As filed with the Securities and Exchange Commission on April 20, 2018	
UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
 Washington , D.C. 20549
____________________
FORM 20-F
____________________
[   ] REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31 , 2017
OR
[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
[   ] SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-35278
Primero Mining Corp. 
 (Exact name of Registrant as specified in its charter)
_________________
British Columbia, Canada 
 (Jurisdiction of incorporation or organization)
79 Wellington Street West, TD South Tower Suite 2100, Toronto, ON, M5K 1H1, Canada
(Address of principal executive offices)
Tamara Brown, Vice President, Corporate Development
79 Wellington Street West,
TD South Tower Suite 2100,
Toronto, ON, M5K 1H1, Canada
Telephone No.: (416) 814 3160
e-mail: info@primeromining.com
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
___________________________________________
Securities registered or to be registered pursuant to Section 12(b) of the Act:
None
 ___________________________________________
Securities registered or to be registered pursuant to Section 12(g) of the Act:

Title of each class:	Name of each exchange on which registered:	
Common Share, without par value	N/A	

___________________________________________
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
 ___________________________________________
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:
193,045,822 Shares of Common Stock
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes [   ]     No [X]
If this is an annual or transition report, indicate by check mark if the Registrant is not required to file pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Yes [   ]     No [X]
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Yes [X]     No [   ]
Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).
Yes [X]     No [   ]
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated Filer [   ]	Accelerated Filer [   ]	Non-accelerated Filer [X]	
Indicate by check mark which basis of accounting the Registrant has used to prepare the financial statements included in this filing:

U.S. GAAP [   ]	International Financial Reporting	Other [   ]	
 	Standards as issued by the	 	
 	International Accounting Standards	 	
 	Board [X]	 	
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the Registrant has elected to follow.
Item 17 [   ]     Item 18 [   ]
If this is an annual report, indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [   ]     No [X]

Table of Contents

ITEM 1.	Identity of Directors, Senior Management and Advisers	5	
ITEM 2.	Offer Statistics and Expected Timetable	5	
ITEM 3.	Key Information	5	
                    A.	Selected Consolidated Income Statement Data	5	
                    B.	Capitalization and Indebtedness	6	
                    C.	Reasons for the Offer and Use of Proceeds	6	
                    D.	Risk Factors	6	
ITEM 4.	Information on the Company	20	
                    A.	History and Development of the Company	20	
                    B.	Business Overview	27	
                    C.	Organizational Structure	38	
                    D.	Property, Plant and Equipment	38	
ITEM 4A.	Unresolved Staff Comments	43	
ITEM 5.	Operating and Financial Review and Prospects	43	
                    A.	Operating Results	43	
                    B.	Liquidity and Capital Resources	60	
                    C.	Research and Development, Patents and Licenses, etc.	69	
                    D.	Trend Information	69	
                    E.	Off-Balance Sheet Arrangements	69	
                    F.	Tabular Disclosure of Contractual Obligations	69	
                    G.	Safe Harbor	69	
ITEM 6.	Directors, Senior Management and Employees	70	
                    A.	Directors and Senior Management	70	
                    B.	Compensation	75	
                    C.	Board Practices	76	
                    D.	Employees	79	
                    E.	Share Ownership	79	
ITEM 7.	Major Shareholders and Related Party Transactions	81	
                    A.	Major Shareholders	81	
                    B.	Related Party Transactions	82	
                    C.	Interests of Experts and Counsel	82	
ITEM 8.	Financial Information	82	
                    A.	Consolidated Statements and Other Financial Information	82	
                    B.	Significant Changes	84	
ITEM 9.	The Offer and Listing	84	
                    A.	Offer and Listing Details	84	
                    B.	Plan of Distribution	84	
                    C.	Markets	84	
                    D.	Selling Shareholders	87	
                    E.	Dilution	87	
                    F.	Expenses of the Issue	87	
ITEM 10.	Additional Information	87	
                    A.	Share Capital	87	
                    B.	Memorandum and Articles of Association	87	

                    C.	Material Contracts	90	
                    D.	Exchange Controls	91	
                    E.	Taxation	91	
                    F.	Dividends and Paying Agents	92	
                    G.	Statement by Experts	92	
                    H.	Documents on Display	92	
                    I.	Subsidiary Information	93	
ITEM 11.	Quantitative and Qualitative Disclosures about Market Risk	93	
ITEM 12.	Description of Securities other than equity securities	93	
ITEM 13.	Defaults, Dividend Arrearages and Delinquencies	93	
ITEM 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds	93	
ITEM 15.	Controls and Procedures	94	
ITEM 16.	Reserved	95	
ITEM 16A.	Audit Committee Financial Expert	95	
ITEM 16B.	Code of Ethics	95	
ITEM 16C.	Principal Accountant Fees and Services	95	
ITEM 16D.	Exemptions from the Listing Standards for Audit Committees	96	
ITEM 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers	96	
ITEM 16F.	Change in Registrant’s Certifying Accountant	96	
ITEM 16G.	Corporate Governance	96	
ITEM 16H.	Mine Safety Disclosure	97	
ITEM 17.	Financial Statements	97	
ITEM 18.	Financial Statements	97	
ITEM 19.	Exhibits	97	
Signature	  	99	

INTRODUCTORY NOTES
GENERAL INFORMATION
This annual report on Form 20-F relates to the registered common shares, no par value, of Primero Mining Corp. (the “Common Shares”).
In this annual report, except as otherwise indicated or as the context otherwise requires, the “Company,” “Primero,” “we,” “us” and “our” refers to Primero Mining Corp. and its subsidiaries.
PRESENTATION OF FINANCIAL AND OTHER DATA
We prepare our audited consolidated financial statements in accordance with International Financial Reporting Standards, or “IFRS”, as issued by the International Accounting Standards Board, or the “IASB”. The financial information and related discussion and analysis contained in this annual report on Form 20-F are presented in United States dollars, except as otherwise specified. Unless otherwise specified, the financial information analysis in this annual report on Form 20-F is based on our consolidated financial statements as of December 31, 2017 and 2016 and for the three years ended December 31, 2017, included elsewhere in this document. Percentages and some amounts in this annual report on Form 20-F have been rounded for ease of presentation. Any discrepancies between totals and the sums of the amounts listed are due to rounding.
CURRENCY TRANSLATION
In this annual report, references to “$”, “U.S. dollar” or “US$” are to the official currency of the United States and references to “Canadian dollar”, “C$” or “CDN$” are to the legal currency of Canada. References to “pesos” or “MXN$” are to the Mexican peso.
CAUTIONARY STATEMENTS ABOUT FORWARD-LOOKING STATEMENTS
This annual report contains “forward-looking information” and “forward-looking statements within the meaning of applicable United States and Canadian securities laws. All statements, other than statements of historical fact, are forward-looking statements. 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 current estimates, beliefs and assumptions, which are based on our perception of historical trends, current conditions and expected future developments, as well as other factors management believes are appropriate in the circumstances. Our estimates, beliefs and assumptions are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events and as such, are subject to change. The Company can give no assurance that such estimates, beliefs and assumptions will prove to be correct.
Forward-looking statements in this annual report include those that relate to: the ability of the Company to operate and expand production at the San Dimas Mine (the “San Dimas Mine”); the ability of the Company to close the plan of arrangement (“Arrangement”) with First Majestic Silver Corp. (“First Majestic”) pursuant to a definitive arrangement agreement (the “Arrangement Agreement”); the termination of the current stream and adoption of the new stream (as defined below); the timing and receipt of required stock exchange and regulatory approvals for the Arrangement in Canada and Mexico; the ability of First Majestic and Primero to satisfy, in a timely manner, other conditions to, and to complete the Arrangement; the effect of mining techniques and methods such as long-hole mining or changing labor shifts; the ability to identify new Mineral Resources and convert Mineral Resources into Mineral Reserves; the Company’s ability to defend the validity of the Advance Pricing Agreement (“APA”) against the legal claim from the Mexican tax authorities seeking to nullify the APA; the Company’s ability to pay taxes in Mexico on realized silver prices; the impact of estimation methodologies on mine and production planning; the ability to generate cash flows that exceed requirements; the timing and amount of capital expenditures and costs; the development of new mineral deposits; the Company’s ability to repay the full outstanding obligation under its Revolving Credit Facility (the “RCF”), if the Arrangement with First Majestic is terminated for any reason; the Company’s ability to meet its financial obligations; the Company’s intentions 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; title disputes relating to the Company’s properties; the timing and possible outcome of pending litigation including securities class actions initiated against the Company in California; the Company’s issuance of a Notice of Intent to submit a claim to international arbitration pursuant to the North American Free Trade Agreement (“NAFTA”); future prices of precious and base metals; the ability of the Company to obtain and maintain government approvals or permits in connection with the continued operation and development of its operations; 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 annual report; the expectations and beliefs of management; assumptions relating to the availability of suitable mining assets for acquisition on reasonable terms; that the Company will close the Arrangement with First Majestic; that the current silver stream arrangement will be terminated; that required stock exchange and regulatory approvals for the Arrangement will be timely obtained; that the Company will complete, in a timely manner, other conditions to the Arrangement; that there are no significant disruptions affecting operations, whether due to labor 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, environmental concerns or otherwise; that development and expansion at the Company’s operations and project proceeds on a basis consistent with current expectations and the Company does not change its 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 annual report; that prices for gold and silver remain consistent with the Company’s expectations; that prices for key mining supplies, including labor 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; that the Company will be able to extend or repay the full outstanding obligation under the RCF; that the Company will be able to meet its financial obligations; and that the Company can access adequate financing, appropriate equipment and sufficient labor, 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, uncertainty concerning the timing of closing the Arrangement; the inability of the Company to receive required stock exchange and regulatory approvals for the Arrangement; the 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 labor issues; our ability to defend the validity of the APA and defend against related securities litigation; 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; the inability of the Company to repay the full outstanding obligation under RCF, if the Arrangement with First Majestic is terminated for any reason; 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 labor laws or in the Company’s labor relations, or labor 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; and failure of plant, equipment or processes to operate as anticipated. Should one or more of these risks and uncertainties materialize, or should any 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 annual report 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 annual report. The forward-looking information and statements contained in this annual report are made as of the date hereof and, accordingly, are subject to change after such date. The Company does not undertake any obligation 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.
CAUTIONARY NOTES TO UNITED STATES INVESTORS CONCERNING ESTIMATES OF
MEASURED, INDICATED AND INFERRED RESOURCES
The disclosure in this annual report 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 mineral reserve and mineral resource estimates contained in or incorporated by reference in this annual report 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 (the “Exchange Act”), as amended (“SEC-Guide 7”) and mineral reserve and mineral resource information contained herein and incorporated by reference herein may not be comparable to similar information disclosed by U.S. companies.
Under SEC-Guide 7, 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 annual report 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 annual report also uses the terms “Mineral Resources”, “Indicated Mineral Resources” and “Inferred Mineral Resources”. See “Introductory Notes—Certain Defined Terms”. We advise investors that while such terms are recognized and required by Canadian securities laws, 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 securities laws, 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 “Item 3. Key Information – D. 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 annual report. 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 Mineral Resources being identified.
For the above reasons, information contained in this annual report 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 promulgated thereunder.
CERTAIN DEFINED TERMS
Certain terms used herein are defined as follows:

Feasibility Study	A Feasibility Study is a comprehensive technical and economic study of the selected development option for a mineral project that includes appropriately detailed assessments of applicable Modifying Factors together with any other relevant operational factors and detailed financial analysis that are necessary to demonstrate, at the time of reporting, that extraction is reasonably justified (economically mineable). The results of the study may reasonably serve as the basis for a final decision by a proponent or financial institution to proceed with, or finance, the development of the project. The confidence level of the study will be higher than that of a Pre-Feasibility Study.
The term proponent captures issuers who may finance a project without using traditional financial institutions. In these cases, the technical and economic confidence of the Feasibility Study is equivalent to that required by a financial institution.	
Indicated Mineral Resource	An Indicated Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit.
Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing and is sufficient to assume geological and grade or quality continuity between points of observation.
An Indicated Mineral Resource has a lower level of confidence than that applying to a Measured Mineral Resource and may only be converted to a Probable Mineral Reserve.	

	Mineralization may be classified as an Indicated Mineral Resource by the Qualified Person when the nature, quality, quantity and distribution of data are such as to allow confident interpretation of the geological framework and to reasonably assume the continuity of mineralization. The Qualified Person must recognize the importance of the Indicated Mineral Resource category to the advancement of the feasibility of the project. An Indicated Mineral Resource estimate is of sufficient quality to support a Pre-Feasibility Study which can serve as the basis for major development decisions.	
Inferred Mineral Resource	An Inferred Mineral Resource is that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity.
An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.
An Inferred Mineral Resource is based on limited information and sampling gathered through appropriate sampling techniques from locations such as outcrops, trenches, pits, workings and drill holes. Inferred Mineral Resources must not be included in the economic analysis, production schedules, or estimated mine life in publicly disclosed Pre-Feasibility or Feasibility Studies, or in the Life of Mine plans and cash flow models of developed mines. Inferred Mineral Resources can only be used in economic studies as provided under NI 43- 101.
There may be circumstances, where appropriate sampling, testing, and other measurements are sufficient to demonstrate data integrity, geological and grade/quality continuity of a Measured or Indicated Mineral Resource, however, quality assurance and quality control, or other information may not meet all industry norms for the disclosure of an Indicated or Measured Mineral Resource. Under these circumstances, it may be reasonable for the Qualified Person to report an Inferred Mineral Resource if the Qualified Person has taken steps to verify the information meets the requirements of an Inferred Mineral Resource.	
Measured Mineral Resource	A Measured Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, and physical characteristics are estimated with confidence sufficient to allow the application of Modifying Factors to support detailed mine planning and final evaluation of the economic viability of the deposit.	

	Geological evidence is derived from detailed and reliable exploration, sampling and testing and is sufficient to confirm geological and grade or quality continuity between points of observation.
A Measured Mineral Resource has a higher level of confidence than that applying to either an Indicated Mineral Resource or an Inferred Mineral Resource. It may be converted to a Proven Mineral Reserve or to a Probable Mineral Reserve.
Mineralization or other natural material of economic interest may be classified as a Measured Mineral Resource by the Qualified Person when the nature, quality, quantity and distribution of data are such that the tonnage and grade or quality of the mineralization can be estimated to within close limits and that variation from the estimate would not significantly affect potential economic viability of the deposit. This category requires a high level of confidence in, and understanding of, the geology and controls of the mineral deposit.	
Mineral Reserve	Mineral Reserves are sub-divided in order of increasing confidence into Probable Mineral Reserves and Proven Mineral Reserves. A Probable Mineral Reserve has a lower level of confidence than a Proven Mineral Reserve.
A Mineral Reserve is the economically mineable part of a Measured and/or Indicated Mineral Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined or extracted and is defined by studies at Pre-Feasibility or Feasibility level as appropriate that include application of Modifying Factors. Such studies demonstrate that, at the time of reporting, extraction could reasonably be justified.
The reference point at which Mineral Reserves are defined, usually the point where the ore is delivered to the processing plant, must be stated. It is important that, in all situations where the reference point is different, such as for a saleable product, a clarifying statement is included to ensure that the reader is fully informed as to what is being reported.
The public disclosure of a Mineral Reserve must be demonstrated by a Pre-Feasibility Study or Feasibility Study.
Mineral Reserves are those parts of Mineral Resources which, after the application of all mining factors, result in an estimated tonnage and grade which, in the opinion of the Qualified Person(s) making the estimates, is the basis of an economically viable project after taking account of all relevant Modifying Factors. Mineral Reserves are inclusive of diluting material that will be mined in conjunction with the Mineral Reserves and delivered to the treatment plant or equivalent facility. The term ‘Mineral Reserve’ need not necessarily signify that extraction facilities are in place or operative or that all governmental approvals have been received. It does signify that there are reasonable expectations of such approvals.	

	‘Reference point’ refers to the mining or process point at which the Qualified Person prepares a Mineral Reserve. For example, most metal deposits disclose mineral reserves with a “mill feed” reference point. In these cases, reserves are reported as mined ore delivered to the plant and do not include reductions attributed to anticipated plant losses. In contrast, coal reserves have traditionally been reported as tonnes of “clean coal”. In this coal example, reserves are reported as a “saleable product” reference point and include reductions for plant yield (recovery). The Qualified Person must clearly state the ‘reference point’ used in the Mineral Reserve estimate.	
Mineral Resource	Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories. An Inferred Mineral Resource has a lower level of confidence than that applied to an Indicated Mineral Resource. An Indicated Mineral Resource has a higher level of confidence than an Inferred Mineral Resource but has a lower level of confidence than a Measured Mineral Resource.
A Mineral Resource is a concentration or occurrence of solid material of economic interest in or on the Earth’s crust in such form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction.
The location, quantity, grade or quality, continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling.
Material of economic interest refers to diamonds, natural solid inorganic material, or natural solid fossilized organic material including base and precious metals, coal, and industrial minerals.
The term Mineral Resource covers mineralization and natural material of intrinsic economic interest which has been identified and estimated through exploration and sampling and within which Mineral Reserves may subsequently be defined by the consideration and application of Modifying Factors. The phrase ‘reasonable prospects for eventual economic extraction’ implies a judgment by the Qualified Person in respect of the technical and economic factors likely to influence the prospect of economic extraction. The Qualified Person should consider and clearly state the basis for determining that the material has reasonable prospects for eventual economic extraction. Assumptions should include estimates of cutoff grade and geological continuity at the selected cut-off, metallurgical recovery, smelter payments, commodity price or product value, mining and processing method and mining, processing and general and administrative costs. The Qualified Person should state if the assessment is based on any direct evidence and testing.	

 	Interpretation of the word ‘eventual’ in this context may vary depending on the commodity or mineral involved. For example, for some coal, iron, potash deposits and other bulk minerals or commodities, it may be reasonable to envisage ‘eventual economic extraction’ as covering time periods in excess of 50 years. However, for many gold deposits, application of the concept would normally be restricted to perhaps 10 to 15 years, and frequently to much shorter periods of time.	
Modifying Factors	Modifying Factors are considerations used to convert Mineral Resources to Mineral Reserves. These include, but are not restricted to, mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and governmental factors.	
Pre-Feasibility Study (Preliminary Feasibility Study)	The CIM Definition Standards requires the completion of a Pre-Feasibility Study as the minimum prerequisite for the conversion of Mineral Resources to Mineral Reserves.
A Pre-Feasibility Study is a comprehensive study of a range of options for the technical and economic viability of a mineral project that has advanced to a stage where a preferred mining method, in the case of underground mining, or the pit configuration, in the case of an open pit, is established and an effective method of mineral processing is determined. It includes a financial analysis based on reasonable assumptions on the Modifying Factors and the evaluation of any other relevant factors which are sufficient for a Qualified Person, acting reasonably, to determine if all or part of the Mineral Resource may be converted to a Mineral Reserve at the time of reporting. A Pre-Feasibility Study is at a lower confidence level than a Feasibility Study.	
Probable Mineral Reserve	A Probable Mineral Reserve is the economically mineable part of an Indicated, and in some circumstances, a Measured Mineral Resource. The confidence in the Modifying Factors applying to a Probable Mineral Reserve is lower than that applying to a Proven Mineral Reserve.
The Qualified Person(s) may elect, to convert Measured Mineral Resources to Probable Mineral Reserves if the confidence in the Modifying Factors is lower than that applied to a Proven Mineral Reserve. Probable Mineral Reserve estimates must be demonstrated to be economic, at the time of reporting, by at least a Pre- Feasibility Study.	

Proven Mineral Reserve (Proved Mineral Reserve)	A Proven Mineral Reserve is the economically mineable part of a Measured Mineral Resource. A Proven Mineral Reserve implies a high degree of confidence in the Modifying Factors.
Application of the Proven Mineral Reserve category implies that the Qualified Person has the highest degree of confidence in the estimate with the consequent expectation in the minds of the readers of the report. The term should be restricted to that part of the deposit where production planning is taking place and for which any variation in the estimate would not significantly affect the potential economic viability of the deposit. Proven Mineral Reserve estimates must be demonstrated to be economic, at the time of reporting, by at least a Pre-Feasibility Study. Within the CIM Definition standards the term Proved Mineral Reserve is an equivalent term to a Proven Mineral Reserve.	
Qualified Person	An individual who (a) is an engineer or geoscientist with at least five years of experience in mineral exploration, mine development or operation or mineral project assessment, or any combination of these; (b) has experience relevant to the subject matter of the mineral project and the technical report; and (c) is in good standing with a professional association and, in the case of a foreign association listed in Appendix A of the Canadian Securities Administrators in National Instrument 43-101 - Standards of Disclosure for Mineral Projects , has the corresponding designation in such Appendix A.	

PART I

ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	
Not applicable.

ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE	
Not applicable.

ITEM 3.	KEY INFORMATION	
The following financial information of Primero is only a summary and should be read in conjunction with, and is qualified in its entirety by reference to, our audited consolidated financial statements and related notes which are included elsewhere in this annual report on Form 20-F.
The tables below represent the selected consolidated income statement and balance sheet data as at and for the years ended December 31, 2017, 2016, 2015, 2014 and 2013 that has been derived from our audited consolidated financial statements, which were prepared in accordance with IFRS as issued by the IASB.

A.	Selected Consolidated Income Statement Data	

Years ended December 31	 	2017	 	 	2016	 	 	2015	 	 	2014	 	 	2013	 	
Financial Data (in thousands of US dollars except per share amounts)	 		 	 		 	 		 	 		 	 		 	
Revenues	$	91,769	 	$	147,581	 	$	213,192	 	$	198,864	 	$	200,326	 	
Earnings from mine operations	 	2,056	 	 	(55,799	)	 	53,484	 	 	49,470	 	 	76,226	 	
Net loss	 	(409,685	)	 	(234,420	)	 	(106,910	)	 	(21,632	)	 	(4,045	)	
Basic net loss per share from continuing operations	 	(1.74	)	 	(0.65	)	 	(0.06	)	 	(0.14	)	 	(0.04	)	
Diluted net loss per share from continuing operations	 	(1.74	)	 	(0.65	)	 	(0.06	)	 	(0.14	)	 	(0.04	)	
Weighted average shares outstanding (basic) (000’s)	 	191,738	 	 	177,569	 	 	162,341	 	 	152,064	 	 	108,528	 	
Weighted average shares outstanding (diluted) (000’s)	 	191,738	 	 	177,569	 	 	162,341	 	 	152,064	 	 	108,528	 	

As of December 31,	 	2017	 	 	2016	 	 	2015	 	 	2014	 	 	2013	 	
Assets	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
   Mining interests	$	125,050	 	$	577,920	 	$	790,118	 	$	881,480	 	$	636,253	 	
     Total Assets	$	205,266	 	$	677,817	 	$	924,968	 	$	1,002,820	 	$	800,822	 	
Liabilities	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
     Long-term liabilities	$	91,134	 	$	130,472	 	$	190,213	 	$	190,213	 	$	94,039	 	
     Total liabilities	$	145,535	 	$	216,687	 	$	254,835	 	$	254,835	 	$	139,732	 	
Equity	$	59,731	 	$	461,130	 	$	747,985	 	$	747,985	 	$	661,090	 	
Primero did not pay a dividend in any of the years noted above.
Exchange Rates
5

The following table sets forth, for the periods indicated, the high, low, average and closing rates of exchange for US$1.00, expressed in Canadian dollars, reported by the Bank of Canada.

 	 	 	 	 	Year ended December 31	 	
	 	April 2018	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
	 	(through  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
	 	April 19,	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
	 	2018)		 	2017	 	 	2016	 	 	2015	 	 	2014	 	 	2013	 	
Low for the period	$	1.2288	 	$	1.2128	 	$	1.2536	 	$	1.1749	 	$	1.0614	 	$	0.9839	 	
High for the period	 	1.3088	 	 	1.3743	 	 	1.4559	 	 	1.3965	 	 	1.1643	 	 	1.0697	 	
Rate at the end of the period	 	1.2633	 	 	1.2545	 	 	1.3427	 	 	1.3840	 	 	1.1601	 	 	1.0636	 	
Average noon spot rate for the period (1)		1.2654			1.2986			1.3245			1.2785			1.1117			1.0299		
________________________
Source: Bank of Canada
   (1) Represents the average of the exchange rates during the period.

B.	Capitalization and Indebtedness	
Not applicable.

C.	Reasons for the Offer and Use of Proceeds	
Not applicable.

D.	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 risk factors below, 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 of Directors of the Company (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
Indebtedness
As of December 31, 2017, Primero’s outstanding indebtedness included (i) the outstanding principal amount under the RCF of $30.2 million, (ii) indebtedness under the 2015 Debentures (as defined below), estimated to have a value of $47.6 million and for which the outstanding principal amount is $75.0 million, and (iii) $0.1 million of finance lease liabilities.
On March 30, 2017, the Company amended the terms of its RCF to extend the maturity date from May 23, 2017 to November 23, 2017 and to exclude all financial covenants until such extended maturity date. The RCF continued to be secured by a charge over substantially all of the Company’s assets, but the extension was also conditional upon the lenders receiving a guarantee from Wheaton Precious Metals Corp. (“WPM”) for a fee of $2.7 million payable at maturity. In connection with the Company’s strategic review process, the RCF was further extended multiple times for short periods during the fourth quarter of 2017. On January 12, 2018, the Company further extended its RCF maturity date to allow for the execution and potential closing of the Arrangement Agreement.
6

During 2017, Primero drew down $25.0 million under the RCF. Following the sales of the Black Fox Complex and the Cerro del Gallo Project, the net proceeds were applied against the outstanding RCF reducing the outstanding balance to $30.2 million as of December 31, 2017. The total net repayment against the RCF for the year 2017 was $19.8 million.
During 2016, the Company repaid in full the $48.1 million outstanding balance of the 6.5% Convertible Debentures assumed as part of the acquisition of Brigus Gold Corp., using $50.0 million drawn on the RCF.
The Company’s exposure to interest rate risk is limited to the RCF, which is subject to a floating interest rate. If the Arrangement with First Majestic is terminated for any reason, there is significant uncertainty regarding Primero’s ability to repay the full outstanding obligation under the RCF upon maturity. Any Event of Default under the RCF, including non-payment upon maturity, unless waived, would trigger cross default provisions under the 2015 Debentures and the Amended and Restated Silver Purchase Agreement (as defined below). This represents a material uncertainty that casts substantial doubt on the ability of the Company to continue as a going concern should such events materialize.
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 RCF and the Amended and Restated Silver Purchase Agreement (as defined below) 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.
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 the San Dimas Mine is dependent on gold and silver prices that are adequate to make it 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.
Challenge to the 2012 APA
Overview
In 2016, the Servicio de Administración Tributaria (“SAT”) initiated a proceeding seeking to nullify the APA which it issued to the Company in 2012. The APA confirmed the Company’s basis for paying taxes on the price it realized for certain silver sales between 2010 to 2014. The Company received notice of this proceeding in February 2016. If the SAT’s challenge is successful it is likely to have a material adverse effect on the Company’s business, financial condition and results of operations.
7

Background
In 2004, affiliates of Goldcorp Inc. (“Goldcorp”) entered into a Silver Purchase Agreement dated as of October 15, 2004 with Silver Wheaton (the “Original Silver Purchase Agreement”), in connection with the San Dimas Mine and two other mines in Mexico. Under the Original Silver Purchase Agreement, Goldcorp received cash and securities in exchange for an obligation to sell the amount of silver extracted from the mines at a price set forth in the Original Silver Purchase Agreement. In order to satisfy its obligations under the Original Silver Purchase Agreement, sales were made by Goldcorp through a non-Mexican subsidiary to WPMI (formerly called SW Caymans) a Silver Wheaton company in the Caymans. Upon Primero’s acquisition of the San Dimas Mine, the Original Silver Purchase Agreement was restated as of March 30, 2006, amended and restated as of August 6, 2010 (the “Amended and Restated Silver Purchase Agreement”) and Primero assumed all of Goldcorp’s obligations with respect to the San Dimas Mine under the Original Silver Purchase Agreement. Primero did not receive any of the initial consideration that was paid to Goldcorp under the Original Silver Purchase Agreement.
The provisions of the Amended and Restated Silver Purchase Agreement require that, on a consolidated basis, the Company sell to Silver Wheaton during a contract year (August 6th to the following August 5th), 100% of the amount of silver produced from the San Dimas Mine up to 6 million ounces and 50% of silver produced thereafter, at the lower of (i) the current market price and (ii) $4.04 per ounce plus an annual increase of 1% (the “PEM Realized Price”). In 2017, the contract price was $4.32. The price paid by Silver Wheaton under the Amended and Restated Silver Purchase Agreement represents the total value that the Company and its affiliates receive for the sale of silver to Silver Wheaton. The Amended and Restated Silver Purchase Agreement continues indefinitely in respect of any silver produced from the San Dimas concessions.
The specific terms of the Amended and Restated Silver Purchase Agreement require that the Company sell the silver through one of its non-Mexican subsidiaries, Silver Trading Barbados (“STB”), to WPMI. As a result, the Company’s Mexican subsidiary that holds the San Dimas concessions, Primero Empresa Minera (“PEM”), sells the required amount of silver produced from the San Dimas concessions to STB to allow it to fulfill its obligations under the Amended and Restated Silver Purchase Agreement.
When the Company initially acquired the San Dimas Mine, the sales from PEM to STB were made at the spot market price while the sales by STB to WPMI were at the PEM Realized Price, which at that time was $4.04 per ounce. In order to reflect commercial realities and the effects of the Amended and Restated Silver Purchase Agreement on the Company on a consolidated basis, PEM amended the terms of sales of silver between itself and STB and commenced to sell the amount of silver due under the Amended and Restated Silver Purchase Agreement to STB at the PEM Realized Price. For Mexican income tax purposes, PEM then recognized the revenue on these silver sales on the basis of its actual realized revenue, which was the PEM Realized Price.
APA
In order to provide the Company with stability and assurances that the SAT would accept the PEM Realized Price (and not the spot market silver price) as the proper price to use to calculate Mexican income taxes, the Company applied for and received the APA from the SAT. The APA confirmed the PEM Realized Price would be used as the Company’s basis for calculating taxes owed by the Company on the silver sold under the Amended and Restated Silver Purchase Agreement. The Company believed that the function of APA was to provide tax certainty and as a result made significant investments in Mexico based on that certainty. Under Mexican law, an advanced pricing agreement is valid for five years and therefore the APA represented the SAT’s agreement to accept the PEM Realized Price as the basis for calculating taxes for the tax years 2010 through 2014.
Challenge to APA for 2010 – 2014 tax years
In 2016, the SAT initiated a legal proceeding seeking to nullify the APA. That legal proceeding does not identify an alternative basis in the legal claim for calculating taxes on the silver sold by PEM for which it receives the PEM Realized Price. If the SAT is successful in retroactively nullifying the APA, the SAT may reassess PEM in respect of its sales of silver in connection with the Amended and Restated Silver Purchase Agreement for 2010 through 2014. The Company is an ‘interested party’ in this proceeding. While PEM would have rights of appeal in connection with any reassessments, if the legal proceeding is finally concluded in favor of the SAT, the amount of additional taxes that the SAT could charge PEM for the tax years 2010 through 2014 on the silver sold in connection with the Amended and Restated Silver Purchase Agreement would likely have a material adverse effect on the Company’s results of operations, financial condition and cash flows.
8

In June 2017, as part of the ongoing annual audits of the PEM tax returns, the SAT issued an observations letter for the 2010 tax year. In October 2017, the SAT issued an observations letter for the 2011 tax year. An observations letter is issued to a taxpayer in advance of a reassessment being issued, provides an outline of the SAT’s position on matters under audit, and affords the taxpayer an opportunity to respond to such position in advance of the reassessment being issued. In these observations letters issued to PEM, the SAT made explicit its view that PEM should pay taxes based on the market price of silver, rather than the PEM Realized Price. As the Company continues to defend the APA in the Mexican legal proceeding, the APA remains valid and the Company will vigorously dispute any reassessment that may be issued in the future on a basis that assesses taxes on its silver revenues that is inconsistent with the APA. The observations letters do not represent a tax reassessment and no liability has been recognized in the financial statements. The Company has submitted formal responses to both the 2010 and 2011 observation letters.
The Company intends to vigorously defend the validity of the APA. In addition, the Company intends to explore opportunities to minimize the potential impact on the Company in the event that the SAT is successful in its legal claim to nullify the APA, but there is no assurance that the Company will find or be able to implement a reasonable solution.
While the Company continues to vigorously defend the validity of the APA and its transfer pricing position, it has also engaged in dialogue with the SAT seeking to resolve matters and bring tax certainty through a negotiated solution. Primero has also had constructive dialogue with the SAT in relation to outstanding VAT receivables and has received VAT refunds since July 2017.
Uncertain Tax Treatment for Tax Years Following 2014
For the 2015, 2016 and 2017 tax years, the Company continued to record its revenue from sales of silver for purposes of Mexican tax accounting in a manner consistent with the APA on the basis that the applicable facts and laws have not changed. The Company’s legal and financial advisors continue to believe that the Company has filed its tax returns compliant with applicable Mexican law. Given the legal challenge by the SAT against the APA for the 2010-2014 tax years and the Company’s belief that it is unlikely that the SAT will agree to an advance pricing agreement for the 2015-2019 tax years on terms similar to the challenged APA, it decided not to file an application for a renewed APA in respect of 2015 and the four subsequent years. To the extent the SAT determines that the appropriate price of silver sales under the Amended and Restated Silver Purchase Agreement is significantly different from the PEM Realized Price, although PEM would have rights of appeal in connection with any reassessments, it is likely to have a material adverse effect on the Company’s business, financial condition and results of operations.
Additional Capital
The mining, processing, development and exploration of Primero’s properties, 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 RCF, 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.
9

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 U.S. dollars at the average rate during the period, as such if the U.S. dollar appreciates as compared to the Canadian dollar, the costs of the Company would decrease in U.S. 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-U.S. 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 labor shortages or strikes. Operational costs may also be affected by a variety of factors, including: changing waste-to-ore ratios, ore grade metallurgy, labor 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.
Global Economic Conditions
Market events and conditions, including recent political and social events in the global arena may adversely affect Primero’s business. In the last several years, the United States and certain European countries have experienced significant political events that have cast uncertainty on global financial and economic markets. NAFTA is currently under renegotiation and the result is uncertain at this time. It is unclear exactly what other actions the administration in the United States will implement, and if implemented, how these actions may impact Canada and Mexico and in particular, the mining industry. Any actions taken by the new United States administration may have a negative impact on the Canadian economy and on our business, financial condition and results of operations. In addition to the political disruption in the United States, the citizens of the United Kingdom recently voted to withdraw from the European Union and the government of the United Kingdom has begun implementing such withdrawal. To the extent that certain political actions taken in North America and elsewhere in the world result in a marked decrease in free trade, access to personnel and freedom of movement, it could have an adverse effect on the Company’s ability to market its products internationally, reduce access to skilled labour and negatively impact the Company’s business, operations, financial condition and the market value of its shares. A change in federal, provincial or municipal governments in Canada may have an impact on the directions taken by such governments on matters that may impact the mining industry. Similarly, with the upcoming presidential elections in Mexico this year, it remains uncertain as to whether a potential change in administration would pose any risks to Mexico’s mining industry, trade relationships and growth outlook.
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; (iv) the Company’s other banking counterparties and (v) the Company’s Value Added Tax (“VAT”) refund, as to when or whether the VAT arrears is eventually reimbursed. 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 and the uncertainty of the recent market volatility, the Company’s planned growth and the trading price of the Company’s securities could either be adversely or positively impacted.
10

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.
Insurance and Uninsured Risks
Mining operations are subject to a number of risks and hazards generally, including adverse environmental conditions, industrial accidents, labor 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 its 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 on its financial performance and results of operations.
Operational Risks
Exploration, Development and Operating Risk
Primero’s current activities are directed towards mining operations and exploration projects at the San Dimas Mine. 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 geological 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. Other operational risks such as equipment failure or failure of retaining dams around tailings disposal areas may result in environmental pollution and consequent liability. Although appropriate precautions to mitigate these risks are taken, the inherent risk remains.
11

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 Resources and 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 ultimately 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 Mineral Reserves and Mineral Resources
The figures for Mineral Reserves and Mineral Resources contained in this annual report and used in the Company’s mine models and as presented for the San Dimas Mine, are estimates based on geological interpretations and geological judgment 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. 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 tools, 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 Revolving Credit Facility that could constitute an event of default. See “Introductory Notes – Cautionary Notes to United States Investors Concerning Estimates of Measured, Indicated and Inferred Resources”.
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 all Inferred Mineral Resources will be upgraded to Mineral Resources with sufficient geological continuity to constitute Proven Mineral Reserves or 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.
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Need for Additional Mineral Reserves
Since all mines have limited lives based on 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. The ability to commence or continue these activities requires sufficient financial resources to support these activities, and there is no assurance that sufficient funds are or will be available to the Company.
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 and/or plans for development.
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 local 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 Ejido or land owner, Primero may seek access under Mexican law which provides for priority rights for mining activities.
Certain of the properties included in the San Dimas Mine and for which Primero holds legal title have been subject to legal proceedings commenced by Ejidos seeking title to the property. These proceedings in all cases were brought against 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. As such, Primero initially has no standing to participate in them and may not receive timely notice of such actions brought decisions rendered.
Since acquiring the San Dimas Mine, Primero has been aware of four such Ejidos actions, three of which have been finally resolved in favour of Primero’s interests. Primero continues to challenge the fourth outstanding Ejidos’ legal claim to defend its position as the legitimate owner of the subject property. If Primero is not successful in this outstanding claim, 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 subject property. Further , there is no assurance that Ejidos will not engage in legal proceedings to claim interests in properties owned by Primero in the future.
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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 currently operates in certain 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.
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.
Health and Safety Hazards
The personnel involved in Primero’s mining operations are subject to many inherent health and safety risks and hazards which could result in occupational illness or health issues, personal injury and loss of life. Primero strives to advance safety performance across all regions of its operations and projects to identify, minimize and manage health and safety risks. Although precautions to mitigate these risks have been taken, these risks cannot be eliminated and may adversely affect the Company’s business and operations.
Environmental Permitting Risks and Environmental 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.
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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.
The potential exposure to environmental risks may be significant and could have a material adverse effect on the Company. Primero has $25 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 “Item 3. Key Information – D. Risk Factors – Financial Risks – Insurance and Uninsured Risks”.
Environmental Permitting Risks and Environmental 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.
San Dimas Tailings Management Risks
Tailings containment sites which existed at the time of Desarrollos Mineros San Luis, S.A. de C.V. (“DMSL”) 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 Cupias tailing storage facility was performed by Amec Foster Wheeler. The final assessment delivered in early 2015 showed that the facility exceeded the minimum factors of safety criteria for static and seismic loading conditions for both the current and ultimate storage configurations. An evaluation of the surface water management facilities did however recommend that the ditches, diversion dam and other structures be modified to accommodate possible major storm events. The engineering of these improvements was completed in 2015 with construction started in 2017 and planned to continue until 2019.
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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 “Item 4. Information on the Company – B. Business Overview – Mining Activities – San Dimas Mine – Environmental Matters.”
Labor and Employment Matters
Union contracts for the San Dimas Mine are renegotiated every two years, except for the compensation aspects, which are reviewed annually. See “See Item 4. Information on the Company – B. Business Overview – 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 union. 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.
A strike action by unionized employees resulted in a complete stoppage of mining and milling activities at the San Dimas Mine from February 15, 2017 to April 22, 2017, which significantly impacted 2017 production levels. With a new collective bargaining agreement (“CBA”) in place, a phased restart was initiated on April 22, 2017.
Although the Company has reached agreement with its union and places significant emphasis on maintaining a positive relationship with the union and employees, should labour strikes and work stoppages occur in the future, they may materially affect the Company’s operations and thereby adversely impact its future cash flows, earnings, production and financial condition.
Foreign Operations Risks – Mexico
All 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.
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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.
With the presidential elections in Mexico looming in July 2018, it remains uncertain as to whether a potential change in administration would pose any risks to Mexico’s mining industry, trade relationships and growth outlook, or to Primero’s operations, profitability, or its ability to resolve its outstanding tax matters through constructive dialogue with the Mexican government. There continue to be risks relating to the uncertain and unpredictable political environment in Mexico surrounding the elections and how our business will be impacted.
The San Dimas Mine is in a remote location and finding or hiring qualified people or obtaining all necessary services for the Company’s operations in Mexico is difficult. It is also difficult to find or hire qualified people in the mining industry to work at San Dimas 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.
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.
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 identify 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.
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Business Arrangements
Primero’s Board of Directors and Primero’s management continually review the Company’s long-term strategic plan and evaluate all alternatives to maximize stakeholder’s value. On January 12, 2018, the Company announced that it has entered into the Arrangement Agreement with First Majestic, whereby First Majestic will acquire all of the issued and outstanding common shares of Primero.
The closing of the Arrangement is subject to applicable regulatory approvals including anti-trust clearance in Mexico and the satisfaction of other customary conditions. There can be no assurance that the Company will be able to obtain required regulatory approvals for the Arrangement and complete, in a timely manner, other conditions to the Arrangement. Should the Arrangement be modified, restructured or terminated by either Primero or First Majestic, the market price of Primero shares or the business and operations of Primero may be materially adversely affected.
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, all permits necessary to develop or continue operating at any particular property.
Limited Reinvestment in San Dimas
Primero does not have sufficient cash to be reinvested in the San Dimas Mine due to its current financial situation. The reduced development in the underground and exploration drilling within the line and from surface may have an impact on the medium to long term production capability of the operation.
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 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. In addition, the proposed Arrangement creates further risk for the retention of key personnel.
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.
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Litigation
Class action lawsuits were filed in February 2016 against the Company in the State of California seeking to recover damages under the U.S. federal securities laws for certain shareholders. The Company filed a motion to dismiss which was granted on January 30, 2017, and the plaintiff’s claims were dismissed without prejudice. The plaintiffs filed an amended complaint on February 28, 2017. On July 14, 2017, the Company’s motion to dismiss the amended complaint was granted and the plaintiffs’ claims were dismissed without prejudice. Rather than amending the complaint again, the plaintiffs asked the federal court to enter final judgment and initiated an appeal of the dismissal to the Ninth Circuit Court of Appeals on September 8, 2017. The parties have filed their briefs in this appeal and a ruling on the appeal is expected in 2018. The Company will continue to vigorously defend these class action lawsuits. The Company may also 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 favorably, it may have a material adverse impact on the Company’s financial performance, cash flow and results of operations. See “Item 3. Key Information – D. Risk Factors – Operational Risks – Use of Ejido-Owned Land” and “D. Risk Factors – Financial Risks – Challenge to the 2012 APA”.
Risk of Amended and Restated Silver Purchase Agreement
Pursuant to the Amended and Restated Silver Purchase Agreement, Primero is required to sell to Wheaton Precious Metals International Ltd. (“WPMI”), a wholly-owned subsidiary of WPM a substantial portion of the silver produced from the San Dimas Mine at a current price of approximately US$4.32 per ounce, which is significantly below market price. This agreement imposes an unsustainable economic impact on the Company and Primero together with its advisors, engaged in discussions with WPM to renegotiate the terms of the Amended and Restated Silver Purchase Agreement since 2013 and more intensively during 2016 and 2017. These discussions did not result in any mutually satisfactory revision of the Amended and Restated Silver Purchase Agreement as WPM would not agree to provide Primero with an acceptable sustainable standalone business alternative. This was a determining factor that led to the Company’s strategic process and resulted in the pending Arrangement with First Majestic.
The closing of the Arrangement with First Majestic is subject to applicable regulatory approvals and the satisfaction of other customary conditions. In the event that the Arrangement with First Majestic is not completed or is terminated by either Primero or First Majestic in certain circumstances, there can be no assurance that the Company will be able to successfully renegotiate the terms of the Amended and Restated Silver Purchase Agreement with WPM or to otherwise mitigate the adverse economic effects.
Reputational Risk
Damage to Primero’s reputation can be the result of the actual or perceived occurrence of any number of events, and could include any negative publicity, whether true or not. Companies are at greater risk of losing control over how they are perceived in the marketplace due to increased usage of social media and other web- based tools used to generate, publish and discuss user-generated content and to connect with other users. Although Primero believes that it operates in a manner that is respectful to all stakeholders and that it places a great emphasis on protecting its image and reputation, the Company does not ultimately have direct control over how it is perceived by others. An impaired reputation may lead to increased challenges in developing and maintaining community relations, resolving conflicts that may arise with governmental authorities, decreased investor confidence and an impediment to the Company’s overall ability to advance its projects thereby having a material adverse impact on the Company’s results of operations, financial condition and growth prospectus.
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ITEM 4.	INFORMATION ON THE COMPANY	

