial Inferred Mineral
Resource estimate. In June 2005 SAM commenced diamond orientated core drilling
twinning reverse circulation drill holes from surface.

SAM
continued resource definition drilling and commenced metallurgical test work
drilling at Cerro del Gallo during 2006 through May 2008. The objective of this
program was to test and define the higher gold grade annulus associated with the
coincident multi-element geochemical and geophysical anomalies surrounding Cerro
del Gallo and to undertake detailed geotechnical and metallurgical test work
diamond core drilling.

Drilling at the Cerro del Gallo deposit by SAM between 2004 and
2008 consists of 280 holes of RC drilling for a total of 59,595 metres and 74
holes of diamond drilling for a total of 36,384 m.

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Sampling

All
RC and DDH samples collected are immediately bagged, tied and placed
collectively in larger polyweave bags and then sealed prior to collection. These
samples are then securely stored until collected by SGS personnel. Samples
collected at the RC drill rig are under constant surveillance around the clock
until collected by SGS personnel. Samples collected from DDH core are stored at
the secure coreyard facility under constant surveillance until collected by SGS
personnel.

RC
samples were collected by three samplers under direct supervision of a geologist
experienced with RC drilling and sampling techniques who was on-site at all
times while drilling and sampling was in progress. Samples were collected
continuously at 5 foot (1.52 m) intervals from the drill collar at surface to
the bottom of the hole. The 5 foot sample interval is based on an imperial rod
string used by the drilling contractor. Sample collection is systematic and
precise in accordance with strict procedural protocols. The splitter and all
sampling equipment are cleaned with compressed air after each sample is
collected. The laboratory sample is bagged from a single catch tray (1/8 sample)
at the base of the splitter while the bulk reject sample is collected from three
additional catch trays that were emptied into a UV stabilized large plastic bag.
The geochemical sample is placed directly into a pre-addressed polyweave sack
for dispatch to the SGS sample preparation laboratory in Durango. Each
geochemical sample is weighed on-site at the time of collection to provide a
record of sample recovery and consistently average between 2.5 4 kg in mass
throughout the program. Holes are terminated when the sample becomes wet and can
easily become contaminated.

Core
drilling is HQ (63.5 mm) size and on rare occasions when a size reduction is
required due to fractured ground conditions NQ (47.6 mm) is recovered. When
possible, the core is re-configured to its original in-situ state to form a
continuous cylinder. The core is firstly marked longitudinally with a felt
tipped pen and then marked at 1.0 metres intervals for sampling for assay. Since
2013, the sampling intervals were not restricted to 1 m, but were based on
geological and structural criteria. The sampling intervals were between 0.5 and
1.5 metres for Cerro del Gallo deposit (infill, delineation, metallurgical and
condemnation drilling programs) and between 0.5 and 1.0 metres for the
epithermal veins.

SGS
Canada Inc. Minerals Services in Toronto, Ontario, Canada and SGS Durango,
Mexico were the primary laboratories used for routine element analysis of drill,
rock-chip, soil, and stream sediment samples from the San Antón Property. SGS
has a sample preparation facility in Durango and since November 2007 the Durango
facility commenced fire assay for gold. SGS collect drill, rock-chip, soil, and
stream sediment samples from the San Antón Property and transport them to
Durango by vehicle. At the laboratory, samples are sorted and routinely oven
dried at 105oC, if necessary (SGS Code DRY 10). After drying, RC and core
samples are crushed to 90% passing 2 mm (10#) prior to riffle splitting a
sub-sample of ~1,000g for pulverizing (SGS code CRU25). The sample is riffle
split using a stainless steel splitter The 1,000g sub-sample is pulverized to
90% passing 75 μm (200#) (SGS code PUL47) using a Labtech ESSA LM2 ring mill
with a standard bowl. A subsample of approximately 200-250 g is then sent to SGS
Toronto for analysis.

Drill samples were initially routinely assayed for
gold, silver, copper, lead, zinc, molybdenum and bismuth up until October 2005.
Gold values are routinely determined by fire assay using a 30 g sample pulp with
instrumental Atomic Absorption Spectrometry (AAS) finish. Since October 2005
drill samples also have been routinely assayed for a standard suite of 32
elements using SGS Method ICP40B.

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