TORONTO, ON — (Marketwired) — 09/21/17 — (Please note that all dollar amounts in this news release are expressed in U.S. dollars unless otherwise indicated.)
Primero Mining Corp. (“Primero” or the “Company”) (TSX: P) today announces an update on recent activities at its operating mines, the San Dimasgold-silver mine located in Durango, Mexico and the Black Fox gold mine located near Timmins, Ontario, Canada. The Company is also providing an update on recent corporate activities.
- San Dimas Experiences Ramp-Up Delay: While the San Dimas mine has experienced a recent improvement in operations, it has not seen the full step increase in productivity that underpinned the 2017 restart plan. Further, the Company has had to restrict capital spending due to current liquidity constraints and has reduced both development and exploration expenditures. As a result, the Company has lowered its 2017 San Dimas production guidance to between 75,000 and 85,000 gold equivalent ounces1 at total cash costs2 of between $800 and $900 per gold equivalent ounce with all-in sustaining costs3 (“AISC”) increasing to $1,050 to $1,150 per gold ounce.
- Black Fox Sale Expected to Close in Early-October: Primero continues to work with McEwen Mining to facilitate the closing of the Black Fox Complex transaction, which is expected to be completed in the first week of October. Black Fox is expected to achieve full-year 2017 production guidance of between 50,000 and 60,000 ounces of gold at AISC of $1,150 to $1,250 per ounce. The Company expects that at the time of closing Black Fox will have delivered approximately 50,000 gold ounces attributable to Primero in 2017.
- Production Guidance Update: Primero’s 2017 production guidance has been reduced to reflect a more gradual restart of the San Dimasoperations and the pending sale of the Black Fox Complex. Primero expects consolidated 2017 production of between 125,000 and 135,000 gold equivalent ounces at total cash costs of between $800 and $900 per gold equivalent ounce with AISC of between $1,200 and $1,300 per gold ounce.
- Corporate Update and Current Liquidity Position: Primero continues to operate in a cash conservation mode as management works on possible alternatives to refinance or repay its upcoming debt obligation. The Company continues with negotiations on the potential sale of San Dimas or potential renegotiation of its silver stream. Primero had approximately $12 million in cash at August 31st and has fully-drawn its $75 million revolving credit facility (“RCF”). The Company expects to use the proceeds from Black Fox transaction to reduce its total debt position.
“We remain very cognizant of the challenges facing us and remain committed to our Primero stakeholders in working to achieve resolution,” stated Joseph F. Conway, Interim President and Chief Executive Officer. “We continue to advance our strategic process and our objective is to obtain a fair distribution of value for Primero stakeholders. At the same time, we are working on possible alternatives to refinance or repay our revolving credit facility due in November and see the sale of the Black Fox asset as a critical step towards meeting this near-term hurdle.”