A.	History and Development of the Company	
1. 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, mill and related assets from DMSL and the shares of Silver Trading (Barbados) Limited (“Silver Trading”) from Goldcorp Silver (Barbados) Ltd., each indirect, wholly-owned subsidiaries of Goldcorp Inc. (“Goldcorp”). Effective January 1, 2015, Primero Mining Corp. and Primero Gold Canada Inc. amalgamated under the name of Primero Mining Corp. Primero also holds exploration properties in Mexico known as the San Dimas Southern Concessions and the Ventanas Property. The Company previously owned a second producing property, the Black Fox mine, located in the Township of Black River-Matheson, Ontario, Canada, which was sold on October 6, 2017 along with properties adjacent to the Black Fox mine – Grey Fox and Pike River, which together with the Black Fox mine and the Black Fox mill, located on the Stock Mill property, comprised the Black Fox Complex (the “Black Fox Complex”). See “Item 4. Information on the Company – A. History and Development of the Company – General Development of the Business – 3. Three Year History – Sale of Black Fox Mine and Complex”.
On November 27, 2017, the Company sold the Cerro del Gallo Project via the sale of all of the issued and outstanding shares of the Company’s wholly-owned subsidiary San Anton Resource Corporation, the indirect owner of the project. See “Item 4. Information on the Company – A. History and Development of the Company – General Development of the Business – 3. Three Year History – Sale of Cerro del Gallo Project”.
Primero has three principal, wholly-owned subsidiaries: Primero Empresa Minera, S.A. de C.V. (“Primero Empresa”), which is incorporated under the laws of Mexico; Silver Trading (Barbados) Limited, which is incorporated under the laws of Barbados; and Primero Mining Luxembourg s.à.r.l., which is incorporated under the laws of Luxembourg. The following chart shows the organization of Primero and the ownership of its mineral properties.
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(1)	Martin Aguilar, the General Manager 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.
2. GENERAL DEVELOPMENT OF THE BUSINESS
Primero is a precious metals producer which operates the San Dimas Mine located on the borders of Durango and Sinaloa states in Mexico, approximately 150 kilometers west of the city of Durango, Mexico. Primero is currently trading on the TSX under the symbol: “P”. Primero’s shares were listed on the New York Stock Exchange (“NYSE”) until August 14, 2017. In addition, Primero has a convertible debenture trading on the TSX under the symbol “P.DB.V” and common share purchase warrants trading on the TSX under the symbol “P.WT.C”.
During 2015, the Company acquired approximately 10,000 hectares of new concessions from the Mexican Mining registry in the vicinity of the San Dimas and Ventanas concessions and in 2016 it further acquired a significant mineral concession area of approximately 30,192 hectares between the San Dimas Mine and the Ventanas exploration property, thereby closing the gaps between these concessions (the “Southern Concessions”).
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Primero’s Board of Directors and Primero’s management continually review the Company’s long-term strategic plan and evaluate all alternatives to maximize stakeholder’s value. Throughout 2017, Primero conducted an extensive strategic review process, exploring all possible opportunities and considering potential offers for some or all of its assets or its shares. Primero sold its Black Fox Complex in October, 2017, and the Cerro del Gallo Project in November, 2017 and the net proceeds from the sales of these assets were used to permanently repay a portion of the outstanding amount owing under its RCF.
On January 12, 2018, the Company announced its friendly acquisition by First Majestic and that the two companies had entered into the Arrangement Agreement whereby First Majestic will acquire all of the issued and outstanding common shares of Primero. Under the terms of the Arrangement Agreement, all of Primero’s issued and outstanding common shares will be exchanged for First Majestic common shares on the basis of 0.03325 of a First Majestic common share for each Primero common share. On March 13, 2018, the shareholders of Primero voted to approve the Arrangement with First Majestic.
3. THREE YEAR HISTORY
Recent Developments
2018
Friendly Acquisition of Primero Mining and Restructured Stream with Wheaton Precious Metals
The Arrangement Agreement between Primero and First Majestic announced on January 12, 2018, marked the end of the strategic review process commenced by Primero. Under the terms of the Arrangement Agreement, all of Primero’s issued and outstanding common shares will be exchanged for First Majestic common shares on the basis of 0.03325 of a First Majestic common share for each Primero common share. This implies consideration of C$0.30 per Primero common share, representing a 200% premium, based on the 20-day volume weighted average prices of the First Majestic and Primero common shares on the Toronto Stock Exchange for the period ended January 10, 2018.
Concurrently with execution of the Arrangement Agreement, First Majestic has entered into agreements with WPMI, whereby, following closing of the Arrangement, the current silver streaming interest at Primero’s San Dimas silver-gold mine held by WPM will be terminated and First Majestic and WPM will enter into a new stream arrangement based on 25% of the gold equivalent production at San Dimas (the “New Stream”) with ongoing payments of $600 per gold equivalent ounce delivered under the agreement. As part of the transaction, WPM will receive 20,914,590 common shares of First Majestic having an aggregate value of $151 million.
Extension of existing Revolving Credit Facility in connection with proposed business combination
On January 12, 2018, the Company announced that it had agreed to an extension of its RCF and the related guarantee provided by WPM, both previously maturing on January 11, 2018, to the earlier of (i) April 30, 2018, (ii) the closing of the Arrangement, and (iii) the seventh business day following termination of the proposed Arrangement.
Special meeting of shareholders and a meeting of debetureholders
On February 9, 2018, the Company announced that it planned to hold a special meeting (the “Shareholder Meeting”) of its shareholders (the “Shareholders”) and a meeting of holders (“Debentureholders”) of its 5.75% convertible unsecured subordinated debentures (the “Primero Debentures”) due February 28, 2020 (the “Debentureholder Meeting”), on March 13, 2018 at 9:00 a.m. (Toronto time) and 10:00 a.m. (Toronto time) respectively. Shareholders and Debentureholders of record as of the close of business on February 9, 2018 were eligible to vote at their respective meetings.
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At the Shareholder Meeting, Shareholders were asked to consider the proposed Arrangement between Primero and First Majestic. Primero’s Board of Directors unanimously recommended that Shareholders vote in favor of the proposed Transaction (as defined below).
At the Debentureholder Meeting, the Debentureholders were asked to consider the proposed amendment of the trust indenture dated February 9, 2015, between Primero and Computershare Trust Company of Canada (the “Trust Indenture”), to accelerate the maturity date of the Primero Debentures to the next Business Day (as defined in the Trust Indenture) following the effective date of the Arrangement (the “Debenture Amendment”).
Primero mailed an information circular with respect to the Arrangement and the Debenture Amendment to Shareholders and Debentureholders of record as of February 9, 2018.
Leading Independent Proxy Advisory Firms Recommend Primero Shareholders Vote in Favour of Proposed Arrangement
The Company on February 28, 2018 announced that Institutional Shareholder Services Inc. and Glass, Lewis & Co., LLC, two leading proxy advisory firms, had recommended that Primero shareholders vote for the Arrangement at the Shareholder Meeting to be held on March 13, 2018.
Shareholders and Debentureholders Vote in Favour of Arrangement Resolutions
On March 13, 2018, the Company announced that the Shareholders voted in favour of the Arrangement with First Majestic by more than 99% of votes cast. In addition, Debentureholders, at their meeting held on the same day, approved with 100 % of the votes cast, the proposed amendment of the Trust Indenture to accelerate the maturity date of the Primero Debentures to the next Business Day following the effective date of the Arrangement.
The Arrangement is expected to close in late April or early May 2018, subject to receipt of applicable regulatory approvals and the satisfaction of other customary conditions. In the event that the Arrangement does not close by April 30, 2018, the Company will seek an extension of the RCF.
2017
Work Stoppage and resumption of operations at San Dimas
On February 15, 2017, the Company announced that unionized employees at its San Dimas Mine in Mexico had initiated a strike action which resulted in the complete stoppage of mining and milling activities at the site. The stoppage resulted from the failure of the parties to reach an agreement during the negotiation of the CBA.
On April 13, 2017, the Company announced a new CBA with the National Union of Mine, Metal, Steel and Allied Workers of the Mexican Republic (Sindicato Nacional de Trabajadores Mineros, Metalúrgicos, Siderúrgicos y Similares de la República Mexicana) and that it had successfully resolved the work stoppage of unionized employees. Operations resumed on April 22, 2017.
Executive Leadership Change
On February 23, 2017, the Company announced the appointment of Mr. Joseph Conway as Interim President and Chief Executive Officer upon the departure of Mr. Ernest Mast as President and Chief Executive Officer.
Strategic Review Process
On February 27, 2017, the Company announced that the Board of Directors had commenced a strategic review process to explore alternatives to improve shareholder value, including strategic investments, joint ventures or asset sales and the sale of the Company.
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Extension of existing Revolving Credit Facility
On March 24, 2017, the Company announced that it had agreed in principle with its lenders to an extension of its existing RCF previously maturing on May 23, 2017. Upon completion of the amending agreement, the maturity of the RCF was extended by six months to November 23, 2017. The amending agreement excluded financial covenants in the amended RCF during the six month extension period, to support the San Dimas restart plan. WPM guaranteed amounts payable under the RCF for a fee of $2.6 million payable at maturity.
On March 31, 2017, the Company announced that it had closed the extension of the maturity of the RCF with its syndicate of lenders. On this same date, Primero drew down $10 million under the RCF. An additional $15 million remained available for further drawdown provided that the proceeds were used solely in connection with the restart of the San Dimas operations, or otherwise any further drawdown required the consent of WPM.
Ongoing Audits of PEM and Observation Letters Received
In June 2017, as part of the ongoing annual audits of the PEM tax returns, the SAT issued an observations letter for the 2010 tax year. In October 2017, the SAT issued an observations letter for the 2011 tax year. In both observations letters, the SAT made explicit its view that PEM should pay taxes based on the market price of silver. The observations letters do not represent a tax reassessment and no liability has been recognized in the financial statements. The Company has submitted its formal response to both observations letters. The Company will vigorously dispute any reassessment of taxes on its silver revenues that is inconsistent with the APA. The Company is continuing a dialogue with the SAT to resolve its tax matters. See “Item 3 – D. Risk Factors”.
Sale of Black Fox Mine and Complex
On August 10, 2017, the Company announced that it had entered into an agreement with McEwen Mining Inc. (“McEwen”) to sell its interest in the Black Fox mine and associated assets located near Timmins, Ontario, Canada. The Company on October 6, 2017, announced the closing of the sale of the Black Fox mine and associated assets for a total consideration of $32.5 million including a closing net working capital adjustment of $2.5 million. This included $27.5 million in cash proceeds and the release of $5.0 million from restricted cash that was pledged towards environmental closure liabilities in the amount of $16.5 million, which were assumed by McEwen. The proceeds net of closing costs from the sale of the Black Fox Complex were used to permanently reduce the outstanding balance on the Company’s RCF. When released, the restricted cash was also applied to reduce the outstanding balance of the RCF.
The results from operations for the Black Fox Complex have been presented as discontinued operations in the audited consolidated financial statements and management’s discussion and analysis (the “MD&A”) for the year ended 2017, which are available on SEDAR at www.sedar.com.
Delist from the New York Stock Exchange, Shares Continue to Trade on the Toronto Stock Exchange
On August 14, 2017, the Company announced that it had received formal notification from the NYSE of its intention to initiate delisting procedures for the Company’s common shares, pursuant to Section 802.01D of the Listed Company Manual. The NYSE had determined that the Company was no longer suitable for listing based on “abnormally low” price levels. Primero did not appeal the NYSE’s decision. The NYSE filed Form 25 (Notification of Removal from Listing and/or Registration Under Section 12(b) of the Exchange Act) with the SEC.
The Company’s Common Shares trade on the Toronto Stock Exchange (“TSX”) under symbol “P”.
Management changes
On September 7, 2017, the Company announced that Mr. Ryan Snyder had been promoted to the role of Chief Financial Officer, effective September 15, 2017, and that Mr. Kevin Jennings had resigned to pursue other opportunities.
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Sale of Cerro del Gallo Project
On November 14, 2017, the Company announced that it had entered into an agreement with Argonaut Gold Inc. (TSX: AR) (“Argonaut”) to sell its Cerro del Gallo development project (the “Cerro del Gallo Project”) located in the state of Guanajuato in central Mexico (the “Transaction”), for total consideration of US$15 million.
On November 27, 2017, the Company announced the closing of the sale of the Cerro del Gallo Project to Argonaut, via the sale of all of the issued and outstanding shares of San Anton Resource Corporation, the indirect owner of the project. The sale proceeds, net of closing costs, were used to permanently reduce the outstanding balance of RCF.
The results from operations for the Cerro del Gallo Project have been presented as discontinued operations in the audited consolidated financial statements and the MD&A for the year ended 2017, which are available on SEDAR at www.sedar.com.
Extension of existing Revolving Credit Facility
On November 22, 2017, the Company announced that it had agreed in principle with its lenders to an extension of the RCF and the related guarantee provided by WPM, previously maturing on November 23, 2017. The maturity of the RCF was extended to December 1, 2017, providing the Company with the ability to continue negotiations surrounding its previously announced strategic review process and the possible divestiture of its San Dimas Mine in Mexico.
Similar announcements were made on December 1, 2017, December 15, 2017 and on December 22, 2017, whereby the Company agreed with its lenders to successive extensions of the maturity of its RCF and related guarantee provided by WPM, to continue its strategic review process and negotiations regarding the possible divestiture of its San Dimas Mine in Mexico.
2016
Operational Challenges
The Company began 2016 with efforts to create and sustain a safety-first culture at its operations. Consequently, the Company implemented enhanced ground support standards at its San Dimas Mine which directly impacted operations for the first quarter of 2016. During the second quarter of 2016, production at the San Dimas Mine was impacted by unexpected labor disruptions along with lower than planned grades which resulted in a further update to the Company’s production guidance. During the third quarter of 2016, production at the San Dimas Mine was affected by unplanned workers absences and lack of achievement of mine plans, which resulted in reduced underground development rates and delayed certain ventilation improvement projects, all of which contributed to a further reduction of the Company’s 2016 production guidance.
Legal Claims
On February 3, 2016, the Company announced that it had received a legal claim from the SAT, seeking to nullify the APA issued by the SAT in 2012. The APA confirmed the Company’s basis for paying taxes on realized silver prices for the years 2010 to 2014 and represented the SAT’s agreement to accept that basis for those years. The legal claim initiated by the SAT did not identify any different basis for paying taxes. The Company believes this legal claim is without merit and it has since vigorously defended the validity of its APA. See “Item 3. Key Information – D. Risk Factors”.
In addition, a class action lawsuit was filed in February 2016 against the Company in the State of California seeking to recover damages under the U.S. federal securities laws for certain shareholders. The Company filed a motion to dismiss which was granted on January 30, 2017 and the plaintiffs’ claims were dismissed without prejudice. The plaintiffs filed an amended complaint on February 28, 2017. On July 14, 2017, the Company’s motion to dismiss the amended complaint was granted and the plaintiffs’ claims were dismissed without prejudice. Rather than amending the complaint again, the plaintiffs asked the federal court to enter final judgment and initiated an appeal of the dismissal to the Ninth Circuit Court of Appeals on September 8, 2017. The parties have filed their briefs in this appeal and a ruling on the appeal is expected sometime in 2018. The Company will continue to vigorously defend this class action lawsuit.
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Announcement of intentions to repay the Brigus Debentures
On February 10, 2016, the Company announced its intention to redeem with cash its outstanding $48.1 million 6.5% senior unsecured convertible debentures due March 31, 2016 (the “Brigus Debentures”) and further announced that it had drawn $50 million under its Revolving Credit Facility to satisfy the repayment of the Brigus Debentures. The Brigus Debentures were paid on March 30, 2016.
NAFTA Dispute
On June 2, 2016, the Company issued a Notice of Intent to submit a claim to international arbitration against the Government of Mexico pursuant to Article 1119 of NAFTA. The Notice of Intent highlighted the improper actions taken by the SAT, which proposed to revoke legal rights previously granted to Primero and upon which Primero relied to expand its investment in Mexico.
As Primero has been able to engage in a constructive dialogue with the Mexican government regarding the SAT’s legal claim against the APA, it has temporarily suspended the advancement of international arbitration proceedings against the Mexican Government.
Acquisition of Mineral Concessions
On June 14, 2016, the Company acquired a large concession area adjacent to its San Dimas Mine in Durango, adding 30,192 hectares substantially covering the area between the San Dimas Mine and the Ventanas exploration property. These new concessions are not covered by the Amended and Restated Silver Purchase Agreement.
Prospectus Offering
On June 24, 2016, the Company closed a “bought deal” underwritten prospectus financing with a syndicate of underwriters, pursuant to which the Company issued 22,022,500 units of the Company at a price of C$2.35 per unit for aggregate gross proceeds of C$51,752,872. Each unit consisted of one Common Share of the Company and one-half of one Common Share purchase warrant of the Company. Each whole warrant entitles the holder to acquire one Common Share of the Company at a price of C$3.35 per Common Share until June 25, 2018.
Executive Changes
On January 31, 2016, Mr. Ernest Mast assumed the role of President and Chief Executive Officer and a director of the Company, replacing Mr. Joseph Conway who retired as Chief Executive Officer and assumed the role of Executive Vice Chairman of the Company.
On September 1, 2016, the Company appointed Mr. Kevin Jennings as Chief Financial Officer replacing Ms. Wendy Kaufman.
On October 6, 2016, the Company appointed Mr. Damien Marantelli as Chief Operating Officer, replacing Mr. Guillermo Adrian who was the Company’s Vice President of Operations and was killed in a plane crash reported on April 2, 2016.
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NYSE Notice
On December 27, 2016, the Company announced that it had received formal notification from the NYSE of its non-compliance with the NYSE’s continued listing standards for minimum trading price. Primero’s shares were listed on the NYSE until August 14, 2017.
2015
Amalgamation
Effective January 1, 2015, Primero Mining Corp. and Primero Gold Canada Inc. (formerly Brigus) amalgamated under the name of Primero Mining Corp. under the Act.
Convertible Debenture Prospectus Offering
On February 9, 2015, the Company announced the closing of an underwritten prospectus offering of $75 million aggregate principal amount of 5.75% convertible unsecured subordinated debentures (the “2015 Debentures”), maturing on February 28, 2020. The 2015 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 2015 Debentures. Upon conversion, holders will be entitled to receive accrued and unpaid interest up to, but excluding, the date of conversion.
Executive Changes; Head Office Consolidation
As part of the Company’s evolution and focus on maintaining efficiency as it continued to grow, the Company made the decision mid-2014 to consolidate its functions in a Toronto-based head office, initiating the closure of its Vancouver office where the corporate accounting and reporting team had previously been located. The Company appointed Ms. Wendy Kaufman to the role of Chief Financial Officer based in Toronto in September 2014. Further, 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.

B.	Business Overview	
Overview
Primero is a Canadian-based precious metals producer with existing mining operations in Mexico. Primero currently has one producing property, the San Dimas Mine, located in Mexico’s San Dimas district on the border of Durango and Sinaloa states. In addition, Primero also holds exploration properties in Mexico known as the San Dimas Southern Concessions and the Ventanas Property.
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 (now WPMI) under the Amended and Restated Silver Purchase Agreement. See “See Item 4. Information on the Company – B. Business Overview – Mining Activities – San Dimas Mine – Amended and Restated Silver Purchase Agreement”.
Seasonality
There are no material seasonality impacts on the Company’s business.
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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 and executives. See “Item 3. Key Information – D. Risk Factors – Operational Risks – Competition”.
Changes to Contracts
As of December 31, 2017, Primero had 798 unionized 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. See “Item 4. Information on the Company – B. Business Overview – Business of Primero – Employees” and “Item 3. Key Information – D. Risk Factors – Operational Risks – Labour and Employment Matters”.
Employees
As of December 31, 2017, the Company had the following employees and contractors:

 	 	Full-Time	 	 	Hourly	 	 	 	 	 	 	 	
Location	 	Salaried	 	 	(Union)	 	 	Contractors	 	 	Total	 	
Durango Office	 	32	 	 	Nil	 	 	2	 	 	34	 	
San Dimas Mine (including Truchas)	 	400	 	 	798	 	 	458	 	 	1,656	 	
Toronto Office	 	18	 	 	Nil	 	 	4	 	 	22	 	
Total	 	450	 	 	798	 	 	464	 	 	1,712	 	
The total number of employees of Primero has reduced substantially from the end of 2016. This is due to the sale of both the Black Fox Complex and Cerro del Gallo Project as well as reductions in San Dimas and Toronto reflecting an increased cost reduction focus.
Foreign Operations
All of the Company’s mining and mineral exploration operations are now conducted in Mexico, and as such, Primero’s operations are exposed to various levels of foreign political, economic and other risks and uncertainties. See “Item 3. Key Information – D. Risk Factors – Operational Risks – Use of Ejido-Owned Land” and “Item 3. Key Information – D. Risk Factors – Operational Risks – Foreign Operations Risks – Mexico”.
Environmental Protection
The activities of the Company are subject to environmental laws and regulations which are evolving in a manner that imposes progressively 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.
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In particular, the Company’s mining, exploration and development activities are subject to various levels of Mexican 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, 2017, the Company spent $0.55 million at the San Dimas Mine on capital projects related to environmental protection. Additionally, the Company accounted for its asset retirement obligations, consisting of reclamation and closure costs of its mining properties in its financial statements. See “Item 4. Information on the Company – B. Business Overview – Mining Activities – San Dimas Mine – Environmental Matters”, and “Item 3. Key Information – D. Risk Factors – Operational Risks – Environmental Permitting Risks and Environmental Hazards – Mexico”.
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 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.
The Company plans to continue to implement and expand the corporate responsibility programs and stakeholder engagement activities that have been initiated. In Tayoltita the ‘Activa Tayoltita’ year-long cultural and recreational activities included educational and sporting events and regular use of the recreational parks. The ongoing implementation of written agreements with local Ejidos in Mexico have generated new employment and business opportunities in the communities. In 2016, 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 and Committee Guidelines” in the Corporate Governance section.
In April 2017, for the sixth consecutive year, the Company was awarded the “Distintivo ESR” (designation as a “Socially Responsible Business”) by the Mexican Center for Philanthropy. 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.
Licensing
The Company is dependent on permits and licences to operate its mines as discussed in “Item 4. Information on the Company – B. Business Overview –Regulation”. There are no additional material industrial or commercial licences that the Company is dependent upon.
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MINERAL RESERVES AND MINERAL RESOURCES
Primero’s total Mineral Reserves and Mineral Resources at December 31, 2017, are shown in the tables below, and are qualified by the more detailed disclosure set out in the following sections.

Total Mineral Reserves and Mineral Resources as at December 31, 2017.	
Classification	Property	Tonnage
(Mt)	Gold
Grade
(g/t)	Silver
Grade
(g/t)	Contained
Gold
(koz)	Contained
Silver
(koz)	
Mineral Reserves	 	 	 	 	 	 	
Proven & Probable	San Dimas	4.1	3.8	304	495	39,662	
Total Proven &
Probable	 	 	 	 	495	39,662	
Mineral Resources	 	 	 	 	 	 	
Measured &
Indicated	San Dimas	4.9	5.1	385	811	60,936	
Measured &
Indicated	Ventanas	0.2	2.5	258	12	1,286	
Total Measured &
Indicated					823	62,222	
Inferred Resources	San Dimas	6.9	3.5	319	782	70,859	
Inferred Resources	Ventanas	0.2	2.3	412	17	3,039	
Total Inferred
Resources	 	 	 	 	799	73,898	
See Notes to Mineral Reserves and Mineral Resources on pages 33 - 35.
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 State, Mexico, Technical Report for Primero Mining Corp.” dated April 18, 2014 (the “San Dimas Technical Report”), prepared in accordance with NI 43-101 by J. Morton Shannon, P. Geo., Rodney Webster, M.AIG, and Gabriel Voicu, P. Geo, each a “Qualified Person” for the purposes of NI 43-101. 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 reviewed and approved by Dave Laudrum, P.Geo., Senior Resource Manager for Primero.
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Amended and Restated Silver Purchase Agreement
As part of the acquisition of the San Dimas Mine, Primero assumed 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 (now WPMI). After meeting its contractual obligations to WPMI, 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 WPMI’s right to terminate;	
 	 		
	-	Silver Trading sells annually (in a “Contract Year”) to WPMI an amount of refined silver (the “Refined Silver”) equal to:	

	o	all ounces produced of payable silver (“Payable Silver”) from the San Dimas Mine up to 6,000,000 ounces (the “Threshold Number”), and	
 	 		
	o	50% of any additional ounces of Payable Silver in excess of the Threshold Number of ounces of Refined Silver for such Contract Year.	

	-	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 ($4.32 for 2017) 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 WPMI 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 WPMI 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 WPMI by October 15, 2031;	
 	 	 	
 	 	multiplied by	
 	 	 	
 	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 WPMI 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 .
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Historical Production
Historical mill production for the San Dimas Mine from 2003 to 2017 is summarized in the following table:

San Dimas Mine Production	 	Grade	Contained Ounces	
Year	Tonnes
(Mt)	Gold
(g/t)	Silver
(g/t)	Gold
(koz)	Silver
(koz)	
2003	0.424	5.3	428	71	5,825	
2004	0.398	6.9	525	88	6,717	
2005	0.508	7.4	497	121	8,115	
2006	0.689	7.8	438	172	9,706	
2007	0.685	6.3	341	138	7,501	
2008	0.657	4.3	259	90	5,479	
2009	0.673	5.4	247	116	5,356	
2010 (1)	0.612	4.5	244	88	4,803	
2011	0.663	3.9	226	80	4,603	
2012	0.721	3.9	234	88	5,134	
2013	0.767	4.7	258	115	6,362	
2014	0.898	4.7	232	134	6,606	
2015	0.993	4.9	274	156	8,760	
2016	0.759	3.9	228	94	5,564	
2017	0.445	4.4	296	62	4,235	
(1)    Primero acquired the San Dimas Mine on August 6, 2010.
Drilling
Prior to Primero’s acquisition of the San Dimas Mine, 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, definition drilling campaigns were designed to convert Inferred Mineral Resources to Indicated Mineral Resources, and only drilling designed to test new targets was designated as exploration drilling. The total drilling conducted in 2017 is shown in the following table.

Area	Number of
Drill Holes	Metres	
Tunel San Fernando	2	849	
Santa Jessica	66	17,522	
Santa Regina	22	7,155	
Perez	10	2,452	
Sistema San Luis	2	399	
Victoria	24	7,142	
San Juanito	3	1,002	
San Rafael	7	2,583	
Alexa	12	2,226	
Trinidad	3	1,158	
Total	151	42,487	
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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 established on development headings driven to access the vein. Holes are typically 200 to 250 metres long and generally between +/- 50 o in dip, while surface drilling, targeting deep veins, can be up to 1,000 metres long. 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. Dave Laudrum, P.Geo., Senior Resource Manager, Primero and a Qualified Person for the purposes of NI 43-101 has reviewed the appropriate reports, and is of the opinion that the analytical and database quality and the geological interpretations support the use of the data in Mineral Resource and Mineral Reserve estimation, and in mine planning.
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 o 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%.
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.
The basis for ore haulage at San Dimas is load-haul-dump (“LHD”) equipment feeding trucks for haulage to the portal and then plant stockpiles. In the Tayoltita mine, the LHD equipment load rail wagons for haulage to the Tayoltita mill crushing plant. 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 9 year life at the current processing rate.
Recent Operating History for the San Dimas Mine
In 2017, Primero continued to implement major safety initiatives which required that all workers in the underground mine would only work under supported ground, and the systematic installation of ground support is now a requirement in all active workplaces. This initiative reduced production rates due to the time involved in installing the ground support.
During 2017, the San Dimas Mine produced 73,665 gold equivalent ounces (just below the Company’s revised guidance range of 75,000 to 90,000 gold equivalent ounces) and 60,167 ounces of gold and 3,962,580 ounces of silver. Throughput at the San Dimas Mine in 2017 averaged 1,219 TPD (based on 365 day availability).
Environmental Matters
During the year ended December 31, 2017, the Company spent $0.55 million on capital projects related to environmental protection. This included continued improvements to the tailings storage areas and some surface water management structures. 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 was completed in the third quarter of 2016 (with the exception of modifications to the tailings pipelines suspension bridge which will be completed in the fourth quarter of 2018).
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In 2015, a Technical Review and Risk Assessment of the Cupias tailing storage facility was performed by Amec Foster Wheeler. The stability evaluation of the storage facility currently in use shows that the facility exceeds the minimum factors of safety criteria for static and seismic loading conditions for both the current and ultimate storage configurations. Preliminary evaluations of the current surface water management facilities shows that the ditches, diversion dam and other structures require modifications to accommodate possible major storm events. The engineering of these improvements was completed in late 2015 and construction started in the second quarter of 2017 with the modification of the ditches completed at the end of the third quarter 2017. Following a planned visit to site in September 2017, Amec Foster Wheeler recommended additional changes to the design of eastern dam and the solution pond located at the east end of the facility. Modifications to the design were completed at the end of 2017. Work on the eastern dam, spill way and solution pond is planned to resume at the start of the second quarter 2018 with completion planned for 2019.
The San Dimas Mine is subject to a full closure plan and reclamation of the site upon cessation of operations, which would include 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 $31.6 million at December 31, 2017 and the present value of the obligation was estimated at $11.4 million, calculated using a discount rate of 7.39% 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 17 years. In respect of the decommissioning liability, San Dimas Mine expects to incur $2.2 million in 2019 and $2.0 million in 2020 to remediate the historical San Antonio tailings, with the remainder of the expenditures to be incurred mainly at the end of the mine life.
On November 3, 2017, a 1” PVC pipe failed inside the process plant spraying process solution containing cyanide over the perimeter wall. Approximately 1.5 cubic metres of cyanide solution spilt onto adjacent soils and into the Piaxtla river. The Company’s emergency response plans addressed the spill and authorities were promptly notified. The analysis of the equipment failure was completed and all observations and recommendations have been closed out.
In addition, Primero is also 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 2020.
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 remnants of the mill. The river was diverted through two tunnels which were excavated in the canyon wall on the inside of the river bend. A third tunnel for road access was excavated and also serves as an additional channel for the river in high flow periods. In 2002, the then owner of the mine (Wheaton River Minerals Ltd.) identified the San Antonio tailings dam as a risk to failure due to a low safety factor in the dam, the 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.
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 potential for erosion 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, is planned to be completed in 2020. See “Item 3. Key Information – D. Risk Factors – Operational Risk – San Dimas Tailings Management Risks”.
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Reserves and Resources
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.
At the San Dimas Mine, the Mineral Reserves and associated Mineral Resources were constrained in 64 individual geological models and block models. Mineral Resources were estimated using GEMS software with ordinary kriging interpolation applied to major veins and inverse distance squared interpolation applied to minor veins. Resources in some additional minor veins were estimated using a polygonal method and included in Inferred Mineral Resources. In addition to the GEMS models, Leapfrog geological models were created for 22 of the main veins which honour the vein contacts, the 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. Variable grade capping was applied to veins supported by statistical analysis and visual checks.
To convert Mineral Resources to Mineral Reserves, mining dilution was added and mining recovery factors were applied on an individual vein basis and respecting mining methodology. For the block-modelled veins, Measured Mineral Resources 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 30 to 45 metres.
Primero used a constant bulk density of 2.6 t/m 3 for the estimation of the tonnes for all veins in the December 2015, December 2016 and December 2017 estimates.
Due to the poor Quality Assurance/Quality Control (“QA/QC”) results in 2011 and 2012, AMC Mining was unable to classify any of the Mineral Resources as a Measured Mineral Resource. Improved QA/QC methods and practices were implemented commencing in 2012 and have continued since then. Commencing with the 2013 Mineral Resources estimate, the Company has been able to classify Measured Mineral Resources. The Company utilizes an external laboratory for all drill samples and the channel samples that are used in Mineral Resources and Reserve estimates.
Samples assayed in an external laboratory (SGS in Durango), are subject to a QA/QC process consisting of the regular insertion of standard reference materials and 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 gold 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.
For the estimation of Mineral Reserves, Primero has assumed that the current drill-jumbo and jackleg cut and fill mining methods continue to be practised at the San Dimas Mine, with respective minimum mining widths of 3 metres and 1 metre. The Company has introduced the use of long-hole mining method at the San Dimas Mine, rather than cut and fill on an increasing scale, with a minimum mining width of 1.5 metres. For the purposes of Mineral Reserve estimation 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 45%. For the veins upon which the year-end 2017 Mineral Reserve estimate is based, the respective mined tonnes from jumbo, jackleg and long-hole mining are estimated at 12%, 35% and 52%, 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, a factor of 75% has been used.
Commencing in 2016 the Company has applied a two-pass cut-off grade at the San Dimas Mine. Firstly an all-in sustaining cost cut-off grade was applied to highlight areas for inclusion in the Mineral Reserve, followed by the application of an operating cost cut-off grade to highlight additional incremental material for potential inclusion. The all-in sustaining cost cut-off grade applied was 3.22 g/t gold equivalent (“AuEq”) and considers direct operating costs and sustaining capital costs. The operating cut-off grade next applied was 2.22 g/t AuEq and considers direct operating costs only. For the 2017 Mineral Reserve, similar operational, revenue and cost assumptions have been used.
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Proven Mineral Reserves and Probable Mineral Reserves for the San Dimas Mine at December 31, 2017 decreased 22,000 ounces of gold and 1.6 million ounces of silver from year-end 2016.
The results of the Mineral Resource and Mineral Reserve estimation work are shown in the table below, which shows a summary of the Mineral Resources and Mineral Reserves at December 31, 2017 . 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.

Classification	Tonnage 
(Mt)	Gold
Grade
(g/t)	Silver
Grade
(g/t)	Contained
Gold
 (koz)	Contained
Silver
(koz)	
Mineral Reserves	 	 	 	 	 	
 	 	 	 	 	 	
Proven	1.2	4.3	364	168	14,118	
Probable	2.8	3.6	279	327	25,544	
Proven &
Probable	4.1	3.8	304	495	39,662	
Mineral Resources	 	 	 	 	 	
 	 	 	 	 	 	
Measured &
Indicated	4.9	5.1	385	811	60,936	
Inferred	6.9	3.5	319	782	70,859	
Notes to Mineral Reserve Statement :
1. Assumed gold price of US$1,200 per troy ounce and silver price of US$17 per troy ounce.
2. A two-pass cut-off grade was applied at San Dimas; first-pass of 3.22 g/t gold equivalent based on total all-in costs of $118.00/t ($81/t direct costs and $37/t sustaining capital), and second-pass of 2.22 g/t gold equivalent based on direct operating costs only. 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 95% and silver of 92% were used in the cut-off grade calculation.
4. Exchange rate assumed is MXN$18.00/US$ 1.00.
5. The Mineral Reserve estimates for San Dimas Mine set out in the table above have been reviewed and approved by Mr. Patrick McCann, P.Eng., Principal Engineer, Primero and a Qualified Person (“QP”) for the purposes of National Instrument 43-101 (“NI 43-101”).
6. Mineral Reserves do not consider the silver purchase agreement which exists with Silver Wheaton Corp. such that the first 6.0 million ounces per annum of silver produced by the San Dimas Mine, plus 50% of the excess silver above this amount, must be sold to Silver Wheaton Caymans at the lesser of $4.32 per ounce (adjusted by 1% per year) and market prices.
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$17 per troy ounce.	
3.	San Dimas cut-off grade of 2.0 g/t AuEq was applied.	
4.	The Mineral Resource estimates for San Dimas Mine set out in the table above have been reviewed and approved by Mr. Dave Laudrum, P.Geo., Senior Resource Manager for Primero and 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.
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Discontinued Operations
On October 6, 2017, the Company closed the sale of the Black Fox Complex. The sale of the Cerro del Gallo Project was closed on November 27, 2017. The results from operations for the Black Fox Complex and Cerro del Gallo Project have been presented as discontinued operations in the audited consolidated financial statements and the MD&A for the year ended 2017, which are available on SEDAR at www.sedar.com .
Prior to the sale on October 6, 2017, the Black Fox mine produced 51,209 ounces of gold attributable to Primero. A total of 606,250 tonnes of ore were milled from the underground and low grade stockpile at an average grade of 2.73 g/t. The mining from underground contributed 182,889 tonnes at an average grade of 6.20g/t.
For information on our discontinued operations (Black Fox Complex and Cerro del Gallo Project) please see our prior years annual reports.
DESCRIPTION OF THE MARKETS WHERE WE OPERATE
All of Primero’s mining and mineral exploration operations are now conducted in the San Dimas Mine, Mexico. 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).
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 WPMI under the Amended and Restated Silver Purchase Agreement. See “See Item 4. Information on the Company – B. Business Overview – Mining Activities – San Dimas Mine – Amended and Restated Silver Purchase Agreement”.
During 2017, the San Dimas Mine produced 73,665 gold equivalent ounces (just below the Company’s revised guidance range of 75,000 to 85,000 gold equivalent ounces), and 60,167 ounces of gold and 3,962,580 ounces of silver.
The following table presents the breakdown of total revenues attributable to each of our products.

 	 	Year ended December 31	 	
(in thousands of U.S. dollars)	 	2017	 	 	2016	 	 	2015	 	
Mexico	 	 	 	 	 	 	 	 	 	
     Gold	$	74,979	 	$	121,553	 	$	169,790	 	
     Silver	 	16,790	 	 	26,028	 	 	43,402	 	
Canada	 	 	 	 	 	 	 	 	 	
     Gold	 	65,828	 	 	71,595	 	 	478,112	 	
Total	$	157,597	 	$	219,176	 	$	291,304	 	
REGULATION
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, labor 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 licenses 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.
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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” and is approved by the Mexican Environmental Agency, the Secretaría de Medio Ambiente y Recursos Naturales (SEMARNAT). 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 and are approved by the National Water Commission, the Comisión Nacional del Agua (CONAGUA) and the explosives procurement and management permit approved and regulated by the National Defense Department, the Secretaria Nacional de la Defensa (SEDENA). A waste rock project was commenced in 2013 for which both the environmental impact study and the technical justification were also approved by the SEMARNAT.
Primero is also subject to tax laws and royalty regulations in Mexico. See “Item 3. Key Information – D. Risk Factors – Financial Risks – Challenges to the 2012 APA”.
Prior to its disposition in 2017, the Black Fox mine in Ontario, Canada was also subject to various regulations. At the Black Fox mine and mill, the primary environmental permits necessary for the continuing development and operation of the mine and mill included:

	•	The Permit to Take Water. These are approved by the Ontario Ministry of Environment and Climate Change (MOECC) for the withdrawal of surface or ground water quantities in excess of 50 m³/day.	
	•	The Environmental Compliance Approval/Air. These are approved by the MOECC for treatment and discharge of emissions to air, including management of dust and noise in emissions.	
	•	The Environmental Compliance Approval/Industrial Sewage Works also approved by the MOECC and for collection, treatment, and discharge of wastewaters.	
	•	A filed Closure Plan, including the posting of final assurance for closure. This is approved by the Ontario Ministry of Northern Development and Mines (MNDM).	
Primero is also subject to applicable corporate, securities and tax laws in Canada, which are administered by the Canadian Securities Administration and the Canada Revenue Agency, and securities laws of the Unites States, which are administered by the Securities and Exchange Commission.

C.	Organizational Structure	
Primero has three principal, wholly-owned subsidiaries: Primero Empresa, which is incorporated under the laws of Mexico; Silver Trading (Barbados) Limited, which is incorporated under the laws of Barbados; and Primero Mining Luxembourg s.à.r.l., which is incorporated under the laws of Luxembourg.

D.	Property, Plant and Equipment	
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 93 contiguous concessions covering approximately 28,423 hectares, having expiry dates ranging from 2019 to 2055. 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.
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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.
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 Electricity Commission” (“CFE”). 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 95% 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 utility (CFE) and by diesel generators at the mine site. 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.
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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.
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.
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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.
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.
41

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.
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.
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Reserves
See “Item 4. Information on the Company – B. Business Overview – Mining Activities – San Dimas Mine – Mineral Reserves and Mineral Resources”.
Production Capacity
The production capacity of the San Dimas mine is dependent upon both the availability of ore from the underground mine and the capacity of the mill. The current sustainable production capacity of the mill is approximately 2,750 tonnes per day. The availability of ore from the underground mine is dependent upon the areas being mined and external factors such as metal prices and foreign exchange. Mining reserves are included in “Item 4. Information on the Company – B. Business Overview – Mining Activities – San Dimas Mine – Mineral Reserves and Mineral Resources”.

ITEM 4A.	Unresolved Staff Comments	
None.

ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	
The following management’s discussion and analysis of financial condition and results of operations should be read in conjunction with our audited consolidated financial statements included elsewhere in this annual report on Form 20-F. This annual report contains forward-looking statements that involve risks and uncertainties.
Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors including, without limitation, those set forth in “Introductory Notes – Cautionary Statements about Forward-Looking Statements” and the matters set forth in this annual report generally.
We have prepared our audited consolidated financial statements as of December 31, 2017 and 2016 and for the three years ended December 31, 2017 in U.S. dollars and in accordance with IFRS as issued by the IASB.
The financial information and related discussion and analysis contained in this item are in accordance with IFRS as issued by the IASB. The amounts are in million U.S. dollars, unless otherwise stated .

A.	Operating Results	
OVERVIEW OF THE BUSINESS
Primero is a Canadian-based precious metals producer with operations in Mexico. The Company owns one producing property, the San Dimas gold-silver mine, located in Mexico’s San Dimas district, on the border of Durango and Sinaloa states. In addition, the Company owns one exploration property, Ventanas, located in Durango State, Mexico. On January 12, 2018, the Company announced that it entered into the Arrangement Agreement whereby First Majestic will acquire all of the issued and outstanding common shares of Primero. On March 13, 2018, the Arrangement Agreement was approved by Primero shareholders. The Company is awaiting anti-trust clearance in Mexico and the satisfaction of other customary conditions.
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The Company previously owned a second producing property, the Black Fox mine, located in the Township of Black River–Matheson, Ontario, Canada, which was sold on October 6, 2017 along with properties adjacent to the Black Fox mine - Grey Fox and Pike River, which together with the Black Fox mine and the Black Fox mill, located on the Stock Mill property, comprised the Black Fox Complex. On November 27, 2017, the Cerro del Gallo gold-silver-copper project was sold, located in the state of Guanajuato in central Mexico.
The profitability and operating cash flow of the Company are affected by numerous factors, including its ability to extend or replace its existing financing or secure future financing, the amount of gold and silver produced and sold, market prices of gold and silver, the price of metal under its existing streaming agreements, operating costs, regulatory and environmental compliance, as well as currency exchange rates, labor relations, political risks, and varying levels of taxation. The Company seeks to manage these risks, but many of the factors affecting these risks are beyond the Company’s control.
The Company’s shares are listed on the Toronto Stock Exchange (“TSX”) under the symbol “P” and were listed on the NYSE under the symbol “PPP” until August 14, 2017. In addition, Primero has a convertible debenture trading on the TSX under the symbol “P.DB.V” and common share purchase warrants trading on the TSX under the symbol “P.WT.C”.
SELECTED CONSOLIDATED ANNUAL INFORMATION

Years ended December 31	 	2017	 	 	2016	 	 	2015	 	
Key Performance Data 1	 	 	 	 	 	 	 	 	 	
Tonnes of ore milled	 	1,050,961	 	 	1,672,322	 	 	1,868,926	 	
Produced	 	 	 	 	 	 	 	 	 	
   Gold equivalent( ounces)	 	124,874	 	 	176,139	 	 	259,474	 	
   Gold (ounces)	 	111,376	 	 	156,052	 	 	221,060	 	
   Silver (million ounces)	 	3.96	 	 	5.32	 	 	8.30	 	
Sold	 	 	 	 	 	 	 	 	 	
   Gold (ounces)	 	114,377	 	 	158,028	 	 	218,194	 	
   Silver (million ounces)	 	3.90	 	 	5.57	 	 	8.12	 	
Average realized prices	 	 	 	 	 	 	 	 	 	
   Gold ($/ounce) 2	$	 1,231	 	$	 1,222	 	$	 1,136	 	
   Silver ($/ounce) 2	$	 4.30	 	$	 4.68	 	$	 5.34	 	
Total cash costs (per gold ounce) 4	 	 	 	 	 	 	 	 	 	
   Gold equivalent basis	$	 862	 	$	 865	 	$	 637	 	
   By-product basis	$	 813	 	$	 817	 	$	 548	 	
All-in sustaining costs (per gold ounce) 4	$	 1,282	 	$	 1,333	 	$	 960	 	
 	 	 	 	 	 	 	 	 	 	
Financial Data 2 (in thousands of U.S. dollars except per share amounts)	 		 	 		 	 		 	
Revenues 3	$	 91,769	 	$	 147,581	 	$	 213,192	 	
Earnings from mine operations 3	 	2,056	 	 	13	 	 	53,574	 	
Net loss	 	(409,685	)	 	(234,420	)	 	(106,910	)	
Basic net loss per share from continuing operations 3	 	(1.74	)	 	(0.65	)	 	(0.06	)	
Diluted net loss per share from continuing operations 3	 	(1.74	)	 	(0.65	)	 	(0.06	)	
Operating cash flows before working capital changes	 	22,633	 	 	15,267	 	 	62,125	 	
Weighted average shares outstanding (basic) (000’s)	 	191,738	 	 	177,569	 	 	162,341	 	
Weighted average shares outstanding (diluted) (000’s)	 	191,738	 	 	177,569	 	 	162,341	 	
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As at December 31 (in thousands of U.S. dollars)	 	2017	 	 	2016	 	 	2015	 	
Assets	 	 	 	 	 	 	 	 	 	
   Mining interests 3	$	 125,050	 	$	 577,920	 	$	 790,118	 	
   Total assets	$	 205,266	 	$	 677,817	 	$	 924,968	 	
Liabilities	 	 	 	 	 	 	 	 	 	
   Long-term liabilities 3	$	 91,134	 	$	 130,472	 	$	 162,427	 	
   Total liabilities	$	 145,535	 	$	 216,687	 	$	 276,092	 	
Equity	$	 59,731	 	$	 461,130	 	$	 648,876	 	

1.	Inclusive of the Black Fox Complex classified as discontinued operations.	
2.	Average realized gold and silver prices reflect the impact of the gold purchase agreement with Sandstorm at the Black Fox mine and the silver purchase agreement with Wheaton Precious Metals International Ltd. (“WPMI”), formerly Silver Wheaton Caymans at the San Dimas Mine (see “Other Liquidity Considerations”).	
3.	As reported per IFRS with Black Fox Complex and the Cerro del Gallo Project classified as discontinued operations.	
4.	See “Non-GAAP Measurements”.	
HIGHLIGHTS
Operational Performance

•	Primero’s consolidated production was 124,874 gold equivalent ounces in 2017 compared to 176,139 gold equivalent ounces in 2016 and 259,474 gold equivalent ounces in 2015. Gold production was 111,376 ounces in 2017 compared to 156,052 ounces in 2016 and 221,060 ounces in 2015. Silver production was 3.96 million ounces from San Dimas in 2017 compared to 5.32 million ounces in 2016 and 8.30 million ounces in 2015.	
 		
•	For San Dimas, gold production of 60,167 ounces was at the bottom end of the guidance range of 60,000 to 70,000 ounces for the year. San Dimas gold equivalent production of 73,665 ounces was just below the guidance range of 75,000 to 85,000 ounces for 2017.	
 		
•	A strike action by unionized employees resulted in a complete stoppage of mining and milling activities at San Dimas from February 15, 2017 to April 22, 2017, which significantly impacted 2017 production levels.	
Corporate Developments

•	On January 12, 2018, the Company announced that it entered into the Arrangement Agreement whereby First Majestic will acquire all of the issued and outstanding common shares of Primero. Under the terms of the Arrangement Agreement, all of Primero’s issued and outstanding common shares will be exchanged for First Majestic common shares on the basis of 0.03325 of a First Majestic common share for each Primero common share. This implies consideration of C$0.30 per Primero common share, based on the 20-day volume weighted average price of the First Majestic common shares on the Toronto Stock Exchange.	
 		
•	The Arrangement Agreement is the culmination of a strategic review process that was commenced by the Company’s Board of Directors to explore alternatives to improve shareholder value. This strategic review process also resulted in the divesture of the Black Fox Complex and the Cerro de Gallo Project, as described below.	
 		
•	On March 13, 2018, the shareholders of Primero voted to approve the Arrangement with First Majestic. The Company is awaiting anti-trust clearance in Mexico. The Arrangement is expected to close in late April or early May 2018, subject to applicable regulatory approvals and the satisfaction of other customary conditions. In the event that the Arrangement does not close by April 30, 2018, the Company will seek an extension of the RCF.	
 		
•	On March 13, 2018, the holders of the 5.75% Convertible Debentures voted to approve an amendment to the maturity date of the debentures. Upon the closing of the Arrangement, the amendment of the trust indenture will accelerate the maturity date of the debentures to the next Business Day following the effective date of the Arrangement and will be paid at par plus accrued interest.	
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•	Under the Arrangement, outstanding Primero stock options and warrants will be replaced with First Majestic securities on equivalent terms. All outstanding Phantom Share Units (“PSU”s) and Deferred Share Units (“DSU”s) will be settled in cash at C$0.30 per unit.	
 		
•	In October 2017, Primero closed the sale of its Black Fox Complex. After closing net working capital adjustments, Primero received total consideration of $32.3 million, comprising $27.5 million in cash proceeds and the release of approximately $4.8 million from restricted cash pledged towards environmental closure liabilities. The operations of Black Fox are reported under “Discontinued Operations” in the consolidated financial statements.	
 		
	In November 2017, the Company closed the sale of the Cerro del Gallo Project in exchange for consideration of $15 million in cash. The activities of the Cerro del Gallo Project are reported under “Discontinued Operations” in the consolidated financial statements.	
 		
•	The net proceeds from the sales of both the Black Fox Complex and the Cerro del Gallo Project were applied to the RCF. As at December 31, 2017, the outstanding principal on the RCF was $30.2 million.	
 		
•	On March 30, 2017, the Company amended the terms of its RCF to extend the maturity date from May 23, 2017 to November 23, 2017 and exclude all financial covenants until the extended maturity date. The RCF continued to be secured by a charge over substantially all of the Company’s asset and was guaranteed by WPM for a fee of $2.7 million payable at maturity. In connection with the strategic review process, the RCF was extended multiple times in the fourth quarter of 2017 and on January 12, 2018, the Company has further extended its RCF maturity date to allow for the execution of the Arrangement Agreement. WPM continues to guarantee the RCF through the current maturity date. The Company believes it has adequate liquidity to manage the business through the closing of the Arrangement.	
 		
•	In June 2017, as part of the ongoing annual audits of the PEM tax returns, the SAT issued an observations letter for the 2010 tax year. In October 2017, the SAT issued an observations letter for the 2011 tax year. The SAT made explicit its view that PEM should pay taxes based on the market price of silver. The observations letters do not represent a tax reassessment and no liability has been recognized in the financial statements. The Company has formally submitted its responses to both the 2010 and 2011 observations letters and continues to believe it is paying taxes on the appropriate legal basis in Mexico.	
 		
•	As the Company continues to defend its APA in Mexican legal proceedings, the APA remains valid and the Company will vigorously dispute any reassessment that assesses taxes on its silver revenues that is inconsistent with the APA. The Company has also continued a dialogue with the SAT to seek resolution of its tax matters.	
 		
•	On July 14, 2017, the Company’s motion to dismiss the amended complaint in the U.S. securities class action lawsuit originally filed in 2016 was granted and the plaintiff’s claims were dismissed without prejudice. Rather than amend the complaint again, the plaintiffs asked the federal court to enter final judgment and initiated an appeal of the dismissal to the Ninth Circuit Court of Appeals on September 8, 2017. The parties have filed their briefs in this appeal and a ruling on the appeal is expected sometime in 2018. The Company intends to vigorously defend itself against this class action lawsuit.	
 		
•	In February 2017, the Company announced the appointment of Mr. Joseph Conway as Interim President and Chief Executive Officer following the departure of Mr. Ernest Mast. In September 2017, Mr. Ryan Snyder was appointed Chief Financial Officer of the Company following the resignation of Mr. Kevin Jennings.	
Financial Performance

•	Earnings from continuing mine operations, being the San Dimas Mine, for 2017 were $2.1 million compared to $0.01 million in 2016 and $53.6 million in 2015. Despite a decrease in production, there was an increase in earnings due to a significant reduction in cost of sales during 2017.	
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•	The Company incurred a net loss of $409.7 million ($2.14 per share) including $398.8 million in non-cash impairment charges in 2017, compared to a net loss of $234.4 million ($1.32 per share) in 2016 which included $228.0 million in non-cash impairment charges in 2016 and a net loss of $106.9 million ($0.66 per share) in 2015 which included $104 million in non-cash impairment charges in 2015.	
 		
•	Operating cash flows before changes in working capital was $22.6 million ($0.12 per share) in 2017 compared to $15.3 million ($0.09 per share) in 2016 mainly due to higher earnings from mine operations and lower taxes paid in Mexico. Working capital outflows were lower in 2017 at $0.1 million compared to $2.2 million in 2016. The decrease relates mainly to lower outflows relating to trade and other payables, partially offset by increased outflows in 2017 associated with inventories. In 2015, operating cash flows before changes in working capital was $62.1 million ($0.38 per share). The decrease from 2015 to 2016 relates to lower cash generated from operations as a result of lower production levels combined with an increase in taxes paid.	
 		
•	Impairment charges of $399 million includes $304 million relating to the San Dimas Mine, $50 million relating to the Cerro del Gallo Project and $45 million relating to the Black Fox Complex. In 2016, impairment charges included $228 million, with $111 million at the San Dimas Mine and $117 million at Black Fox Complex. In 2015, impairment charges included $104 million, with $82 million at the Black Fox complex and $22 million at Cerro del Gallo.	
REVIEW OF ANNUAL CONSOLIDATED FINANCIAL INFORMATION
Years ended December 31, 2017, 2016 and 2015
Earnings from continuing mine operations comprises:

 	 	Year ended December 31	 	
(in thousands of U.S. dollars)	 	2017	 	 	2016	 	 	2015	 	
Gold revenue	$	 74,979	 	$	 121,553 $	 	 	169,790	 	
Silver revenue	 	16,790	 	 	26,028	 	 	43,402	 	
Operating expenses	 	(67,280	)	 	(100,452	)	 	(103,782	)	
Depreciation and depletion	 	(22,433	)	 	(47,116	)	 	(55,836	)	
Earnings from mine operations	$	 2,056	 	$	 13 $	 	 	53,574	 	
The table below sets out variances in the key drivers of earnings from mine operations for the year ended December 31, 2017 compared with the year ended December 31, 2016 and December 31, 2015:

 	 	Year ended	 	
(in thousands of U.S. dollars)	 	December 31	 	
Earnings from mine operations in 2015	$	 53,574	 	
Differences:	 	 	 	
Revenue	 	 	 	
   Higher realized gold price	 	9,406	 	
   Lower ounces of gold sold	 	(57,643	)	
   Lower realized silver price	 	(3,702	)	
   Lower ounces of silver sold	 	(13,672	)	
Lower operating expenses	 	3,330	 	
Lower depreciation and depletion	 	8,720	 	
Earnings from mine operations in 2016	$	  13	 	
Differences:	 	 	 	
Revenue	 	 	 	
   Higher realized gold price	 	870	 	
   Lower ounces of gold sold	 	(47,444	)	
   Lower realized silver price	 	(1,468	)	
   Lower ounces of silver sold	 	(7,770	)	
   Lower operating expenses	 	33,172	 	
   Lower depreciation and depletion	 	24,683	 	
Earnings from mine operations in 2017	$	 2,056	 	
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Revenue
Gold revenue decreased by $46.6 million and silver revenue decreased by $9.2 million in 2017 compared to 2016 primarily as a result of lower production at San Dimas. Production was impacted by the union strike and a work slow-down in July during annual bonus negotiations. Gold revenue decreased by $48.2 million and silver revenue decreased by $17.4 million in 2016 from 2015 also primarily as a result of reduced production output at San Dimas.
Operating expenses
Operating expenses decreased in 2017 by $33.2 million due to the reduction in mining and milling activity levels. Operating expenses decreased in 2016 by $3.3 million, resulting mainly from lower mine extracting activities, reduced performance bonuses and the weakening peso at San Dimas.
Depreciation and depletion
Depreciation and depletion was $22.4 million in 2017, a decrease of $24.7 million from 2016 due to lower production levels in 2017 and the impact of the impairments recognized in Q4 2016 and Q2 2017. Depreciation and depletion was $47.1 million in 2016, a decrease of $8.7 million from 2015 due to lower production in 2016.
A summary income statement follows:

 	 	Year ended
December 31		
(in thousands of U.S. dollars)	 	2017	 	 	2016	 	 	2015	 	
 	 	 	 	 	 	 	 	 	 	
Earnings from mine operations	$	 2,056	 	$	 13 $	 	 	53,574	 	
Impairment charge	 	(303,858	)	 	(111,000	)	 	-	 	
Exploration expenses	 	(1,345	)	 	(1,885	)	 	(1,690	)	
Share-based compensation	 	(4,149	)	 	(7,049	)	 	(7,144	)	
General and administrative expenses	 	(11,479	)	 	(13,529	)	 	(19,021	)	
Idle and restart costs incurred during strike at San Dimas	 	(6,207	)	 	-	 	 	-	 	
Other charges	 	(7,044	)	 	(4,725	)	 	(2,702	)	
Transaction costs	 	-	 	 	(679	)	 	(4,416	)	
Interest and finance expense	 	(11,285	)	 	(8,761	)	 	(11,498	)	
Mark-to-market gain on convertible debentures & warrants	 	(5,897	)	 	12,610	 	 	13,500	 	
Other (expense) income	 	(355	)	 	(427	)	 	(1,869	)	
Income tax recovery	 	4,393	 	 	19,938	 	 	(27,991	)	
Net loss from continuing operations	 	($333,376	)	 	($115,494	)	 	($9,257	)	
Impairment Charges
As part of the strategic review process carried out in 2017, the Company received several proposals during the second quarter of 2017 that identified that the carrying value of its CGUs exceeded their fair value. During the second quarter of 2017, the Company recorded an impairment of $285 million, which comprised impairments of $195 million for the San Dimas Mine, $40 million for the Black Fox Complex and $50 million for the Cerro del Gallo Project. During the third quarter of 2017, an additional impairment of $5 million was recorded for the Black Fox Complex to align with the actual net proceeds from its disposition during the fourth quarter of 2017. During the fourth quarter, the Company recorded an additional impairment of $109 million relating to the San Dimas Mine as the negotiation process that led to the Arrangement Agreement identified that the carrying value of the San Dimas Mine exceeded the recoverable amount. The carrying value of the San Dimas CGU as at December 31, 2017 is now aligned to the approximate value implied in the Arrangement Agreement.
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In 2016, impairment charges were recognized in relation to San Dimas and the Black Fox Complex based on updated life-of-mine plans. In 2015, impairment charges were recognized in relation to Black Fox Complex based on declining gold prices and changes in internal mines plans. The 2015 Cerro del Gallo impairment was based on a decision to delay the construction of the project due to economic conditions. The impairment charges associated with Black Fox Complex and Cerro del Gallo have been included in discontinued operations.

 	 	Year ended December 31	 	
(in thousands of U.S. dollars)	 	2017	 	 	2016	 	 	2015	 	
 	 	 	 	 	 	 	 	 	 	
San Dimas	$	 303,858	 	$	 111,000	 	$	 -	 	
Black Fox Complex	 	44,963	 	 	117,000	 	 	82,000	 	
Cerro del Gallo	 	50,000	 	 	-	 	 	22,000	 	
 	$	 398,821	 	$	 228,000	 	$	 104,000	 	
Share-based Compensation
Share-based compensation includes amortization on equity-settled plans and marked-to-market adjustments on the value of units in the Company’s cash-settled plans. The 2017 decrease is attributed to the decline in the Company’s share price and a reduction in the value of grants issued.
General and Administrative Expenses

 	 	Year ended December 31	 	
(in thousands of U.S. dollars)	 	2017	 	 	2016	 	 	2015	 	
Salaries and wages	$	 5,053	 	$	 5,778	 	$	 10,967	 	
Rent and office costs	 	792	 	 	828	 	 	1,232	 	
Legal, accounting and consulting services	 	2,369	 	 	2,547	 	 	2,830	 	
Directors’ fees and expenses	 	1,357	 	 	935	 	 	922	 	
Other general and administrative expenses	 	1,908	 	 	3,441	 	 	3,070	 	
 	$	 11,479	 	$	 13,529	 	$	 19,021	 	
General and administrative expenses were $11.5 million in 2017 compared to $13.5 million in 2016 and $19.0 million in 2015. The decrease in expenses was primarily due to lower head count and employee related costs in 2017 as compared to 2016 as a result of efforts to reduce spending as part of the strategic review. The decrease in 2016 expenses from 2015 was primarily due to lower bonuses recognized in 2016, salaries paid to the former Vancouver finance team in 2015 and the reduction in the number of executives in 2016.
Other Charges

 	 	Year ended December 31	 	
(in thousands of U.S. dollars)	 	2017	 	 	2016	 	 	2015	 	
Legal expenses associated with proceedings in Mexico	$	 1,103	 	$	 3,254	 	$	 694	 	
Employee severance payments	 	2,120	 	 	1,171	 	 	2,008	 	
Legal and advisory costs relating to financing initiatives	 	647	 	 	300	 	 	-	 	
Advisory fees associated with strategic review process	 	2,023	 	 	-	 	 	-	 	
Loss on disposition of Cerro del Gallo	 	1,151	 	 	-	 	 	-	 	
 	$	 7,044	 	$	 4,725	 	$	 2,702	 	
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Other charges in 2017 include legal expenses associated with proceedings in Mexico, advisory fees associated with the strategic review process and severance payments to former employees.
Interest and Finance Expenses
Interest and finance expense increased by $2.5 million in 2017 as compared to 2016, primarily due to the guarantee fee incurred on the revolving credit facility and higher RCF interest charges. Interest and finance expenses include accretion costs. Expenses decreased by $2.7 million in 2016 compared to 2015, primarily due to the repayment in full of the 6.5% Convertible Debentures. Interest and finance expenses include accretion costs.
Mark-to-Market Gain on Convertible Debentures and Warrants
In June 2016, the Company recognized a warrant liability in connection with the equity offering which is, along with the 5.75% Convertible Debenture, measured at fair value and marked-to-market each period based on the corresponding trading price. The Company recognized a gain of $4.9 million from the 5.75% Convertible Debentures and $1.0 million from the common share purchase warrants during 2017 (2016 - $9.0 million gain from the 5.75% Convertible Debentures and $3.6 million from the common share purchase warrants, 2015 - $13.5 million gain from the 5.75% Convertible Debenture).
Other income (expense)
Other income (expense) includes foreign exchange gains and losses, gains on the 6.5% convertible debenture derivative liability and other items. The Company recorded a foreign exchange loss of $0.1 million in 2017 compared to a loss of $0.2 million in 2016 and $2.8 million gain in 2015. Foreign exchange gains and losses result primarily from the translation of Mexican peso denominated and Canadian dollar denominated asset retirement obligations offset by foreign exchange losses from the peso denominated taxes receivable. In 2017, the Mexican peso and the Canadian dollar strengthened relative to the U.S. dollar (the Company’s functional currency). In 2016, the Mexican peso depreciated while the Canadian dollar strengthened relative to the U.S. dollar (the Company’s functional currency). In 2015, both the Mexican peso and the Canadian dollar depreciated relative to the U.S. dollar.
Income tax expense

 	 	Year ended December 31	 	
(in thousands of U.S. dollars)	 	2017	 	 	2016	 	 	2015	 	
Current tax expense	 	 	 	 	 	 	 	 	 	
Mining royalty at San Dimas	$	 -	 	$	 981	 	$	 5,590	 	
Other current tax	 	3,298	 	 	108	 	 	17,775	 	
 	$	 3,298	 	$	 1,089	 	$	 23,365	 	
Deferred tax expense (recovery)	 	 	 	 	 	 	 	 	 	
Withholding tax on intercompany interest	$	 3,418	 	$	 3,308	 	$	 3,932	 	
San Dimas change in tax basis	 	909	 	 	(18,002	)	 	6,552	 	
Mining royalty at San Dimas	 	(12,018	)	 	(6,333	)	 	(1,122	)	
Tax on recovery on expiry of warrants	 	-	 	 	-	 	 	(4,736	)	
 	 	($7,691	)	 	($21,027	)	$	4,626	 	
Total	 	($4,393	)	 	($19,938	)	$	27,991	 	
San Dimas pays income taxes based on its Mexican peso financial statements, which include foreign exchange and other income items (permanent differences) different than the U.S. dollar reporting financial statements. In addition, foreign exchange losses are recognized in deferred income tax expense when the Mexican peso denominated deferred income tax balance is translated to its U.S. dollar reporting currency. In 2017 this increased deferred tax recovery by $6.5 million (2016 – decrease of $26.6 million, 2015 - $25.4 million). The increase in San Dimas tax basis reflects the impact of this foreign exchange and inflation on the San Dimas’ deferred income tax balances and the impact of higher book to tax depreciation. The volatility of the exchange rate between the Mexican peso and the U.S. dollar can result in significant adjustments to deferred tax expense.
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The Company’s Mexican operations in 2017 generated a current tax of $2.1 million in comparison with the current tax expense of $0.1 million in 2016 and $17.8 million in 2015. In addition, San Dimas current income taxes have increased because of lower tax depreciation than accounting depreciation. See Note 15 to the December 31, 2017 consolidated financial statements for a full reconciliation of annual income taxes at the statutory rate to the income tax recovery or expense in the statement of operations and comprehensive loss.
The mining royalty is deductible for tax purposes and is calculated as 7.5% of a royalty base. The royalty base being taxable revenues for income tax purposes (except interest and inflationary adjustment), less allowable deductions for income tax purposes (except interest, inflationary adjustment, depreciation and mining fees), less prospecting and exploration expenses of the year.
The Company has taken the position that the royalty is an income tax as it is based on a measure of revenue less certain specified costs. On substantial enactment, a taxable temporary difference arose, as mining assets and financial assets/liabilities had a book basis but no tax basis for purposes of the royalty. The Company has recognized a net deferred tax liability of $7.5 million as at December 31, 2017 in respect of this royalty (2016 - $22.3 million, 2015 - $28.7 million). This deferred tax liability will be drawn down to $nil as a reduction to tax expense over the life of mine as the mine and its related assets are depleted/depreciated. In 2017, the liability was reduced by $14.8 million (2016-$6.4 million, 2015 - $3.9 million).
REVIEW OF OPERATIONS
San Dimas Mine

 	 	Year ended December 31	 	
 	 	2017	 	 	2016	 	 	2015	 	
 	 	 	 	 	 	 	 	 	 	
Key Performance Data	 	 	 	 	 	 	 	 	 	
Tonnes of ore mined	 	437,918	 	 	762,167	 	 	988,168	 	
Tonnes of ore milled	 	444,711	 	 	759,087	 	 	993,093	 	
Tonnes of ore milled per day	 	1,555	 	 	2,074	 	 	2,721	 	
Average mill head grade (grams/tonne)	 	 	 	 	 	 	 	 	 	
   Gold	 	4.36	 	 	3.94	 	 	4.90	 	
   Silver	 	296	 	 	228	 	 	274	 	
Average gold recovery rate (% )	 	 	 	 	 	 	 	 	 	
   Gold	 	97%	 	 	98%	 	 	97%	 	
   Silver	 	94%	 	 	96%	 	 	95%	 	
Produced	 	 	 	 	 	 	 	 	 	
   Gold equivalent (ounces)	 	73,665	 	 	113,968	 	 	189,769	 	
   Gold (ounces)	 	60,167	 	 	93,881	 	 	151,355	 	
   Silver (million ounces)	 	3.96	 	 	5.32	 	 	8.30	 	
Sold	 	 	 	 	 	 	 	 	 	
   Gold (ounces)	 	59,481	 	 	97,560	 	 	147,706	 	
   Silver at fixed price (million ounces)	 	3.90	 	 	5.41	 	 	7.27	 	
   Silver at spot (million ounces)	 	-	 	 	0.16	 	 	0.85	 	
Average realized price (per ounce)	 	 	 	 	 	 	 	 	 	
   Gold	$	 1,261	 	$	 1,246	 	$	  1,150	 	
   Silver 1	$	 4.30	 	$	 4.68	 	$	  5.34	 	
Total cash costs (per gold ounce) 2	 	 	 	 	 	 	 	 	 	
   Gold equivalent basis	$	 939	 	$	 856	 	$	  559	 	
   By product basis	$	 867	 	$	 774	 	$	  409	 	
All in sustaining costs (per ounce) 3	$	 1,216	 	$	 1,117	 	$	  680	 	
Revenue ($000’s)	$	 91,769	 	$	 147,581	 	$	  213,191	 	
Earnings from mine operations ($000’s)	$	 2,169	 	$	 145	 	$	  53,717	 	
51

1.	Average realized silver prices reflect the impact of the silver purchase agreement with WPMI (see “Other Liquidity Considerations”).	
2.	See “Non-GAAP Measures”.	
3.	For the purposes of calculating all-in sustaining costs at individual mine sites, the Company does not include corporate general and administrative expenses. See “Non-GAAP Measures”.	
Production during 2017 was impacted by a strike action taken by unionized employees between February 15, 2017 and April 17, 2017. With a new CBA in place, a phased restart was initiated on April 22, 2017. San Dimas continued to implement its production ramp-up plan through the remainder of the year.
Production was also limited in July 2017 due to periods of inactivity during the negotiation of the 2016 annual workers’ bonus (“PTU Bonus”). Since the conclusion of these negotiations, the site has experienced an improvement in worker alignment.
Gold equivalent production in 2017 totaled 73,665 ounces, which consisted of 60,167 gold ounces and 3.96 million silver ounces. This compares to 113,968 gold equivalent ounces produced in 2016 and 189,769 gold equivalent ounces produced in 2015. Realized head grades in 2017 were 4.36 grams per tonne of gold and 296 grams per tonne of silver, approximately 11% and 30% higher for gold and silver, respectively, compared to 2016. The increased head grades were the result of a specific mining focus on production from the high-quality veins at San Dimas. However, this did not fully offset the lower availability of run-of-mine ore during 2017 resulting from the closure of many lower grade veins, the strike, and low worker productivity during the negotiations for the annual bonus.
All silver sold during 2017 was delivered to WPMI under the silver purchase agreement. The threshold limit under the silver purchase agreement for the 2017 contract year (August 6 of a year to August 5 of the following year) was 6.0 million ounces of silver. The annual threshold was not exceeded for the year-ended August 5, 2017. As of December 31, 2017, the Company has delivered 2.3 million ounces of silver towards the current annual threshold.
Capital expenditures during 2017 were $21.8 million and focused mainly on underground development. Due to liquidity constraints, exploration drilling and drifting in 2017 were below historical levels.
Black Fox 1 (discontinued operations)

 	 	Year ended December 31	 	
 	 	2017	 	 	2016	 	 	2015	 	
Key Performance Data	 	 	 	 	 	 	 	 	 	
Open pit mining	 	 	 	 	 	 	 	 	 	
   Tonnes of ore mined	 	-	 	 	-	 	 	849,668	 	
   Strip ratio	 	-	 	 	-	 	 	4.71	 	
   Average gold grade (grams/tonne)	 	-	 	 	-	 	 	2.09	 	
Underground mining	 	 	 	 	 	 	 	 	 	
   Tonnes of ore mined	 	182,889	 	 	234,518	 	 	140,836	 	
   Average gold grade (grams/tonne)	 	6.20	 	 	4.98	 	 	4.81	 	
Tonnes increase (decrease) in stock pile	 	423,361	 	 	(678,717	)	 	114,671	 	
Tonnes processed	 	 	 	 	 	 	 	 	 	
   Tonnes of ore milled	 	606,250	 	 	913,235	 	 	875,833	 	
   Tonnes of ore milled per day	 	2,221	 	 	2,495	 	 	2,400	 	
   Average mill head grade (grams/tonne)	 	2.73	 	 	2.22	 	 	2.60	 	
   Average gold recovery rate (% )	 	96%	 	 	96%	 	 	96%	 	
Produced	 	 	 	 	 	 	 	 	 	
   Gold (ounces)	 	51,209	 	 	62,171	 	 	69,705	 	
Sold	 	 	 	 	 	 	 	 	 	
   Gold at spot price (ounces)	 	50,264	 	 	55,371	 	 	64,597	 	
   Gold at fixed price (ounces)	 	4,632	 	 	5,097	 	 	5,891	 	
Average realized gold price 2	 	 	 	 	 	 	 	 	 	
   Gold price (per ounce)	$	 1,199	 	$	 1,181	 	$	 1,108	 	
   Gold at spot price (per ounce)	$	 1,251	 	$	 1,246	 	$	 1,156	 	
   Gold at fixed price (per ounce)	$	 531	 	$	 523	 	$	 516	 	
Total cash costs (per gold ounce) 3	$	 750	 	$	 881	 	$	 850	 	
All-in sustaining costs (per ounce) 4	$	 1,031	 	$	 1,291	 	$	 1,163	 	
Revenue ($000’s)	$	 65,828	 	$	 71,595	 	$	 78,112	 	
Earnings (loss) from mine operations (000’s)	$	 18,578	 	$	 649	 	 	($ 3,011	)	

52

1.	The Black Fox Complex has been classified as discontinued operations.	
2.	Average realized gold prices reflect the impact of the gold purchase agreement with Sandstorm (see “Other Liquidity Considerations”).	
3.	See “Non-GAAP Measures”.	
4.	For the purposes of calculating all-in sustaining costs at individual mine sites, the Company does not include corporate general and administrative expenses. See “Non-GAAP Measures”.	
The Black Fox mine produced 51,209 ounces of gold in the first nine-months of 2017, the production period attributable to Primero, with underground mining focused on the Deep Central Zone.
On October 6, 2017, the Black Fox Complex was sold to McEwen as part of Primero’s strategic review process. All metal production subsequent to September 30, 2017 is attributable to McEwen.
FINANCIAL CONDITION REVIEW
During the first quarter of 2017, the Company amended the terms of the RCF to extend its maturity from May 23, 2017 to November 23, 2017 and exclude all financial covenants until the extended maturity date. The maturity date was subsequently extended for several short periods in order to facilitate Primero’s ongoing discussions regarding possible strategic transactions. With the signing of the Arrangement Agreement, the maturity has been extended to the earliest of the following dates:

 	i.	The date on which the Arrangement is completed,	
 	ii.	The date that is seven business days after the Arrangement Agreement is terminated, and	
 	iii.	April 30, 2018	
The RCF has been guaranteed by WPM. A guarantee fee of $2.7 million was paid in December 2017 for the initial extension period. Subsequent to this date, as WPM continues to guarantee the RCF and a daily guarantee fee of approximately $5 thousand continues to accrue.
In 2017, the Board commenced a strategic review process to explore alternatives to improve shareholder value. This process ultimately resulted in the sale of the Black Fox Complex in Q4 2017, the sale of the Cerro del Gallo Project in Q4 2017, and the Arrangement Agreement to sell Primero to First Majestic, announced on January 12, 2018.
On March 13, 2018, the Arrangement was approved by Primero shareholders. On March 13, 2018, the holders of the 5.75% convertible debentures voted to approve an amendment to the maturity date of the debentures to the day following the closing date of the Arrangement with full principal and accrued interest paid on this date. The Company is awaiting anti-trust clearance in Mexico. The Arrangement is expected to close in late April or early May 2018, subject to applicable regulatory approvals and the satisfaction of other customary conditions. In the event that the Arrangement does not close by April 30, 2018, the Company will seek an extension of the RCF.
Primero did not generate enough cash from operations to support its investing activities during 2017. The Company has sufficient cash on hand to support the business through to the expected close of the arrangement with First Majestic. If the transaction closes as planned, management believes First Majestic will have sufficient funding to satisfy all commitments of Primero and its subsidiaries.
53

If the Arrangement Agreement with First Majestic is terminated for any reason, there is significant uncertainty that Primero will have sufficient funds to repay the full outstanding obligation under the RCF upon maturity, which would allow the lenders to exercise their rights under the RCF. The Company notes that any Event of Default under the RCF, unless waived, would trigger cross default provisions under the 2015 Debentures and the Amended and Restated Silver Purchase Agreement. This represents a material uncertainty that casts substantial doubt on the ability of the Company to continue as a going concern.
Key financial ratios the Company uses to assess financial capacity are shown in the net asset table below.

 	 	Year ended December 31	 	
(in thousands of U.S. dollars except ratios and per share	 	 	 	 	 	 	 	 	 	
amounts)	 	2017	 	 	2016	 	 	2015	 	
 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	$	 20,966	 	$	 19,875	 	$	 45,601	 	
Other current assets	 	58,340	 	 	63,178	 	 	72,970	 	
Non-current assets	 	125,960	 	 	594,764	 	 	806,397	 	
Total assets	$	 205,266	 	$	 677,817	 	$	 924,968	 	
 	 	 	 	 	 	 	 	 	 	
Current liabilities (excluding current debt)	$	 24,091	 	$	 35,374	 	$	 61,248	 	
Non-current liabilities (excluding long-term debt)	 	43,509	 	 	77,566	 	 	99,700	 	
Current debt	 	30,310	 	 	50,841	 	 	52,417	 	
Long-term debt	 	47,625	 	 	52,906	 	 	62,727	 	
Total liabilities	$	 145,535	 	$	 216,687	 	$	 276,092	 	
 	 	 	 	 	 	 	 	 	 	
Total shareholders’ equity	$	 59,731	 	$	 461,130	 	$	 648,876	 	
Total equity	$	 59,731	 	$	 461,130	 	$	 648,876	 	
 	 	 	 	 	 	 	 	 	 	
Total common shares outstanding 1	 	193,045,822	 	 	189,508,365	 	 	164,185,807	 	
Total options outstanding 1	 	6,811,316	 	 	6,525,244	 	 	4,246,198	 	
Total common share purchase warrants outstanding	 	11,011,250	 	 	11,011,250	 	 	-	 	
 	 	 	 	 	 	 	 	 	 	
Key financial ratios	 	 	 	 	 	 	 	 	 	
Current ratio 2	 	1.46	 	 	0.96	 	 	1.04	 	
Total liabilities-to-equity 3	 	2.44	 	 	0.47	 	 	0.43	 	
Debt-to-total capitalization 4	 	0.57	 	 	0.18	 	 	0.15	 	

1.	As at the date of this annual report, the Company had 193,045,822 common shares outstanding, the total number of options outstanding was 6,674,325 of which 4,943,920 are exercisable.	
2.	Current ratio is calculated as (cash and cash equivalents + other current assets) ÷ (current liabilities + current debt).	
3.	Total liabilities-to-equity is calculated as total liabilities ÷ total equity.	
4.	Debt-to-total capitalization is calculated as (current debt + long-term debt) ÷ (current debt + long-term debt + total equity).	
The Company’s net assets (equity) as at December 31, 2017 were $60 million compared to $461 million as at December 31, 2016 and $648.9 million as at December 31, 2015. The current ratio has increased from December 31, 2016 and December 31, 2015 as a result of maintaining cash on hand during the years and decreased current debt due to additional funds received from the sale of assets.
NON-GAAP MEASURES
The Company has included certain non-GAAP performance measures throughout this document. These performance measures are employed by management to assess the Company’s operating and financial performance and to assist in business decision-making. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, certain investors and other stakeholders use this information to evaluate the Company’s operating and financial performance; however, these non-GAAP performance measures do not have any standardized meaning. Accordingly, these performance measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.
54

Cash Costs Per Gold Ounce
The Company has included the non-GAAP performance measures of total cash costs per gold ounce on a gold equivalent ounce and by-product basis, throughout this document. The Company reports total cash costs on a production basis. In the gold mining industry, this is a common performance measure but does not have any standardized meaning. In presenting cash costs on a production basis, the Company follows the original recommendations of the Gold Institute Production Cost Standard. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, certain investors use this information to evaluate the Company’s performance and ability to generate cash flow. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The following table provides a reconciliation of total cash costs per gold equivalent ounce and total cash costs per gold ounce on a by-product basis to operating expenses (the nearest GAAP measure) per the consolidated financial statements.

 	 	Year ended December 31	 	
(in thousands of U.S. dollars except for per ounce amounts)	 	2017	 	 	2016	 	 	2015	 	
Operating expenses per the consolidated financial (1) statements	$	 67,280	 	$	100,452	 	$	103,782	 	
Operating expenses per discontinued operation in the consolidated	 	 	 	 	 	 	 	 	 	
financial statements	 	39,982	 	 	54,815	 	 	59,811	 	
Share-based compensation included in operating expenses	 	(702	)	 	(1,536	)	 	(1,583	)	
Inventory movements and adjustments (2)	 	1,058	 	 	(1,429	)	 	3,284	 	
Total cash operating costs	$	 107,618	 	 	152,302	 	$	165,294	 	
Ounces of gold produced	 	111,376	 	 	156,052	 	 	221,060	 	
Gold equivalent ounces of silver produced	 	13,498	 	 	20,087	 	 	38,414	 	
Gold equivalent ounces produced	 	124,874	 	 	176,139	 	 	259,474	 	
Total cash costs per gold equivalent ounce	$	 862	 	 	865	 	$	 637	 	
Total cash operating costs	$	 107,618	 	 	152,302	 	$	165,294	 	
By-product silver credits	 	(17,039	)	 	(24,879	)	 	(44,157	)	
Cash costs, net of by-product credits	$	 90,579	 	 	127,423	 	$	121,137	 	
Ounces of gold produced	 	111,376	 	 	156,052	 	 	221,060	 	
Total by-product cash costs per gold ounce produced	$	 813	 	 	817	 	$	 548	 	

(1)	Costs incurred during the strike at San Dimas were excluded in calculating operating expenses. These costs consist of non- union labor, costs of running the camp, security and fixed costs such as licenses and utility tariff charges.	
 	 	
(2)	Inventory adjustments in the year ended December 31, 2016 includes additional costs incurred due to the abnormal production level resulting from the ground support initiatives and a significant draw down of finished goods inventory at San Dimas.	
Gold equivalent ounces of silver produced for the San Dimas Mine are computed as silver ounces produced multiplied by the ratio of the average realized silver price to the average realized gold price during each quarter. The computations are shown below.

 	 	Year ended December 31	 	
 	 	2017	 	 	2016	 	 	2015	 	
 	 	 	 	 	 	 	 	 	 	
Silver ounces produced (millions) (A)	 	3.96	 	 	5.32	 	 	8.30	 	
Average realized silver price (B)	$	 4.30	 	$	 4.68	 	$	 5.34	 	
Average realized gold price (C )	$	 1,261	 	$	 1,246	 	$	 1,150	 	
Gold equivalent ounces of silver (A) x (B)/(C )	 	13,498	 	 	20,087	 	 	38,414	 	
55

By-product silver credits are calculated as silver ounces produced multiplied by the average realized silver price ( (A) X (B) ) in the table above.
Management uses total cash costs per gold equivalent ounce and by-product cash costs per gold ounce to monitor the operating performance of its mines and to assess the attractiveness of potential acquisition targets. Management also believes these measures provide investors and analysts with useful information about the Company’s underlying cash costs of operations and the impact of by-product credits on the Company’s cost structure is a relevant metric used to understand the Company’s operating profitability and ability to generate cash flow. When deriving the production costs associated with an ounce of gold, the Company includes byproduct credits as the Company considers that the cost to produce the gold is reduced as a result of the by-product sales supplementary to the gold production process, thereby allowing management and the Company’s other stakeholders to assess the net costs of gold production.
All-in Sustaining Costs per Gold Ounce
The World Gold Council (“WGC”) guidance notes on non-GAAP metrics available to companies in the gold industry to use to report their costs in an effort to encourage improved understanding of the total costs associated with mining an ounce of gold. The WGC is a market development organization for the gold industry and is an association whose membership comprises leading gold mining companies, including Primero. The WGC is not a regulatory industry organization. The WGC worked with its member companies to develop the definition of “all-in sustaining costs per gold ounce”, which it believes to be helpful to investors, governments, local communities and other stakeholders in understanding the economics of gold mining.
The Company has adopted the reporting of “all-in sustaining costs per gold ounce”. This metric is a non-GAAP performance measure. The Company reports this measure on a gold ounces produced basis.
The Company presents all-in sustaining costs because it believes that it more fully defines the total current cost associated with producing gold. The Company also believes that this measure allows investors and other stakeholders of the Company to better understand its costs of producing gold and better assess the Company’s ability to generate cash flow from current operations. Management also uses all-in sustaining costs in evaluating the efficiency of its operations because it believes that IFRS measures, such as operating expenses, do not capture all of the costs incurred to discover, develop, and sustain gold production. As the measure seeks to reflect the full cost of gold production from current operations, it does not include capital expenditures attributable to development projects or mine expansions, exploration and evaluation costs attributable to growth projects, income tax payments and financing costs. In addition, the calculation of all-in sustaining costs does not include depreciation and depletion expense as it does not reflect the impact of expenditures incurred in prior periods. Even though this measure is not representative of all of the Company’s cash expenditures, management believes that it is a useful measure in allowing it to analyze the efficiency of its current gold mining operations.
The following table provides a reconciliation of all-in sustaining costs per gold ounce cash cost, net of by-product credits for year ended December 31, 2017, 2016 and 2015:

 	 	Year ended December 31	 	
(in thousands of U.S. dollars except for per ounce amounts)	 	2017	 	 	2016	 	 	2015	 	
 	 	 	 	 	 	 	 	 	 	
Cash costs, net of by-product credits	$	 90,579	 	$	 127,423	 	$	121,137	 	
Corporate general and administrative expenses	 	15,880	 	 	21,851	 	 	27,188	 	
Reclamation cost accretion	 	943	 	 	1,043	 	 	1,122	 	
Sustaining capital expenditures	 	35,397	 	 	57,657	 	 	62,762	 	
All-in sustaining costs	$	 142,799	 	$	 207,974	 	$	212,209	 	
Ounces of gold produced	 	111,376	 	 	156,052	 	 	221,060	 	
All-in sustaining costs per gold ounce	$	 1,282	 	$	 1,333	 	$	 960	 	
56

All-in sustaining costs adjust “cash costs, net of by-product credits”, for corporate general and administrative expenses, reclamation cost accretion and sustaining capital expenditures. Corporate general and administrative expenses are included as a line item on the Company’s statement of operations. Sustaining capital expenditures and reclamation cost accretion are not line items on the Company’s financial statements.
Sustaining capital expenditures are defined as those capital expenditures which do not increase annual gold ounce production at a mine site and exclude all expenditures at the Company’s projects and certain expenditures at the Company’s operating sites which are deemed expansionary in nature.
Reclamation cost accretion represents the growth in the Company’s decommissioning liability due to the passage of time. This amount does not reflect cash outflows but it is considered to be representative of the periodic costs of reclamation and remediation. Reclamation cost accretion is included in finance expense in the Company’s condensed consolidated statements of operations and comprehensive loss.
The Company’s exploration program comprises delineation drilling, exploration drilling, exploration drifting and regional exploration. The costs related to delineation drilling, exploration drilling and exploration drifting are included in all-in sustaining costs. The regional exploration program is designed to identify new mineral targets on the Company’s extensive land holdings in order to grow production rather than sustain production.
RELATED PARTY TRANSACTIONS
The Company’s related parties include its subsidiaries, associates over which it exercises significant influence, and key management personnel. During its normal course of operation, the Company enters into transactions with its related parties for goods and services. The Company’s related party transactions are described in Note 23 to the Company’s annual consolidated financial statements for the year ended December 31, 2017.
ACCOUNTING PRONOUNCEMENTS
The Company continually monitors the issuance by the IASB of new and revised accounting pronouncements which may have an impact on the accounting, presentation and disclosure of transactions underlying the Company’s consolidated financial statements. New and revised pronouncements issued which may have an impact in the future on the Company are described in Note 2 to the Company’s annual consolidated financial statements for the year ended December 31, 2017.
CRITICAL ACCOUNTING POLICIES
The Company’s consolidated financial statements are prepared in accordance with IFRS as issued by the International Accounting Standards Board. The significant accounting policies applied are described in Note 2 to the Company’s annual consolidated financial statements for the year ended December 31, 2017.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of these financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets, and liabilities at the date of the financial statements. If in future such judgements, estimates and assumptions, which are based on management’s experience and knowledge of the relevant facts and circumstances at the date of the financial statements, deviate materially from actual circumstances, the original judgements, estimates and assumptions will be modified as appropriate in the period in which the circumstances change.
57

a) Accounting Estimates
The significant assumptions about the future and other major sources of estimation uncertainty as at the end of the reporting period that have a significant risk of resulting in a material adjustment to the carrying amounts of the Company’s assets and liabilities are as follows:
(i) Estimated Recoverable Reserves and Resources
The Company estimates its Proven Mineral Reserves and Probable Mineral Reserves and Measured Mineral Resources and Indicated Mineral Resources and Inferred Mineral Resources based on information compiled by appropriately qualified persons. Estimated ounces from mineral reserves and resources as well as estimates for exploration potential are included in the Company’s estimation of future cash flows. These cash flows are based on factors such as estimates of foreign exchange rates, commodity prices, future capital requirements and production costs along with geological assumptions and judgments made in estimating the size and grade of the ore body. Changes in estimated ounces may impact the carrying value of assets, reclamation and remediation obligations, recognition of deferred tax amounts, depreciation and depletion, and impairment charges.
(ii) Determination of Useful Lives of Property, Plant and Equipment
Property, plant and equipment are depreciated to their estimated residual value over the estimated useful life of the asset. Should the actual useful life of the property, plant or equipment vary, future depreciation charges may change.
(iii) Impairment Charges
Non-current assets are tested for impairment if there is an indicator of impairment. The impairment analysis generally requires the use of estimates and assumptions, including amongst others, long-term commodity prices, discount rates, length of mine life, future production levels, future operating costs, future capital expenditures and tax estimates. The estimates and assumptions are subject to risk and uncertainty; hence, there is the possibility that changes in circumstances will alter these projections, which may impact the recoverable amount of the assets. In such circumstances the carrying value of the assets may be impaired or a prior period’s impairment charge reversed with the impact recorded in the statements of operations and comprehensive loss.
(iv) Decommissioning Liability
The Company’s accounting policy for the recognition of accrued site closure costs requires significant estimates and assumptions such as the requirements of the relevant legal and regulatory framework, the magnitude of possible disturbance and the timing, extent and costs of required closure, rehabilitation activity and applicable discount rates. Changes to these estimates and assumptions may result in actual expenditures in the future differing from the amounts currently provided. The decommissioning liability is periodically reviewed and updated based on the available facts and circumstances.
(v) Income Taxes
The Company is periodically required to estimate the tax basis of assets and liabilities. Where applicable tax laws and regulations are either unclear or subject to varying interpretations, it is possible that changes in these estimates could occur that materially affect the amounts of deferred income tax assets and liabilities recorded in the financial statements. Changes in deferred tax assets and liabilities generally have a direct impact on earnings in the period of change. Each period, the Company evaluates the likelihood of whether some portion or all of each deferred tax asset will not be realized. This evaluation is based on historic and future expected levels of taxable income, the pattern and timing of reversals of taxable temporary timing differences that give rise to deferred tax liabilities, and tax planning initiatives. Levels of future taxable income are affected by, among other things, the market price for gold and silver, production costs, quantities of proven and probable reserves, interest rates and foreign currency exchange rates.
58

(vi) Valuation of Inventory
All inventory, other than supplies, is valued at the lower of average cost or net realizable value. Management is required to make various estimates and assumptions to determine the value of stockpiled ore, in-circuit inventories and doré inventories. The estimates and assumptions include surveyed quantities of stockpiled ore, in-circuit process volumes, gold and silver contents of both, costs to recover saleable ounces, recoverable ounces once processed and the price per ounce of gold or silver when ounces of gold and silver are expected to be recovered and sold.
vii) Share-based Compensation
The Company makes certain estimates and assumptions when calculating the fair values of share-based compensation granted. The significant estimations and assumptions include expected volatility, expected life, expected dividend rate and risk-free rate of return.
b) Accounting Judgments
The critical judgments that the Company’s management have made that have the most significant effect on the amounts recognized in the Company’s consolidated financial statements are as follows:
(i) Functional Currency
The determination of a subsidiary’s functional currency often requires significant judgment where the primary economic environment in which an entity operates may not be clear. This can have a significant impact on the consolidated results of the Company.
(ii) Tax Ruling in Mexico
On October 4, 2012, PEM received a ruling (the “APA Ruling”) from the SAT, which confirmed the appropriate price for sales of silver under the Amended and Restated Silver Purchase Agreement (see note 15 (c) for further information). Under Mexican tax law, an advance pricing agreement ruling is generally applicable for up to a five year period (which in the Company’s case, covered the year in which the ruling application was filed, the immediately preceding year and the three subsequent years). The Company’s APA Ruling covered the five years ended December 31, 2014.
In February 2016, PEM received a legal claim from the Mexican tax authority seeking to nullify the APA. The legal claim initiated does not identify any different basis for paying taxes, nor have any tax reassessments been received from the SAT. The Company intends to vigorously defend the validity of its APA. The Company has filed procedural and substantive responses to the claim. The procedural response is a challenge against the admission of SAT’s claim. The substantive response contains the Company’s response to the SAT’s claim. If the SAT is successful in retroactively nullifying the APA, the SAT may seek to audit and reassess PEM in respect of its sales of silver in connection with the Silver Purchase Agreement for 2010 through 2014. If SAT is successful in retroactively nullifying the APA and issuing reassessments, it would likely have a material adverse effect on the Company’s results of operations, financial condition and cash flows. PEM would have rights of appeal in connection with any reassessments.
In June 2017, as part of the ongoing annual audits of the PEM tax returns, the SAT issued an observations letter for the 2010 tax year. An observations letter is issued to a taxpayer in advance of a reassessment being issued, provides an outline of the SAT’s position on matters under audit, and affords the taxpayer an opportunity to respond to such position in advance of the reassessment being issued. In this observations letter issued to PEM, the SAT made explicit its view that PEM should pay taxes based on the market price of silver which, if successfully applied to its 2010 taxation year, would make PEM liable for an additional $8.5 million of taxes before penalties or interest. As the Company continues to defend the APA in the Mexican legal proceeding, the APA remains valid and the Company will vigorously dispute any reassessment that may be issued in the future on a basis that assesses taxes on its silver revenues that is inconsistent with the APA. The observations letter does not represent a tax reassessment and no liability has been recognized in the financial statements.
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In October 2017, the SAT issued an observations letter for the 2011 tax year, with the same explicit view that PEM should pay taxes on the market price of silver, which if successfully applied to its 2011 taxation year, would make PEM liable for an additional $23.4 million of taxes before penalties or interest. The Company has submitted its formal response to both the 2010 and the 2011 observations letters.
While the Company continues to believe its tax filing position based upon the APA is correct, should the Company ultimately be required to pay tax on its silver revenues based on market prices without any mitigating adjustments, the incremental income tax for the years 2012-2017 would be in the range of $130 - $145 million, before interest or penalties.
While the Company continues to vigorously defend the validity of the APA and its transfer pricing position, it is also engaging in dialogue with the SAT seeking to resolve matters and bring tax certainty through a negotiated solution. Primero has also had constructive dialogue with the SAT in relation to outstanding VAT receivables and has received $15.2 million of VAT refunds since July 2017.
Since January 1, 2015, the Company has continued to record its revenue from the sale of silver for purposes of Mexican tax accounting in a manner consistent with the APA, on the basis that the applicable facts and laws have not changed. The Company’s legal and financial advisors continue to believe that the Company has filed its tax returns compliant with applicable Mexican law. To the extent the SAT determines that the appropriate price of silver sales under the Silver Purchase Agreement is significantly different from the realized price and while PEM would have rights of appeal in connection with any reassessments, it is likely to have a material adverse effect on the Company’s business, financial condition and results of operations.

B.	Liquidity and Capital Resources	
ANALYSIS OF CASH FLOWS FOR THE YEARS
 ENDED DECEMBER 31, 2017, 2016 AND 2015
Sources and uses of cash

 	 	Year ended December 31	 	
(in thousands of U.S. dollars)	 	2017	 	 	2016	 	 	2015	 	
Cash flow:	 	 	 	 	 	 	 	 	 	
Provided by operating activities before working capital changes	$	 22,633	 	$	 15,267	 	$	 83,166	 	
Changes in non-cash working capital	 	(82	)	 	(2,158	)	 	(1,537	)	
Provided by operating activities	 	22,551	 	 	13,109	 	 	81,629	 	
Used in investing activities	 	4,518	 	 	(67,673	)	 	(99,722	)	
Provided by financing activities and other	 	(25,978	)	 	28,838	 	 	36,305	 	
Increase (decrease) in cash	$	 1,091	 	 	($25,726	)	$	18,212	 	
Operating activities
Primero’s cash flows from operating activities before working capital changes were higher in 2017 compared to 2016 as a result of lower taxes paid in relation to San Dimas, partially offset by lower cash earnings from operations due to the impact of the strike at San Dimas. The decrease in 2016 from 2015 was due to lower gold production and sales at both San Dimas and Black Fox and significantly higher income tax installments by PEM compared to 2015.
Changes in non-cash working capital were a cash outflow of $0.1 million in 2017 compared with $2.2 million in 2016 and $1.5 million in 2015. The cash outflow during the year was mainly due to a reduction in trade and other payables, largely offset by a decrease in value added and income tax receivable. At the end of 2017 the Company has $22 million of VAT and $19 million of income taxes pending for refund.
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Investing activities
Cash used in investing activities are mostly capital expenditures as shown in the table below.

 	 	Year ended December 31	 	
(in millions of U.S. dollars)	 	2017	 	 	2016	 	 	2015	 	
Capital Expenditures	 	 	 	 	 	 	 	 	 	
San Dimas Underground Development	$	 15.0	 	$	 13.9	 	$	 16.7	 	
San Dimas Sustaining Capital	 	2.5	 	 	11.4	 	 	16.9	 	
San Dimas Projects	 	-	 	 	3.7	 	 	12.4	 	
San Dimas Sub Total	$	 17.5	 	$	 29.0	 	$	 46.0	 	
Black Fox Underground Development	 	9.9	 	 	15.1	 	 	10.9	 	
Black Fox Sustaining Capital	 	1.5	 	 	5.7	 	 	5.3	 	
Black Fox Projects	 	-	 	 	-	 	 	2.9	 	
Black Fox Complex Sub Total	$	 11.4	 	$	 20.8	 	$	 19.1	 	
Cerro del Gallo Development	 	-	 	 	-	 	 	2.9	 	
Total Capital Expenditures	$	 28.9	 	$	 49.8	 	$	 68.0	 	
 	 	 	 	 	 	 	 	 	 	
Capitalized Exploration Expenditures	 	 	 	 	 	 	 	 	 	
San Dimas Diamond Drilling	$	 3.8	 	$	 4.6	 	$	 4.9	 	
San Dimas Drifting	 	0.5	 	 	2.2	 	 	2.6	 	
San Dimas Regional Diamond Drilling	 	-	 	 	0.4	 	 	3.0	 	
San Dimas Sub Total	$	 4.3	 	$	 7.2	 	$	 10.5	 	
Black Fox Diamond Drilling	 	3.0	 	 	4.7	 	 	5.8	 	
Regional Exploration	 	0.5	 	 	4.8	 	 	9.0	 	
Black Fox Complex Sub Total	$	 3.5	 	$	 9.5	 	$	 14.8	 	
Total Capitalized Exploration Expenditures	$	 7.8	 	$	 16.7	 	$	 25.3	 	
TOTAL CAPITAL EXPENDITURES	$	 36.7	 	$	 66.5	 	$	 93.3	 	
San Dimas capital spending during 2017 focused on underground development. In order to conserve cash, the capital plan for San Dimas prioritized only the expenditures required to maintain current operating levels for the current year. The majority of exploration activity aimed at new reserve generation was deferred.
Prior to the sale of the Black Fox Complex, Black Fox capital spending mainly relating to underground development costs in the Deep Central Zone. The Company closed the Black Fox sale transaction on October 6, 2017.
Financing Activities
During 2017, Primero drew down $25.0 million under the RCF. Following the sales of the Black Fox Complex and the Cerro del Gallo Project, the net proceeds were applied against the outstanding RCF reducing the outstanding balance to $30.2 million as at December 31, 2017. The total net repayment against the RCF for the 2017 year was $19.8 million.
During 2016, the Company repaid in full the $48.1 million outstanding balance of the 6.5% Convertible Debentures assumed on the acquisition of Brigus Gold Corp. using $50.0 million drawn on the RCF. The Company completed an equity offering pursuant to which the Company issued 22,022,500 Units of the Company at a price of C$2.35 per Unit for aggregate gross proceeds of C$51,752,875. Each Unit consisted of one common share of Primero and one-half of one common share purchase warrant of the Company. Each whole warrant entitles the holder to acquire one common share of the Company at a price of C$3.35 per common share until June 25, 2018.
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Debt

 	 	As at	 	 	As at	 	 	As at	 	
(in thousands of U.S. dollars)	 	December 31, 2017	 	 	December 31, 2016	 	 	December 31, 2015	 	
Current debt	 	 	 	 	 	 	 	 	 	
Revolving credit facility (RCF)	$	 30,201	 	$	 49,639	 	$	 -	 	
6.5% convertible debentures	 	-	 	 	-	 	 	47,751	 	
Finance lease liabilities	 	109	 	 	1,202	 	 	4,666	 	
Total current debt	 	30,310	 	 	50,841	 	 	52,417	 	
Long-term debt	 	 	 	 	 	 	 	 	 	
5.75% convertible debentures	$	 47,625	 	$	 52,500	 	$	 61,500	 	
Finance lease liabilities	 	-	 	 	406	 	 	1,227	 	
Total long-term debt	 	47,625	 	 	52,906	 	 	62,727	 	
Total debt	$	 77,935	 	$	 103,747	 	$	 115,144	 	
Shareholders’ Equity
Shares Issued
During the year ended December 31, 2017, the Company issued 2,543,773 common shares for the settlement of vested PSUs under the 2013 PSU Plan and the Directors’ PSU Plan; 993,684 common shares for severance and other employee payments.
Outstanding Share Data
As at December 31, 2017, the Company had 193,045,822 common shares outstanding (189,508,365 as at December 31, 2016, 164,185,807 as at December 31, 2015). As at the date of this MD&A, the Company had 193,045,822 common shares outstanding.
Options
As at December 31, 2017, the Company had 6,811,316 options outstanding with a weighted average exercise price of C$3.04; of these 4,048,197 were exercisable at a weighted average exercise price of C$4.13. As at the date of this MD&A, the total number of options outstanding was 6,674,325, of which 4,338,184 are exercisable.
Common Share Purchase Warrants
As at December 31, 2016, the Company had 11,011,250 common share purchase warrants outstanding. Each warrant entitles the holder to acquire one common share of the Company at an exercise price of $3.35 until its expiry date of June 25, 2018.
PSUs Exercisable into Common Shares
As at December 31, 2017 and the date of this MD&A, the Company had 74,627 Directors’ PSUs outstanding which vested on December 1, 2017 for which settlement is pending the closing of the arrangement with First Majestic. Pursuant to the Arrangement Agreement each Directors’ PSU outstanding immediately before completion of the arrangement shall be deemed to be fully vested and each holder thereof shall be paid a cash payment in an amount equal to $0.30 per Directors’ PSU. A director holding Director PSUs would otherwise be entitled to elect to receive, at vesting either (1) a cash amount equal to the number of Director PSUs that vest multiplied by the volume weighted average trading price per common share over the five preceding trading days, (2) the number of common shares equal to the number of Directors’ PSUs (subject to the total number of common shares issuable at any time under the Directors’ PSU Plan, combined with all other common shares issuable under any other equity compensation arrangements then in place, not exceeding 10% of the total number of issued and outstanding common shares of the Company), or (3) a combination of cash and shares. If no election is made, the Company will pay out such Directors’ PSUs in cash.
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As at December 31, 2017 and the date of this MD&A, the Company had 5,182,621 PSUs outstanding under the 2013 PSU Plan (“2013 PSUs”), which, by their terms, would vest and expire between February 18, 2017, and December 31, 2020. Pursuant to the Arrangement Agreement, however, each 2013 PSU outstanding immediately before completion of the arrangement shall be deemed to be fully vested and each holder thereof shall be paid a cash payment in an amount equal to $0.30 per 2013 PSU. A person holding 2013 PSUs would otherwise entitled to receive at vesting, at the Company’s option, either (1) a cash amount equal to the number of 2013 PSUs that vest multiplied by the volume weighted average trading price per common share over the five preceding trading days, (2) the number of common shares equal to the number of 2013 PSUs (subject to the total number of common shares issuable at any time under the 2013 PSU Plan, combined with all other common shares issuable under any other equity compensation arrangements then in place, not exceeding 10% of the total number of issued and outstanding common shares of the Company) or (3) a combination of cash and shares.
Deferred Share Units
As at December 31, 2017 and the date of this annual report, the Company had 315,790 deferred share units (“DSUs”) outstanding under the deferred share unit plan which vest between May 25, 2015 and May 25, 2020. Pursuant to the Arrangement Agreement each DSU outstanding immediately before completion of the arrangement shall be deemed to be fully vested and each holder thereof shall be paid a cash payment in an amount equal to $0.30 per DSU. A person holding DSUs under this plan would otherwise be entitled to receive at vesting, either a cash payment equal to the redemption value of the DSUs, shares issued from treasury equal to the number of DSUs, shares purchased on the stock exchange, or any combination of these, such that the cash payment plus number of shares delivered have a value equal to the redemption value of the DSUs. The choice of settlement is solely at the Company’s discretion. The redemption value is calculated by the number of DSUs redeemed multiplied by the weighted average price per share traded on the TSX over the last five trading days preceding the redemption date.
Cash requirements
The following table summarizes the contractual maturities of the Company’s financial liabilities and operating and capital commitments:

  	 	As at	 	 	 	 	 	 	 	
 	 	December 31, 2017	 	 	As at	 	 	As at	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	Dec. 31, 2016	 	 	Dec. 31, 2015	 	
 	 	Within 1	 	 	2-5	 	 	Over 5	 	 	Total	 	 	Total	 	 	Total	 	
(in thousands of U.S. dollars)	 	year	 	 	years	 	 	years	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Trade and other payables and accrued liabilities	$	 19,593	 	$	 -	 	$	 -	 	$	 19,593	 	$	 31,667	 	$	 44,307	 	
Share based payments	 	71	 	 	-	 	 	-	 	 	71	 	 	115	 	 	661	 	
6.5% Convertible debentures and interest	 	-	 	 	-	 	 	-	 	 	-	 	 	 	 	 	49,680	 	
5.75% Convertible debentures and interest	 	4,313	 	 	80,010	 	 	-	 	 	84,323	 	 	88,635	 	 	92,959	 	
Revolving line of credit and interest	 	30,657	 	 	-	 	 	-	 	 	30,657	 	 	50,811	 	 	-	 	
Finance lease payments	 	-	 	 	-	 	 	-	 	 	-	 	 	1,608	 	 	5,893	 	
Minimum rental and operating lease payments	 	-	 	 	-	 	 	-	 	 	-	 	 	3,218	 	 	3,630	 	
Reclamation and closure cost obligations	 	-	 	 	5,004	 	 	25,711	 	 	30,715	 	 	50,173	 	 	60,637	 	
Commitment to purchase plant and equipment	 	122	 	 	-	 	 	-	 	 	122	 	 	516	 	 	5,689	 	
Total	$	 54,756	 	$	85,014	 	$	 25,711	 	$	165,481 $	 	 	226,743	 	$	 263,456	 	
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Other Liquidity Considerations
APA Ruling
In February 2016 the Mexican tax authority, the SAT, initiated a proceeding seeking to nullify the APA which it issued to the Company in 2012. The APA confirmed the Company’s basis for paying taxes on the price it realized for certain silver sales between 2010 to 2014. If the SAT’s challenge is successful it is likely to have a material adverse effect on the Company’s business, financial condition and results of operations.
In June 2017, as part of the ongoing annual audits of the PEM tax returns, the SAT issued an observations letter for the 2010 tax year. An observations letter is issued to a taxpayer in advance of a reassessment being issued, provides an outline of the SAT’s position on matters under audit, and affords the taxpayer an opportunity to respond to such position in advance of the reassessment being issued. In this observations letter issued to PEM, the SAT made explicit its view that PEM should pay taxes based on the market price of silver which, if successfully applied to its 2010 taxation year, would make PEM liable for an additional $8.5 million of taxes before penalties or interest. As the Company continues to defend the APA in the Mexican legal proceeding, the APA remains valid and the Company will vigorously dispute any reassessment that may be issued in the future on a basis that assesses taxes on its silver revenues that is inconsistent with the APA. The observations letter does not represent a tax reassessment and no liability has been recognized in the financial statements.
In October 2017, the SAT issued an observations letter for the 2011 tax year, with the same explicit view that PEM should pay taxes based on the market price of silver, which if successfully applied to its 2011 taxation year, would make PEM liable for an additional $23.4 million of taxes before penalties or interest. The Company has submitted formal responses to both the 2010 and 2011 observation letters.
While the Company continues to believe its tax filing position based upon the APA is correct, should the Company ultimately be required to pay tax on its silver revenues based on market prices without any mitigating adjustments, the incremental income tax for the years 2012-2017 would be in the range of $130 - $145 million, before interest or penalties.
The Company vigorously defends the validity of the APA and has filed procedural and substantive responses to the claim. In addition, the Company intends to explore opportunities to minimize the potential impact on the Company in the event that the SAT is successful in its legal claim to nullify the APA, but there is no assurance that the Company will find or be able to implement a reasonable solution.
While the Company continues to vigorously defend the validity of the APA and its transfer pricing position, it is also engaging in dialogue with the SAT seeking to resolve matters and bring tax certainty through a negotiated solution. Primero has also had constructive dialogue with SAT in relation to outstanding VAT receivables and has received $15.2 million of VAT refunds since July 2017.
Other
In 2016, the Company and certain officers were served with a class action lawsuit that was filed earlier in the year in federal court in the State of California seeking to recover damages for investors in the Company’s common shares under the U.S. federal securities laws. On July 14, 2017, the Company’s motion to dismiss the amended complaint was granted and the plaintiffs’ claims were dismissed without prejudice. The plaintiff filed a notice of appeal of the dismissal order on September 8, 2017. The parties have filed their briefs in this appeal and a ruling on the appeal is expected sometime in 2018. The Company intends to vigorously defend this class action lawsuit.
In the observations letters for both the 2010 and 2011 tax years the SAT raised queries with respect to certain intercompany transactions and the Company has provided the pertinent information for 2010 and 2011. The observations letters do not represent a tax reassessment and no liability has been recognized in the financial statements.
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Dividend Report and Policy
The Company has not paid any dividends since incorporation and currently has no plans to pay dividends.
Capital management
The Company’s primary objective in managing capital is to ensure sufficient liquidity through the conclusion of the Arrangement Agreement with First Majestic.
The Company’s capital items are the following:

 	 	December 31	 	 	December 31	 	 	December 31	 	
(in thousands of U.S. dollars)	 	2017	 	 	2016	 	 	2015	 	
Cash and cash equivalents	$	 20,966 $	 	 	19,875	 	$	 45,601	 	
Undrawn revolving credit facility	 	4,799	 	 	25,000	 	 	75,000	 	
Current debt	 	30,310	 	 	50,841	 	 	52,417	 	
Long-term debt	 	47,625	 	 	52,906	 	 	62,727	 	
Shareholders’ equity	 	59,731	 	 	461,130	 	 	648,876	 	
To support the Company’s capital management objectives, the Company manages its capital structure and makes adjustments to it within the context of the Company’s strategy, economic conditions and risk characteristics of its underlying assets. To maintain or adjust its capital structure, the Company may attempt to issue shares, adjust the amount of debt or enter into new debt. The Company does not currently pay out dividends. Utilization of the undrawn RCF requires consent from WPM.
As at December 31, 2017, the Company was not subject to any financial covenants and was in compliance with all non-financial covenants.
FINANCIAL INSTRUMENTS
The Company’s financial instruments at December 31, 2017 consist of cash and cash equivalents, restricted cash, trade and other receivables, an equity investment in Fortune Bay, trade and other payables, and debt.
At December 31, 2017, the carrying amounts of cash and cash equivalents, restricted cash, trade and other receivables, trade and other payables and the RCF are considered to be a reasonable approximation of their fair values due to their short-term nature. The fair value of the financial lease liabilities approximate their carrying value as the interest rate implicit in the leases approximate current market rates.
Derivative Instruments - Embedded Derivatives
Financial instruments and non-financial contracts may contain embedded derivatives, which are required to be accounted for separately at fair value as derivatives when the risks and characteristics of the embedded derivatives are not closely related to those of their host contract and the host contract is not carried at fair value. The Company regularly assesses its financial instruments and non-financial contracts to ensure that any embedded derivatives are accounted for in accordance with its policy. There were no material embedded derivatives requiring separate accounting at December 31, 2017, December 31, 2016, or December 31, 2015 other than those discussed below.
The convertible debentures assumed with the acquisition of Brigus were considered to contain an embedded derivative liability which was initially recognized at fair value using an option pricing model, and was subsequently measured at fair value each period during the term of the debentures.
The 5.75% convertible debentures issued by the Company on February 9, 2015 (Note 10 (c)) are considered to contain multiple embedded derivatives. These debentures and all related derivatives were accounted for as one instrument which was initially recognized at fair value and will subsequently be measured at fair value for each period during the term of the debentures. During the year ended December 31, 2017 a mark to market gain of $4.9 million (2016 – $9.0 million, 2015 - $13.5 million) was recognized in relation to the debentures.
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The common share purchase warrants issued by the Company on June 24, 2016 are considered derivative liabilities and were initially recognized at fair value and are subsequently measured at fair value during the term of the warrants. During the year ended December 31, 2017, a mark-to-market gain of $1.0 million (2016 - $3.6 million, 2015 - $nil) was recognized in relation to the common share purchase warrants.
Fair value measurements of financial assets and liabilities recognized on the Consolidated Statements of Financial Position
The categories of the fair value hierarchy that reflect the significance of inputs used in making fair value measurements are as follows:
Level 1 – quoted prices in active markets for identical assets or liabilities; Level 2 – inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and Level 3 – inputs for the asset or liability that are not based on observable market data.
The levels in the fair value hierarchy by which the Company’s financial assets and liabilities are measured and recognized at fair value on a recurring basis are as follows:

 	 	December 31	 	 	December 31	 	 	December 31	 	
Level 1 (in thousands of U.S. dollars)	 	2017	 	 	2016	 	 	2015	 	
Investment in Fortune Bay (1)	$	910	 	$	1,160	 	$	525	 	
5.75% convertible debentures (2, 3)	 	47,625	 	 	52,500	 	 	61,500	 	
Warrant liability (2)	 	44	 	 	1,066	 	 	-	 	

(1)	Fortune Bay is a publicly-listed company and the fair value is based on the trading price of its shares as at the date of the statement of financial position.	
(2)	The fair value of the 5.75% convertible debentures and warrant liability are calculated using the market price on the TSX as at the date of the statement of financial position.	
(3)	On March 13, 2018, the holders of the 5.75% convertible debentures voted to approve an amendment to the maturity date of the debentures to the day following the closing date of the Arrangement with full principal of $75 million paid on this date.	
At December 31, 2017, there were no financial assets or liabilities measured and recognized on the consolidated statements of financial position at fair value that would be categorized as Level 3 in the fair value hierarchy (December 31, 2016 – $nil, December 31, 2015 - $nil).
Financial Instruments Risk
The following describes the types of financial instrument risks to which the Company is exposed and its objectives and policies for managing those risk exposures:
Credit Risk
Credit risk is the risk that the counterparty to a financial instrument will cause a financial loss for the Company by failing to discharge its obligations. Credit risk is primarily associated with trade and other receivables; however, it also arises on cash and cash equivalents and restricted cash. To mitigate exposure to credit risk on financial assets, the Company ensures non-related counterparties demonstrate minimum acceptable credit worthiness and ensures liquidity of available funds.
The Company closely monitors its financial assets and does not have any significant concentration of credit risk with non-related parties. The Company invests its cash and cash equivalents in highly rated financial institutions and sells its products exclusively to organizations with strong credit ratings. The credit risk associated with trade receivables at December 31, 2017 is considered to be negligible. The Company expects the outstanding value added tax receivable from the Mexican tax authorities to be refunded or be offset against future tax payments. Approximately $15.2 million was refunded since July 2017.
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The Company’s maximum exposure to credit risk at December 31, 2017, 2016, and 2015 is as follows:

(in thousands of U.S. dollars)	 	2017	 	 	2016	 	 	2015	 	
Cash and restricted cash	$	 20,966	 	$	 24,452	 	$	 51,521	 	
Trade and other receivables	 	1,241	 	 	1,962	 	 	1,793	 	
Current and non-current taxes receivable	 	40,789	 	 	41,838	 	 	30,689	 	
 	$	 62,996	 	$	 68,252	 	$	 84,003	 	
Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s objectives and key guidelines for capital management, including management of long-term debt, are described in note 21 to the Company’s annual consolidated financial statements for the year ended December 31, 2017.
If the Arrangement Agreement to sell the Company to First Majestic is terminated for any reason, there would be significant uncertainty as to whether the Company could discharge its commitments as they come due from cash from operations and collection of receivables without an extension of the RCF maturity date or other form of re-financing.
The table below shows the Company’s liquidity risk profile at December 31, 2017:

 	 	Within 1	 	 	2-5	 	 	 	 	
(in thousands of U.S. dollars)	 	year	 	 	years	 	 	Total	 	
 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	$	 20,966	 	$	 -	 	$	 20,966	 	
Trade and other payables	 	(19,593	)	 	-	 	 	(19,593	)	
Revolving credit facility balance and interest	 	(30,657	)	 	-	 	 	(30,657	)	
Finance lease liabilities	 	(109	)	 	-	 	 	(109	)	
5.75% Convertible debentures and interest	 	(4,313	)	 	(80,010	)	 	(84,323	)	
Total	 	($33,706	)	 	($80,010	)	 	($113,716	)	
Refer to note 2(b) to the Company’s annual consolidated financial statements for the Company’s plans to address liquidity risk associated with the current working capital deficiency. The Company has entered into commercial leases on certain types of equipment and office space which have been classified as operating leases. These leases have terms of between 1 and 6 years. There are no restrictions placed on the Company as a result of entering into these leases. Some of the leases contain renewal or purchase options at the end of the lease. The total operating lease expense from continuing operations during the year ended December 31, 2017 was $0.9 million (2016 - $0.8 million, 2015 - $1.2 million).
Market Risk
(i) Currency Risk
Currency risk is the risk that the fair values or future cash flows of the Company’s financial instruments will fluctuate because of changes in foreign currency exchange rates. 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 U.S. dollars at the average rate during the period and as such if the U.S. dollar appreciates as compared to the Canadian dollar, the costs of the Company would decrease in U.S. dollar terms. The Company is further exposed to currency risk through non-monetary assets and liabilities of its Mexican entities whose taxable profit or loss is denominated in a non-U.S. dollar currency. Changes in exchange rates give rise to temporary differences resulting in a deferred tax liability or asset with the resulting deferred tax charged or credited to income tax expense.
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During the year ended December 31, 2017, the Company recognized a loss of $4.5 million on foreign exchange (2016 – loss of $1.0 million, 2015 – gain of $0.1 million). Based on the above net exposures at December 31, 2017, a 10% depreciation or appreciation of the Mexican peso against the U.S. dollar would result in a $1.6 million increase or decrease in the Company’s before-tax net loss from continuing operations (2016 - $1.4 million, 2015 - $0.03 million); and a 10% depreciation or appreciation of the Canadian dollar against the U.S. dollar would result in a $0.2 million increase or decrease in the Company’s before-tax net loss from continuing operations (2016 - $2.7 million, 2015 - $1.6 million).
The Company does not currently use derivative instruments to reduce its exposure to currency risk, however, management monitors its differing currency needs and tries to reduce its exposure to currency risks through exchanging currencies at what are considered to be optimal times.
(ii) Interest Rate Risk
Interest rate risk is the risk that the fair values and future cash flows of the financial instruments will fluctuate because of changes in market interest rates. The exposure to interest rates is monitored. The Company’s exposure to interest rate risk is limited to the revolving credit facility which is subject to a floating interest rate. An increase or decrease of 100 basis points in the interest rate would result in a decrease or increase in profit before tax of $0.3 million (assuming $30.2 million drawn on the line of credit).
(iii) Price Risk
Price risk is the risk that the fair value or future cash flows of the Company’s financial instruments will fluctuate because of changes in commodity prices. Profitability depends on sales prices for gold and silver. Metal prices are affected by numerous factors such as the sale or purchase of gold and silver by various central banks and financial institutions, interest rates, exchange rates, inflation or deflation, fluctuations in the value of the U.S. dollar and foreign currencies, global and regional supply and demand, and the political and economic conditions of major producing countries throughout the world.
The table below summarizes the impact on profit before-tax for a 10% change in the average commodity price achieved by the Company during the year. The analysis is based on the assumption that the gold and silver prices move 10% with all other variables held constant.

(in thousands of U.S. dollars)	 	2017	 	 	2016	 	 	2015	 	
Gold price	 	 	 	 	 	 	 	 	 	
   10% increase	$	 14,081	 	$	 14,084	 	$	 18,091	 	
   10% decrease	 	(14,081	)	 	(14,084	)	 	(18,091	)	
Silver price	 	 	 	 	 	 	 	 	 	
   10% increase	$	 -	 	$	 222	 	$	 938	 	
   10% decrease	 	-	 	 	(222	)	 	(938	)	
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C.	Research and Development, Patents and Licenses, etc.	
Primero does not carry out any research and development activities. Please refer to Item 5A and Item 5B above for a discussion of the expenditures that the Company has incurred in connection with its business activities.

D.	Trend Information	
Trends that are considered by Primero to be reasonably likely to have a material effect on our results of operations are discussed under “Operating Results” in Item 5.A and “Liquidity and Capital Resources” in Item 5.B. Further, financial and operational risks discussed under “Risk Factors” in Item 3.D could materially affect the Company’s future operating results and could impair business operations. If any of these events actually occur, our business, prospects, financial condition, cash flows and operating results could be materially impacted.

E.	Off-Balance Sheet Arrangements	
The Company does not have any off-balance sheet arrangements, other than the potential availability of the undrawn $4.8 million under the RCF. The Company is not anticipating drawing down the remaining balance since it has entered into the Arrangement Agreement with First Majestic.

F.	Tabular Disclosure of Contractual Obligations	
The following table outlines the current obligations of the Company as of December 31, 2017:

 	 	Payments due by period	 	
Contractual Obligations (in thousands of U.S.	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
dollars)	 	Total	 	 	< 1 year	 	 	1 – 3 years	 	 	3 – 5 years	 	 	> 5 years	 	
Trade and other payables and accrued liabilities	 	19,593	 	 	19,593	 	 	-	 	 	-	 	 	-	 	
Share based payments	 	71	 	 	71	 	 	-	 	 	-	 	 	-	 	
5.75% Convertible debentures and interest	 	84,323	 	 	4,313	 	 	80,010	 	 	-	 	 	-	 	
Revolving line of credit and interest	 	30,657	 	 	30,657	 	 	-	 	 	-	 	 	-	 	
Reclamation and closure cost obligations	 	30,715	 	 	-	 	 	5,004	 	 	-	 	 	25,711	 	
Commitment to purchase plant and equipment	 	122	 	 	122	 	 	-	 	 	-	 	 	-	 	
Total	 	165,481	 	 	54,756	 	 	85,014	 	 	-	 	 	25,711	 	

G.	Safe Harbor	
Certain statements contained in the foregoing operating results and elsewhere in this annual report on Form 20-F constitutes forward-looking statements. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Primero to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statements were made, and readers are advised to consider such forward-looking statements in light of the risks set forth below. See “Introductory Notes—Cautionary Statements about Forward-Looking Statements”.
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Risk factors that could affect our future results include, but are not limited to, risks inherent in mineral exploration activities and other operating and development risks, financial risk, shareholder dilution from additional equity financings, competition, environmental regulations, changes to reclamation requirements, volatility and sensitivity to market prices for precious and base metals, the impact of changes in foreign currencies’ exchange rates, political risk, changes in government regulation and policies including trade laws and policies, demand for precious and base metals, and receipt of permits and approvals from governmental authorities.

ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	

A.	Directors and Senior Management	
The following table is as of the date of this annual report 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.

Name and Residence	Age	Position(s) with the
Company	Principal
Occupation	Director Since	
JOSEPH CONWAY (1)(2)
Ontario, Canada	60	Vice Chairman,
Interim President
and Chief Executive Officer	Vice Chairman,
Interim President
and Chief Executive Officer	June 28, 2010	
DAVID DEMERS (3)(4)
British Columbia, Canada	62	Director	Consultant, Crocus
Advisors Ltd.	October 29, 2008	
GRANT EDEY (2) (4) (5)
 Ontario, Canada	68	Director	Corporate Director	June 28, 2010	
PATRICIA A.
FORTIER (2)(4)(6)
 Ontario, Canada	63	Director	Former Canadian diplomat	November 1, 2016	
BRAD MARCHANT (2)(5)
 British Columbia, Canada	61	Director	Corporate Director	June 26, 2013	
WADE NESMITH
British Columbia, Canada	66	Chairman and Director	Chairman of the Company	October 29, 2008	
ROBERT A.
QUARTERMAIN (2)(3)
British Columbia, Canada	63	Director	Executive Chairman and
Director of Pretium Resources Inc.	June 28, 2010	
MICHAEL RILEY (3)(5)
 British Columbia, Canada	66	Director	Corporate Director	April 22, 2010	
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Name and Residence	Age	Position(s) with the
Company	Principal
Occupation	Director Since	
TAMARA BROWN (1)
Ontario, Canada	45	Vice President,
Corporate Development	Vice President,
Corporate Development
of the Company	N/A	
H. MAURA LENDON (1)
Ontario, Canada	55	Chief General
Counsel and
Corporate Secretary	Chief General
Counsel and
Corporate Secretary
of the Company	N/A	
JAMES MALLORY,
Ontario, Canada	59	Vice President,
Corporate Responsibility	Vice President,
Corporate Responsibility	N/A	
DAMIEN MARANTELLI (1)
Ontario, Canada	57	Chief Operating Officer	Chief Operating Officer
of the Company	N/A	
RYAN SNYDER (1)(7)
Ontario, Canada	35	Chief Financial Officer	Chief Financial Officer
of the Company	N/A	
LOUIS TONER
Quebec, Canada	58	Vice President,
Project Development
and Construction	Vice President,
Project Development
and Construction	N/A	

(1)	Member of the Disclosure Committee.	
(2)	Member of the Technical and Corporate Responsibility Committee, formerly known as the Corporate Responsibility Committee. Mr. Conway was appointed to the Technical Corporate Responsibility Committee on February 17, 2016. Mr. Marchant is the Chair of the Technical and Corporate Responsibility Committee.	
(3)	Member of the Human Resources Committee. Mr. Quartermain is the Chair of the Human Resources Committee.	
(4)	Member of the Governance and Nominating Committee. Mr. Demers is the Chair of the Governance and Nominating Committee.	
(5)	Member of the Audit Committee. Mr. Riley is the Chair of the Audit Committee.	
(6)	Ms. Fortier was appointed to the Governance & Nominating Committee and the Technical and Corporate Responsibility Committee, effective November 1 and ratified by the Board on November 8, 2016.	
(7)	Mr. Snyder was promoted to the role of Chief Financial Officer effective September 15, 2017.	
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.
Joseph Conway – Vice Chairman, Interim President and Chief Executive Officer
Mr. Conway was appointed Interim President and Chief Executive Officer upon the departure of Mr. Ernest Mast as President and Chief Executive Officer effective March 6, 2017. 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, and retired from his position as Chief Executive Officer on January 31, 2016. Effective February 1, 2016, he became Executive Vice Chairman of the Company. He has also been a director of Orezone Gold Corporation since October 2014. Mr. Conway was a non-executive director of Santana Mineral Limited from June 2013 to November 2015. 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.
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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 Fuel Systems, a University of British Columbia spinoff company that has grown into the world’s leading alternative fuels automotive systems company, supplying CNG and LNG systems to many of the world’s leading manufacturers of cars and commercial vehicles. Mr. Demers served as CEO and a director of Westport from 1996 until July 2016, when it merged with Fuel Systems Solutions of New York. Mr. Demers has worked as a Director of a number of technology start-ups, 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 which was sold to Dolby. He also served as a Director of Clean Energy Fuels (CLNE) 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.
Grant Edey – Director
Mr. Edey has been a director of the Company since June 28, 2010. He was President and Chief Executive Officer of Khan Resources Inc. from July 2010 to May 2017. 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 Master of Business Administration from the University of Western Ontario and a Bachelor of Science (Mining Engineering) degree from Queen’s University.
Patricia A. Fortier – Director
Ms. Fortier has been a director of the Company since November 1, 2016. Ms. Fortier is a former Canadian diplomat whose career has focused on political relations, governance, international security, and trade and investment – notably involved with the extractive and defence industries abroad. She became a Fellow of the Canadian Global Affairs Institute in April 2017 and Senior Fellow at University of Ottawa’s Graduate School of Public and International Affairs in September 2017. In February 2017 she became a member of the board of the Retired Heads of Mission Association of Canada, the official grouping for all former Canadian Ambassadors. Her last post in government was as Assistant Deputy Minister responsible for Consular, Security, and Legal Affairs in Global Affairs Canada. Ms. Fortier was the past Canadian Ambassador to Peru and Bolivia and the Canadian Ambassador to the Dominican Republic. She was also the Minister-Counsellor (Political) at the Canadian Embassy in Washington, D.C. Ms. Fortier’s past work abroad includes being Senior Advisor to the OAS Electoral Observation Mission to Peru and Chief Advisor to the High Level Mission to Peru. In Costa Rica, she worked with international NGOs on climate change (Earth Council) and human rights/democracy (Instituto Interamericano de los Derechos Humanos). Other diplomatic postings included Chile, the Canadian mission to the United Nations in New York, India, Kenya and Zambia. She was also a member of the board of the Pearson Peacekeeping Centre. Ms. Fortier has a Master’s degree in Public Administration and a BA (Honours) from Queen’s University and was a Weatherhead Fellow at Harvard University. She is fluent in English, Spanish and French.
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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 40 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. Mr. Marchant’s extensive industry experience and operations expertise make him a valued member of the Company’s Audit Committee and also the chair of the Technical and Corporate Responsibility Committee.
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 is also a director of Westport Fuel Systems Inc., a NASDAQ and TSX listed technology company involved in the creation and manufacture of fuel systems that use gaseous fuels. 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. from 1998 until 2003, helping to lead their public markets activities and retiring as President, Westport Europe. He was a founding director of Silver Wheaton Corp. (TSX, NYSE), serving from 2004 to 2016.
Robert A. Quartermain – Director
Dr. Quartermain, D.Sc., has been a director of the Company since June 28, 2010 and has worked in the resource industry since 1976. He is Executive Chairman 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 and worked for Teck Corp. from 1981 to 1984. 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. 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 and the BCAA Road Safety Foundation. Mr. Riley 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 and continues to hold the Canadian CPA CA designation as a member of both the BC and Quebec CPA professional bodies. Mr. Riley’s accounting background, financial sophistication and auditing expertise are valuable assets to the Company’s Audit Committee.
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Tamara Brown – Vice President, Corporate Development
Ms. Brown has been Vice President, Investor Relations of the Company since June 1, 2010. Ms. Brown was later appointed Vice President of Corporate Development of the Company on October 16, 2015. 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. She holds directorships in the Boards of Superior Gold Inc. and Eastmain Resources Inc.
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. Prior to that, she held senior legal roles, including as 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 40 years of mining industry experience including 13 years of international service in Chile.
Damien Marantelli – Chief Operating Officer
Mr. Marantelli was appointed Chief Operating Officer in October 2016. Mr. Marantelli, an experienced mining engineer, brings over 37 years of international experience in the mining industry where he has successfully managed development, construction and operations across a variety of commodities. Previously, Mr. Marantelli held the roles of General Manager of the Sentinel copper mine in development by First Quantum Minerals, Managing Director of First Quantum’s (previously Inmet’s) Las Cruces copper mine, and the Managing Director of the Çayeli underground copper and zinc mine. Prior to his experiences with First Quantum/Inmet, Mr. Marantelli was the General Manager of BHP Billiton’s (previously WMC Resources) Mount Keith operations and General Manager with Leinster Underground. Mr. Marantelli received a Diploma of Engineering (Mining) from the Royal Melbourne Institute of Technology, and a Diploma of Business (Frontline Management) from Excel Consulting Australia.
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Ryan Snyder, Chief Financial Officer
Mr. Snyder was appointed Chief Financial Officer in September 2017. Mr. Snyder was previously Primero’s Director of Finance and Treasurer and has an extensive background in financial management, reporting, treasury, and strategy development. Prior to working for Primero, he held progressively senior roles at Inmet Mining Corporation (now First Quantum Minerals Ltd.) and Enirgi Group Corporation, after starting his career at KPMG LLP. Ryan is a Chartered Professional Accountant with a Bachelor of Commerce from Queen’s 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 35 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 University and is fluent in French, English and Spanish. He is a member of the Ordre des ingénieurs du Québec (OIQ) and the Association of Professional Engineers and Geoscientists of New Brunswick.

B.	Compensation	
The aggregate remuneration of all members of the Board of Directors and Executive Officers of Primero in 2017 for services in all capacities is presented below:

Name and current
principal position	Salary (CDN$)	Share-based
awards (1)
(CDN$)	Option-based
awards (1)
(CDN$)	Annual
incentive plans
(CDN$)	Total
compensation
(CDN$)	
Joseph F. Conway (2)
Interim President
and CEO	486,265	150,000	-	-	636,265	
Damien Marantelli
COO	450,000	-	-	209,000	659,000	
Ryan Snyder
CFO (3)	244,375	-	-	120,000	364,375	
Maura Lendon
CGC and Corporate
Secretary	400,000	-	-	166,000	566,000	
Tamara Brown
VP, Corporate
Development	350,000	-	-	148,000	498,000	

1.	Long-term incentive awards are typically made following year end performance assessments. None were made in respect of 2017 in view of the pending acquisition by First Majestic.	
2.	A portion of Mr. Conway`s compensation relates to his services as a director.	
3.	Compensation for Mr. Snyder includes compensation received prior to his appointment as CFO.	

Name and current
position	Fees earned
(CDN$)	Share-based
awards (CDN$)	Total
compensation
(CDN$)	
Wade Nesmith
Chairman	258,500	200,000	458,500	
Brad Marchant
Director	132,000	100,000	232,000	
David R. Demers
Director	161,833	100,000	261,833	
Grant Edey
Director	119,000	100,000	219,000	
Mike Riley
Director	164,500	100,000	264,500	
Robert A. Quartermain
Director	138,000	100,000	238,000	
Patricia A. Fortier
Director	132,500	100,000	232,500	

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C.	Board Practices	
During 2017, our management held individual and group meetings with shareholders, investors and analysts to talk about the performance of our business and our opportunities for growth both in the short-term as well as in the future. We hosted quarterly conference calls, transmitted simultaneously on the Internet, to clarify financial and operating results as well as answered questions from the investment community.
Mr. Nesmith, as a non-executive director and Chairman of the Board is compensated according to a letter agreement dated March 15, 2015 (the “ Chairman’s Agreement ”). The Chairman’s Agreement sets the Chairman’s annual cash retainer and equity retainer to be two times the annual cash and equity retainers, respectively, for independent directors. The Chairman’s Agreement has a five year term and was entered into as part of the Board’s succession planning initiatives in relation to the roles of CEO and Chairman. In recognition of Mr. Nesmith’s role as the founder of the Company and to oversee the development and execution of succession plans for both the CEO and the Chairman roles, pursuant to the Chairman’s Agreement, he was granted a retirement allowance of deferred share units (“DSUs”) equal to $1.5 million (as at the date of award) under a deferred share unit plan (the “DSU Plan”). The DSUs vest in equal amounts annually over a five (5) year period and will be redeemable subject to the terms and conditions of the DSU Plan.
Effective February 1, 2016, Mr. Conway retired as CEO and assumed the role of Vice Chairman of the Board pursuant to an engagement agreement dated January 21, 2016 (the “Vice Chairman’s Agreement”). The Vice Chairman’s Agreement sets his annual cash retainer at $125,000, mid-way between the cash retainers for the Chairman and for independent directors, and the value of his equity retainer was determined by the Board (with Mr. Conway recused) to also be mid-way between the between the cash retainers for the Chairman and for independent directors. The Vice Chairman’s Agreement has a three year term and was also entered into as part of the Board’s succession planning initiatives in relation to the roles of CEO and Chairman. Upon assuming the role of Interim CEO on March 6, 2016, by resolution of the Board, Mr. Conway’s compensation for such temporary role was set at an annualized compensation rate of $500,000 (without any annual or long term incentive), payable in lieu of his Vice Chairman cash retainer. While performing this temporary engagement, however, Mr. Conway will continue to receive his equity-based retainer as Vice Chairman.
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. All directors are subject to annual re-election by shareholders at the Company’s annual general meeting and there are no other contracts in relation to directors services except as set forth above in relation to the Chairman and Vice Chairman.
The Board facilitates the exercise of independent supervision over management by ensuring representation on the Board by directors who are independent of management. Directors are considered to be independent if they have no direct or indirect material relationship with the Company.
Pursuant to the Company’s governance principles, the Board has followed the practice of meeting in executive session without management present at all scheduled Board meetings. In addition, where a matter under consideration at a Board meeting warrants it and to ensure that free and candid discussions can take place, the Chairman may request one or more members of management or non-independent directors to withdraw during the discussion of that matter. The Chairman may also call meetings of independent directors at the request of any independent director, on his own initiative, or in a situation whereby a conflict of interest arises with any director and such director should abstain from any vote regarding such matter.
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The meetings of independent directors are chaired by the Chairman. The meetings provide an opportunity for independent directors to raise issues that they do not wish to discuss in the presence of management. When such meetings are held at the commencement of the meeting, independent directors are able to discuss matters preparatory to the meeting and, when held at the conclusion of the Board meeting, independent directors are able to discuss any issues that may have arisen during the Board meeting. Throughout 2017, the majority of the Board meetings included an in camera session of independent directors at the beginning or end of the meeting, and some meetings included in camera sessions both at the beginning and end of the meeting.
There are currently four committees of the Board: (a) the Audit Committee, (b) the Human Resources Committee, (c) the Governance and Nominating Committee, and (d) the Technical and Corporate Responsibility Committee.
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 Brad Marchant, 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 U.S. securities laws and regulations. Michael Riley, the Chair of the Audit Committee, is also an “audit committee financial expert” under the 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 “Item 6. Directors, Senior Management and Employees – A. Directors and Senior Management – 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.	
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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.
Human Resources Committee
Human Resources Committee Charter
The Human Resources Committee assists the Board in fulfilling its responsibilities relating to human resources and compensation issues. This committee is responsible for establishing a plan of continuity for members of senior management and for ensuring that the Company has an executive compensation plan that is both motivational and competitive to enable the Company to attract, retain and inspire performance of management of a quality and nature that will enhance the sustainable profitability and growth of the Company. The Human Resources Committee is also responsible for reviewing and making recommendations to the Board with respect to the compensation philosophy and guidelines for the Company, and for ensuring the production of an annual report on executive compensation for review and approval by the Board. This committee reviews the terms of reference and corporate goals and objectives of the Chief Executive Officer, Chairman, and Vice Chairman and leads the annual evaluation process of performance of the Chief Executive Officer, Chairman and Vice Chairman. It also reviews and recommends compensation for directors, benefit plans, incentive awards and terms of employment agreements, and administers the Company’s equity-based compensation plans for employees and directors.
Composition of Human Resources Committee
The Human Resources Committee is currently comprised of three directors, Robert Quartermain, David Demers and Michael Riley. Mr. Quartermain is the Chair of the Human Resources Committee.
Governance and Nominating Committee
Governance and Nominating Committee Charter
The Governance and Nominating Committee enhances the Company’s performance by providing a focus on governance. It also assesses and makes recommendations relating to effectiveness of the Board. This committee is responsible for establishing and leading the process for identifying, recruiting, appointing, re-appointing and providing ongoing development for directors. As part of its mandate, this committee, among other things, develops and reviews a long-term plan for Board composition, reviews the Board’s relationship with management to ensure the Board functions independently, develops criteria for directors, recommends nominees for election as directors and for appointment to committees and reviews and monitors orientation and education of directors.
Composition of Governance and Nominating Committee
The Governance and Nominating Committee is currently comprised of three directors, David Demers, Grant Edey and Patricia Fortier. Mr. Demers is the Chair of the Governance and Nominating Committee.
Technical and Corporate Responsibility Committee
Technical and Corporate Responsibility Committee Charter
The Corporate Responsibility Committee was renamed the Technical and Corporate Responsibility Committee effective March 14, 2017. This committee assists the Board in fulfilling its oversight responsibilities with respect to: (i) the technical and operational aspects of the Company’s mine, development, and exploration sites and programs, including all geological and engineering issues; and (ii) the Company’s environmental, safety and health, and corporate social responsibility policies and programs, and related performance.
78

Composition of Technical and Corporate Responsibility Committee
The Technical and Corporate Responsibility Committee is currently comprised of five directors, Brad Marchant, Robert Quartermain, Joseph Conway, Patricia Fortier and Grant Edey. Mr. Marchant is the Chair of the Technical and Corporate Responsibility Committee.

D.	Employees	
As of December 31, 2017, the Company had the following employees and contractors:

 	 	Full-Time	 	 	Hourly	 	 	 	 	 	 	 	
Location	 	Salaried	 	 	(Union)	 	 	Contractors	 	 	Total	 	
Durango Office	 	32	 	 	Nil	 	 	2	 	 	34	 	
San Dimas Mine (including Truchas)	 	400	 	 	798	 	 	458	 	 	1,656	 	
Toronto Office	 	18	 	 	Nil	 	 	4	 	 	22	 	
Total	 	450	 	 	798	 	 	464	 	 	1,712	 	
The total number of employees of Primero has reduced substantially from the end of 2016. This is due to the sale of both the Black Fox Complex and Cerro del Gallo Project as well as reductions in San Dimas and Toronto reflecting an increased cost reduction focus.
As at December 31, 2017, Primero had 798 unionized 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.
On February 15, 2017, the Company announced that unionized employees at its San Dimas Mine in Mexico had initiated a strike action which resulted in the complete stoppage of mining and milling activities at the site. The stoppage resulted from the failure of the parties to reach an agreement during the negotiation of the CBA. On April 13, 2017, the Company announced a new CBA with the National Union of Mine, Metal, Steel and Allied Workers of the Mexican Republic (Sindicato Nacional de Trabajadores Mineros, Metalúrgicos, Siderúrgicos y Similares de la República Mexicana) and that it had successfully resolved the work stoppage of unionized employees, operations resumed on April 22, 2017.

E.	Share Ownership	
As of the date of this annual report, the directors and executive officers of the Company, as a group, beneficially own, directly or indirectly, or exercise control or direction over 2,333,154 Common Shares, being 1.21% 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.
The following table provides securities ownership information for our directors and executive officers as of the date of the date of the annual report:
79

DIRECTOR/EXECUTIVE
OFFICER	COMMON
SHARES	PSUS AND
DSUS	OPTIONS	WARRANTS	DEBENTURES	
JOSEPH CONWAY	974,994	1,318,218	727,941	Nil	300	
DAVID DEMERS	283,894	164,223	Nil	Nil	Nil	
GRANT EDEY	79,743	164,223	Nil	Nil	50	
PATRICIA A. FORTIER	Nil	145,587	Nil	Nil	Nil	
BRAD MARCHANT	59,683	164,223	Nil	Nil	Nil	
WADE NESMITH	550,226	644,237	100,000	Nil	Nil	
ROBERT A.
QUARTERMAIN	68,391	164,223	Nil	Nil	Nil	
MICHAEL RILEY	74,948	164,223	Nil	Nil	Nil	
TAMARA BROWN	62,143	201,407	772,671	Nil	Nil	
H. MAURA LENDON	85,265	278,042	1,074,657	Nil	45	
JAMES MALLORY	40,338	126,836	539,360	Nil	Nil	
DAMIEN MARANTELLI	Nil	434,282	608,892	Nil	Nil	
RYAN SNYDER	Nil	177,173	Nil	Nil	Nil	
LOUIS TONER	53,529	175,019	677,984	Nil	Nil	
As of the date of this annual report, the Company also had outstanding obligations to issue up to an aggregate of 17,685,575 Common Shares in respect of options and warrants as follows:

•	stock options to purchase 6,674,325 Common Shares at a price ranging from CDN$0.75 to CDN$7.95 expiring between February 18, 2019 and March 24, 2022:	

Grant Date	Expiry Date	Award Type	Grant 
Price	At April 20, 2017
Outstanding	
09-Jul-2009	09-Jul-2019	Stock
Option	$2.70	160,000	
18-Feb-2014	18-Feb-2019	Stock
Option	$7.40	617,832	
28-Mar-2014	28-Mar-2019	Stock
Option	$7.95	58,816	
10-Nov-2014	10-Nov-2019	Stock
Option	$4.11	164,757	
17-Feb-2015	17-Feb-2020	Stock
Option	$4.19	1,540,589	
23-Feb-2016	23-Feb-2021	Stock
Option	$2.95	1,967,188	
21-Nov-2016	21-Nov-2021	Stock
Option	$1.36	347,938	
24-Mar-2017	24-Mar-2022	Stock
Option	$0.75	1,817,205	
TOTAL	 	 	 	6,674,325	
; and

•	warrants to purchase an aggregate of 11,011,250 Common Shares at a price of CDN$3.35, expiring on June 25, 2018.	
In addition, as of the date of this annual report, the Company also had outstanding obligations to issue up to 11,450,385 Common Shares in respect of convertible debentures.
80

ITEM 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	

A.	Major Shareholders	
To the knowledge of the directors and officers of Primero, the following shareholders of Primero own more than 5% of Primero’s common shares at December 31, 2017:

 	 	 	 	 	 	% of Outstanding	 	
 	Institution Name	 	Shares Held	 	 	Shares	 	
 	Donald Smith & Co., Inc.	 	17,920,695	 	 	9.32%	 	
 	RBC Dominion Securities, Inc	 	13,147,000	 	 	6.84%	 	
All holders of Primero common shares have equal voting rights. To the best of Primero’s knowledge, Primero was not directly or indirectly owned or controlled by another corporation, by any foreign government or by any other natural or legal person severally or jointly.
On January 12, 2018, the Company announced that it entered into the Arrangement Agreement whereby First Majestic will acquire all of the issued and outstanding common shares of Primero. Under the terms of the Arrangement Agreement, all of Primero’s issued and outstanding common shares will be exchanged for First Majestic common shares on the basis of 0.03325 of a First Majestic common share for each Primero common share (the "Exchange Ratio").
Concurrent with execution of the Arrangement Agreement, First Majestic has entered into agreements with WPMI, a wholly-owned subsidiary of WPM whereby, following closing of the Arrangement, the current silver streaming interest at San Dimas held by WPM will be terminated and First Majestic and WPM will enter into a new stream arrangement based on 25% of the gold equivalent production at San Dimas (the "New Stream") with ongoing payments of $600 per gold equivalent ounce delivered under the agreement. As part of the transaction, WPM will receive 20,914,590 common shares of First Majestic having an aggregate value of $151 million.
The Arrangement will also provide for the issuance by First Majestic of an aggregate of approximately 226,476 replacement stock options (assuming no exercise of existing Primero options) to Primero optionholders who do not exercise their Primero options prior to the effective time of the Arrangement, at exercise prices adjusted by the Exchange Ratio. Under the Arrangement all existing warrants of Primero will become exercisable to acquire First Majestic common shares at exercise prices adjusted by the Exchange Ratio. The Arrangement will also provide that upon the Arrangement becoming effective all existing deferred share units and phantom share units of Primero will be paid out in cash in an amount equal to C$0.30 per deferred share unit or phantom share unit.
Certain additional amounts payable in connection with the Arrangement, include repayment of all amounts owing under Primero's existing RCF and the expected repayment of Primero's $75 million of outstanding convertible debentures.
On March 13, 2018, the Arrangement was approved by Primero shareholders. The Company is awaiting antitrust clearance in Mexico. The Arrangement is expected to close in late April or early May 2018, subject to applicable regulatory approvals and the satisfaction of other customary conditions. In the event that the Arrangement does not close by April 30, 2018, the Company will seek an extension of the RCF.
On March 13, 2018, the debentureholders voted to approve an amendment to the maturity date of the debentures. Upon the closing of the Arrangement, the amendment of the trust indenture will accelerate the maturity date of the Primero Debentures to the next Business Day (as defined in the trust indenture) following the effective date of the Arrangement.
81

B.	Related Party Transactions	
The only related party transactions entered into by the Company relate to the compensation paid to Directors and Executive Officers as disclosed in Item 6. Directors, Senior Management and Employees – B. Compensation. All of the compensation paid to key management personnel was equivalent to that which would have been incurred in an arm’s length transaction.
Other than disclosed above, there have not been transactions during the 2017 year which have materially affected or will materially affect Primero in which any director, executive officer, or beneficial holder of more than 5% of the outstanding common stock, or any of their respective relatives, spouses, associates or affiliates has had or will have any direct or material interest.
Conflicts of Interest
Some of the Company’s directors and officers 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 “Item 3. Key Information – D. Risk Factors”.

C.	Interests of Experts and Counsel	
Not applicable.

ITEM 8.	FINANCIAL INFORMATION	

A.	Consolidated Statements and Other Financial Information	
See “Item 3. Key Information - A. Selected Consolidated Income Statement Data” and “Item 18. Financial Statements.”
Legal Proceedings
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.
82

Certain of the properties included in the San Dimas Mine and for which Primero holds legal title have been subject to legal proceedings commenced by Ejidos seeking title to the property. These proceedings in all cases were brought against 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. As such, Primero initially has no standing to participate in them and may not receive timely notice of such actions brought decisions rendered.
Since acquiring the San Dimas Mine, Primero has been aware of four such Ejidos actions, three of which have been finally resolved in favour of Primero’s interests. Primero continues to challenge the fourth outstanding Ejidos’ legal claim to defend its position as the legitimate owner of the subject property. If Primero is not successful in this outstanding claim, 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 subject property. Further , there is no assurance that Ejidos will not engage in legal proceedings to claim interests in properties owned by Primero in the future.
Tax Matters
On February 3, 2016, the Company announced that it had received a legal claim from the SAT, seeking to nullify the APA issued by the SAT in 2012. The APA confirmed the Company's basis for paying taxes on realized silver prices for the years 2010 to 2014 and represented the SAT's agreement to accept that basis for those years. The legal claim initiated by the SAT did not identify any different basis for paying taxes. The Company believes this legal claim is without merit and it has since vigorously defended the validity of its APA. See “Item 3. Key Information – D. Risk Factors – Financial Risks – Challenge to the 2012 APA”.
Labor Matters
No legal or arbitration proceedings exist relating to labor or employees, having significant effects on the company’s financial position or profitability.
Civil Claims
The Company is aware of class action lawsuits having been filed in February 2016 against the Company in the State of California seeking to recover damages for investors in the Company’s common shares under the U.S. federal securities laws. The Company filed a motion to dismiss which was granted on January 30, 2017. The plaintiff’s claims were dismissed without prejudice and the plaintiffs filed an amended complaint on February 28, 2017. On July 14, 2017, the Company’s motion to dismiss the amended complaint was granted and the plaintiff’s claims were dismissed without prejudice. Rather than amending the complaint again, the plaintiffs asked the federal court to enter final judgment and initiated an appeal of the dismissal to the Ninth Circuit Court of Appeals on September 8, 2017. The parties have filed their briefs in this appeal and a ruling on the appeal is expected sometime in 2018. The Company will continue to vigorously defend this class action lawsuit.
Environmental Matters
No legal or arbitration proceedings exist relating to environmental matters, having significant effects on the company’s financial position or profitability.
Dividends and Dividend Policy
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, but there is no current intention to declare any dividends or distributions.
83

B.	Significant Changes	
Except as otherwise disclosed in our audited consolidated financial statements and in this annual report, there have been no significant changes in our business, financial conditions or results in December 31, 2017.

ITEM 9.	THE OFFER AND LISTING	

A.	Offer and Listing Details	
Not applicable. Information regarding the price history of the stock listed as required by Item 9.A.4 is set forth below in “Item 9. The Offer and Listing - C. Markets”.

B.	Plan of Distribution	
Not applicable.

C.	Markets	
Common Shares
The Company’s Common Shares are traded on the TSX under the symbol “P”. The Company’s Common Shares were listed on the NYSE until August 14, 2017. The Company continues to trade on the OTC Pink Market under the symbol “PPPMF”.
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:

Period	 	High (CDN$)	 	 	Low (CDN$)	 	 	Volume	 	
2017	 	 	 	 	 	 	 	 	 	
     January	$	1.14	 	$	0.98	 	 	427,703	 	
     February	 	1.21	 	 	0.82	 	 	625,156	 	
     March	 	0.86	 	 	0.70	 	 	470,452	 	
     April	 	0.84	 	 	0.61	 	 	429,504	 	
     May	 	0.74	 	 	0.50	 	 	631,540	 	
     June	 	0.54	 	 	0.43	 	 	508,712	 	
     July	 	0.47	 	 	0.39	 	 	245,395	 	
     August	 	0.47	 	 	0.11	 	 	1,665,372	 	
     September	 	0.12	 	 	0.08	 	 	884,913	 	
     October	 	0.09	 	 	0.08	 	 	423,120	 	
     November	 	0.10	 	 	0.08	 	 	473,022	 	
     December	 	0.10	 	 	0.09	 	 	466,036	 	
2018	 	 	 	 	 	 	 	 	 	
     January	 	0.30	 	 	0.09	 	 	2,512,244	 	
     February	 	0.23	 	 	0.19	 	 	11,877,972	 	
84

Period	 	High (CDN$)	 	 	Low (CDN$)	 	 	Volume	 	
   March	 	0.27	 	 	0.21	 	 	7,645,875	 	
   April 1 – April 19	 	0.28	 	 	0.24	 	 	8,280,383	 	
Warrants
The Company’s warrants are traded on the TSX under the symbol “P.WT.C”. The warrants commenced trading on June 24, 2016.
The following table shows the high and low trading prices and monthly trading volume of the warrants of Primero on the TSX for the periods listed:

P.WT.C	 	 	 	 	 	 	 	 	 	
Period	 	High (CDN$)	 	 	Low (CDN$)	 	 	Volume	 	
2017	 	 	 	 	 	 	 	 	 	
     January	$	0.20	 	$	0.14	 	 	197,350	 	
     February	 	0.18	 	 	0.08	 	 	632,500	 	
     March	 	0.09	 	 	0.05	 	 	638,750	 	
     April	 	0.05	 	 	0.03	 	 	65,250	 	
     May	 	0.05	 	 	0.03	 	 	167,500	 	
     June	 	0.05	 	 	0.01	 	 	235,300	 	
     July	 	0.03	 	 	0.02	 	 	72,000	 	
     August	 	0.04	 	 	0.01	 	 	755,311	 	
     September	 	0.01	 	 	0.01	 	 	494,000	 	
     October	 	0.02	 	 	0.01	 	 	366,500	 	
     November	 	0.01	 	 	0.01	 	 	187,300	 	
     December	 	0.01	 	 	0.01	 	 	195,000	 	
2018	 	 	 	 	 	 	 	 	 	
     January	 	0.03	 	 	0.01	 	 	822,700	 	
     February	 	0.01	 	 	0.01	 	 	103,700	 	
     March	 	0.01	 	 	0.01	 	 	54,000	 	
     April 1 – April 19	 	0.01	 	 	0.01	 	 	723,560	 	
Convertible Debentures
The Company’s 2015 Debentures are traded on the TSX under the symbol “P.DB.V”.
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:
85

P.DB.V
Period	 	High (CDN$)	 	 	Low (CDN$)	 	 	Volume	 	
2017	 	 	 	 	 	 	 	 	 	
     January	$	68.00	 	$	65.00	 	 	65,000	 	
     February	 	70.00	 	 	57.01	 	 	5,215,000	 	
     March	 	62.00	 	 	55.00	 	 	4,967,000	 	
     April	 	68.00	 	 	60.00	 	 	150,000	 	
     May	 	70.79	 	 	64.00	 	 	277,000	 	
     June	 	63.00	 	 	60.00	 	 	8,916,000	 	
     July	 	62.00	 	 	58.00	 	 	5,288,000	 	
     August	 	63.25	 	 	50.00	 	 	4,337,000	 	
     September	 	65.00	 	 	61.00	 	 	2,240,000	 	
     October	 	65.00	 	 	63.00	 	 	1,359,000	 	
     November	 	66.50	 	 	63.00	 	 	1,694,250	 	
     December	 	65.00	 	 	63.50	 	 	426,000	 	
2018	 	 	 	 	 	 	 	 	 	
     January	 	99.75	 	 	62.50	 	 	7,226,000	 	
     February	 	100.00	 	 	88.00	 	 	4,103,000	 	
     March	 	99.13	 	 	98.03	 	 	7,472,000	 	
     April 1 – April 19	 	99.00	 	 	98.00	 	 	288,000	 	
PRIOR SALES
During the financial year ended December 31, 2017, Primero issued or granted the following Common Shares or securities convertible into Common Shares:

Date of Issuance	Number and Type
of Securities Issued	Issue or Exercise
Price Per Security
(CDN$)	
February 17, 2017	57,207 Common Shares (2)	$1.00	
February 23, 2017	11,300 Common Shares (2)	$0.89	
March 2, 2017	590,657 Common Shares (3)	$0.82	
March 6, 2017	762,454 Common Shares (2)	$0.74	
March 24, 2017	2,771,877 PSUs	$0.75	
March 24, 2017	2,057,589 Stock Options	$0.76	
March 27, 2017	259,041 Common Shares (2)	$0.76	
March 27, 2017	95,395 PSUs	$0.76	
March 28, 2017	80,217 Common Shares (2)	$0.74	
March 28, 2017	46,474 PSUs	$0.78	
March 29, 2017	49,658 Common Shares (2)	$0.73	
March 29, 2017	49,658 PSUs	$0.73	
March 31, 2017	304,574 Common Shares (2)	$0.75	
April 3, 2017	30,987 Common Shares (2)	$0.74	
April 3, 2017	30,987 PSUs	   $0.74	
April 4, 2017	46,875 PSUs	   $0.74	
April 4, 2017	46,875 Common Shares (2)	   $0.73	
April 5, 2017	46,246 Common Shares (2)	   $0.73	
April 5, 2017	46,246 PSUs	   $0.73	
April 6, 2017	42,852 PSUs	 $0.73	
April 6, 2017	42,852 Common Shares (2)	   $0.73	
April 7, 2017	44,540 PSUs	   $0.74	
April 7, 2017	44,540 Common Shares (2)	   $0.73	
May 11, 2017	633,329 PSUs	$0.75 (4)	
May 12, 2017	202,608 Common Shares (2)	   $0.72	
May 15, 2017	39,661 Common Shares (2)	 $0.68	
May 29, 2017	12,231 Common Shares (2)	 $0.60	
May 31, 2017	13,258 Common Shares (2)	 $0.51	
June 16, 2017	4,721 Common Shares (2)	 $0.46	
August 14, 2017	602,579 PSUs	 $0.75 (4)	
August 21, 2017	161,521 Common Shares (2)	 $0.13	
October 3, 2017	506,551 Common Shares (2)	 $0.09	
November 16, 2017	46,297 Common Shares (2)	 $0.09	
November 30, 2017	219,598 Common Shares (2)	 $0.09	
December 13, 2017	4,943 Common Shares (2)	 $0.09	
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Notes:	
 	(1)	“Price per Security” refers to the share price at the closing of the day before the date of grant in the case of Primero options and Primero PSUs and the market price at the time of issuance in the case of Primero shares.	
 	(2)	Issuance of Primero shares in connection with vested Primero PSUs.	
 	(3)	Issuance of Primero shares in connection with severance entitlement of former President and Chief Executive Officer Ernest Mast.	
 	(4)	Reflects the price utilized by the Primero Board to determine the quantity of units issued.	

D.	Selling Shareholders	
Not applicable.

E.	Dilution	
Not applicable.

F.	Expenses of the Issue	
Not applicable.

ITEM 10.	ADDITIONAL INFORMATION	

A.	Share Capital	
Not applicable.

B.	Memorandum and Articles of Association	
Articles of Association
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Primero Mining Corp. is incorporated under the Act. Effective January 1, 2015, Primero Mining Corp. and Primero Gold Canada Inc. amalgamated under the name of Primero Mining Corp. under Incorporation No. BC1023633. The Company’s articles of association (the “Company’s Articles”) were last amended by shareholder resolution passed at the Annual General and Special Meeting held on May 6, 2015. The Company’s Articles do not contain a description or place any restrictions on the Company’s objects and purposes. For more information, see the Consolidated Articles filed as Exhibit 1.1 to this Form 20-F.
Disclosure of Interest of Directors
The Company’s Articles provide that a director or senior officer who holds a disclosable interest (as that term is used in the Act) in a contract or transaction into which the Company has entered or proposes to enter is liable to account to the Company for any profit that accrues to the director or senior officer under or as a result of the contract or transaction only if and to the extent provided in the Act.
Further, a director who holds a disclosable interest in a contract or transaction into which the Company has entered or proposes to enter is not entitled to vote on any directors’ resolution to approve that contract or transaction, unless all the directors have a disclosable interest in that contract or transaction, in which case any or all of those directors may vote on such resolution. Such director who is present at the meeting of directors at which the contract or transaction is considered for approval may be counted in the quorum at the meeting whether or not the director votes on any or all of the resolutions considered at the meeting.
The Company’s Articles provide that a director or senior officer who holds any office or possesses any property, right or interest that could result, directly or indirectly, in the creation of a duty or interest that materially conflicts with that individual’s duty or interest as a director or senior officer, must disclose the nature and extent of the conflict as required by the Act.
Remuneration of Directors
The Company’s Articles provide that the Board will from time to time determine the remuneration to be paid to the directors. The Company must reimburse each director for the reasonable expenses that he or she may incur in and about the business of the Company. The Board may also by resolution, award special remuneration to any director for undertaking any professional or other services on Company’s behalf that in the opinion of the Board are outside the ordinary duties of a director, Borrowing Powers of Directors The Company’s Articles provide that the directors may: (a) borrow money in the manner and amount, on the security, from the sources and on the terms and conditions that they consider appropriate; (b) issue bonds, debentures and debt obligations either outright or as security for any liability or obligation of the Company or any other person and at such discounts or premiums and on such other terms as they consider appropriate; (c) guarantee the repayment of money by any other person or the performance of any obligation of any other person; and (d) mortgage, charge, whether by way of specific or floating charge, grant a security interest in, or give other security on, the whole or any part of the present and future assets and undertaking of the Company. Alteration to the Articles can be carried out in accordance with the Act by way of passing resolutions.
Retirement/Age Limit of Directors
The Company does not have a retirement age policy for its directors. The Company believes that imposing term limits on its directors would be unduly restrictive and not in the best interests of the Company, and could become an arbitrary mechanism for removing directors which could result in valuable and experienced directors being forced to leave the Board solely because of length of service. Therefore, the Company has decided not to adopt specific term limits for the directors on its Board, but rely instead upon effective annual assessments to ensure the ongoing efficacy of individual directors and the Board and its committees as a whole. Qualification Shares
A director is not required to hold a share in the capital of the Company as qualification for his or her office but must be qualified as required by the Act to become, act or continue to act as a director.
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Shares and Shareholders
The Company’s Articles provide that no share may be issued until it is fully paid. 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 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. The special rights and restrictions attaching to the Common shares and the Preferred shares are set forth in Part 27 of the Articles.
Majority Voting Policy for Directors
Company’s Board has adopted a policy stipulating that if the votes in favour of the election of a nominee director at a shareholders’ meeting represent less than a majority of the shares voted and withheld, the nominee will submit his or her resignation promptly after the meeting to the Board, to be effective upon acceptance by the Board. The Governance and Nominating Committee will review the circumstances of the election and make a recommendation to the Board as to whether or not to accept the tendered resignation. The Board will determine whether or not to accept the tendered resignation as soon as reasonably possible and in any event within 90 days of the election. Subject to any corporate law restrictions, the Board may fill any resulting vacancy through the appointment of a new director. The nominee will not participate in any Governance and Nominating Committee or Board deliberations on the offered resignation. This policy does not apply in circumstances involving contested director elections.
Meetings of Shareholders
The Act requires the Company to call an annual shareholders’ meeting not later than 15 months after holding the last preceding annual meeting and permits the Company to call a special shareholders’ meeting at any time. Further, in accordance with the Act, the holders of not less than 5% of the Company’s shares carrying the right to vote at a meeting sought to be held may requisition the directors to call a special shareholders’ meeting for the purpose stated in the requisition. The Company is required to mail a notice of the date, time and location of any meeting of shareholders, including proxy related materials in the manner provided in the Articles, the Act and applicable securities legislations. The directors set a date as the record date for the purpose of determining shareholders entitled to receive notices of any meeting of shareholders and to vote at any such meetings. The Company’s Articles provide that a quorum of two shareholders in person or represented by proxy holding or representing, in the aggregate, at least 5% of the Company’s issued shares entitled to be voted at the meeting. In addition to shareholders and their duly appointed proxies and corporate representatives, the Company’s directors, president, secretary, lawyers, auditors and invitees of directors, are entitled to be admitted to the Company’s annual and special shareholders meetings, provided that any such person is not be counted in the quorum and is not entitled to vote at the meeting unless that person is a shareholder or proxy holder entitled to vote at the meeting.
Disclosure of Share Ownership and Changes in Capital
The Company complies with insider transaction reporting obligations required under the Canadian Securities legislation. In addition, the Company has adopted share ownership guidelines setting minimum shareholding requirements for its directors and officers. The policy also disallows directors and officers from engaging in hedging against declines in value of the Company’s equity securities. Directors share ownership information is disclosed in Company’s management information circular sent out to shareholders prior to holding annual and special shareholder meetings.
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Provisions concerning the alteration of authorized share structure is set forth in Article 9.1.
There are no limitations on the rights to own securities, including the rights of non-resident or foreign shareholders to hold or exercise voting rights on the securities imposed by the Act or by the constating document of the Company.
There is no provision in the Company's Articles that would have an effect of delaying, deferring or preventing a change in control of the Company and that would operate only with respect to a merger, acquisition or corporate restructuring involving the Company (or any of its subsidiaries).

C.	Material Contracts	
The material contracts, other than contracts entered into in the ordinary course of business, to which the Company is a party, for the two years immediately preceding publication of this annual report, are the following:

 	(a)	Credit Agreement, dated May 23, 2014, between the Company and a syndicate of lenders led by Bank of Montreal as Administrative Agent (as amended pursuant to a first amending agreement dated December 22, 2014, a second amending agreement dated February 5, 2015, a third amending agreement dated December 31, 2015, a fourth amending agreement dated December 28, 2016, a fifth amending agreement dated March 30, 2017, a sixth amending agreement dated October 2, 2017, a seventh amending agreement dated November 23, 2017, an eighth amending agreement dated November 23, 2017, a ninth amending agreement dated November 30, 2017, a tenth amending agreement dated December 15, 2017, an eleventh amending agreement dated December 22, 2017 and a twelfth amending agreement dated January 11, 2018). See “Item 3. Key Information – D. Risk Factors – Financial Risks – Indebtedness”.	
 	 	 	
 	(b)	Trust Indenture, dated February 9, 2015, between the Company and Computershare Trust Company of Canada. See “Item 4. Information on the Company – A. History and Development of the Company – 3. Three Year History – Recent Developments – 2015 – Convertible Debenture Prospectus Offering”.	
 	 	 	
 	(c)	Second amended and restated silver purchase agreement among Silver Trading, SW Caymans, the Company and Silver Wheaton dated as of August 6, 2010. See “Item 3. Key Information – D. Risk Factors – Financial Risks – Challenges to the 2012 APA” and “Item 4. Information on the Company – B. Business Overview – Mining Activities – San Dimas Mine – Amended and Restated Silver Purchase Agreement”.	
 	 	 	
 	(d)	Deed of indemnity among Silver Trading, the Company and Goldcorp, dated as of August 6, 2010 entered into in connection with the Amended and Restated Silver Purchase Agreement pursuant to which the Company agreed to (i) reimburse Goldcorp for certain amounts paid or payable by Goldcorp to SW Caymans pursuant to Goldcorp’s guarantee and (ii) indemnify and save harmless Goldcorp from and against certain losses of Goldcorp that arise out of or relate to SW Caymans pursuant to Goldcorp’s guarantee. See “Item 3. Key Information – D. Risk Factors – Financial Risks – Challenges to the 2012 APA” and “Item 4. Information on the Company – B. Business Overview – Mining Activities – San Dimas Mine – Amended and Restated Silver Purchase Agreement”.	
 	 	 	
 	(e)	Asset Purchase Agreement dated August 25, 2017, between the Company and McEwen Mining Inc. See “Item 4. Information on the Company – A. History and Development of the Company – 3. Three Year History – Recent Developments – 2017 – Sale of Black Fox Mine and Complex”.	
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 	(f)	Arrangement Agreement dated January 11, 2018 between the Company and First Majestic Silver Corp. See “Item 4. Information on the Company – A. History and Development of the Company – 3. Three Year History – Recent Developments – 2018 – Friendly Acquisition of Primero Mining and Restructured Stream with Wheaton Precious Metals”.	

D.	Exchange Controls	
See “Item 3. Key Information - A. Selected Consolidated Income Statement Data - Exchange Rates.”

E.	Taxation	
Certain Canadian Federal Income Tax Consequences
The following summarizes the principal Canadian federal income tax consequences applicable to the holding and disposition of common shares in the capital of the Company by a holder who, for purposes of the Income Tax Act (Canada) (the “Tax Act”) and the Canada United States Income Tax Convention, 1980, as amended (the “Canada-U.S. Tax Convention”), is resident in the United States, beneficially holds the common shares as capital property and does not use or hold the common shares in the course of carrying on a business in Canada (a “U.S. Holder”). The common shares will generally be considered to be capital property unless the U.S. Holder holds the common shares in the course of carrying on a business, or acquires the common shares in a transaction or transactions considered to be an adventure in the nature of trade.
This summary is based on the current provisions of the Tax Act, the regulations thereunder, all amendments thereto publicly proposed by the government of Canada, the published administrative practices of the Canada Revenue Agency and the current provisions of the Canada-U.S. Tax Convention. This summary does not otherwise take into account or anticipate any changes in law, whether by way of legislative, judicial or administrative action or interpretation, nor does it address any provincial, territorial or foreign (including without limitation, any United States) tax considerations.
This summary is of a general nature only and it is not intended to be, nor should it be construed to be, legal or tax advice to any particular U.S. Holder. Accordingly, U.S. Holders are urged to consult with their own tax advisors about the specific tax consequences of acquiring, holding and disposing of common shares.
Disposition of Common Shares and Capital Gains:
A U.S. Holder will generally not be subject to tax under the Tax Act in respect of a capital gain realized on the disposition or deemed disposition of a common share, unless the common share constitutes “taxable Canadian property” to the U.S. Holder for purposes of the Tax Act. Provided that the common shares are listed on a “designated stock exchange” for purposes of the Tax Act (which includes the TSX) at the time of disposition, the common shares will generally not constitute “taxable Canadian property” to a U.S. Holder unless, at any time during the 60-month period immediately preceding the disposition (i) the U.S. Holder, together with persons with whom the U.S. Holder does not deal at “arm’s length” for the purposes of the Tax Act, owned 25% or more of the issued shares of any class of shares of the Company and (ii) more than 50% of the fair market value of the common shares was derived directly or indirectly from one or a combination of real or immovable property situated in Canada, “Canadian resource properties” or “timber resource properties” (as such terms are defined in the Tax Act), or options or interests in respect of any such properties.
Provided the common shares are listed at the time of disposition on the TSX or other “recognized stock exchange” (which includes the TSX) for purposes of the Tax Act, a U.S. Holder who disposes of common shares will not be required to satisfy the obligations imposed under Section 116 of the Tax Act and, as such, the purchaser of such shares will not be required to withhold any amount on the purchase price paid and the US Holder will not have to apply to obtain a certificate of compliance related to the disposition of the common shares.
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U.S. Holders whose common shares may constitute “taxable Canadian property” should consult their own tax advisors.
Certain United States Federal Income Tax Consequences:
The following is a general summary of certain material U.S. federal income tax considerations applicable to a U.S. Holder (as defined below) arising from and relating to the acquisition, ownership and disposition of common shares.
This summary is for general information purposes only and does not purport to be a complete analysis or listing of all potential U.S. federal income tax considerations that may apply to a U.S. Holder arising from and relating to the acquisition, ownership, and disposition of common shares. In addition, this summary does not take into account the individual facts and circumstances of any particular U.S. Holder that may affect the U.S. federal income tax consequences to such U.S. Holder, including, without limitation, specific tax consequences to a U.S. Holder under an applicable income tax treaty. Accordingly, this summary is not intended to be, and should not be construed as, legal or U.S. federal income tax advice with respect to any U.S. Holder. This summary does not address the U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local, and non-U.S. tax consequences to U.S. Holders of the acquisition, ownership, and disposition of common shares. In addition, except as specifically set forth below, this summary does not discuss applicable tax reporting requirements. Each prospective U.S. Holder should consult its own tax advisors regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local, and non-U.S. tax consequences relating to the acquisition, ownership and disposition of common shares.
Reporting Obligations for Certain U.S. Holders
Certain U.S. holders that hold certain specified foreign financial assets, including stock in a foreign corporation, with values in excess of certain thresholds are required to file IRS Form 8938 with their federal income tax return. Such form requires disclosure of information concerning such foreign assets, including the value of the assets. Failure to file the form when required is subject to penalties. An exemption from reporting applies to foreign assets held through a U.S. financial institution, generally including a non-U.S. branch or subsidiary of a U.S. institution and a U.S. branch of a non-U.S. institution. U.S. holders are encouraged to consult their tax advisors regarding the possible application of this disclosure requirement to their investment in our common shares.
THE PRECEDING DISCUSSION OF U.S. FEDERAL INCOME TAX CONSIDERATIONS IS FOR GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE. ACCORDINGLY, EACH INVESTOR SHOULD CONSULT ITS TAX ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES OF PURCHASING, HOLDING AND DISPOSING OF PRIMERO COMMON SHARES, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL, FOREIGN OR OTHER TAX LAWS AND OF ANY PROPOSED CHANGES IN APPLICABLE LAW.

F.	Dividends and Paying Agents	
Not applicable.

G.	Statement by Experts	
Not applicable.

H.	Documents on Display	
We are subject to the informational requirements of the U.S. Securities Exchange Act of 1934. Accordingly, we are required to file reports and other information with the SEC, including annual reports on Form 20-F and certain other reports on Form 6-K containing the information that we make public under Canadian law, file with the Canadian stock exchanges or distribute to shareholders. You may inspect and copy reports and other information to be filed with the SEC at the public reference facilities maintained by the SEC at 100 F Street, N.W., Washington D.C. 20549 and at the SEC’s regional offices at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and 233 Broadway, New York, New York 10279. Copies of the materials may be obtained from the Public Reference Room of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. The public may obtain information on the operation of the SEC’s Public Reference Room by calling the SEC in the United States at 1-800-SEC-0330. In addition, the SEC maintains an Internet website at http://www.sec.gov , from which you can electronically access the registration statement and its materials.
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As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements and will not be required to file proxy statements with the SEC, and its officers, directors and principal shareholders will be exempt from the reporting and “short swing” profit recovery provisions contained in Section 16 of the Exchange Act.
You may obtain documents from us by requesting them in writing, at the following electronic mailing address or by telephone:

 	Investor Relations	
 	 	
 	Telephone: (416) 814-3160	
 	 	
 	Email: info@primeromining.com	

I.	Subsidiary Information	
Not applicable.

ITEM 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	
Please see “Item 5. Operating and Financial Review and Prospects – B. Liquidity and Capital Resources – Financial Instruments Risk – Market Risks”.

ITEM 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	
Not applicable
PART II

ITEM 13.	  DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	
Primero is in compliance with all contracts and agreements. The Company does not currently pay dividends.

ITEM 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	

14. A.-B. 	Modifications to the Rights of Security Holders	
Holders of the Primero Debentures at a special meeting held on March 13, 2018 approved the proposed amendment of the Trust Indenture to accelerate the maturity date of the Primero Debentures to the next Business Day (as defined in the Trust Indenture) following the effective date of the Arrangement involving, among other things, the acquisition by First Majestic of all of the outstanding shares of Primero.
Furthermore, each Primero option which is outstanding and has not been duly exercised prior to the effective date of the Arrangement (whether vested or unvested), notwithstanding the terms of the Primero options, shall be unconditionally vested and exercisable in full, and such Primero option will be exchanged for a replacement option to purchase from First Majestic under the same exchange ratio as First Majestic shares are entitled to.
Each holder of a Primero warrant outstanding immediately prior to the effective date of the Arrangement shall receive (and such holder shall accept), upon the exercise of such holder’s Primero warrant, in lieu of each Primero share to which such holder was theretofore entitled, such number of First Majestic shares as is equal to the exchange ratio (and when aggregated with an exercise of other similar Primero warrants resulting in a fraction of a First Majestic share, they all shall be rounded down to nearest whole number of First Majestic shares) provided, however, the exercise price per First Majestic share shall be equal to the current exercise price per Primero share divided by the exchange ratio. Each Primero warrant shall continue to be governed by and be subject to the terms of the Primero warrant indenture and any applicable supplemental indenture executed thereunder.
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Pursuant to the Arrangement Agreement, each Director’s PSU outstanding immediately before completion of the arrangement shall be deemed to be fully vested and each holder thereof shall be paid a cash payment in an amount equal to $0.30 per Director’s PSU. In addition, each DSU outstanding immediately before completion of the arrangement shall be deemed to be fully vested and each holder thereof shall be paid a cash payment in an amount equal to $0.30 per DSU.

14. C .		
Not applicable.

14. D.		
Not applicable.

14. E.	Use of Proceeds	
Not applicable.

ITEM 15.	CONTROLS AND PROCEDURES	

 	(a)	Disclosure Controls and Procedures .	
Disclosure controls and procedures form a framework designed to provide reasonable assurance that information disclosed publicly fairly presents in all material respects the financial condition, results of operations, and cash flows of the Company for the periods presented in this annual report. The Company’s disclosure controls and procedures framework includes processes designed to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to management by others within those entities to allow timely decisions regarding required disclosure.
The Company’s management, with the participation of its CEO and CFO, has evaluated the design, operation and effectiveness of the Company’s disclosure controls and procedures. Based on the results of that evaluation, the Company’s CEO and CFO have concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by the Company in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported, within the time periods specified in the securities legislation, and is accumulated and communicated to the Company’s management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

 	(b)	Management’s Report on Internal Control over Financial Reporting .	
The Company’s management, with the participation of its CEO and CFO, is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed or under the supervision of, the CEO and CFO, and effected by the Company’s Board of Directors, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. The Company’s internal control over financial reporting includes policies and procedures that:

•     pertain to the maintenance of records that accurately and fairly reflect, in reasonable detail, the transactions and dispositions of assets of the Company;	
	
•     provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS and that the Company’s receipts and expenditures are made only in accordance with authorizations of management and the Company’s directors; and	
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•     provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the Company’s consolidated financial statements.	
Management assessed the effectiveness of Primero’s internal control over financial reporting as of December 31, 2017, based on the criteria set forth in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on its assessment, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2017.
Readers are cautioned that any controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Due to the inherent limitations in all controls systems, they cannot provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been prevented or detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by unauthorized override of the control. The design of any control system also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Accordingly, because of the inherent limitations in a cost effective control system, misstatements due to error or fraud may occur and not be detected.

 	(c)	Attestation Report of the Independent Registered Public Accounting Firm .	
The effectiveness of Primero’s internal control over financial reporting as of December 31, 2017 has been audited by KPMG LLP, Primero’s independent registered public accounting firm.

 	(d)	Changes in Internal Control over Financial Reporting .	
During the year ended December 31, 2017, there were no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITEM 16.	RESERVED	

ITEM 16A.	Audit Committee Financial Expert	
The Audit Committee is currently comprised of three directors, Michael Riley, Grant Edey and Brad Marchant, 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 U.S. 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.

ITEM 16B.	Code of Ethics	
Our Board has adopted a Code of Ethics applicable to our directors, officers and employees, including our principal executive officer and principal financial officer. The Code of Ethics can be found at www.primeromining.com. Information found at this website is not incorporated by reference into this document.

ITEM 16C.	Principal Accountant Fees and Services	
Audit Fees
For the financial years ended December 31, 2017 and 2016, the Company paid the external auditor, CDN$832,999 and CDN$839,575, respectively, as detailed below:
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 	 	Year Ended December 31   	 	
Nature of Services	 	2017	(1)	 	2016	(1)	
Audit Fees (2)	$	670,762	 	 	761,142	 	
Audit-Related Fees	 	-	 	 	-	 	
Tax Fees	 	162,237	 	 	78,433	 	
All Other Fees	 	-	 	 	-	 	
Total	$	832,999	 	$	839,575	 	
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 review and audit of the Company’s interim and annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years.	
Audit-Related Fees
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.
Tax Fees
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.
All Other Fees
Other fees would include transaction related services.
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.

ITEM 16D.	Exemptions from the Listing Standards for Audit Committees	
Not applicable.

ITEM 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers	
There were no purchases of Primero’s securities by the Company or any affiliated purchasers during 2017.

ITEM 16F.	Change in Registrant’s Certifying Accountant	
None.

ITEM 16G. Corporate Governance	
Not applicable.
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ITEM 16H.	Mine Safety Disclosure	
Not applicable.
PART III

ITEM 17.	FINANCIAL STATEMENTS	
See “Item 18. Financial Statements.”

ITEM 18.	FINANCIAL STATEMENTS	
See our audited consolidated financial statements beginning on Page F-1.

ITEM 19.	EXHIBITS	

1.1	Primero Mining Corp. Articles of Incorporation	
 		
2.1	Trust Indenture, dated February 9, 2015, between the Company and Computershare Trust Company of Canada for the 5.75% Convertible Debentures	
 		
4.1	Credit Agreement, dated May 23, 2014, between the Company and a syndicate of lenders led by Bank of Montreal as Administrative Agent (as amended pursuant to a first amending agreement dated December 22, 2014, a second amending agreement dated February 5, 2015, a third amending agreement dated December 31, 2015, a fourth amending agreement dated December 28, 2016, a fifth amending agreement dated March 30, 2017, a sixth amending agreement dated October 2, 2017, a seventh amending agreement dated November 23, 2017, an eighth amending agreement dated November 23, 2017, a ninth amending agreement dated November 30, 2017, a tenth amending agreement dated December 15, 2017, an eleventh amending agreement dated December 22, 2017 and a twelfth amending agreement dated January 11, 2018)	
 		
4.2	Arrangement Agreement, dated January 11, 2018, between the Company and First Majestic Silver Corp.	
 		
4.3	Second Amended and Restated Silver Purchase Agreement among Silver Trading (Barbados), SW Caymans (now Wheaton Precious Metals International), the Company and Silver Wheaton (now Wheaton Precious Metals) dated August 6, 2010 (previously filed as an exhibit to the Company’s Form 40-F filed August 11, 2011)	
 		
4.4	Deed of Indemnity among Silver Trading (Barbados), the Company and Goldcorp Inc., dated August 6, 2010 (previously filed as an exhibit to the Company’s Form 40-F filed August 11, 2011)	
 		
4.5	Asset Purchase Agreement for the Black Fox Complex with McEwen Mining Inc., dated August 25, 2017	
 	 	
4.6	Primero DSU Plan (previously filed as an exhibit to the Company's Form 6-K filed March 27,2015)	
 		
4.7	Primero PSU Plan (previously filed as an exhibit to the Company’s Form 6-K filed April 19, 2016)	
 		
4.8	Primero Stock Option Plan (previously filed as an exhibit to the Company’s Form 6-K filed April 5, 2016)	
 		
8.1	List of Material Subsidiaries	
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12.1	Certification pursuant to Rule 13a-14(a) (17 CFR 240.13a-14(a)) or Rule 15d-14(a) (17 CFR 240.15d-14(a)) of Chief Executive Officer.	
 	 	
12.2	Certification pursuant to Rule 13a-14(a) (17 CFR 240.13a-14(a)) or Rule 15d-14(a) (17 CFR 240.15d-14(a)) of Chief Financial Officer.	
 	 	
13.1	Certification pursuant to 18 U.S.C. 1350 of Chief Executive Officer.	
 	 	
13.2	Certification pursuant to 18 U.S.C. 1350 of Chief Financial Officer.	
 	 	
19.1	Consent of Expert - Dave Laudrum, P.Geo.	
 	 	
19.2	Consent of Expert - Patrick McCann, P.Eng.	
 	 	
19.3	Consent of Expert - John Morton Shannon, P.Geo.	
 	 	
19.4	Consent of Expert - Gabriel Voicu, P.Geo.	
 	 	
19.5	Consent of Expert - Rodney Webster, M.AIG	
98

SIGNATURE
The Company hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on Form 20-F on its behalf.

PRIMERO MINING CORP.	
 	 	
By:	/s/ Joseph Conway	
Name:	Joseph Conway	
Title:	Interim President and Chief Executive Officer	
Dated: April 20, 2018
99

TABLE OF CONTENTS

Management’s Responsibility for Financial Reporting	1	
 	 	
Report of Independent Registered Public Accounting Firm	2 - 5	
 	 	
Consolidated statements of operations and comprehensive loss	6	
 	 	
Consolidated statements of financial position	7	
 	 	
Consolidated statements of changes in equity	8	
 	 	
Consolidated statements of cash flows	9	
 	 	
Notes to the consolidated financial statements	10 - 54	

MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING
Management’s Report on Financial Statements
The consolidated financial statements of Primero Mining Corp. have been prepared by, and are the responsibility of the Company’s management. The consolidated financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and reflect management’s best estimates and judgments based on information currently available. In the opinion of management, the accounting practices utilized are appropriate in the circumstances and the consolidated financial statements fairly reflect the financial position and results of operations of the Company.
The Board of Directors is responsible for ensuring management fulfills its financial reporting responsibilities. The Audit Committee meets with the Company’s management and external auditors to discuss the results of the audit and to review the consolidated financial statements prior to the Audit Committee’s submission to the Board of Directors for approval. The Audit Committee also reviews the quarterly financial statements and recommends them for approval to the Board of Directors, reviews with management the Company’s systems of internal control, and reviews the scope of the external auditors’ audit and non-audit work. The Audit Committee is composed entirely of directors not involved in the daily operations of the Company who are thus considered to be free from any relationship that could interfere with their exercise of independent judgment as a committee member.
The consolidated financial statements have been audited by KPMG LLP and their report outlines the scope of their examination and gives their opinion on the consolidated financial statements.

/s/ Joseph F. Conway	 	/s/ Ryan Snyder	
Joseph F. Conway	 	Ryan Snyder	
President and Chief Executive Officer	 	Chief Financial Officer	
April 19, 2018	 	April 19, 2018	
1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of Primero Mining Corp.
Opinion on the Financial Statements
We have audited the accompanying consolidated statements of financial position of Primero Mining Corp. (the "Company") as of December 31, 2017, and 2016, the related consolidated statements of operations and comprehensive loss, changes in equity and cash flows for each of the three years in the period ended December 31, 2017, and the related notes (collectively referred to as the " consolidated financial statements").
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017, and 2016, and its financial performance and its cash flows for each of the three years in the period ended December 31, 2017, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.
Material Uncertainty Related to Going Concern
Without qualifying our opinion on the financial statements, we draw attention to Note 2 b) to the financial statements, which indicates that the Company`s cash and liquidity position may not be sufficient to meet its obligations as they become due. This condition, along with other matters as set forth in Note 2 b), indicate the existence of material uncertainties that cast substantial doubt on the Company’s ability to continue as a going concern.
Report on Internal Control over Financial Reporting
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 31, 2017, based on the criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated April 19, 2018 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits.
We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
2

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Chartered Professional Accountants, Licensed Public Accountants
We have served as Company’s auditor since 2015.
Toronto, Canada
April 19, 2018
3

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of Primero Mining Corp.
Opinion on Internal Control Over Financial Reporting
We have audited Primero Mining Corp.’s (the “Company”) internal control over financial reporting as of December 31, 2017, based on the criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based on the criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Report on the Financial Statements
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated statements of financial position of the Company as of December 31, 2017, and 2016, the related consolidated statements of operations and comprehensive loss, changes in equity and cash flows for each of the three years in the period ended December 31, 2017, and the related notes (collectively referred to as the "consolidated financial statements") and our report dated April 19, 2018 expressed an unqualified opinion on those consolidated financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included under item 15 in the Company`s Annual Report on Form 20-F for the year ended December 31, 2017. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.
We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
4

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Chartered Professional Accountants, Licensed Public Accountants
Toronto, Canada
April 19, 2018
5

PRIMERO MINING CORP.	
CONSOLIDATED STATEMENTS OF OPERATIONS AND	
COMPREHENSIVE LOSS	
FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015	
(IN THOUSANDS OF UNITED STATES DOLLARS, EXCEPT FOR SHARE AND PER SHARE AMOUNTS)	

 	 	 	 	 	Year ended December 31	 	
 	 	Notes	 	 	2017	 	 	2016	 	 	2015	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Revenue	 	7	 	$	91,769	 	$	147,581	 	$	213,192	 	
Operating expenses	 	 	 	 	(67,280	)	 	(100,452	)	 	(103,782	)	
Depreciation and depletion	 	 	 	 	(22,433	)	 	(47,116	)	 	(55,836	)	
Total cost of sales	 	 	 	 	(89,713	)	 	(147,568	)	 	(159,618	)	
Earnings from mine operations	 	 	 	 	2,056	 	 	13	 	 	53,574	 	
Mining interest impairment charge	 	4	 	 	(303,858	)	 	(111,000	)	 	-	 	
Exploration expenses	 	 	 	 	(1,345	)	 	(1,885	)	 	(1,690	)	
Share-based compensation	 	 	 	 	(4,149	)	 	(7,049	)	 	(7,144	)	
General and administrative expenses	 	11	 	 	(11,479	)	 	(13,529	)	 	(19,021	)	
Idle and restart costs incurred during strike at San Dimas	 	 	 	 	(6,207	)	 	-	 	 	-	 	
Other charges	 	12	 	 	(7,044	)	 	(4,725	)	 	(2,702	)	
Loss from operations	 	 	 	 	(332,026	)	 	(138,175	)	 	23,017	 	
Transaction costs	 	 	 	 	-	 	 	(679	)	 	(4,416	)	
Interest and finance expenses	 	13	 	 	(11,285	)	 	(8,761	)	 	(11,498	)	
Mark-to-market gain on debentures & warrants	 	 	 	 	5,897	 	 	12,610	 	 	13,500	 	
Other expenses	 	14	 	 	(355	)	 	(427	)	 	(1,869	)	
Loss before income taxes	 	 	 	 	(337,769	)	 	(135,432	)	 	18,734	 	
Income tax recovery (expense)	 	15	 	 	4,393	 	 	19,938	 	 	(27,991	)	
Net loss from continuing operations	 	 	 	 	(333,376	)	 	(115,494	)	 	(9,257	)	
Net loss from discontinued operations, net of income taxes	 	5	 	 	(76,309	)	 	(118,926	)	 	(97,653	)	
Net loss for the year	 	 	 	 	($409,685	)	 	($234,420	)	 	($106,910	)	
Other comprehensive loss, net of tax	 	 	 	 	 	 	 	 	 	 	 	 	
Items that may be subsequently reclassified to profit or loss:	 	 	 	 	 	 	 	 	 	 	 	 	
  Exchange differences on translation of foreign operations, net of tax of $nil	 		 	 	3,099	 	 	(102	)	 	(5	)	
  Unrealized (loss) gain on investment in Fortune Bay, net of tax of $nil	 	 	(250	)	 	1,058	 	 	516	 	
Total comprehensive loss for the year	 	 	 	 	($406,836	)	 	($233,464	)	 	($106,399	)	
Basic and diluted loss per share from continuing operations	 	 	 	 	($1.74	)	 	($0.65	)	 	($0.06	)	
Basic and diluted loss per share from discontinued operations	 	 	 	 	($0.40	)	 	($0.67	)	 	($0.60	)	
Basic and diluted loss per share including discontinued operations	 	 	 	 	($2.14	)	 	($1.32	)	 	($0.66	)	
Weighted average number of common shares outstanding	 		 	 		 	 		 	 		 	
  Basic	 	 	 	 	191,738,274	 	 	177,569,024	 	 	162,340,566	 	
  Diluted	 	 	 	 	191,738,274	 	 	177,569,024	 	 	162,340,566	 	
See accompanying notes to the consolidated financial statements.
6

PRIMERO MINING CORP.	
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION	
(IN THOUSANDS OF UNITED STATES DOLLARS)	

 	 	 	 	 	December 31	 	 	December 31	 	
 	 	Notes	 	 	2017	 	 	2016	 	
 	 	 	 	 	 	 	 	 	 	
Assets	 	 	 	 	 	 	 	 	 	
Current assets	 	 	 	 	 	 	 	 	 	
  Cash and cash equivalents	 	19	 	$	20,966	 	$	19,875	 	
  Trade and other receivables	 	 	 	 	1,241	 	 	1,962	 	
  Value added and income taxes receivable	 	 	 	 	40,789	 	 	34,494	 	
  Prepaid expenses	 	 	 	 	2,642	 	 	3,893	 	
  Inventories	 	8	 	 	13,668	 	 	22,829	 	
Total current assets	 	 	 	 	79,306	 	 	83,053	 	
 	 	 	 	 	 	 	 	 	 	
Non-current assets	 	 	 	 	 	 	 	 	 	
  Restricted cash	 	 	 	 	-	 	 	4,577	 	
  Mining interests	 	4,9	 	 	125,050	 	 	577,920	 	
  Deferred tax asset	 	 	 	 	-	 	 	3,763	 	
  Long term stock pile	 	8	 	 	-	 	 	-	 	
  Value added tax receivable	 	 	 	 	-	 	 	7,344	 	
  Other non-current assets	 	 	 	 	910	 	 	1,160	 	
Total assets	 	 	 	$	205,266	 	$	677,817	 	
 	 	 	 	 	 	 	 	 	 	
Liabilities	 	 	 	 	 	 	 	 	 	
Current liabilities	 	 	 	 	 	 	 	 	 	
  Trade and other payables	 	 	 	$	19,593	 	$	31,781	 	
  Income tax payable	 	 	 	 	3,298	 	 	1,558	 	
  Other taxes payable	 	 	 	 	1,200	 	 	2,035	 	
  Current portion of long-term debt	 	10	 	 	30,310	 	 	50,841	 	
Total current liabilities	 	 	 	 	54,401	 	 	86,215	 	
 	 	 	 	 	 	 	 	 	 	
Non-current liabilities	 	 	 	 	 	 	 	 	 	
  Other taxes payable	 	 	 	 	18,805	 	 	14,120	 	
  Deferred tax liability	 	 	 	 	7,457	 	 	28,428	 	
  Decommissioning liability	 	20	 	 	11,646	 	 	29,790	 	
  Long-term debt	 	10	 	 	47,625	 	 	52,906	 	
  Warrant liability  	 	17 (a)		 	44	 	 	1,066	 	
  Other long-term liabilities	 	 	 	 	5,557	 	 	4,162	 	
Total liabilities	 	 	 	$	145,535	 	$	216,687	 	
 	 	 	 	 	 	 	 	 	 	
Shareholders' equity	 	 	 	 	 	 	 	 	 	
Share capital	 	17 (a)		$	915,641	 	$	908,923	 	
Shares reserved for future issuance	 	17 (a)		 	243	 	 	297	 	
Contributed surplus	 	17 (b)		 	57,630	 	 	58,857	 	
Accumulated other comprehensive loss	 	 	 	 	(845	)	 	(3,694	)	
Deficit	 	 	 	 	(912,938	)	 	(503,253	)	
Total shareholders' equity	 	 	 	$	59,731	 	$	461,130	 	
Total liabilities and shareholders' equity	 	 	 	$	205,266	 	$	677,817	 	
Basis of Presentation and Going concern (Note 2 b))
Commitments and contingencies (Note 24)
Subsequent events (Note 25)
See accompanying notes to the consolidated financial statements.
Approved on behalf of the Board of Directors

/s/ Joseph F. Conway	 	/s/ Michael E. Riley	
Joseph F. Conway, Director	 	Michael E. Riley, Director	
7

PRIMERO MINING CORP.	
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY	
(IN THOUSANDS OF UNITED STATES DOLLARS, EXCEPT FOR NUMBER OF COMMON SHARES)	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Accumulated	 	 	 	 	 	 	 	
 	 	 	 	 	Share capital	 	 	Shares reserved	 	 	 	 	 	 	 	 	other	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	for future	 	 	Warrants	 	 	Contributed	 	 	comprehensive	 	 	 	 	 	 	 	
 	 	Notes	 	 	Shares	 	 	Amount	 	 	issuance	 	 	reserve	 	 	surplus	 	 	loss	 	 	Deficit	 	 	Total equity	 	
Balance, January 1, 2015	 	 	 	 	161,555,875	 	$	858,761	 	$	-	 	$	34,782	 	$	21,526	 	 	($5,161	)	 	($161,923	)	$	747,985	 	
Shares issued for	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
  Exercise of stock options	 	 	 	 	300,000	 	 	1,120	 	 	-	 	 	-	 	 	(294	)	 	-	 	 	-	 	 	826	 	
  PSUs settled in shares	 	 	 	 	963,164	 	 	4,364	 	 	-	 	 	-	 	 	(4,404	)	 	-	 	 	-	 	 	(40	)	
  Flow-through agreement	 	 	 	 	1,366,768	 	 	3,130	 	 	-	 	 	-	 	 	-	 	 	-	 	 	-	 	 	3,130	 	
Expiry of warrants, net of tax	 	 	 	 	-	 	 	-	 	 	-	 	 	(34,782	)	 	30,046	 	 	-	 	 	-	 	 	(4,736	)	
Reclassification of unrealized loss on	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
  investment in Fortune Bay	 	 	 	 	-	 	 	-	 	 	-	 	 	-	 	 	-	 	 	456	 	 	-	 	 	456	 	
Foreign currency translation	 	 	 	 	-	 	 	-	 	 	-	 	 	-	 	 	-	 	 	(5	)	 	-	 	 	(5	)	
Unrealized gain on investment in Fortune Bay	 	 	 	 	-	 	 	-	 	 	-	 	 	-	 	 	-	 	 	60	 	 	-	 	 	60	 	
Share-based compensation	 	 	 	 	-	 	 	-	 	 	-	 	 	-	 	 	8,110	 	 	-	 	 	-	 	 	8,110	 	
Loss for the period	 	 	 	 	-	 	 	-	 	 	-	 	 	-	 	 	-	 	 	-	 	 	(106,910	)	 	(106,910	)	
Balance, December 31, 2015	 	 	 	 	164,185,807	 	$	867,375	 	$	-	 	$	-	 	$	54,984	 	 	($4,650	)	 	($268,833	)	$	648,876	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance, January 1, 2016	 	 	 	 	164,185,807	 	$	867,375	 	$	-	 	$	-	 	$	54,984	 	 	($4,650	)	 	($268,833	)	$	648,876	 	
Shares issued for	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
  Public equity offering	 	 	 	 	22,022,500	 	 	33,047	 	 	-	 	 	-	 	 	-	 	 	-	 	 	-	 	 	33,047	 	
  Acquisition of mining concessions	 	 	 	 	1,854,271	 	 	3,540	 	 	-	 	 	-	 	 	-	 	 	-	 	 	-	 	 	3,540	 	
  PSUs settled in shares	 	 	 	 	1,445,787	 	 	4,961	 	 	-	 	 	-	 	 	(4,851	)	 	-	 	 	-	 	 	110	 	
Common shares reserved for future issuance	 	 	 	 	-	 	 	-	 	 	297	 	 	-	 	 	-	 	 	-	 	 	-	 	 	297	 	
Other comprehensive income, net of tax	 	 	 	 	-	 	 	-	 	 	-	 	 	-	 	 	-	 	 	956	 	 	-	 	 	956	 	
Share-based compensation	 	 	 	 	-	 	 	-	 	 	-	 	 	-	 	 	8,724	 	 	-	 	 	-	 	 	8,724	 	
Loss for the year	 	 	 	 	-	 	 	-	 	 	-	 	 	-	 	 	-	 	 	-	 	 	(234,420	)	 	(234,420	)	
Balance, December 31, 2016	 	 	 	 	189,508,365	 	$	908,923	 	$	297	 	$	-	 	$	58,857	 	 	($3,694	)	 	($503,253	)	$	461,130	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance, January 1, 2017	 	 	 	 	189,508,365	 	$	908,923	 	$	297	 	$	-	 	$	58,857	 	 	($3,694	)	 	($503,253	)	$	461,130	 	
Shares issued for	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
  PSUs settled in shares	 	17 (a)		 	2,543,773	 	 	6,117	 	 	-	 	 	-	 	 	(6,117	)	 	-	 	 	-	 	 	-	 	
  Severance and other employee payments	 	17 (a)		 	993,684	 	 	601	 	 	-	 	 	-	 	 	(5	)	 	-	 	 	-	 	 	596	 	
Release of common shares reserved for future issuance	 	 	 	 	-	 	 	-	 	 	(54	)	 	-	 	 	-	 	 	-	 	 	-	 	 	(54	)	
Other comprehensive income, net of tax	 	 	 	 	-	 	 	-	 	 	-	 	 	-	 	 	-	 	 	2,849	 	 	-	 	 	2,849	 	
Share-based compensation	 	17 (c)		 	-	 	 	-	 	 	-	 	 	-	 	 	4,895	 	 	-	 	 	-	 	 	4,895	 	
Loss for the year	 	 	 	 	-	 	 	-	 	 	-	 	 	-	 	 	-	 	 	-	 	 	(409,685	)	 	(409,685	)	
Balance, December 31, 2017	 	 	 	 	193,045,822	 	$	915,641	 	$	243	 	$	-	 	$	57,630	 	 	($845	)	 	($912,938	)	$	59,731	 	
Total comprehensive loss was $406.8 million for the year ended December 31, 2017 (December 31, 2016 – loss of $233.5 million, December 31, 2015 - $106.4 million) .
See accompanying notes to the consolidated financial statements.
8

PRIMERO MINING CORP.	
CONSOLIDATED STATEMENTS OF CASH FLOWS	
FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015	
(IN THOUSANDS OF UNITED STATES DOLLARS)	

 	 	 	 	 	Year ended December 31	 	
 	 	Notes	 	 	2017	 	 	2016	 	 	2015	 	
Operating activities	 	 	 	 	 	 	 	 	 	 	 	 	
Loss before income taxes	 	 	 	 	($337,769	)	 	($135,432	)	$	18,734	 	
Loss before income taxes, from discontinued operations	 	5	 	 	(82,020	)	 	(120,452	)	 	(105,247	)	
Adjustments for:	 	 	 	 	 	 	 	 	 	 	 	 	
     Mining interests impairment charge	 	4	 	 	398,821	 	 	228,000	 	 	104,000	 	
     Depreciation and depletion	 	 	 	 	29,703	 	 	63,329	 	 	77,238	 	
     Share-based compensation expense	 	 	 	 	4,875	 	 	8,586	 	 	8,938	 	
     Payments made under the Phantom Share Unit Plan	 	 	 	 	-	 	 	(377	)	 	(4,245	)	
     Mark-to-market gain on convertible debentures	 	 	 	 	(4,875	)	 	(9,000	)	 	(13,500	)	
     Mark-to-market gain on warrant liability	 	 	 	 	(1,022	)	 	(3,610	)	 	-	 	
     Write-down of inventory	 	 	 	 	-	 	 	1,040	 	 	3,048	 	
     Unrealized foreign exchange loss (gain)	 	 	 	 	5,329	 	 	2,390	 	 	(4,743	)	
     Taxes paid	 	 	 	 	(4,027	)	 	(29,625	)	 	(15,104	)	
     Other	 	 	 	 	2,199	 	 	975	 	 	(1,007	)	
Other adjustments	 	 	 	 	 	 	 	 	 	 	 	 	
Transaction costs (disclosed in financing activities)	 	 	 	 	-	 	 	232	 	 	3,651	 	
Finance income (disclosed in investing activities)	 	 	 	 	(41	)	 	(88	)	 	(111	)	
Finance expense	 	 	 	 	11,460	 	 	9,299	 	 	11,514	 	
Operating cash flow before working capital changes	 	 	 	 	22,633	 	 	15,267	 	 	83,166	 	
Changes in non-cash working capital	 	16	 	 	(82	)	 	(2,158	)	 	(1,537	)	
Cash provided by operating activities	 	 	 	$	22,551	 	$	13,109	 	$	81,629	 	
Investing activities	 	 	 	 	 	 	 	 	 	 	 	 	
Expenditures on mining interests - San Dimas	 	 	 	 	($22,410	)	 	($37,446	)	 	($62,695	)	
Expenditures on mining interests - Black Fox	 	 	 	 	(13,235	)	 	(29,956	)	 	(33,880	)	
Expenditures on mining interests - Other	 	 	 	 	(206	)	 	(271	)	 	(3,147	)	
Proceeds from dispositions, net	 	 	 	 	40,369	 	 	-	 	 	-	 	
Cash provided by (used in) investing activities	 	 	 	$	4,518	 	 	($67,673	)	 	($99,722	)	
Financing activities	 	 	 	 	 	 	 	 	 	 	 	 	
Proceeds from equity offering	 	17 (a)		$	-	 	$	39,958	 	$	-	 	
Transaction costs on equity offering	 	17 (a)		 	-	 	 	(2,464	)	 	-	 	
Net (repayment)/drawdown on revolving credit facility	 	10 (a)		 	(19,799	)	 	50,000	 	 	-	 	
Repayment of convertible debenture	 	10 (c)		 	-	 	 	(48,116	)	 	-	 	
Repayment of revolving credit facility	 	 	 	 	-	 	 	-	 	 	(40,000	)	
Payments on capital leases	 	 	 	 	(1,116	)	 	(4,497	)	 	(5,715	)	
Funds released from reclamation bond	 	 	 	 	4,799	 	 	1,564	 	 	9,846	 	
Interest paid	 	 	 	 	(9,954	)	 	(7,493	)	 	(6,267	)	
Proceeds from exercise of options	 	 	 	 	-	 	 	-	 	 	828	 	
Proceeds from issuance of flow-through shares	 	 	 	 	-	 	 	-	 	 	4,340	 	
Issuance of convertible debt	 	 	 	 	-	 	 	-	 	 	75,000	 	
Transaction costs on issuance of convertible debt	 	 	 	 	-	 	 	-	 	 	(3,651	)	
Cash (used in) provided by financing activities	 	 	 	 	($26,070	)	$	28,952	 	$	34,381	 	
Effect of foreign exchange rate changes on cash	 	 	 	$	92	 	 	($114	)	$	1,924	 	
Increase (decrease) in cash	 	 	 	$	1,091	 	 	($25,726	)	$	18,212	 	
Cash, beginning of year	 	 	 	 	19,875	 	 	45,601	 	 	27,389	 	
Cash, end of year	 	 	 	$	20,966	 	$	19,875	 	$	45,601	 	
See accompanying notes to the consolidated financial statements.
9

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	

1.	Corporate information	
Primero Mining Corp. (“Primero” or the “Company”) is a publicly traded company, listed on the Toronto Stock Exchange and previously listed on the New York Stock Exchange until August 14, 2017. Its registered office is Suite 1500, 1055 West Georgia Street, Vancouver, British Columbia. The Corporate address is Suite 2100, 79 Wellington Street West, Toronto, Ontario. The Company owns one producing property, the San Dimas gold-silver mine in the San Dimas district of Mexico, and previously owned a second producing property, the Black Fox gold mine and adjoining properties in Timmins, Ontario, Canada (the “Black Fox Complex”) which was sold in 2017 and has been reported as discontinued operations in these consolidated financial statements. The Company also has one project in the exploration stage, Ventanas located in Mexico. The Company previously owned a property in the development stage, the Cerro del Gallo project in Mexico which was sold in 2017 and has been reported as discontinued operations in these consolidated financial statements.

2.	Basis of preparation and summary of significant accounting policies	
a) Statement of compliance
These consolidated financial statements, as at and for the years ended December 31, 2017, 2016 and 2015, of the Company have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).
These consolidated financial statements were approved by the Company’s Board of Directors on April 19, 2018.
b) Basis of presentation and going concern
These consolidated financial statements have been prepared on a going concern basis, under the historical cost basis, except for the certain financial instruments which are presented at fair value. Certain prior year balances have been reclassified to conform with the current year presentation.
In 2017, the Company’s Board of Directors commenced a strategic review process to explore alternatives to improve shareholder value. This process ultimately resulted in the sale of the Black Fox Complex in October 2017, the sale of the Cerro del Gallo project in November 2017, and a definitive arrangement agreement (the "Arrangement Agreement") to sell Primero to First Majestic Silver Corp. (“First Majestic”), announced on January 12, 2018. Refer to note 25 for additional details.
On March 13, 2018, the Arrangement was approved by Primero shareholders. On March 13, 2018, the holders of the 5.75% convertible debentures voted to approve an amendment to the maturity date of the debentures to the day following the closing date of the Arrangement with full principal paid on this date. The Company is awaiting anti-trust clearance in Mexico. The Arrangement is expected to close in late April or early May 2018, subject to applicable regulatory approvals and the satisfaction of other customary conditions. In the event that the Arrangement does not close by April 30, 2018, the Company will seek an extension of the revolving credit facility ("RCF").
Primero did not generate enough cash from operations to support its investing activities during 2017. The Company has sufficient cash on hand to support the business through to the expected close of the Arrangement with First Majestic. If the transaction closes as planned, management believes First Majestic will have sufficient funding to satisfy all commitments of Primero and its subsidiaries.
10

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	
If the Arrangement Agreement with First Majestic is terminated for any reason, there is significant uncertainty that Primero will have sufficient funds to repay the full outstanding obligation under the RCF upon maturity, which would allow the lenders to exercise their rights under the RCF (see notes 9 and 10). An Event of Default under the RCF, unless waived, would trigger cross default provisions under the convertible debentures and the Silver Purchase Agreement.
The above noted factors represent a material uncertainty that casts substantial doubt on the ability of the Company to continue as a going concern. These financial statements do not include the adjustments to the amounts and classification of assets and liabilities that would be necessary should the Company be unable to continue as a going concern. These adjustments may be material.
These consolidated financial statements include the accounts of the Company and its subsidiaries from their respective dates of acquisition. All intragroup balances and transactions between entities of the group have been eliminated in full. The Company’s significant subsidiaries, which are all wholly owned, are:

Subsidiary	Location	Property	
Primero Empresa Minera, S.A. de C.V. ("PEM ")	Mexico	San Dimas Mine and Ventanas	
Silver Trading (Barbados) Limited ("STB")	Barbados	-	
Primero Mining Luxem bourg S.a.r.l.	Luxembourg	-	
 	 	 	
Subsidiary Disposed of in 2017	Location	Property	
San Anton de las Minas, S.A. de C.V.	Mexico	Cerro del Gallo Project	
The results of discontinued operations, comprising the Black Fox Complex and Cerro del Gallo, included in the consolidated statement of operations and comprehensive loss for the years ended December 31, 2017, 2016 and 2015 are disclosed in note 5. The comparative periods have been recast accordingly.
c) Functional and presentation currency
The functional and presentation currency of the Company is the U.S. dollar. The functional currency of PEM and STB is the U.S. dollar. The functional currency of San Anton de las Minas S.A. de C.V. prior to it’s disposition was the U.S. dollar. The functional currency of Primero Mining Luxembourg S.a.r.l. is the Mexican peso.
For entities using U.S. dollars as the functional currency, all monetary assets and liabilities denominated in a currency other than the U.S. dollar are translated at current exchange rates at each balance sheet date and the resulting adjustments are included in a separate line item under other income (expenses). Revenue and expense in foreign currencies are translated using the exchange rates at the date of the transaction.
The accounts of Primero Mining Luxembourg S.a.r.l. are translated into the U.S. dollar presentation currency as follows: all assets and liabilities are translated at the exchange rate prevailing at the statement of financial position date; equity balances are translated at the rates of exchange at the transaction dates, and all items included in the statement of operations are translated using the annual average exchange rates unless there are significant fluctuations in the exchange rate, in which case the rate at the date of transaction is used. All differences arising upon the translation to the presentation currency are recorded in the foreign currency translation reserve within accumulated other comprehensive loss; there is no tax impact of this translation.
11

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	
d) Revenue recognition
Revenue is derived from the sale of gold and silver. Revenue is recognized on individual contracts when there is persuasive evidence that all of the following criteria are met:

•	the significant risks and rewards of ownership have been transferred to the buyer;	
•	neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold have been retained;	
•	the amount of revenue and costs to sell can be measured reliably;	
•	it is probable that the economic benefits associated with the transaction will flow to the Company and collectability of proceeds is reasonably assured.	
All of these criteria are met based on the contract with the respective buyers which generally coincides with the receipt of the sales proceeds. Sales prices are based on the terms of the contract or at spot prices.
e) Inventories
Inventories including finished goods (gold and silver), work-in-progress, and stockpiled ore are valued at the lower of average production cost and net realizable value. Net realizable value is calculated as the estimated price at the time of sale less estimated future production costs to convert the inventories into saleable form.
Ore extracted from a mine is stockpiled and subsequently processed into finished goods. Production costs including mining and milling costs, applicable overhead costs, depreciation and depletion are capitalized to inventory depending on its current location and condition. Inventories of stockpiled ore that are not expected to be processed in the next year are classified as non-current inventories.
Inventories also include supplies, which are valued at the lower of average cost or replacement cost.
f) Financial instruments
All financial instruments are required to be measured at fair value on initial recognition. Measurement in subsequent periods depends upon whether the financial instrument is classified as fair value through profit or loss (“FVTPL”), available-for-sale, held-to-maturity, loans and receivables, or other liabilities.
Financial instruments classified as FVTPL are measured at fair value with gains and losses recognized in the statement of operations and comprehensive loss. The 5.75% convertible debentures and warrant liability are classified as FVTPL and measured at fair value based on their trading price. Financial assets classified as held-to-maturity, loans and receivables, and financial liabilities classified as other liabilities, are measured at amortized cost. Trade and other receivables, cash and cash equivalents, and restricted cash are classified as loans and receivables, and are measured at amortized cost. Trade and other payables, and the RCF are classified as other financial liabilities, and are also measured at amortized cost.
12

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	
Transaction costs in respect of financial assets and liabilities which are measured at FVTPL are recognized in the statement of operations and comprehensive loss immediately. Transaction costs in respect of other financial instruments are included in the initial carrying value of the financial instrument.
A financial asset is classified as available-for-sale when: (i) it is not classified as a loan and receivable, a held-to-maturity investment or at FVTPL; or (ii) it is designated as available-for-sale on initial recognition. The Company’s equity investment in Fortune Bay (included in other non-current assets) is classified as available-for-sale and is measured at fair value with mark-to-market gains and losses recognized in other comprehensive income (OCI). When available-for-sale investments in marketable securities and equity securities are derecognized, the cumulative mark-to-market gains or losses that had been previously recognized in OCI are reclassified to earnings for the period. When there is objective evidence that an available-for-sale financial asset is impaired, the cumulative loss that had been previously recognized in OCI is reclassified to earnings for the period.
The Company may enter into derivative contracts or financial instruments and non-financial contracts containing embedded derivatives. Embedded derivatives are required to be accounted for separately at fair value as derivatives when the risks and characteristics of the embedded derivatives are not closely related to those of their host contract, and the host contract is not designated as FVTPL. These embedded derivatives are measured at fair value with changes in fair value recognized in earnings for the period.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized when:

•	The rights to receive cash flows from the asset have expired, or	
•	The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through ‘arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.	
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to pay under the guarantee.
g) Mining interests
The Company categorizes mining interests based on the type of asset and/or the stage of operation, development or exploration of the property.
Land, buildings, plant and equipment includes land, mobile and stationary equipment, and refining and processing facilities for all properties regardless of their stage of development or operation.
13

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	
Mineral properties include:

	•	Development and operating properties which include capitalized development and stripping costs, cost of assets under construction, capitalized exploration and evaluation costs and mineral interests for those properties currently in operation for which development has commenced or for which technical feasibility and commercial viability have been determined; and	
	•	Pre-development properties which include exploration and evaluation costs and mineral interests for those properties for which development has not commenced.	
Land, buildings, plant and equipment
Upon initial acquisition, land, buildings, plant and equipment are valued at cost, being the purchase price and the directly attributable costs of acquisition or construction required to bring the asset to the location and condition necessary for the asset to be capable of operating in the manner intended by management.
In subsequent periods, buildings, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment charges. Land is stated at cost less any impairment in value and is not depreciated.
Buildings, plant and equipment are depreciated (net of residual value) using the straight-line method based on estimated useful lives.
Where significant components of an asset have differing useful lives, depreciation is calculated on each separate component. The estimated useful life of each item or part has due regard to both its own physical life limitations and the present assessment of economically recoverable reserves of the mine property at which the item is located, and to possible future variations in those assessments. Estimates of remaining useful lives and residual values are reviewed annually. Changes in estimates which affect depreciation are accounted for prospectively.
The expected useful lives are as follows:

Plant and buildings	5 years to life of mine	
Equipment and vehicles	4 years to life of mine	
Computer equipment	3 to 5 years	
Mining properties
The cost of acquiring mineral reserves and mineral resources is capitalized in the statement of financial position as incurred.
Mine development costs incurred to develop areas of the mine which will be mined in future periods are capitalized and depleted when the related mining area is mined. Mine development costs incurred to prepare current production areas are considered operating expenses and expensed in the year as incurred.
Mining properties are depleted using the units-of-production method over the mine’s estimated proven and probable reserves and, if appropriate, an estimate of the portion of resources expected to be classified as reserves. Depletion is calculated on a mine-by-mine basis.
14

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	
The Company’s depletion estimation methodology allocates mining properties from operating mines into a depletable component and a non-depletable component upon initial acquisition. The value assigned to the depletable component is equal to the value assigned to the proven and probable reserves and a portion of resources of the asset. The value assigned to the non-depletable component is the value assigned to the exploration potential of the asset and the remaining resources not included in the depletable component. Values allocated to both the depletable and non-depletable components may be adjusted prospectively when there has been a significant change in the reserves, resources and/or exploration potential or when impairment charges have been recorded.
The allocation of values to the proven and probable reserves, resources and exploration potential of the asset are based on the discounted cash flow analysis of the Company’s future expected cash flows at each operating mine. The depletable component is depleted over 100% of reserves and a portion of resources included in the Company’s discounted cash flow analysis. The non-depletable component is not depleted but, in combination with the depletable component, is evaluated for impairment when events and changes in circumstances indicate that the carrying amount may not be recoverable.
Reserves (including proven and probable) and resources (including measured, indicated and inferred) are based on the definitions in National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”). Exploration potential is the mineralization quantified by the Company’s geologists with a sufficient degree of confidence to include in the Company’s fair value determination, but without the necessary level of measurement precision to enable it to be classified as a resource as defined by NI 43-101.
Each year, coincident with the updated reserve and resource estimates, the Company expects that a portion of resources will be transferred to reserves and a portion of exploration potential will be transferred to resources. As a result, the category of non-depletable mineralization is expected to reduce and, in the absence of further additions to exploration potential, eventually be fully classified within the depletable component over the life of mine.
When considering the portion of resources to include in the depletion base of the depletable component, management considers the resources which are believed to have the probability of eventually being classified as proven and probable reserves, which includes:

•	resources that can be economically mined and are therefore commercially viable, considering management’s assumptions on cut off grades, long-term gold and silver prices and exchange rates,	
•	historical experience and available geological and drilling information of the area under consideration.	
Development costs incurred during a period are added to the total mining property capitalized at the commencement of the period in calculating the depletion expense. Future development costs necessary to access resources, have been taken into account when determining the pattern of depletion for the Company’s mining properties; such costs are included in the discounted cash flow analysis and are determined by the Company’s geologists and engineers based on an in-depth knowledge of the mine and planned development work to access resources.
15

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	
Exploration and evaluation expenditures
Exploration and evaluation expenditures are charged to the statement of operations and comprehensive loss in the period incurred unless management determines that probable future economic benefits will be generated as a result of the expenditures.
Once a project has been established as technically feasible and commercially viable, the capitalized expenditures are tested for impairment and transferred from exploration and evaluation costs to development costs within mining properties. If events take place subsequently and such project is no longer considered commercially viable it would be transferred back from development costs to exploration and evaluation expenditures.
Major maintenance and repairs
Expenditure on major maintenance and repairs includes the cost of replacement parts of assets and overhaul costs. Where an asset or part of an asset is replaced and it is probable that future economic benefits associated with the item will be available to the Company, that expenditure is capitalized and the carrying amount of the item replaced derecognized. Similarly, overhaul costs associated with major maintenance are capitalized when it is probable that future economic benefits will be available and any remaining carrying amounts of the cost of previous overhauls are derecognized. All other maintenance and repair costs are expensed as incurred.
Borrowing costs
Borrowing costs directly relating to the financing of qualifying assets are added to the capitalized cost of those projects until such time as the assets are substantially ready for their intended use or sale which, in the case of mining properties, is when they are capable of commercial production. Where funds have been borrowed specifically to finance a project, the amount capitalized represents the actual borrowing costs incurred. Where the funds used to finance a project form part of general borrowings, the amount capitalized is calculated using a weighted average of rates applicable to relevant general borrowings of the Company during the period.
All other borrowing costs are recognized in the statement of operations and comprehensive loss in the year in which they are incurred. Borrowing costs are included as part of interest paid in the statement of cash flows.
Leases
The Company holds leases for office space and equipment. Leases are classified as either finance or operating leases.
Assets held under finance leases, where substantially all of the risks and rewards of ownership have passed to the Company, are capitalized in the statement of financial position at the lower of the fair value of the leased property and the present value of the minimum lease payments during the lease term calculated using the interest rate implicit in the lease agreement. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation. Capitalized amounts are determined at the inception of the lease and are depreciated over the shorter of their useful economic lives or the lease term. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized in the statement of operations and comprehensive loss as finance expense unless they are directly attributable to qualifying assets, in which case they are capitalized in accordance with the Company’s accounting policy on borrowing costs.
16

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	
Leases where substantially all of the risks and rewards of ownership have not passed to the Company are classified as operating leases. Rentals payable under operating leases are charged to the statement of operations and comprehensive loss as operating expenses or general and administrative expenses on a straight-line basis over the lease term.
Impairment of non-current assets
The carrying amounts of assets included in mining interests are reviewed for impairment when events and changes in circumstances indicate that the related carrying amounts may not be recoverable. In addition, capitalized exploration and evaluation costs are assessed for impairment upon demonstrating commercial viability of a project. The carrying amounts of the assets are compared to the recoverable amount of the assets whenever events or changes in circumstances indicate that their carrying value may not be recoverable. The recoverable amount is the higher of value-in-use and fair value less cost of disposal (“FVLCD”).
For mining assets, when a binding sale agreement and observable market prices are not readily available, FVLCD is estimated using a discounted cash flow approach for each of the Company’s cash generating units (“CGU”s) to which the individual assets are allocated. The assumptions used in determining the FVLCD for the CGU’s include long-term mining plans, long-term commodity prices, discount rates, foreign exchange rates and values of un-modeled mineralization.
If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount is reduced to its recoverable amount. An impairment is recognized immediately as an expense.
Where an impairment subsequently reverses, the carrying amount of the asset (or CGU) is increased to the revised estimate of its recoverable amount, subject to the amount not exceeding the carrying amount that would have been determined had no impairment been recognized for the asset (or CGU) in prior periods. A reversal of impairment is recognized during the period in the statement of operations and comprehensive loss.
Disposal
Upon disposition, an item within mining interests is derecognized, and the difference between its carrying value and net sales proceeds is disclosed as a gain or loss on disposal in the statement of operations and comprehensive loss.
h) Income taxes
Income tax expense (recovery) comprises current and deferred tax. Current tax and deferred tax are recognized in the statement of operations and comprehensive loss except to the extent they relate to items recognized directly in equity or in OCI, in which case the related taxes are recognized in equity or OCI.
Current income tax is the expected cash tax payable or receivable on the local taxable income or loss for the year for each taxable entity using tax rates enacted or substantively enacted at the reporting date. This may differ from earnings reported in the statement of operations and comprehensive loss due to income or expense items that are not currently taxable or deductible for tax purposes, and any adjustment to income taxes in respect of previous years.
17

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	
Deferred income tax is recognized in respect of unused tax losses, tax credits and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the tax rates that have been substantively enacted at the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.
A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
The Company records foreign exchange gains and losses representing the impacts of movements in foreign exchange rates on the tax bases of non-monetary assets and liabilities which are denominated in foreign currencies. Foreign exchange gains and losses relating to the translation of the deferred income tax balance from local statutory accounts to functional currency accounts are included in deferred income tax expense or recovery in the statements of operations and comprehensive loss.
Uncertain income tax positions are recorded in the consolidated financial statements when probable and measured at the amount expected to be paid to (recovered from) the taxation authority using the Company’s best estimate of the amount.
i) Share–based compensation
Equity-settled awards to employees and others providing similar services
For equity-settled awards, the fair value of the award is charged to the statement of operations and comprehensive loss and credited to share-based compensation reserve (within equity in the consolidated statement of financial position) ratably over the vesting period, after adjusting for the number of awards that are expected to vest. The fair value of the awards is determined at the date of grant using the Black-Scholes option pricing model. At each statement of financial position date prior to vesting, the cumulative expense representing the extent to which the vesting period has expired and management’s best estimate of the awards that are ultimately expected to vest, is computed and charged to the statement of operations and comprehensive loss.
Expenses recognized for forfeited awards are reversed. For awards that are cancelled, any expense not yet recognized is recognized immediately in the statement of operations and comprehensive loss.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognized as if the terms had not been modified over the original vesting period. In addition, an expense is recognized for any modification which increases the total fair value of the share-based payment arrangement as measured at the date of modification, over the remainder of the vesting period.
18

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	
Cash-settled awards to employees and others providing similar services
For cash-settled awards, the fair value is re-calculated at each statement of financial position date until the awards are settled, using the Company’s share price (with any changes in fair value recognized in the statement of operations and comprehensive loss). During the vesting period, a liability is recognized representing the portion of the vesting period which has expired at the statement of financial position date multiplied by the fair value of the awards expected to vest at that date. After vesting, the full fair value of the unsettled awards at each statement of financial position date is recognized as a liability. Movements in value are recognized in the statement of operations and comprehensive loss.
Equity or cash-settled awards to employees and others providing similar services
The Company accounts for awards issued under the 2013 Phantom Share Unit Plan as equity-settled. For equity-settled awards, the fair value of the award is charged to the statement of operations and comprehensive loss and credited to share-based compensation reserve (within equity in the consolidated statement of financial position) ratably over the vesting period. The fair value of the awards is determined at the date of grant using the closing market price of the Company’s shares. At each statement of financial position date prior to vesting, the cumulative expense representing the extent to which the vesting period has expired and management’s best estimate of the awards that are ultimately expected to vest, is computed and charged to the statement of operations and comprehensive loss.
No expense is recognized for awards that ultimately do not vest. For any awards that are cancelled, any expense not yet recognized is recognized immediately in the statement of operations and comprehensive loss.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognized as if the terms had not been modified over the original vesting period. In addition, an expense is recognized for any modification which increases the total fair value of the share-based compensation arrangement as measured at the date of modification, over the remainder of the vesting period.
j) Provisions
General
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Company expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset, but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of operations and comprehensive loss net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as finance expense in the statement of operations and comprehensive loss.
19

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	
Decommissioning liability
The Company records a liability for the estimated reclamation and closure of a mine, including site rehabilitation and long-term treatment and monitoring costs, discounted to net present value; this liability is then accreted to full value over the life of the mine with the accretion charge being recorded as a finance expense. The net present value is determined using the liability-specific risk-free interest rate. The estimated net present value of reclamation and closure cost obligations is re-measured each reporting period or when changes in circumstances occur and/or new material information becomes available. Increases or decreases to the obligations arise due to changes in legal or regulatory requirements, the extent of environmental remediation required, cost estimates and the discount rate applied to the obligation. The net present value of the estimated cost of these changes is recorded in the period in which the change is identified and quantifiable. Reclamation and closure cost obligations relating to operating mines and development projects are recorded with a corresponding increase to the carrying amounts of related assets and the adjusted cost is depreciated on a prospective basis.
k) Loss per share
Basic loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. The computation of diluted loss per share assumes the conversion, exercise or contingent issuance of securities only when such conversion, exercise or issuance would have a dilutive effect on loss per share. For this purpose, the treasury stock method is used for the assumed proceeds upon the exercise of stock options and warrants that are used to purchase common shares at the average market price during the period.
l) Segmented reporting
The Company operated in one geographic area, Mexico, with corporate activities occurring in a second geographic area, Canada. Prior to the disposition of the Black Fox Complex, the Company operated in two geographic areas; Mexico and Canada. The Company’s operating segments reflect the Company’s different mining interests and are reported in a manner consistent with the internal reporting to the chief operating decision maker, used to assess each segment’s performance. Primero currently has one reportable segment, the San Dimas mine (which currently includes the Ventanas property and Coral Silver concessions). During 2017 and prior to the dispositions of the Black Fox Complex and the Cerro del Gallo project, Primero had three reportable segments: the San Dimas mine, the Black Fox Complex and the Cerro del Gallo project.
m) Assets held for sale and discontinued operations
Assets or disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and measured at the lower of carrying amount or FVLCD. The assets or disposal groups must be available for immediate sale and the sale must be highly probable within one year. Impairment losses on initial classification as held for sale and gains or losses on subsequent remeasurement are included in the statements of operations and comprehensive loss. No depreciation is charged on assets or disposals groups classified as held for sale.
20

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	
A discontinued operation is a component of an entity that either has been disposed of, abandoned or that is classified as held for sale.
Discontinued operations are presented on the statements of operations and comprehensive loss as a separate line.
n) Recent pronouncements issued
The Company has reviewed new and revised accounting pronouncements that have been issued but are not yet effective and determined the following will have potential future impact on the Company.
In May 2014, the IASB issued IFRS 15, Revenue from Contracts with Customers which supersedes existing standards and interpretations including IAS 18, Revenue . IFRS 15 establishes a single five-step model framework for determining the nature, amount, timing and uncertainty of revenue and cash flows arising from a contract with a customer. The standard is currently effective for annual periods beginning on or after January 1, 2018, with early adoption permitted. The Company does not expect the impact of adopting this standard to be material to its consolidated financial statements.
In July 2014, the IASB issued the final version of IFRS 9, Financial Instruments (IFRS 9). This standard is effective for annual periods beginning on or after January 1, 2018, and permits early adoption. IFRS 9 provides a revised model for recognition, measurement and impairment of financial instruments and includes a substantially reformed approach to hedge accounting. The Company does not expect the impact of adopting this standard to be material on its consolidated financial statements.
In January 2016, the IASB issued IFRS 16, Leases (IFRS 16). IFRS 16 is effective for periods beginning on or after January 1, 2019, with early adoption permitted, provided IFRS 15 has been adopted. IFRS 16 eliminates the current dual model for lessees, which distinguishes between on-balance sheet finance leases and off-balance sheet operating leases. Instead, there is a single, on-balance sheet accounting model that is similar to current finance lease accounting for lessees. The Company is currently evaluating the impact the standard is expected to have on its consolidated financial statements.

3.	Critical Accounting Estimates and Judgments	
The preparation of these financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets, and liabilities at the date of the financial statements. If in the future such judgements, estimates and assumptions, which are based on management’s experience and knowledge of the relevant facts and circumstances at the date of the financial statements, deviate materially from actual circumstances, the original judgements, estimates and assumptions will be modified as appropriate in the period in which the circumstances change.
a) Accounting estimates
The significant assumptions about the future and other major sources of estimation uncertainty as at the end of the reporting period that have a significant risk of resulting in a material adjustment to the carrying amounts of the Company’s assets and liabilities are as follows:
21

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	
(i) Estimated recoverable reserves and resources
The Company estimates its proven and probable mineral reserves and measured and indicated and inferred mineral resources based on information compiled by appropriately qualified persons. Estimated ounces from mineral reserves and resources as well as estimates for exploration potential are included in the Company’s estimation of future cash flows. These cash flows are based on factors such as estimates of foreign exchange rates, commodity prices, future capital requirements and production costs along with geological assumptions and judgments made in estimating the size and grade of the ore body. Changes in estimated ounces may impact the carrying value of assets, reclamation and remediation obligations, recognition of deferred tax amounts, depreciation and depletion, and impairment charges.
22

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	
(ii) Determination of useful lives of property, plant and equipment
Property, plant and equipment are depreciated to their estimated residual value over the estimated useful life of the asset. Should the actual useful life of the property, plant or equipment vary, future depreciation charges may change.
(iii) Impairment charges
Non-current assets are tested for impairment if there is an indicator of impairment. The impairment analysis generally requires the use of estimates and assumptions, including amongst others, long-term commodity prices, discount rates, length of mine life, future production levels, future operating costs, future capital expenditures and tax estimates. The estimates and assumptions are subject to risk and uncertainty; hence, there is the possibility that changes in circumstances will alter these projections, which may impact the recoverable amount of the assets. In such circumstances the carrying value of the assets may be impaired or a prior period’s impairment charge reversed with the impact recorded in the statements of operations and comprehensive loss.
(iv) Decommissioning liability
The Company’s accounting policy for the recognition of accrued site closure costs requires significant estimates and assumptions such as the requirements of the relevant legal and regulatory framework, the magnitude of possible disturbance and the timing, extent and costs of required closure, rehabilitation activity and applicable discount rates. Changes to these estimates and assumptions may result in actual expenditures in the future differing from the amounts currently provided. The decommissioning liability is periodically reviewed and updated based on the available facts and circumstances.
(v) Income taxes
The Company is periodically required to estimate the tax basis of assets and liabilities. Where applicable tax laws and regulations are either unclear or subject to varying interpretations, it is possible that changes in these estimates could occur that materially affect the amounts of deferred income tax assets and liabilities recorded in the financial statements. Changes in deferred tax assets and liabilities generally have a direct impact on earnings in the period of change. Each period, the Company evaluates the likelihood of whether some portion or all of each deferred tax asset will not be realized. This evaluation is based on historic and future expected levels of taxable income, the pattern and timing of reversals of taxable temporary differences that give rise to deferred tax liabilities, and tax planning initiatives. Levels of future taxable income are affected by, among other things, the market price for gold and silver, production costs, quantities of proven and probable reserves, interest rates and foreign currency exchange rates.
23

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	
(vi) Valuation of inventory
All inventory, other than supplies, is valued at the lower of average cost or net realizable value. Management is required to make various estimates and assumptions to determine the value of stockpiled ore, in-circuit inventories and doré inventories. The estimates and assumptions include surveyed quantities of stockpiled ore, in-circuit process volumes, gold and silver contents of both, costs to recover saleable ounces, recoverable ounces once processed and the price per ounce of gold or silver when ounces of gold and silver are expected to be recovered and sold.
24

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	
(vii) Share-based compensation
The Company makes certain estimates and assumptions when calculating the fair values of share-based compensation granted. The significant estimations and assumptions include expected volatility, expected life, expected dividend rate and risk-free rate of return.
b) Accounting judgments
The critical judgments that the Company’s management have made that have the most significant effect on the amounts recognized in the Company’s consolidated financial statements are as follows:
(i) Functional currency
The determination of a subsidiary’s functional currency often requires significant judgment where the primary economic environment in which an entity operates may not be clear. This can have a significant impact on the consolidated results of the Company.
(ii) Tax ruling in Mexico
On October 4, 2012, PEM received a ruling (the “APA Ruling”) from the Mexican tax authority, Servicio de Administración Tributaria (“SAT”), which confirmed the appropriate price for sales of silver under the Amended and Restated Silver Purchase Agreement (see note 15 c) for further information). Under Mexican tax law, an advance pricing agreement (“APA”) ruling is generally applicable for up to a five year period (which in the Company’s case, covered the year in which the ruling application was filed, the immediately preceding year and the three subsequent years). The Company’s APA Ruling covered the five years ended December 31, 2014.
In February 2016, PEM received a legal claim from the Mexican tax authority seeking to nullify the APA. The legal claim initiated does not identify any different basis for paying taxes, nor have any tax reassessments been received from the SAT. The Company intends to vigorously defend the validity of its APA. The Company has filed procedural and substantive responses to the claim. The procedural response is a challenge against the admission of the SAT’s claim. The substantive response contains the Company’s response to the SAT’s claim. If the SAT is successful in retroactively nullifying the APA, the SAT may seek to audit and reassess PEM in respect of its sales of silver in connection with the Silver Purchase Agreement for 2010 through 2014. If the SAT is successful in retroactively nullifying the APA and issuing reassessments, it would likely have a material adverse effect on the Company’s results of operations, financial condition and cash flows. PEM would have rights of appeal in connection with any reassessments.
In June 2017, as part of the ongoing annual audits of the PEM tax returns, the SAT issued an observations letter for the 2010 tax year. An observations letter is issued to a taxpayer in advance of a reassessment being issued, provides an outline of the SAT’s position on matters under audit, and affords the taxpayer an opportunity to respond to such position in advance of the reassessment being issued. In this observations letter issued to PEM, the SAT made explicit its view that PEM should pay taxes based on the market price of silver which, if successfully applied to its 2010 taxation year, would make PEM liable for an additional $8.5 million of taxes before penalties or interest. As the Company continues to defend the APA in the Mexican legal proceeding, the APA remains valid and the Company will vigorously dispute any reassessment that may be issued in the future on a basis that assesses taxes on its silver revenues that is inconsistent with the APA. The observations letter does not represent a tax reassessment and no liability has been recognized in the financial statements.
25

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	
In October 2017, the SAT issued an observations letter for the 2011 tax year, with the same explicit view that PEM should pay taxes on the market price of silver, which if successfully applied to its 2011 taxation year, would make PEM liable for an additional $23.4 million of taxes before penalties or interest. The Company has submitted its formal response to both the 2010 and the 2011 observations letters.
While the Company continues to believe its tax filing position based upon the APA is correct, should the Company ultimately be required to pay tax on its silver revenues based on market prices without any mitigating adjustments, the incremental income tax for the years 2012-2017 would be in the range of $130 - $145 million, before interest or penalties.
While the Company continues to vigorously defend the validity of the APA and its transfer pricing position, it is also engaging in dialogue with the SAT seeking to resolve matters and bring tax certainty through a negotiated solution. Primero has also had constructive dialogue with the SAT in relation to outstanding value-added tax (“VAT”) receivables and has received $15.2 million of VAT refunds since July 2017.
Since January 1, 2015, the Company has continued to record its revenue from the sale of silver for purposes of Mexican tax accounting in a manner consistent with the APA, on the basis that the applicable facts and laws have not changed. The Company’s legal and financial advisors continue to believe that the Company has filed its tax returns compliant with applicable Mexican law. To the extent the SAT determines that the appropriate price of silver sales under the Silver Purchase Agreement is significantly different from the realized price and while PEM would have rights of appeal in connection with any reassessments, it is likely to have a material adverse effect on the Company’s business, financial condition and results of operations.

4.	Impairment Charges	

 	 	Year ended December 31	 	
(in thousands of U.S. dollars)	 	2017	 	 	2016	 	 	2015	 	
 	 	 	 	 	 	 	 	 	 	
San Dimas	$	303,858	 	$	111,000	 	$	-	 	
Black Fox Complex	 	44,963	 	 	117,000	 	 	82,000	 	
Cerro del Gallo	 	50,000	 	 	-	 	 	22,000	 	
 	$	398,821	 	$	228,000	 	$	104,000	 	
In accordance with IFRS, non-current assets are tested for impairment when events or changes in circumstances suggest that their carrying amount may not be recoverable. When there is an indicator of impairment, the impacted CGU is tested for impairment.
2017
As part of the strategic review process discussed in note 1 the Company received several proposals during the second quarter of 2017 which provided evidence the carrying value of its CGUs exceeded their fair value. During the second quarter of 2017, the Company recorded an impairment of $285.0 million, which comprised impairments of $195.0 million for the San Dimas mine, $40.0 million for the Black Fox Complex and $50.0 million for the Cerro del Gallo project (note 5). During the third quarter of 2017, an additional impairment of $5.0 million was recorded for the Black Fox Complex to align with the net proceeds received from the disposition during the fourth quarter of 2018. During the fourth quarter, the Company recorded an additional impairment of $109 million relating to the San Dimas mine as the negotiation process that led to the Arrangement Agreement identified that the carrying value of the San Dimas mine exceeded the recoverable amount. The carrying value of the San Dimas CGU as at December 31, 2017 is now aligned to the approximate value implied in the Arrangement Agreement.
26

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	
The difference between the final net proceeds from disposition and the carrying values of the CGUs immediately prior to the disposition have been recognized as a loss on disposition, for the CGUs disposed of during 2017.
2016
In 2016, the Company’s share price declined such that the carrying value of its net assets exceeded its market capitalization. In addition, during the fourth quarter, the Company identified impairment indicators at the San Dimas mine and Black Fox Complex and as a result, recorded non-cash impairment charges of $111.0 million and $117.0 million, respectively based on their FVLCD, which exceeds the value in use for both CGUs.
2015
The Company identified impairment indicators at Black Fox Complex and Cerro del Gallo Project as at December 31, 2015, and as a result, recorded non-cash impairment charges aggregating $104.0 million comprised of $82.0 million relating to the Black Fox Complex CGU and $22.0 million relating to the Cerro del Gallo project CGU, based on their FVLCD, which have been determined to be greater than their value in use.
The recoverable amount was determined as the FVLCD for each CGU. FVLCD was determined based on the net present value of the future estimated cash flows expected to be generated from the continued use of the CGUs, using assumptions derived from from observable market indicators and the current life-of–mines plans for each operation. The mine plans are typically developed annually and are based on management’s current best estimates of optimized mine and processing plans, future operating costs and the assessment of capital expenditure at the mine site. The determination of the FVLCD used Level 3 valuation techniques. Key assumptions used in the fair value models include:

Assumptions	 	2016	 	 	2015	 	
Discount rate	 	6.5% - 8.5%	 	 	5% - 7%	 	
Gold price	 	 	 	 	 	 	
   Short term	 	$1,250	 	 	$1,100	 	
   Long term	 	$1,300	 	 	$1,200	 	
Foreign exchange	 	 	 	 	 	 	
   Mexican peso (MXN)	 	 	 	 	 	 	
       Short term	 	MXN 18	 	 	n.a.	 	
       Long term	 	MXN 20	 	 	n.a.	 	
   Canadian Dollar (CAD)	 	 	 	 	 	 	
       Short term/long term	 	CAD 1.30	 	 	CAD 1.40	 	
Market value per gold ounce	 	n.a.	 	 	$25	 	
Life of mine (in years) (1)	 	5 & 17	 	 	11	 	
(1) For purposes of assessing asset impairment, the Company used an estimated life of mine of 5 years for Black Fox and 17 years for San Dimas as of December 31, 2016, and 11 years for Black Fox as of December 31, 2015.
27

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	
San Dimas Mine
The impairment test for the San Dimas mine was based on the updated life-of-mine plan, which incorporated updated reserves and resources, discount rate factors to account for the underlying risks and management’s view of the exploration potential of the mine site. The resulting non-cash impairment charge for the San Dimas mine was driven by decrease in reserves, revisions in the mining cut-off methodology and the application of higher discount rates in the net present value of future estimated cash flows.
Black Fox Complex
The impairment test for the Black Fox Complex was based on the the updated life-of-mine plan. In 2016, the resulting non-cash impairment charge for the Black Fox Complex derived from decreases in reserves and shortened mine life. In 2015, the charge was derived from the declining metal prices, the temporary decision to defer Grey Fox development and changes in the Black Fox mine plan.
Cerro del Gallo Project
In 2015, the Company decided not to construct the project under the economic environment and as such as at December 31, 2015 the CGU was reclassified as an exploration and evaluation asset. The commercial viability of this project will depend on market conditions. The impairment value of $22 million in 2015 in relation to the Cerro del Gallo was as a result of a lower market value per gold ounce and low cash flows projections.
Sensitivities
The impairment charges are highly sensitive to discount rates, gold prices and foreign exchange rates used in the cash flow projection. The table below summarizes the impact on the recognized impairment charges with all the variables held constant except as follows:

 	 	 	 	 	San Dimas Mine	 	 	Black Fox Complex	 	
 	 	 	 	 	2016	 	 	2016	 	 	2015	 	
Discount rate	 	+/-1%	 	$	29,000	 	$	2,000	 	$	12,000	 	
Gold price	 	+/-10%	 	$	88,000	 	$	39,000	 	$	70,000	 	
Foreign exchange	 	 	 	 	 	 	 	 	 	 	 	 	
   MXN	 	+/-10%	 	$	46,000	 	 	n.a.	 	 	n.a.	 	
   CAD	 	+/-10%	 	 	n.a.	 	$	37,000	 	$	55,000	 	

5.	Discontinued operations	
On October 6, 2017, the Company sold the Black Fox Complex for total consideration of $32.3 million including cash proceeds of $27.5 million and the release of $4.8 million from restricted cash that was pledged towards environmental closure liabilities. The Black Fox Complex comprises the Black Fox mine and adjacent properties, Grey Fox and Pike River.
On November 27, 2017, the Company sold the Cerro del Gallo project, via the sale of all of the issued and outstanding shares of San Anton Resource Corporation, the indirect owner of the Cerro del Gallo project to Argonaut Gold Inc for cash proceeds of $15 million resulting in a loss on disposition of $1,151.
28

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	

 	 	Cerro del	 	 	Black Fox	 	 	Discontinued	 	
 	 	Gallo	 	 	Complex	 	 	operations	 	
Year Ended December 31, 2017	 	 	 	 	 	 	 	 	 	
Revenue	$	-	 	$	65,828	 	$	65,828	 	
Operating expenses	 	-	 	 	39,982	 	 	39,982	 	
Depreciation and depletion	 	44	 	 	7,269	 	 	7,313	 	
Total cost of sales	 	44	 	 	47,251	 	 	47,295	 	
(Loss) earnings from mine operations	 	(44	)	 	18,577	 	 	18,533	 	
Mining interest impairment charge	 	(50,000	)	 	(44,963	)	 	(94,963	)	
Exploration expenses	 	(830	)	 	-	 	 	(830	)	
General and administrative expenses	 	(3	)	 	(252	)	 	(255	)	
Other charges	 	-	 	 	(51	)	 	(51	)	
Loss from operations	 	(50,877	)	 	(26,689	)	 	(77,566	)	
Other expense items	 	(3,069	)	 	(1,385	)	 	(4,454	)	
Loss before income taxes	 	(53,946	)	 	(28,074	)	 	(82,020	)	
Income tax recovery	 	5,711	 	 	-	 	 	5,711	 	
Net loss	 	($48,235	)	 	($28,074	)	 	($76,309	)	

 	 	Cerro del	 	 	Black Fox	 	 	Discontinued	 	
 	 	Gallo	 	 	Complex	 	 	operations	 	
 	 	 	 	 	 	 	 	 	 	
Year Ended December 31, 2016	 	 	 	 	 	 	 	 	 	
Revenue	$	-	 	$	71,595	 	$	71,595	 	
Operating expenses	 	-	 	 	54,815	 	 	54,815	 	
Depreciation and depletion	 	82	 	 	16,131	 	 	16,213	 	
Total cost of sales	 	82	 	 	70,946	 	 	71,028	 	
(Loss) earnings from mine operations	 	(82	)	 	649	 	 	567	 	
Mining interest impairment charge	 	-	 	 	(117,000	)	 	(117,000	)	
Exploration expenses	 	(1,529	)	 	-	 	 	(1,529	)	
General and administrative expenses	 	(164	)	 	(1,109	)	 	(1,273	)	
Loss from operations	 	(1,775	)	 	(117,460	)	 	(119,235	)	
Other expense items	 	(315	)	 	(902	)	 	(1,217	)	
Loss before income taxes	 	(2,090	)	 	(118,362	)	 	(120,452	)	
Income tax recovery	 	326	 	 	1,200	 	 	1,526	 	
Net loss	 	($1,764	)	 	($117,162	)	 	($118,926	)	
29

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	

 	 	Cerro del	 	 	Black Fox	 	 	Discontinued	 	
 	 	Gallo	 	 	Complex	 	 	operations	 	
Year Ended December 31, 2015	 	 	 	 	 	 	 	 	 	
Revenue	$	-	 	$	78,112	 	$	78,112	 	
Operating expenses	 	-	 	 	59,811	 	 	59,811	 	
Depreciation and depletion	 	90	 	 	21,312	 	 	21,402	 	
Total cost of sales	 	90	 	 	81,123	 	 	81,213	 	
Earnings (loss) from mine operations	 	(90	)	 	(3,011	)	 	(3,101	)	
Mining interest impairment charge	 	(22,000	)	 	(82,000	)	 	(104,000	)	
Exploration expenses	 	-	 	 	-	 	 	-	 	
Share-based compensation	 	-	 	 	-	 	 	-	 	
General and administrative expenses	 	(21	)	 	(1,002	)	 	(1,023	)	
Other charges	 	-	 	 	-	 	 	-	 	
Earnings (loss) from operations	 	(22,111	)	 	(86,013	)	 	(108,124	)	
Other income (expense) items	 	41	 	 	2,836	 	 	2,877	 	
Earnings (loss) before income taxes	 	(22,070	)	 	(83,177	)	 	(105,247	)	
Income tax recovery (expense)	 	(323	)	 	7,917	 	 	7,594	 	
Net income (loss)	 	($22,393	)	 	($75,260	)	 	($97,653	)	
The results of discontinued operations included in the consolidated statement of cash flows, excluding the cash flows arising from the dispositions, for the years ended December 31, 2017, 2016 and 2015 are presented below; the comparative periods have been recast accordingly.

 	 	Years ended December 31	 	
Cash flow from (used in):	 	2017	 	 	2016	 	 	2015	 	
 	 	 	 	 	 	 	 	 	 	
Operating activities before working capital changes	$	16,077	 	$	21,170	 	$	21,058	 	
Changes in non-cash working capital	 	($2,637	)	$	7,704	 	 	($8,478	)	
Operating activities	$	13,440	 	$	28,874	 	$	12,580	 	
Investing activities	 	($13,387	)	 	($30,879	)	 	($36,784	)	
Financing activities and effect of foreign exchange rates	 	($1,033	)	 	($4,582	)	 	($5,715	)	
Net cash flow from (used in) discontinued operations	 	($980	)	 	($6,587	)	 	($29,919	)	

6.	Segmented information	
The Company’s operating segments reflect its different mining interests and are reported in a manner consistent with the internal reporting used to assess each segment’s performance. Significant information relating to reportable operating segments is summarized below:
30

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	

 	 	San Dimas	 	 	Corporate	 	 	Total	 	
At December 31, 2017	 	 	 	 	 	 	 	 	 	
Current assets	$	72,026	 	$	7,280	 	$	79,306	 	
Mining interests	 	124,835	 	 	215	 	 	125,050	 	
Other non-current assets	 	-	 	 	910	 	 	910	 	
Total assets	$	196,861	 	$	8,405	 	$	205,266	 	
 	 	 	 	 	 	 	 	 	 	
Current liabilities	$	19,242	 	$	35,159	 	$	54,401	 	
Non-current liabilities	 	42,428	 	 	48,706	 	 	91,134	 	
Total liabilities	$	61,670	 	$	83,865	 	$	145,535	 	

 	 	 	 	 	 	 	 	Black Fox	 	 	 	 	 	 	 	
As at December 31, 2016	 	San Dimas	 	 	Corporate	 	 	Complex	 	 	Cerro del Gallo	 	 	Total	 	
Current assets	$	60,604	 	$	4,209	 	$	16,761	 	$	1,479	 	$	83,053	 	
Mining interests	 	428,251	 	 	330	 	$	85,680	 	 	63,659	 	 	577,920	 	
Other non-current assets	 	11,107	 	 	1,160	 	$	4,577	 	 	-	 	 	16,844	 	
Total assets	$	499,962	 	$	5,699	 	$	107,018	 	$	65,138	 	$	677,817	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Current liabilities	$	20,373	 	$	54,836	 	$	10,988	 	$	18	 	$	86,215	 	
Non-current liabilities	 	50,585	 	 	53,861	 	$	20,315	 	 	5,711	 	 	130,472	 	
Total liabilities	$	70,958	 	$	108,697	 	$	31,303	 	$	5,729	 	$	216,687	 	

 	 	 	 	 	 	 	 	Continuing	 	 	Cerro del	 	 	Black Fox	 	 	Discontinued	 	 	 	 	
 	 	San Dimas	 	 	Corporate	 	 	Operations	 	 	Gallo	 	 	Complex	 	 	operations	 	 	Total	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Year Ended December 31, 2017	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Revenue	$	91,769	 	$	-	 	$	91,769	 	$	-	 	$	65,828	 	$	65,828	 	$	157,597	 	
Operating expenses	 	67,280	 	 	-	 	 	67,280	 	 	-	 	 	39,982	 	 	39,982	 	 	107,262	 	
Depreciation and depletion	 	22,320	 	 	113	 	 	22,433	 	 	44	 	 	7,269	 	 	7,313	 	 	29,746	 	
Total cost of sales	 	89,600	 	 	113	 	 	89,713	 	 	44	 	 	47,251	 	 	47,295	 	 	137,008	 	
Earnings (loss) from mine operations	 	2,169	 	 	(113	)	 	2,056	 	 	(44	)	 	18,577	 	 	18,533	 	 	20,589	 	
Mining interest impairment charge	 	(303,858	)	 	-	 	 	(303,858	)	 	(50,000	)	 	(44,963	)	 	(94,963	)	 	(398,821	)	
Exploration expenses	 	(1,345	)	 	-	 	 	(1,345	)	 	(830	)	 	-	 	 	(830	)	 	(2,175	)	
Share-based compensation	 	-	 	 	(4,149	)	 	(4,149	)	 	-	 	 	-	 	 	-	 	 	(4,149	)	
General and administrative expenses	 	(2,242	)	 	(9,237	)	 	(11,479	)	 	(3	)	 	(252	)	 	(255	)	 	(11,734	)	
Idle and restart costs incurred during strike at San Dimas	 	(6,207	)	 	-	 	 	(6,207	)	 	-	 	 	-	 	 	-	 	 	(6,207	)	
Other charges	 	(1,356	)	 	(5,688	)	 	(7,044	)	 	-	 	 	(51	)	 	(51	)	 	(7,095	)	
Loss from operations	 	(312,839	)	 	(19,187	)	 	(332,026	)	 	(50,877	)	 	(26,689	)	 	(77,566	)	 	(409,592	)	
Other expense items	 	(1,025	)	 	(4,718	)	 	(5,743	)	 	(3,069	)	 	(1,385	)	 	(4,454	)	 	(10,197	)	
Loss before income taxes	 	(313,864	)	 	(23,905	)	 	(337,769	)	 	(53,946	)	 	(28,074	)	 	(82,020	)	 	(419,789	)	
Income tax recovery (expense)	 	4,819	 	 	(426	)	 	4,393	 	 	5,711	 	 	-	 	 	5,711	 	 	10,104	 	
Net loss	 	($309,045	)	 	($24,331	)	 	($333,376	)	 	($48,235	)	 	($28,074	)	 	($76,309	)	 	($409,685	)	
31

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	

 	 	 	 	 	 	 	 	Continuing	 	 	Cerro del	 	 	Black Fox	 	 	Discontinued	 	 	 	 	
 	 	San Dimas	 	 	Corporate	 	 	Operations	 	 	Gallo	 	 	Complex	 	 	operations	 	 	Total	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Year Ended December 31, 2016	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Revenue	$	147,581	 	$	-	 	$	147,581	 	$	-	 	$	71,595	 	$	71,595	 	$	219,176	 	
Operating expenses	 	100,452	 	 	-	 	 	100,452	 	 	-	 	 	54,815	 	 	54,815	 	 	155,267	 	
Depreciation and depletion	 	46,984	 	 	132	 	 	47,116	 	 	82	 	 	16,131	 	 	16,213	 	 	63,329	 	
Total cost of sales	 	147,436	 	 	132	 	 	147,568	 	 	82	 	 	70,946	 	 	71,028	 	 	218,596	 	
Earnings (loss) from mine operations	 	145	 	 	(132	)	 	13	 	 	(82	)	 	649	 	 	567	 	 	580	 	
Mining interest impairment charge	 	(111,000	)	 	-	 	 	(111,000	)	 	-	 	 	(117,000	)	 	(117,000	)	 	(228,000	)	
Exploration expenses	 	(1,885	)	 	-	 	 	(1,885	)	 	(1,529	)	 	-	 	 	(1,529	)	 	(3,414	)	
Share-based compensation	 	-	 	 	(7,049	)	 	(7,049	)	 	-	 	 	-	 	 	-	 	 	(7,049	)	
General and administrative expenses	 	(5,419	)	 	(8,110	)	 	(13,529	)	 	(164	)	 	(1,109	)	 	(1,273	)	 	(14,802	)	
Other charges	 	(2,327	)	 	(2,398	)	 	(4,725	)	 	-	 	 	-	 	 	-	 	 	(4,725	)	
Loss from operations	 	(120,486	)	 	(17,689	)	 	(138,175	)	 	(1,775	)	 	(117,460	)	 	(119,235	)	 	(257,410	)	
Other expense items	 	(1,494	)	 	4,237	 	 	2,743	 	 	(315	)	 	(902	)	 	(1,217	)	 	1,526	 	
Loss before income taxes	 	(121,980	)	 	(13,452	)	 	(135,432	)	 	(2,090	)	 	(118,362	)	 	(120,452	)	 	(255,884	)	
Income tax recovery	 	19,938	 	 	-	 	 	19,938	 	 	326	 	 	1,200	 	 	1,526	 	 	21,464	 	
Net loss	 	($102,042	)	 	($13,452	)	 	($115,494	)	 	($1,764	)	 	($117,162	)	 	($118,926	)	 	($234,420	)	

 	 	 	 	 	 	 	 	Continuing	 	 	Cerro del	 	 	Black Fox	 	 	Discontinued	 	 	 	 	
 	 	San Dimas	 	 	Corporate	 	 	Operations	 	 	Gallo	 	 	Complex	 	 	operations	 	 	Total	 	
Year Ended December 31, 2015	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Revenue	$	213,192	 	$	-	 	$	213,192	 	$	-	 	$	78,112	 	$	78,112	 	$	291,304	 	
Operating expenses	 	103,782	 	 	-	 	 	103,782	 	 	-	 	 	59,811	 	 	59,811	 	 	163,593	 	
Depreciation and depletion	 	55,693	 	 	143	 	 	55,836	 	 	90	 	 	21,312	 	 	21,402	 	 	77,238	 	
Total cost of sales	 	159,475	 	 	143	 	 	159,618	 	 	90	 	 	81,123	 	 	81,213	 	 	240,831	 	
Earnings (loss) from mine operations	 	53,717	 	 	(143	)	 	53,574	 	 	(90	)	 	(3,011	)	 	(3,101	)	 	50,473	 	
Mining interest impairment charge	 	-	 	 	-	 	 	-	 	 	(22,000	)	 	(82,000	)	 	(104,000	)	 	(104,000	)	
Exploration expenses	 	(1,690	)	 	-	 	 	(1,690	)	 	-	 	 	-	 	 	-	 	 	(1,690	)	
Share-based compensation	 	-	 	 	(7,144	)	 	(7,144	)	 	-	 	 	-	 	 	-	 	 	(7,144	)	
General and administrative expenses	 	(2,546	)	 	(16,475	)	 	(19,021	)	 	(21	)	 	(1,002	)	 	(1,023	)	 	(20,044	)	
Other charges	 	(694	)	 	(2,008	)	 	(2,702	)	 	-	 	 	-	 	 	-	 	 	(2,702	)	
Earnings (loss) from operations	 	48,787	 	 	(25,770	)	 	23,017	 	 	(22,111	)	 	(86,013	)	 	(108,124	)	 	(85,107	)	
Other income (expense) items	 	(4,225	)	 	(58	)	 	(4,283	)	 	41	 	 	2,836	 	 	2,877	 	 	(1,406	)	
Earnings (loss) before income taxes	 	44,562	 	 	(25,828	)	 	18,734	 	 	(22,070	)	 	(83,177	)	 	(105,247	)	 	(86,513	)	
Income tax recovery (expense)	 	(32,536	)	 	4,545	 	 	(27,991	)	 	(323	)	 	7,917	 	 	7,594	 	 	(20,397	)	
Net income (loss)	$	12,026	 	 	($21,283	)	 	($9,257	)	 	($22,393	)	 	($75,260	)	 	($97,653	)	 	($106,910	)	

7.	Revenue	

 	 	Year ended December 31	 	
  	 	2017	 	 	2016	 	 	2015	 	
 	 	 	 	 	 	 	 	 	 	
Gold	$	74,979	 	$	121,553	 	$	169,790	 	
Silver	 	16,790	 	$	26,028	 	$	43,402	 	
 	$	91,769	 	$	147,581	 	$	213,192	 	
32

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	
a) Silver Purchase Agreement
The Silver Purchase Agreement provides that for the life of the mine, the first 6.0 million ounces of silver produced per annum by the San Dimas mine, plus 50% of the excess silver produced above this amount, must be sold to Wheaton Precious Metals International Ltd. (“WPMI”), formerly Silver Wheaton Caymans (“SWC”), at the lesser of $4.32 per ounce (adjusted by 1% per year) and market prices. All silver not sold to WPMI is available to be sold by the Company at market prices.
The contract year for purposes of the threshold runs from August 6 of a year to August 5 of the following year. The threshold for the year ended August 5, 2017 was not exceeded (4.3 million ounces were delivered under the contract), while the threshold for the year ended August 5, 2016 was exceeded in July 2016 and the threshold for August 5, 2015 was met in July 2015. During the year ended December 31, 2017 the Company did not sell any silver at market prices (year ended December 31, 2016 - 0.2 million ounces and year ended December 31, 2015 – 0.8 million ounces were sold at market prices).
In connection with the Arrangement Agreement, First Majestic has entered into agreements with WPMI, whereby, following closing of the Arrangement, the Silver Purchase Agreement will be terminated and replaced with a new stream which will provide for a reduction in the amount of payable metal content.
b) Gold Purchase Agreement
The Company had a gold purchase agreement related to the Black Fox Mine, which was disposed of in October 2017. Under the agreement, the Company was obligated to sell 8% of the gold production at the Black Fox Mine and 6.3% at the adjoining Pike River property (“Black Fox Extension”).
During the year ended December 31, 2017, the Company recorded revenue classified as discontinued operations of $2.5 million (2016 - $2.7 million and 2015 - $3.0 million) under the contract terms.

8.	Inventories	

 	 	December 31	 	 	December 31	 	
 	 	2017	 	 	2016	 	
Gold and silver	$	5,848	 	$	5,827	 	
Stock piled ore	 	175	 	 	5,285	 	
Work-in-progress	 	2,444	 	 	5,771	 	
Supplies	 	5,201	 	 	5,946	 	
 	$	13,668	 	$	22,829	 	
33

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	

9.	Mining interests	

 	 	Mining	 	 	 	 	 	Plant,	 	 	 	 	 	 	 	
 	 	properties	 	 	Land and	 	 	equipment and	 	 	Construction	 	 	 	 	
 	 	and leases	 	 	buildings	 	 	vehicles	 	 	in progress	 	 	Total	 	
At January 1, 2016	 	948,182	 	 	78,198	 	 	191,825	 	 	35,949	 	 	1,254,154	 	
Additions	 	55,788	 	 	8,256	 	 	30,536	 	 	(21,218	)	 	73,362	 	
Reclassifications	 	1,086	 	 	3,948	 	 	(5,279	)	 	239	 	 	(6	)	
Assets derecognized	 	-	 	 	-	 	 	(5,021	)	 	-	 	 	(5,021	)	
At December 31, 2016	 	1,005,056	 	 	90,402	 	 	212,061	 	 	14,970	 	 	1,322,489	 	
Additions	 	32,876	 	 	4,409	 	 	6,332	 	 	(8,093	)	 	35,524	 	
Assets derecognized	 	-	 	 	-	 	 	(8,180	)	 	-	 	 	(8,180	)	
Disposition of Black Fox Complex and Cerro del Gallo project	 	(456,856	)	 	(18,579	)	 	(68,012	)	 	(926	)	 	(544,373	)	
At December 31, 2017	$	581,076	 	$	76,232	 	$	142,201	 	$	5,951	 	$	805,460	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accumulated depreciation and depletion	 		 	 		 	 		 	 		 	 		 	
At January 1, 2016	 	355,893	 	 	16,945	 	 	91,198	 	 	-	 	 	464,036	 	
Depreciation and depletion	 	31,046	 	 	3,247	 	 	22,942	 	 	-	 	 	57,235	 	
Impairment charge	 	228,000	 	 	-	 	 	-	 	 	-	 	 	228,000	 	
Reclassifications	 	1,487	 	 	4,768	 	 	(6,261	)	 	-	 	 	(6	)	
Assets derecognized	 	-	 	 	-	 	 	(4,696	)	 	-	 	 	(4,696	)	
At December 31, 2016	 	616,426	 	 	24,960	 	 	103,183	 	 	-	 	 	744,569	 	
Depreciation and depletion	 	7,162	 	 	1,999	 	 	19,257	 	 	-	 	 	28,418	 	
Impairment charge	 	284,972	 	 	48,311	 	 	65,538	 	 	-	 	 	398,821	 	
Assets derecognized	 	-	 	 	-	 	 	(7,233	)	 	-	 	 	(7,233	)	
Disposition of Black Fox Complex and Cerro del Gallo project	 	(412,926	)	 	(15,504	)	 	(55,735	)	 	-	 	 	(484,165	)	
At December 31, 2017	$	495,634	 	$	59,766	 	$	125,010	 	$	-	 	$	680,410	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Carrying value	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
At December 31, 2016	$	388,630	 	$	65,442	 	$	108,878	 	$	14,970	 	$	577,920	 	
At December 31, 2017	$	85,442	 	$	16,466	 	$	17,191	 	$	5,951	 	$	125,050	 	
A summary of mining interest by property is as follows:

 	 	Mining	 	 	 	 	 	Plant,	 	 	 	 	 	 	 	 	 	 	
 	 	properties	 	 	Land and	 	 	equipment	 	 	Construction	 	 	December 31	 	 	December 31	 	
 	 	and leases	 	 	buildings	 	 	and vehicles	 	 	in progress	 	 	2017	 	 	2016	 	
San Dimas Mine	$	85,442	 	$	16,466	 	$	16,976	 	$	5,951	 	$	124,835	 	$	428,251	 	
Black Fox Complex	 	-	 	 	-	 	 	-	 	 	-	 	 	-	 	 	85,680	 	
Cerro Del Gallo Project	 	-	 	 	-	 	 	-	 	 	-	 	 	-	 	 	63,659	 	
Corporate	 	-	 	 	-	 	 	215	 	 	-	 	 	215	 	 	330	 	
Total	$	85,442	 	$	16,466	 	$	17,191	 	$	5,951	 	$	125,050	 	$	577,920	 	
All property of the San Dimas mine is pledged as security for the Company’s obligations under the Silver Purchase Agreement (Notes 7 a)). Substantially all of the Company’s assets are pledged as security under the revolving credit facility (Note 10 a)).
34

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	
The carrying value of property, plant and equipment under finance leases at December 31, 2017 was $0.4 million (December 31, 2016 - $8.0 million). The lessors hold first security rights over the leased assets.
Depreciation and depletion recognized for the year ended December 31, 2017 was $28.4 million (2016 - $57.2 million and 2015 - $80.4 million). As at December 31, 2017, the non-cash component in the inventories balance was $1.4 million (2016 – $5.8 million and 2015 - $12.5 million).

10.	Debt	

 	 	December 31	 	 	December 31	 	
 	 	2017	 	 	2016	 	
Current debt	 	 	 	 	 	 	
   Revolving credit facility (RCF) (a)	$	30,201	 	$	49,639	 	
   Finance lease liabilities (b)	 	109	 	 	1,202	 	
 	 	30,310	 	 	50,841	 	
Long-term debt	 	 	 	 	 	 	
   5.75% convertible debentures (c)	$	47,625	 	$	52,500	 	
   Finance lease liabilities (b)	 	-	 	 	406	 	
 	 	47,625	 	 	52,906	 	
 	$	77,935	 	$	103,747	 	
(a) The Company has a RCF, which 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 availment by the Company) plus an applicable margin. In March 2016, the Company drew down $50 million under the RCF to repay the 6.5% convertible debentures, assumed as part of the acquisition of Brigus Gold Corp. An additional $10 million was drawn down in March 2017, $5 million was drawn in May 2017 and $10 million was drawn in July 2017, fully drawing the RCF and bringing the outstanding balance under the RCF to $75.0 million. On March 30, 2017, the Company amended the terms of the RCF to extend its maturity date from May 23, 2017 to November 23, 2017 and exclude all financial covenants until the extended maturity date. The RCF with its amended terms was guaranteed by WPM and a fee of $2.7 million was paid in 2017. This fee was accreted over the new term of the RCF as additional interest cost. The net proceeds from the sale of the Black Fox Complex and Cerro del Gallo were used to reduce the outstanding balance of the RCF. The RCF was subsequently extended multiple times from November 2017 to January 2018 in connection with the Company’s strategic review process resulting in the current maturity date being the earlier of (i) April 30, 2018, (ii) the closing of the business combination with First Majestic, and (iii) the seventh business day following termination of the proposed business combination. WPM continues to provide a guarantee for the RCF.
Total unamortized transaction costs of $0.1 million relating to the original term of the RCF have been expensed. The revolving credit facility is secured by substantially all of the Company’s assets and contains customary covenants and default clauses typical for this type of facility.
(b) The Company is obligated under various finance leases for equipment. All finance lease agreements provide that the Company can purchase the leased equipment at the end of the lease term for a nominal amount. There are no restrictions placed on the Company as a result of these leases, however, the lessors hold first security rights over the leased assets.
35

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	
(c) On February 9, 2015, the Company issued $75 million of 5.75% convertible unsecured subordinated debentures (the 5.75% convertible debentures) maturing on February 28, 2020. The 5.75% convertible debentures bear interest at a rate of 5.75% per annum, payable in U.S. dollars semi-annually on August 28 and February 28 each year, commencing on August 28, 2015. The 5.75% convertible debentures are convertible into the Company’s 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 the debentures. Upon conversion, holders will be entitled to receive accrued and unpaid interest up to, but excluding, the date of conversion. The 5.75% convertible debentures have a cross-default provision that would be triggered by any default on the RCF.
The 5.75% convertible debentures are not redeemable prior to February 28, 2018. On and after February 28, 2018 and prior to February 28, 2020, the 5.75% convertible debentures may be redeemed by the Company, in whole or in part from time to time, on not more than 60 days and not less than 30 days prior notice, at a redemption price equal to their principal amount plus accrued and unpaid interest, if any, up to but excluding the date set for redemption, provided the simple average of the daily volume-weighted average trading price of the common shares for the 20 consecutive trading days ending five trading days prior to the date on which notice of redemption is provided is at least 125% of the conversion price.
On March 13, 2018, holders of the 5.75% convertible debentures voted to amend the terms of the securities (refer to note 25).

11.	General and administrative expenses	

 	 	Year ended December 31	 	
 	 	2017	 	 	2016	 	 	2015	 	
Salaries and wages	$	5,053	 	$	5,778	 	$	10,967	 	
Rent and office costs	 	792	 	 	828	 	 	1,232	 	
Legal, accounting, consulting and professional fees	 	2,369	 	 	2,547	 	 	2,830	 	
Directors fees and expenses	 	1,357	 	 	935	 	 	922	 	
Other general and administrative expenses	 	1,908	 	 	3,441	 	 	3,070	 	
 	$	11,479	 	$	13,529	 	$	19,021	 	

12.	Other charges	

 	 	Year ended December 31	 	
 	 	2017	 	 	2016	 	 	2015	 	
Legal expenses associated with proceedings in Mexico	$	1,103	 	$	3,254	 	$	694	 	
Office closure costs and severance payments	 	2,120	 	 	1,171	 	 	2,008	 	
Legal and advisory costs relating to financing initiatives	 	647	 	 	300	 	 	-	 	
Advisory fees associated with strategic review process	 	2,023	 	 	-	 	 	-	 	
Loss on disposition of Cerro del Gallo	 	1,151	 	 	-	 	 	-	 	
 	$	7,044	 	$	4,725	 	$	2,702	 	
36

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	

13.	Interest and finance expenses	

 	 	 	 	 	Year ended December 31	 	
 	 	Notes	 	 	2017	 	 	2016	 	 	2015	 	
Interest expenses	 	 	 	 	 	 	 	 	 	 	 	 	
  Interest on 5.75% convertible debentures	 	10	 	$	4,312	 	$	4,313	 	$	3,381	 	
  Interest on 6.5% convertible debentures	 	 	 	 	-	 	 	775	 	 	3,123	 	
  Interest on revolving credit facility	 	10	 	 	2,792	 	 	1,577	 	 	925	 	
 	 	 	 	 	7,104	 	 	6,665	 	 	7,429	 	
Finance expenses	 	 	 	 	 	 	 	 	 	 	 	 	
  Accretion on 6.5% convertible debentures	 	 	 	$	-	 	$	365	 	$	1,436	 	
  Accretion on asset retirement obligation	 	 	 	 	766	 	 	723	 	 	1,472	 	
  Revolving credit facility guarantee fee	 	10	 	 	2,646	 	 	-	 	 	-	 	
  Amortization of revolving credit facility transaction costs	 	 	 	 	481	 	 	870	 	 	877	 	
  Others	 	 	 	 	288	 	 	138	 	 	284	 	
 	 	 	 	 	4,181	 	 	2,096	 	 	4,069	 	
 	 	 	 	$	11,285	 	$	8,761	 	$	11,498	 	

14.	Other expenses	

 	 	Year ended December 31	 	
 	 	2017	 	 	2016	 	 	2015	 	
Foreign exchange gain	$	76	 	$	155	 	 	($2,772	)	
Gain on derivative liability	 	-	 	 	5	 	 	1,478	 	
Finance income	 	41	 	 	88	 	 	229	 	
Royalty and other	 	(472	)	 	(675	)	 	(804	)	
 	 	($355	)	 	($427	)	 	($1,869	)	

15.	Income taxes	
a) Tax expense
Tax expense comprises the following:

 	 	2017	 	 	2016	 	 	2015	 	
Current income tax expense	$	3,298	 	$	1,089	 	$	23,365	 	
Deferred income tax recovery	 	(7,691	)	 	(21,027	)	 	4,626	 	
Income tax (recovery)	 	($4,393	)	 	($19,938	)	$	27,991	 	
Income tax expense differs from the amount that would result from applying the Canadian federal and provincial income tax rates to earnings from continuing operations before taxes. These differences result from the following items:
37

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	

 	 	2017	 	 	2016	 	 	2015	 	
Loss before income taxes	 	($337,769	)	 	($135,432	)	$	18,734	 	
Canadian federal and provincial income tax rate	 	26.5%	 	 	26.5%	 	 	26.5%	 	
Expected income tax (recovery)	 	(89,509	)	 	(35,889	)	 	4,965	 	
(Increase) decrease attributable to:	 	 	 	 	 	 	 	 	 	
  Effect of different foreign statutory rates on earnings of subsidiaries	 	(11,416	)	 	(2,930	)	 	998	 	
  Share-based payments	 	1,148	 	 	1,986	 	 	1,882	 	
  Amounts allowable for tax purposes	 	(6,290	)	 	(9,592	)	 	(10,357	)	
  Impact of foreign exchange and inflation	 	(7,709	)	 	27,180	 	 	24,595	 	
  Withholding taxes on intercompany interest	 	3,800	 	 	3,308	 	 	2,614	 	
  Royalty taxes in Mexico	 	(149	)	 	115	 	 	769	 	
  Impairment of mining interest	 	79,069	 	 	(5,827	)	 	-	 	
  Benefit of tax losses and temporary differences not recognized	 	26,663	 	 	1,711	 	 	2,525	 	
Income tax (recovery)	 	($4,393	)	 	($19,938	)	$	27,991	 	
b) Deferred tax liabilities and assets
The significant components of the Company’s deferred tax liabilities and assets are as follows:

 	 	2017	 	 	2016	 	
Deferred tax assets	 	 	 	 	 	 	
   Non-capital losses	$	-	 	$	8,183	 	
   Decommissioning liability to be recovered	 	472	 	 	1,315	 	
   Deduction for Mexican royalty taxes	 	-	 	 	9,565	 	
   Accruals and other	 	-	 	 	2,338	 	
 	$	472	 	$	21,401	 	
Deferred tax liability	 	 	 	 	 	 	
   Accruals and other	 	(26	)	 	-	 	
   Mining interests	 	(7,903	)	 	($46,066	)	
Net deferred tax liability	 	($7,457	)	 	($24,665	)	
A reconciliation of net deferred tax liability to the amounts presented in the consolidated statements of financial position follows:

 	 	2017	 	 	2016	 	
Deferred tax asset	$	-	 	$	3,763	 	
Deferred tax liability	 	(7,457	)	 	(28,428	)	
Net deferred tax liability	 	($7,457	)	 	($24,665	)	
38

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	
The movement in deferred income tax balances is explained as follows:

 	 	2017	 	 	2016	 	
As at January 1	 	($24,665	)	 	($49,326	)	
Deferred tax recovery	 	13,408	 	 	22,553	 	
Flow through share premium credit charged to deferred tax expense	 	-	 	 	(1,200	)	
With holding expense accrued as tax payable	 	3,800	 	 	3,308	 	
Warrant expiry	 	-	 	 	-	 	
As at December 31	 	($7,457	)	 	($24,665	)	
Given recent San Dimas performance, the Company deteremined that it could not deem future taxable income to be probable under current operating conditions. Therefore, no deferred tax assets have been recognized. Of the Company’s total deferred tax liability of $7.5 million (2016 - $28.4 million), $0.6 million (2016 - $5.2 million) is expected to reverse within twelve months of the statement of financial position date and the remainder after twelve months of the statement of financial position date.
The Company has total unused Canadian losses of $235.4 million (2016 - $221.0 million) that are available to be applied against future taxable income. These losses expire from 2025 to 2037. Of these losses, $122 million (2016 - $132 million) are restricted to use only against income from the same or similar business that created these losses.
Deductible temporary differences, unused tax losses and their tax effect for which no deferred tax assets have been recognized are attributable to the following:

 	 	Temporary Differences	 	 	Tax effect	 	
 	 	2017	 	 	2016	 	 	2017	 	 	2016	 	
Non-capital losses	$	210,071	 	$	203,529	 	$	53,360	 	$	51,885	 	
Capital losses	 	130,612	 	 	2,555	 	 	17,306	 	 	339	 	
Share issuance costs	 	3,878	 	 	5,906	 	 	1,028	 	 	1,565	 	
Accrued liabilities and other	 	1,669	 	 	1,138	 	 	442	 	 	302	 	
Resource and equipment tax pools	 	-	 	 	162,143	 	 	-	 	 	44,442	 	
Ontario mining tax	 	-	 	 	122,796	 	 	-	 	 	10,438	 	
 	$	346,230	 	$	498,067	 	$	72,136	 	$	108,971	 	
Following the completion of the Arrangement, the capital losses are expected to expire, and there is uncertainty over whether the non-capital losses can be utilized after the completion of the Arrangement.
c) Challenge to the 2012 APA
Overview
In February 2016 the Mexican tax authority, the SAT, initiated a proceeding seeking to nullify the APA which it issued to the Company in 2012. The APA confirmed the Company’s basis for paying taxes on the price it realized for certain silver sales between 2010 to 2014. If the SAT’s challenge is successful it is likely to have a material adverse effect on the Company’s business, financial condition and results of operations.
39

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	
Background
In 2004, affiliates of Goldcorp Inc. (“Goldcorp”) entered into a Silver Purchase Agreement with WPM in connection with the San Dimas mine and two other mines in Mexico. Under the Silver Purchase Agreement, Goldcorp received cash and securities in exchange for an obligation to sell the amount of silver extracted from the mines at a price set forth in the Silver Purchase Agreement. In order to satisfy its obligations under the Silver Purchase Agreement, sales were made by Goldcorp through a non-Mexican subsidiary to a WPM subsidiary in the Cayman Islands. Upon Primero’s acquisition of the San Dimas Mine, the Silver Purchase Agreement was amended and restated and Primero assumed all of Goldcorp’s obligations with respect to the San Dimas concession under the Silver Purchase Agreement. Primero did not receive any of the initial consideration that was paid to Goldcorp under the Silver Purchase Agreement.
As amended and restated, the provisions of the Silver Purchase Agreement require that, on a consolidated basis, the Company sell to WPM 100% of silver produced from the San Dimas concessions during a contract year (August 6th to the following August 5th), up to 6 million ounces and 50% of silver produced thereafter, at the lower of (i) the current market price and (ii) $4.04 per ounce plus an annual increase of 1% (the PEM Realized Price). From August 6, 2016 to August 5, 2017, the contract price was $4.28 per ounce (August 6, 2015 to August 5, 2016 - $4.24) . From August 6, 2017 the contract price is $4.32 per ounce. The price paid by WPM under the Silver Purchase Agreement represents the total value that the Company and its affiliates receive for the sale of silver to WPM. The Silver Purchase Agreement continues indefinitely in respect of any silver produced from the San Dimas concessions.
The specific terms of the Silver Purchase Agreement require that the Company sell the silver through one of its non-Mexican subsidiaries, STB, to WPM’s subsidiary, WPMI. As a result, the Company’s Mexican subsidiary that holds the San Dimas concessions, PEM, sells the required amount of silver produced from the San Dimas concessions to STB to allow it to fulfill its obligations under the Silver Purchase Agreement.
When the Company initially acquired the San Dimas mine, the sales from PEM to STB were made at the spot market price while the sales by STB to WPMI were at the contracted PEM Realized Price, which at that time was $4.04 per ounce. In order to reflect commercial realities and the effects of the Silver Purchase Agreement on the Company on a consolidated basis, PEM amended the terms of sales of silver between itself and STB and commenced to sell the amount of silver due under the Silver Purchase Agreement to STB at the PEM Realized Price. For Mexican income tax purposes PEM then recognized the revenue on these silver sales on the basis of its actual realized revenue, which was the PEM Realized Price.
APA
In order to provide the Company with stability and assurances that the SAT would accept the PEM Realized Price as the proper price to use to calculate Mexican income taxes, the Company applied for and received the APA from the SAT. The APA confirmed the PEM Realized Price would be used as the Company’s basis for calculating taxes owed by the Company on the silver sold under the Silver Purchase Agreement. The Company believed that the function of an APA was to provide tax certainty and as a result made significant investments in Mexico based on that certainty. Under Mexican law, an advanced pricing agreement is valid for five years and therefore the APA represented the SAT’s agreement to accept the PEM Realized Price as the basis for calculating taxes for the tax years 2010 through 2014.
40

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	
Challenge to APA for 2010 – 2014 tax years
In February 2016, the SAT initiated a legal proceeding seeking to nullify the APA, however, the SAT has not identified an alternative basis in the legal claim for calculating taxes on the silver sold by PEM for which it receives the PEM Realized Price. The Company is an ‘interested party’ in this proceeding. If the SAT is successful in retroactively nullifying the APA, the SAT may seek to audit and reassess PEM in respect of its sales of silver in connection with the Silver Purchase Agreement for 2010 through 2014.
In June 2017, as part of the ongoing annual audits of the PEM tax returns, the SAT issued an observations letter for the 2010 tax year. An observations letter is issued to a taxpayer in advance of a reassessment being issued, provides an outline of the SAT’s position on matters under audit, and affords the taxpayer an opportunity to respond to such position in advance of the reassessment being issued. In this observations letter issued to PEM, the SAT made explicit its view that PEM should pay taxes based on the market price of silver which, if successfully applied to its 2010 taxation year, would make PEM liable for an additional $8.5 million of taxes before penalties or interest. As the Company continues to defend the APA in the Mexican legal proceeding, the APA remains valid and the Company will vigorously dispute any reassessment that may be issued in the future on a basis that assesses taxes on its silver revenues that is inconsistent with the APA. The observations letter does not represent a tax reassessment and no liability has been recognized in the financial statements.
In October 2017, the SAT issued an observations letter for the 2011 tax year, with the same explicit view that PEM should pay taxes based on the market price of silver, which if successfully applied to its 2011 taxation year, would make PEM liable for an additional $23.4 million of taxes before penalties or interest. The Company has submitted formal responses to both the 2010 and 2011 observation letters.
While the Company continues to believe its tax filing position based upon the APA is correct, should the Company ultimately be required to pay tax on its silver revenues based on market prices without any mitigating adjustments, the incremental income tax for the years 2012-2017 would be in the range of $130 - $145 million, before interest or penalties.
The Company vigorously defends the validity of the APA and has filed procedural and substantive responses to the claim. In addition, the Company intends to explore opportunities to minimize the potential impact on the Company in the event that the SAT is successful in its legal claim to nullify the APA, but there is no assurance that the Company will find or be able to implement a reasonable solution.
While the Company continues to vigorously defend the validity of the APA and its transfer pricing position, it is also engaging in dialogue with the SAT seeking to resolve matters and bring tax certainty through a negotiated solution. Primero has also had constructive dialogue with the SAT in relation to outstanding VAT receivables and has received $15.2 million of VAT refunds since July 2017.
Primero Mining Corp.’s claim against the Mexican Government
On June 2, 2016, the Company notified the Mexican Government that the measures taken by the SAT against PEM in connection with the judicial proceeding seeking to retroactively nullify the APA, breached several provisions of Chapter 11 of the North American Free Trade Agreement (“NAFTA”) because these measures are arbitrary, discriminatory, unfair and inequitable. As at December 31, 2017, the Company has the option to commence international arbitration proceedings pursuant to Article 1119 of the NAFTA at a time of its choosing. As Primero is continuing its dialogue with the Mexican Government regarding the Mexican tax authority’s legal claim against the APA, it has temporarily suspended its advancement of international arbitration proceedings against the Mexican Government.
41

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	
Tax treatment for tax years following 2014
Since January 1, 2015, the Company has continued to record its revenue from the sale of silver for purposes of Mexican tax accounting in a manner consistent with the APA on the basis that the applicable facts and laws have not changed. The Company’s legal and financial advisors continue to believe that the Company has filed its tax returns compliant with applicable Mexican law. Given the legal challenge by the SAT against the APA for the 2010-2014 tax years, the Company currently believes it is unlikely the SAT will agree to an Advance Pricing Agreement for the 2015-2019 tax years on terms similar to the challenged APA. To the extent the SAT determines that the appropriate price of silver sales under the Silver Purchase Agreement, for tax purposes, is significantly different from the PEM Realized Price and, while PEM would have rights of appeal in connection with any reassessments, it is likely to have a material adverse effect on the Company’s business, financial condition and results of operations.
Other
In the observations letters for both the 2010 and 2011 tax years the SAT raised some queries with respect to certain intercompany transactions, and the Company has provided the pertinent information. The observations letters do not represent a tax reassessment and no liability has been recognized in the financial statements related to these queries.

16.	Supplementary cash flow information	
Changes in non-cash working capital comprise the following:

 	 	Year ended December 31	 	
 	 	2017	 	 	2016	 	 	2015	 	
Trade and other receivables	$	391	 	 	($169	)	 	($638	)	
Value added and income taxes receivable	 	3,464	 	 	1,980	 	 	243	 	
Prepaid expenses	 	866	 	 	3,232	 	 	(850	)	
Inventories	 	(1,800	)	 	6,382	 	 	(4,318	)	
Trade and other payables	 	(4,637	)	 	(12,652	)	 	4,734	 	
Other taxes payable	 	1,634	 	 	(931	)	 	(708	)	
 	 	($82	)	 	($2,158	)	 	($1,537	)	

17.	Shareholders’ equity	
a) Share capital
The authorized share capital consists of unlimited common shares without par value and unlimited preferred shares, issuable in series with special rights and restrictions attached.
42

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	
On June 9, 2016, PEM completed an acquisition of certain concessions adjacent to its San Dimas mine. The initial consideration comprised a cash payment of $1.0 million and the issuance of 2,010,050 of Primero’s common shares. As of December 31, 2017, 1,854,271 common shares were issued (2016 – 1,854,271 and 2015 - nil), 28,342 shares were replaced with cash consideration (2016 – nil and 2015- nil), with the remaining 127,437 common shares expected to be issued. The price per common share was $1.91 based on the NYSE trading price at the closing date. The Company has recognized an equity reserve in shareholders’ equity for the unissued common shares for concessions that have not yet been transferred. During 2017, one concession was transferred, resulting in the release of $54 from the equity reserve.
On June 24, 2016, the Company completed a public equity offering, raising gross proceeds of $40.0 million (C$51.8 million) through the issuance of 22,022,500 units (Unit) of the Company at a price of C$2.35 per Unit (the equity offering). Each Unit consists of one common share of Primero and one-half of one common share purchase warrant (each whole common share purchase warrant is a “Warrant”) of the Company. Each whole Warrant entitles the holder to acquire one common share of the Company at a price of C$3.35 per Common share until June 25, 2018.
Out of the gross proceeds from the equity offering, $4.7 million was allocated to the common share purchase warrants based on their fair value determined using the trading price at the date of closing of the transaction, and the remaining $35.3 million was allocated to the common shares and recorded as share capital. The common share purchase warrants are classified as a financial liability in the statement of financial position. Fair value changes of the common share purchase warrants are recognized in the statement of operations and comprehensive loss. During the year ended December 31, 2017 a mark to market gain of $0.2 million (2016 – gain of $3.6 million and 2015 - nil) was recognized in relation to the common share purchase warrants.
Transaction costs relating to the equity offering amounted to $2.5 million, of which $0.2 million was allocated to the common share purchase warrants and was recognized as an expense in the statement of operations and comprehensive loss for the year ended December 31, 2016. The balance of $2.3 million was allocated to share capital.
In December 2015, the Company received $4.3 million (net of transaction costs) from the issuance of 1,366,768 flow-through shares to be used to fund the exploration at the Froome Zone within the Black Fox Complex. The proceeds were fully spent during 2016.
During the year ended December 31, 2017, the Company issued a total of 993,684 common shares, valued at $0.6 million, for severance and other payments to former employees.
b) Warrants
As at January 1, 2015, the Company had 20.8 million warrants outstanding which were exercisable to purchase 20.8 million common shares at a price of C$8.00 until July 20, 2015. On July 21, 2015, these warrants expired unexercised. Accordingly, the carrying value of $34.8 million was reclassified to contributed surplus net of income taxes on the expired warrants of $4.7 million.
43

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	
c) Share-based compensation
The movement in contributed surplus and phantom share liability related to share-based compensation during the years ended December 31, 2017, 2016 and 2015 are as follows:

 	 	Contributed Surplus	 	 	 	 	
 	 	 	 	 	 	 	 	Deferred share	 	 	 	 	 	 	 	 	Phantom share	 	
 	 	2013 Plan PSUs	 	 	Stock options	 	 	units	 	 	Others	 	 	Total	 	 	liability	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
At January 1, 2015	$	3,020	 	$	18,539	 	$	-	 	 	($33	)	$	21,526	 	$	4,037	 	
Expercise of stock options	 	-	 	 	(294	)	 	-	 	 	-	 	 	(294	)	 	-	 	
PSUs settled in shares	 	(4,404	)	 	-	 	 	-	 	 	-	 	 	(4,404	)	 	-	 	
PSUs settled in cash	 	-	 	 	-	 	 	-	 	 	-	 	 	-	 	 	(4,205	)	
Expiry of warrants	 	-	 	 	-	 	 	-	 	 	30,046	 	 	30,046	 	 	-	 	
Share-based compensation expense	 	5,769	 	 	1,964	 	 	377	 	 	-	 	 	8,110	 	 	829	 	
At December 31, 2015	$	4,385	 	$	20,209	 	$	377	 	$	30,013	 	$	54,984	 	$	661	 	
PSUs settled in shares	 	(4,851	)	 	-	 	 	-	 	 	-	 	 	(4,851	)	 	(110	)	
PSUs settled in cash	 	-	 	 	-	 	 	-	 	 	-	 	 	-	 	 	(377	)	
Share-based compensation expense	 	6,420	 	 	1,897	 	 	407	 	 	-	 	 	8,724	 	 	(131	)	
At December 31, 2016	$	5,954	 	$	22,106	 	$	784	 	$	30,013	 	$	58,857	 	$	43	 	
PSUs settled in shares	 	(6,117	)	 	-	 	 	-	 	 	-	 	 	(6,117	)	 	-	 	
Severance payments	 	-	 	 	-	 	 	-	 	 	(5	)	 	(5	)	 	-	 	
Share-based compensation expense	 	3,657	 	 	1,002	 	 	236	 	 	-	 	 	4,895	 	 	(18	)	
At December 31, 2017	$	3,494	 	$	23,108	 	$	1,020	 	$	30,008	 	$	57,630	 	$	25	 	
(i) Stock options
Under the Company’s stock option plan (the Plan), the number of common shares that may be issued on the exercise of options granted under the Plan is equal to 10% of the issued and outstanding shares of the Company at the time an option is granted (less any common shares reserved for issuance under other share-based compensation arrangements).
A summary of the Company’s stock option activities for the years ended December 31, 2017, 2016 and 2015 is presented below.

 	 	Options	 	 	Weighted average	 	
 	 	outstanding	 	 	exercise price	 	
Outstanding at January 1, 2015	 	9,254,224	 	 	C$6.17	 	
Granted	 	1,617,870	 	 	4.23	 	
Exercised	 	(300,000	)	 	3.47	 	
Cancelled/Forfeited	 	(71,875	)	 	5.68	 	
Expired	 	(6,254,021	)	 	6.17	 	
Outstanding at December 31, 2015	 	4,246,198	 	 	C$5.70	 	
Granted	 	2,782,317	 	 	2.68	 	
Cancelled/Forfeited	 	(3,500	)	 	4.52	 	
Expired	 	(499,771	)	 	8.78	 	
Outstanding at December 31, 2016	 	6,525,244	 	 	C$4.17	 	
Granted	 	2,057,589	 	 	0.75	 	
Cancelled/Forfeited	 	(437,084	)	 	1.57	 	
Expired	 	(1,334,433	)	 	5.54	 	
Outstanding at December 31, 2017	 	6,811,316	 	 	C$3.04	 	
The following table summarizes the weighted average assumptions used in the Black-Scholes valuation model for the determination of the cost of stock options issued during the years ended December 31, 2017, 2016 and 2015.
44

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	

 	 	2017	 	 	2016	 	 	2015	 	
Risk free interest rate	 	0.95%	 	 	0.55%	 	 	0.95%	 	
Expected life in years	 	3.50	 	 	3.50	 	 	3.50	 	
Volatility	 	72.90%	 	 	63.92%	 	 	59.27%	 	
Expected dividends	 	0.00%	 	 	0.00%	 	 	0.00%	 	
Forfeiture rate	 	5.00%	 	 	5.00%	 	 	5.00%	 	
Weighted average fair value of options issued	 	C$0.39	 	 	C$0.80	 	 	C$1.73	 	
As at December 31, 2017, the following stock options were outstanding and exercisable:

Awards Outstanding	 	 	Awards Exercisable	 	
 	 	 	 	 	Remaining	 	 	Weighted	 	 	 	 	 	Remaining	 	 	Weighted	 	
 	 	 	 	 	contractual	 	 	average	 	 	 	 	 	contractual	 	 	average	 	
Range of exercise	 	 	 	 	life	 	 	exercise	 	 	 	 	 	life	 	 	exercise	 	
price per share	 	Quantity	 	 	(in years)	 	 	price	 	 	Quantity	 	 	(in years)	 	 	price	 	
C$0.75 -C$2.00	 	2,165,143	 	 	4.17	 	 	C$0.84	 	 	115,980	 	 	3.89	 	 	C$1.36	 	
C$2.01-C$5.00	 	3,918,004	 	 	2.64	 	 	3.46	 	 	3,204,048	 	 	2.57	 	 	3.52	 	
C$5.01-C$8.00	 	728,169	 	 	1.23	 	 	7.28	 	 	728,169	 	 	1.23	 	 	7.28	 	
 	 	6,811,316	 	 	2.98	 	 	C$3.04	 	 	4,048,197	 	 	2.37	 	 	C$4.13	 	
(ii) Phantom Share Unit Plan (PSUP) and Directors PSU Plan (Directors PSUP)
PSUP is a cash-settled plan. The amount to be paid for vested units is based on the volume weighted average price per share of the Company traded on the Toronto Stock Exchange over the last twenty trading days preceding the vesting date.
A person holding Director PSUs is entitled to elect to receive at vesting, either a cash amount equal to the number of Directors’ PSUs that vest multiplied by the volume weighted average trading price per common share over the five preceding trading days, or the number of common shares equal to the number of Directors’ PSUs. If no election is made, the Company will pay out such Directors’ PSUs in cash.
A summary of the unit activity for the years ended December 31, 2017, 2016 and 2015 under the PSUP and the Directors PSUP is presented below.

 	 	PSUP	 	 	Directors PSUP	 	
Outstanding at January 1, 2015	 	1,329,080	 	 	186,063	 	
Redeemed	 	(1,088,066	)	 	(198,575	)	
Granted	 	-	 	 	223,883	 	
Cancelled	 	(7,437	)	 	-	 	
Outstanding at December 31, 2015	 	233,577	 	 	211,371	 	
Redeemed	 	(189,961	)	 	(136,744	)	
Cancelled	 	(3,896	)	 	-	 	
Outstanding at December 31, 2016	 	39,720	 	 	74,627	 	
Redeemed	 	(36,887	)	 	-	 	
Cancelled	 	(2,833	)	 	-	 	
Outstanding at December 31, 2017	 	-	 	 	74,627	 	
Units issued under the PSUP and Directors PSUP are accounted for as cash-settled awards. All of the units issued under the PSUP and Directors PSUP have been measured at the reporting date using their fair values. The total amount recognized in the statement of operations and comprehensive loss during the year ended December 31, 2017 in relation to the PSUP and Directors PSUP was an expense of $0.02 million (2016 – recovery of $0.1 million and 2015 - $0.8 million expense) recognized under general and administrative expenses. The total liability recognized at December 31, 2017 in respect of the PSUP and Directors PSUP was less than $0.1 million (December 31, 2016 – less than $0.1 million and December 31, 2015 - $0.7 million) which is classified as a current liability, reported within trade and other payables.
45

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	
(iii) 2013 PSU Plan (2013 PSUP)
A person holding PSUs issued under this plan is entitled to receive at vesting either a cash amount equal to the number of 2013 PSUs that vest multiplied by the volume weighted average trading price per common share over the five preceding trading days, or the number of common shares equal to the number of PSUs, or a combination of cash and equity. The choice of settlement is solely at the Company’s discretion.
A summary of the unit activity for the years ended December 31, 2017, 2016 and 2015 under the 2013 PSUP is presented below.

 	 	December 31	 	 	December 31	 	 	December 31	 	
 	 	2017	 	 	2016	 	 	2015	 	
Opening balance	 	4,670,104	 	 	2,088,902	 	 	1,152,464	 	
Redeemed	 	(2,946,800	)	 	(1,324,092	)	 	(958,515	)	
Granted	 	4,410,812	 	 	4,046,139	 	 	1,960,463	 	
Cancelled	 	(951,495	)	 	(140,845	)	 	(65,510	)	
 	 	5,182,621	 	 	4,670,104	 	 	2,088,902	 	
The 2013 PSUP is accounted for as an equity-settled plan. All of the outstanding units have been measured at the reporting date using their grant date fair value, calculated based on the grant date closing price of Primero shares on the TSX. The total amount of expense recognized in the statement of operations and comprehensive loss for the year ended December 31, 2017 in relation to the 2013 PSUP was $2.9 million (2016 - $4.9 million and 2015 - $6.8 million).
(iv) Deferred share units
A person holding deferred share units (DSUs) under this plan is entitled to receive at vesting, either a cash payment equal to the redemption value of the DSUs, shares issued from treasury equal to the number of DSUs, shares purchased on the stock exchange, or any combination of these, such that the cash payment plus number of shares delivered have a value equal to the redemption value of the DSUs. The choice of settlement is solely at the Company’s discretion.
The redemption value is calculated by the number of DSUs redeemed multiplied by the weighted average price per share traded on the TSX over the last five trading days preceding the redemption date.
As at December 31, 2017, a total of 315,790 DSUs were issued and outstanding. The DSUP is accounted for as an equity-settled plan. All of the outstanding units have been measured at the reporting date using their grant date fair value, calculated based on the grant date closing price of Primero shares on the TSX. The total amount of expense recognized in the statements of operations and comprehensive loss for the year ended December 31, 2017 was $0.2 million (2016 - $0.4 million and 2015 - $0.4 million).
46

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	

18.	Loss per share	
Basic loss per share amounts are calculated by dividing the net loss for the year by the weighted average number of common shares outstanding during the year.

 	 	2017	 	 	2016	 	 	2015	 	
Net loss attributable to shareholders	 	 	 	 	 	 	 	 	 	
  Basic	 	($409,685	)	 	($234,420	)	 	($106,910	)	
  Diluted	 	(409,685	)	 	(234,420	)	 	(106,910	)	
Weighted average number of shares	 	 	 	 	 	 	 	 	 	
  Basic	 	191,738,274	 	 	177,569,024	 	 	162,340,566	 	
  Diluted	 	191,738,274	 	 	177,569,024	 	 	162,340,566	 	
Basic loss per share	 	($2.14	)	 	($1.32	)	 	($0.66	)	
Diluted loss per share	 	($2.14	)	 	($1.32	)	 	($0.66	)	
For the year ended December 31, 2017, 28,411,463 common shares which are issuable from outstanding stock options, 2013 PSUs, DSUs and from the 5.75% convertible debentures (2016 – 26,928,026 common shares and 2015 – 32,143,546 common shares ) were excluded from the calculation of diluted loss per share as they would be considered to be anti-dilutive.

19.	Cash	
a) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, deposits in banks and highly liquid investments with an original maturity of 90 days or less.
b) Restricted cash
The Company does not have any restricted cash at December 31, 2017. At December 31, 2016, restricted cash of $4.6 million (C$6.2 million) represented collateralized cash held for a letter of credit securing C$20.5 million of closure bonds held with the Ontario Ministry of Northern Development and Mines (“MNDM”). This was released in 2017, following the sale of the Black Fox Complex.

20.	Decommissioning liability	
As at December 31, 2017, the decommissioning liability consists of reclamation and closure costs for the San Dimas mine. As at December 31, 2016, the decommissioning liability consists of reclamation and closure costs for the San Dimas mine and the Black Fox Complex. The undiscounted cash flow amount of the total obligation was $30.7 million at December 31, 2017 (2016 - $59.6 million) and the present value of the obligation was estimated at $11.6 million (2016- $29.8 million).
47

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	

 	 	San Dimas	 	 	Black Fox	 	 	Total	 	
Decommissioning liability, January 1, 2016	 	9,324	 	 	18,970	 	 	28,294	 	
Accretion expense	 	723	 	 	320	 	 	1,043	 	
Change in estimated timing of cash flows	 	(167	)	 	620	 	 	453	 	
At December 31, 2016	 	9,880	 	 	19,910	 	 	29,790	 	
Accretion expense	 	766	 	 	208	 	 	974	 	
Foreign exchange, estimated timing and other adjustments	 	1,000	 	 	-	 	 	1,000	 	
Disposition	 	-	 	 	(20,118	)	 	(20,118	)	
At December 31, 2017	$	11,646	 	$	-	 	$	11,646	 	
The discount rates used by the Company in 2017, and 2016 are based on prevailing risk-free pre-tax rates in Mexico and Canada, respectively, for periods of time which coincide with the period over which the decommissioning costs are discounted. The following table summarizes the assumptions used in provision for the years ended December 31, 2017 and 2016:

 	 	Expected years	 	 	Discount rate	 	 	Inflation rate	 	
2017	 	 	 	 	 	 	 	 	 	
San Dimas	 	16 yrs	 	 	7.39%	 	 	3.50%	 	
2016	 	 	 	 	 	 	 	 	 	
San Dimas	 	17 yrs	 	 	7.75%	 	 	3.40%	 	
Black Fox Complex	 	5 yrs	 	 	2.34%	 	 	2.00%	 	

21.	Capital management	
The Company’s primary objective in managing capital is to ensure sufficient liquidity through the conclusion of the Arrangement Agreement with First Majestic.
The Company’s capital items are the following:

 	 	December 31	 	 	December 31	 	
 	 	2017	 	 	2016	 	
Cash and cash equivalents	$	20,966	 	$	19,875	 	
Undrawn revolving credit facility	 	4,799	 	 	25,000	 	
Current debt	 	30,310	 	 	50,841	 	
Long-term debt	 	47,625	 	 	52,906	 	
Shareholders' equity	 	59,731	 	 	461,130	 	
To support the Company’s capital management objectives, the Company manages its capital structure and makes adjustments to it within the context of the Company’s strategy, economic conditions and risk characteristics of its underlying assets. To maintain or adjust its capital structure, the Company may attempt to issue shares, adjust the amount of debt or enter into new debt. The Company does not currently pay out dividends. Utilization of the undrawn RCF requires consent from WPM.
As at December 31, 2017, the Company was not subject to any financial covenants and was in compliance with all non-financial covenants.
48

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	

22.	Financial instruments	
The Company’s financial instruments at December 31, 2017 consist of cash and cash equivalents, trade and other receivables, an equity investment in Fortune Bay, trade and other payables, and debt.
At December 31, 2017, the carrying amounts of cash and cash equivalents, trade and other receivables, trade and other payables, and the RCF are considered to be a reasonable approximation of their fair values due to their short-term nature. The fair value of the finance lease liabilities approximate their carrying value as the interest rate implicit in the leases approximate current market rates.
Derivative instruments - Embedded derivatives
Financial instruments and non-financial contracts may contain embedded derivatives, which are required to be accounted for separately at fair value as derivatives when the risks and characteristics of the embedded derivatives are not closely related to those of their host contract and the host contract is not carried at fair value. The Company regularly assesses its financial instruments and non-financial contracts to ensure that any embedded derivatives are accounted for in accordance with its policy. There were no material embedded derivatives requiring separate accounting at December 31, 2017 or December 31, 2016 other than those discussed below.
The 5.75% convertible debentures issued by the Company on February 9, 2015 (Note 10 (c)) are considered to contain multiple embedded derivatives. These debentures and all related derivatives were accounted for as one instrument which was initially recognized at fair value and will subsequently be measured at fair value for each period during the term of the debentures. During the year ended December 31, 2017 a mark to market gain of $4.9 million (2016 – $9.0 million) was recognized in relation to the debentures.
The common share purchase warrants issued by the Company on June 24, 2016 (Note 17 a)) are considered derivative liabilities and were initially recognized at fair value and are subsequently measured at fair value during the term of the warrants. During the year ended December 31, 2017, a mark-to-market gain of $1.0 million (2016 - $3.6 million) was recognized in relation to the common share purchase warrants.
Fair value measurements of financial assets and liabilities recognized on the Consolidated Statements of Financial Position
The categories of the fair value hierarchy that reflect the significance of inputs used in making fair value measurements are as follows:
Level 1 – quoted prices in active markets for identical assets or liabilities;
Level 2 – inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
Level 3 – inputs for the asset or liability that are not based on observable market data.
49

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	
The levels in the fair value hierarchy that the Company’s financial assets and liabilities that are measured and recognized at fair value on a recurring basis are as follows:

 	 	December 31	 	 	December 31	 	
Level 1	 	2017	 	 	2016	 	
Investment in Fortune Bay (1)	$	910	 	$	1,160	 	
5.75% convertible debentures (2,3)	 	47,625	 	 	52,500	 	
Warrant liability (2)	 	44	 	 	1,066	 	

1.	Fortune Bay is a publicly-listed company and the fair value is based on the trading price of its shares as at the date of the statement of financial position.	
2.	The fair value of the 5.75% convertible debentures and the warrant liability are calculated using the respective market prices on the TSX Exchange as at the date of the statement of financial position.	
3.	On March 13, 2018, the holders of the 5.75% convertible debentures voted to approve an amendment to the maturity date of the debentures to the day following the closing date of the Arrangement with full principal of $75 million paid on this date.	
At December 31, 2017, there were no financial assets or liabilities measured and recognized on the consolidated statements of financial position at fair value that would be categorized as Level 3 in the fair value hierarchy (December 31, 2016 – $nil).
The following describes the types of financial instrument risks to which the Company is exposed and its objectives and policies for managing those risk exposures:
a) Credit risk
Credit risk is the risk that the counterparty to a financial instrument will cause a financial loss for the Company by failing to discharge its obligations. Credit risk is primarily associated with trade and other receivables; however, it also arises on cash and cash equivalents and restricted cash. To mitigate exposure to credit risk on financial assets, the Company ensures non-related counterparties demonstrate minimum acceptable credit worthiness and ensures liquidity of available funds.
The Company closely monitors its financial assets and does not have any significant concentration of credit risk with non-related parties. The Company invests its cash and cash equivalents in highly rated financial institutions and sells its products exclusively to organizations with strong credit ratings. The credit risk associated with trade receivables at December 31, 2017 is considered to be negligible. The Company expects the outstanding VAT receivable from the Mexican tax authorities to be refunded or be offset against future tax payments. Approximately $15.2 million was refunded since July 2017.
The Company’s maximum exposure to credit risk at December 31, 2017, and 2016 is as follows:

 	 	2017	 	 	2016	 	
Cash and restricted cash	$	20,966	 	$	24,452	 	
Trade and other receivables	 	1,241	 	 	1,962	 	
Current and non-current taxes receivable	 	40,789	 	 	41,838	 	
 	$	62,996	 	$	68,252	 	
b) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s objectives and key guidelines for capital management, including management of long-term debt, are described in note 21. Further considerations in our liquidity risk are described in note 15 (c).
50

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	
If the Arrangement Agreement to sell the Company to First Majestic is terminated for any reason, there would be significant uncertainy as to whether the Company could discharge its commitments as they come due from cash from operations and collection of receivables without an extension of the RCF maturity date or other form of re-financing.
The table below shows the Company’s liquidity risk profile at December 31, 2017:

	 	Within 1	 	 	2-5	 	 	Total	 	
(in thousands of U.S. dollars)	 	year	 	 	years	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	$	20,966	 	$	-	 	$	20,966	 	
Trade and other payables	 	(19,593	)	 	-	 	 	(19,593	)	
Revolving credit facility balance and interest	 	(30,657	)	 	-	 	 	(30,657	)	
Finance lease liabilities	 	(109	)	 	-	 	 	(109	)	
5.75% Convertible debentures and interest	 	(4,313	)	 	(80,010	)	 	(84,323	)	
Total	 	($33,706	)	 	($80,010	)	 	($113,716	)	
Refer to note 2 b) for the Company’s plans to address liquidity risk associated with the current working capital deficiency. The Company has entered into commercial leases on certain types of equipment and office space which have been classified as operating leases. These leases have terms of between 1 and 6 years. There are no restrictions placed on the Company as a result of entering into these leases. Some of the leases contain renewal or purchase options at the end of the lease. The total operating lease expense from continuing operations during the year ended December 31, 2017 was $0.9 million (2016 - $0.8 million and 2015 - $1.2 million).
c) Market risk
(i) Currency risk
Currency risk is the risk that the fair values or future cash flows of the Company’s financial instruments will fluctuate because of changes in foreign currency exchange rates. Exchange rate fluctuations may affect the costs incurred in the Company’s operations. Gold is sold in US dollars and costs are incurred principally in US 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 US 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, and 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 entities whose taxable profit or loss is denominated in a non-US dollar currency. Changes in exchange rates give rise to temporary differences resulting in a deferred tax liability or asset with the resulting deferred tax charged or credited to income tax expense.
During the year ended December 31, 2017, the Company recognized a loss of $4.5 million on foreign exchange (2016 – loss of $1.0 million and 2015 – gain of $0.1 million). Based on the above net exposures at December 31, 2017, a 10% depreciation or appreciation of the Mexican peso against the U.S. dollar would result in a $1.6 million increase or decrease in the Company’s before-tax net loss from continuing operations (2016 - $1.4 million and 2015 - $0.03 million); and a 10% depreciation or appreciation of the Canadian dollar against the U.S. dollar would result in a $0.2 million increase or decrease in the Company’s before-tax net loss from continuing operations (2016 - $2.7 million and 2015 - $1.6 million).
51

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	
The Company does not currently use derivative instruments to reduce its exposure to currency risk, however, management monitors its differing currency needs and tries to reduce its exposure to currency risks through exchanging currencies at what are considered to be optimal times.
(ii) Interest rate risk
Interest rate risk is the risk that the fair values and future cash flows of the financial instruments will fluctuate because of changes in market interest rates. The exposure to interest rates is monitored. The Company’s exposure to interest rate risk is limited to the revolving credit facility which is subject to a floating interest rate. An increase or decrease of 100 basis points in the interest rate would result in a decrease or increase in profit before tax of $0.3 million (assuming $30.2 million drawn on the line of credit).
(iii) Price risk
Price risk is the risk that the fair value or future cash flows of the Company’s financial instruments will fluctuate because of changes in commodity prices. Profitability depends on sales prices for gold and silver. Metal prices are affected by numerous factors such as the sale or purchase of gold and silver by various central banks and financial institutions, interest rates, exchange rates, inflation or deflation, fluctuations in the value of the U.S. dollar and foreign currencies, global and regional supply and demand, and the political and economic conditions of major producing countries throughout the world.
The table below summarizes the impact on profit before tax for a 10% change in the average commodity price achieved by the Company during the year. The analysis is based on the assumption that the gold and silver prices move 10% with all other variables held constant.

 	 	2017	 	 	2016	 	 	2015	 	
Gold price	 	 	 	 	 	 	 	 	 	
  10% increase	$	14,081	 	$	14,084	 	$	18,091	 	
  10% decrease	 	(14,081	)	 	(14,084	)	 	(18,091	)	
Silver price	 	 	 	 	 	 	 	 	 	
  10% increase	$	-	 	$	222	 	$	938	 	
  10% decrease	 	-	 	 	(222	)	 	(938	)	

23.	Related party transactions	
Compensation of key management personnel of the Company
The key management personnel of the Company are considered to be all directors, the Chief Executive Officer, the Chief Financial Officer and the Chief Operating Officer. Aggregate compensation recognized in respect of key management personnel of the Company including directors is as follows:
52

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	

 	 	2017	 	 	2016	 	 	2015	 	
Short-term employee benefits	$	2,418	 	$	3,122	 	$	5,198	 	
Share-based compensation	 	2,409	 	 	3,879	 	 	2,494	 	
Termination benefits	 	1,395	 	 	1,172	 	 	-	 	
 	$	6,222	 	$	8,173	 	$	7,692	 	
As at December 31, 2017 $0.9 million (2016 - $0.6 million) of the short-term employee benefits were outstanding. All of the compensation of key management personnel was equivalent to that which would be incurred in an arm’s length transaction.

24.	Commitments and contingencies	
(a) 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 an assembly where each of the Ejido members has a voting right. 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.
Certain of the properties included in the San Dimas mine and for which Primero holds legal title have been subject to legal proceedings commenced by Ejidos seeking title to the property. These proceedings were initiated against 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. As such, Primero initially has no standing to participate in them and may not receive timely notice of such actions brought or decisions rendered.
Since acquiring the San Dimas mine, Primero has been aware of four such Ejidos actions, three of which have been finally resolved in favour of Primero’s interests. Primero continues to challenge the fourth outstanding Ejidos’ legal claim to defend its position as the legitimate owner of the subject 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. Further, there can be no assurance that Ejidos will not engage in legal proceedings to claim interests in properties owned by Primero in future.
(b) The Company has agreed to indemnify its directors and officers, and the directors and officers of its subsidiaries, to the extent permitted under corporate law, against costs and damages incurred as a result of lawsuits or any other judicial, administrative or investigative proceeding in which said directors or officers are sued as a result of their services. The directors and officers are covered by directors’ and officers’ liability insurance.
53

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	
In July 2016, the Company and certain officers were served with a class action lawsuit that was filed earlier in the year in federal court in the State of California seeking to recover damages for investors in the Company’s common shares under the U.S. federal securities laws. The Company filed a motion to dismiss this action which was granted on January 30, 2017. The plaintiff’s claims were dismissed without prejudice and the plaintiffs filed an amended complaint on February 27, 2017. On July 14, 2017 the Company’s motion to dismiss the amended complaint was granted and the plaintiffs’ claims were dismissed without prejudice. Rather than amend the complaint again, the plaintiffs asked the federal court to enter final judgment and initiated an appeal of the dismissal to the Ninth Circuit Court of Appeals on September 8, 2017. The parties have filed their briefs in this appeal and a ruling on the appeal is expected sometime in 2018. The Company intends to vigorously defend this class action lawsuit.
(c) As at December 31, 2017, the Company had entered into commitments to purchase plant and equipment totaling $0.1 million (December 31, 2016 - $0.5 million).
(d) Due to the size, complexity and nature of the Company’s operations, various legal and tax matters arise in the ordinary course of business. The Company accrues for such items when a liability is both probable and the amount can be reasonably estimated.
(e) Under the Silver Purchase Agreement, a subsidiary of Primero has a commitment to deliver 215 million ounces of silver to WPMI by October 15, 2031 (the “Minimum Silver Amount”). In the event the Minimum Silver Amount is not reached, a payment of $0.50 per ounce for the shortfall ounces is required (the “Minimum Silver Payment”). Goldcorp has indemnified Primero, and will ultimately be responsible for, any amount paid in respect of the Minimum Silver Payment.

25.	Subsequent events	
On January 12, 2018, the Company announced that it entered into the Arrangement Agreement whereby First Majestic will acquire all of the issued and outstanding common shares of Primero (the "Arrangement"). Under the terms of the Arrangement Agreement, all of Primero’s issued and outstanding common shares will be exchanged for First Majestic common shares on the basis of 0.03325 of a First Majestic common share for each Primero common share (the "Exchange Ratio").
Concurrent with execution of the Arrangement Agreement, First Majestic has entered into agreements with WPMI, a wholly-owned subsidiary of WPM whereby, following closing of the Arrangement, the current silver streaming interest at San Dimas held by WPM will be terminated and First Majestic and WPM will enter into a new stream arrangement based on 25% of the gold equivalent production at San Dimas (the "New Stream") with ongoing payments of $600 per gold equivalent ounce delivered under the agreement. As part of the transaction, WPM will receive 20,914,590 common shares of First Majestic having an aggregate value of $151 million.
The Arrangement will also provide for the issuance by First Majestic of an aggregate of approximately 226,476 replacement stock options (assuming no exercise of existing Primero options) to Primero optionholders who do not exercise their Primero options prior to the effective time of the Arrangement, at exercise prices adjusted by the Exchange Ratio. Under the Arrangement all existing warrants of Primero will become exercisable to acquire First Majestic common shares at exercise prices adjusted by the Exchange Ratio. The Arrangement will also provide that upon the Arrangement becoming effective all existing deferred share units and phantom share units of Primero will be paid out in cash in an amount equal to C$0.30 per deferred share unit or phantom share unit.
54

PRIMERO MINING CORP.	
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	
(IN THOUSANDS OF UNITED STATES DOLLARS UNLESS OTHERWISE STATED)	
Certain additional amounts payable in connection with the Arrangement, include repayment of all amounts owing under Primero's existing RCF and the expected repayment of Primero's $75 million of outstanding convertible debentures.
On March 13, 2018, the Arrangement was approved by Primero shareholders. The Company is awaiting anti-trust clearance in Mexico. The Arrangement is expected to close in late April or early May 2018, subject to applicable regulatory approvals and the satisfaction of other customary conditions. In the event that the Arrangement does not close by April 30, 2018, the Company will seek an extension of the RCF.
On March 13, 2018, the debentureholders voted to approve an amendment to the maturity date of the debentures. Upon the closing of the Arrangement, the amendment of the trust indenture will accelerate the maturity date of the Primero Debentures to the next Business Day (as defined in the trust indenture) following the effective date of the Arrangement.
55

Incorporation Number	BC0870265	

CONSOLIDATED ARTICLES	
OF	
PRIMERO MINING CORP.	

PROVINCE OF BRITISH COLUMBIA	
 	
BUSINESS CORPORATIONS ACT	
(Includes the articles as adopted on incorporation on November 26, 2007, amendments made by resolutions passed at the Annual and Special Meeting held on June 28, 2010 and effective on deposit of the minutes at the Company’s records office on July 15, 2010, amendments made by resolutions passed at the Annual and Special Meeting held on May 17, 2011 and effective on deposit of the minutes at the Company’s records office on June 9, 2011 and amendments made by resolutions passed at the Annual General and Special Meeting held on May 6, 2015 and effective on deposit of the minutes at the Company’s records office on September 17, 2015.)

TABLE OF CONTENTS

 	PART 1	 	
 	INTERPRETATION	 	

Article 1.1	Definitions	1	
Article 1.2	Business Corporations Act and Interpretation Act Definitions Applicable	1	
 	 	 	
   PART 2  	
   SHARES AND SHARE CERTIFICATES  	
 	 	 	
Article 2.1	Authorized Share Structure	1	
Article 2.2	Form of Share Certificate	2	
Article 2.3	Shareholder Entitled to Certificate, Acknowledgment or Written Notice	2	
Article 2.4	Delivery by Mail	2	
Article 2.5	Replacement of Worn Out or Defaced Certificate or Acknowledgement	2	
Article 2.6	Replacement of Lost, Stolen or Destroyed Certificate or Acknowledgment	2	
Article 2.7	Splitting Share Certificates	3	
Article 2.8	Certificate Fee	3	
Article 2.9	Recognition of Trusts	3	
 	 	 	
   PART 3  	
   ISSUE OF SHARES  	
 	 	 	
Article 3.1	Directors Authorized	3	
Article 3.2	Commissions and Discounts	4	
Article 3.3	Brokerage	4	
Article 3.4	Conditions of Issue	4	
Article 3.5	Share Purchase Warrants and Rights	4	
 	 	 	
   PART 4  	
   SHARE REGISTERS  	
 	 	 	
Article 4.1	Central Securities Register	4	
Article 4.2	Closing Register	5	
 	 	 	
   PART 5  	
   SHARE TRANSFERS  	
 	 	 	
Article 5.1	Registering Transfers	5	
Article 5.2	Form of Instrument of Transfer	5	
Article 5.3	Transferor Remains Shareholder	5	
Article 5.4	Signing of Instrument of Transfer	5	
Article 5.5	Enquiry as to Title Not Required	6	
Article 5.6	Transfer Fee	6	
 	 	 	
   PART 6  	
   TRANSMISSION OF SHARES  	
 	 	 	
Article 6.1	Legal Personal Representative Recognized on Death	6	
Article 6.2	Rights of Legal Personal Representative	6	
( i )

   PART 7  	
   PURCHASE OF SHARES  	
 	 	 	
Article 7.1	Company Authorized to Purchase Shares	7	
Article 7.2	Purchase When Insolvent	7	
Article 7.3	Sale and Voting of Purchased Shares	7	
 	 	 	
   PART 8  	
   BORROWING POWERS  	
 	 	 	
Article 8.1	Borrowing Powers	7	
 	 	 	
   PART 9  	
   ALTERATIONS  	
 	 	 	
Article 9.1	Alteration of Authorized Share Structure	8	
Article 9.2	Special Rights and Restrictions	9	
Article 9.3	Change of Name	9	
Article 9.4	Other Alterations	9	
 	 	 	
   PART 10  	
   MEETINGS OF SHAREHOLDERS  	
 	 	 	
Article 10.1	Annual General Meetings	9	
Article 10.2	Resolution Instead of Annual General Meeting	9	
Article 10.3	Calling of Meetings of Shareholders	10	
Article 10.4	Notice for Meetings of Shareholders	10	
Article 10.5	Record Date for Notice	10	
Article 10.6	Record Date for Voting	10	
Article 10.7	Failure to Give Notice and Waiver of Notice	10	
Article 10.8	Notice of Special Business at Meetings of Shareholders	11	
Article 10.9	Place of Meetings	11	
 	 	 	
   PART 11  	
   PROCEEDINGS AT MEETINGS OF SHAREHOLDERS  	
 	 	 	
Article 11.1	Special Business	11	
Article 11.2	Special Majority	12	
Article 11.3	Quorum	12	
Article 11.4	One Shareholder May Constitute Quorum	12	
Article 11.5	Other Persons May Attend	12	
Article 11.6	Requirement of Quorum	12	
Article 11.7	Lack of Quorum	13	
Article 11.8	Lack of Quorum at Succeeding Meeting	13	
Article 11.9	Chair	13	
Article 11.10	Selection of Alternate Chair	13	
Article 11.11	Adjournments	13	
Article 11.12	Notice of Adjourned Meeting	14	
Article 11.13	Decisions by Show of Hands or Poll	14	
Article 11.14	Declaration of Result	14	
( ii )

Article 11.15	Motion Need Not be Seconded	14	
Article 11.16	Casting Vote	14	
Article 11.17	Manner of Taking Poll	14	
Article 11.18	Demand for Poll on Adjournment	15	
Article 11.19	Chair Must Resolve Dispute	15	
Article 11.20	Casting of Votes	15	
Article 11.21	Demand for Poll	15	
Article 11.22	Demand for Poll Not to Prevent Continuance of Meeting	15	
Article 11.23	Retention of Ballots and Proxies	15	
 	 	 	
   PART 12  	
   VOTES OF SHAREHOLDERS  	
 	 	 	
Article 12.1	Number of Votes by Shareholder or by Shares	15	
Article 12.2	Votes of Persons in Representative Capacity	16	
Article 12.3	Votes by Joint Holders	16	
Article 12.4	Legal Personal Representatives as Joint Shareholders	16	
Article 12.5	Representative of a Corporate Shareholder	16	
Article 12.6	Proxy Provisions Do Not Apply to All Companies	17	
Article 12.7	Appointment of Proxy Holders	17	
Article 12.8	Alternate Proxy Holders	17	
Article 12.9	When Proxy Holder Need Not Be Shareholder	17	
Article 12.10	Deposit of Proxy	18	
Article 12.11	Validity of Proxy Vote	18	
Article 12.12	Form of Proxy	18	
Article 12.13	Revocation of Proxy	19	
Article 12.14	Revocation of Proxy Must Be Signed	19	
Article 12.15	Production of Evidence of Authority to Vote	19	
 	 	 	
   PART 13  	
   DIRECTORS  	
 	 	 	
Article 13.1	First Directors; Number of Directors	20	
Article 13.2	Change in Number of Directors	20	
Article 13.3	Directors’ Acts Valid Despite Vacancy	20	
Article 13.4	Qualifications of Directors	21	
Article 13.5	Remuneration of Directors	21	
Article 13.6	Reimbursement of Expenses of Directors	21	
Article 13.7	Special Remuneration for Directors	21	
Article 13.8	Gratuity, Pension or Allowance on Retirement of Director	21	
 	 	 	
   PART 14  	
   ELECTION AND REMOVAL OF DIRECTORS  	
 	 	 	
Article 14.1	Election at Annual General Meeting	21	
Article 14.2	Consent to be a Director	22	
Article 14.3	Failure to Elect or Appoint Directors	22	
Article 14.4	Places of Retiring Directors Not Filled	22	
Article 14.5	Directors May Fill Casual Vacancies	23	
( iii )

Article 14.6	Remaining Directors Power to Act	23	
Article 14.7	Shareholders May Fill Vacancies	23	
Article 14.8	Additional Directors	23	
Article 14.9	Ceasing to be a Director	23	
Article 14.10	Removal of Director by Shareholders	24	
Article 14.11	Removal of Director by Directors	24	
 	 	 	
   PART 15  	
   ALTERNATE DIRECTORS  	
 	 	 	
Article 15.1	Appointment of Alternate Director	24	
Article 15.2	Notice of Meetings	24	
Article 15.3	Alternate for More Than One Director Attending Meetings	24	
Article 15.4	Consent Resolutions	25	
Article 15.5	Alternate Director Not an Agent	25	
Article 15.6	Revocation of Appointment of Alternate Director	25	
Article 15.7	Ceasing to be an Alternate Director	25	
Article 15.8	Remuneration and Expenses of Alternate Director	25	
 	 	 	
   PART 16  	
   POWERS AND DUTIES OF DIRECTORS  	
 	 	 	
Article 16.1	Powers of Management	26	
Article 16.2	Appointment of Attorney of Company	26	
 	 	 	
   PART 17  	
   DISCLOSURE OF INTEREST OF DIRECTORS  	
 	 	 	
Article 17.1	Obligation to Account for Profits	26	
Article 17.2	Restrictions on Voting by Reason of Interest	26	
Article 17.3	Interested Director Counted in Quorum	27	
Article 17.4	Disclosure of Conflict of Interest or Property	27	
Article 17.5	Director Holding Other Office in the Company	27	
Article 17.6	No Disqualification	27	
Article 17.7	Professional Services by Director or Officer	27	
Article 17.8	Director or Officer in Other Corporations	27	
 	 	 	
   PART 18  	
   PROCEEDINGS OF DIRECTORS  	
 	 	 	
Article 18.1	Meetings of Directors	28	
Article 18.2	Voting at Meetings	28	
Article 18.3	Chair of Meetings	28	
Article 18.4	Meetings by Telephone or Other Communications Medium	28	
Article 18.5	Calling of Meetings	29	
Article 18.6	Notice of Meetings	29	
Article 18.7	When Notice Not Required	29	
Article 18.8	Meeting Valid Despite Failure to Give Notice	29	
Article 18.9	Waiver of Notice of Meetings	29	
( iv )

Article 18.10	Quorum	29	
Article 18.11	Validity of Acts Where Appointment Defective	30	
Article 18.12	Consent Resolutions in Writing	30	
 	 	 	
   PART 19  	
   EXECUTIVE AND OTHER COMMITTEES  	
 	 	 	
Article 19.1	Appointment and Powers of Executive Committee	30	
Article 19.2	Appointment and Powers of Other Committees	31	
Article 19.3	Obligations of Committees	31	
Article 19.4	Powers of Board	31	
Article 19.5	Committee Meetings	32	
 	 	 	
   PART 20  	
   OFFICERS  	
 	 	 	
Article 20.1	Directors May Appoint Officers	32	
Article 20.2	Functions, Duties and Powers of Officers	32	
Article 20.3	Qualifications	32	
Article 20.4	Remuneration and Terms of Appointment	33	
 	 	 	
   PART 21  	
   INDEMNIFICATION  	
 	 	 	
Article 21.1	Definitions	33	
Article 21.2	Mandatory Indemnification of Directors and Former Directors	33	
Article 21.3	Indemnification of Other Persons	34	
Article 21.4	Non-Compliance with Business Corporations Act	34	
Article 21.5	Company May Purchase Insurance	34	
 	 	 	
   PART 22  	
   DIVIDENDS  	
 	 	 	
Article 22.1	Payment of Dividends Subject to Special Rights	34	
Article 22.2	Declaration of Dividends	34	
Article 22.3	No Notice Required	35	
Article 22.4	Record Date	35	
Article 22.5	Manner of Paying Dividend	35	
Article 22.6	Settlement of Difficulties	35	
Article 22.7	When Dividend Payable	35	
Article 22.8	Dividends to be Paid in Accordance with Number of Shares	35	
Article 22.9	Receipt by Joint Shareholders	35	
Article 22.10	Dividend Bears No Interest	36	
Article 22.11	Fractional Dividends	36	
Article 22.12	Payment of Dividends	36	
Article 22.13	Capitalization of Surplus	36	
( v )

   PART 23  	
   DOCUMENTS, RECORDS AND REPORTS  	
 	 	 	
Article 23.1	Recording of Financial Affairs	36	
Article 23.2	Inspection of Accounting Records	36	
 	 	 	
   PART 24  	
   NOTICES  	
 	 	 	
Article 24.1	Method of Giving Notice	37	
Article 24.2	Deemed Receipt of Mailing	37	
Article 24.3	Certificate of Sending	38	
Article 24.4	Notice to Joint Shareholders	38	
Article 24.5	Notice to Trustees	38	
 	 	 	
   PART 25  	
   SEAL  	
 	 	 	
Article 25.1	Who May Attest Seal	38	
Article 25.2	Sealing Copies	39	
Article 25.3	Mechanical Reproduction of Seal	39	
 	 	 	
   PART 26  	
   PROHIBITIONS  	
 	 	 	
Article 26.1	Definitions	39	
Article 26.2	Application	40	
Article 26.3	Consent Required for Transfer of Shares or Designated Securities	40	
 	 	 	
   PART 27  	
  SPECIAL RIGHTS AND RESTRICTIONS ATTACHING TO THE COMMON SHARES	
   AND THE PREFERRED SHARES  	
 	 	 	
Article 27.1	Voting Rights	40	
Article 27.2	Dividend Rights on Common Shares	40	
Article 27.3	Dissolution	40	
Article 27.4	Issuance of Preferred Shares in Series	40	
Article 27.5	Ranking	41	
( vi )

Incorporation Number	BC0870265	

PRIMERO MINING CORP.	
(the “ Company ” )	
 	
CONSOLIDATED ARTICLES	
 	
PART 1	
INTERPRETATION	

Article 1.1	Definitions	
In these Articles, unless the context otherwise requires:

 	(a)	“ board of directors ”, “ directors ” and “ board ” mean the directors or sole director of the Company for the time being;	
 	 	 	
 	(b)	“ Business Corporations Act ” means the Business Corporations Act (British Columbia) from time to time in force and all amendments thereto and includes all regulations and amendments thereto made pursuant to that Act;	
 	 	 	
 	(c)	“ legal personal representative ” means the personal or other legal representative of the shareholder;	
 	 	 	
 	(d)	“ registered address ” of a shareholder means the shareholder’s address as recorded in the central securities register;	
 	 	 	
 	(e)	“ seal ” means the seal of the Company, if any.	

Article 1.2	Business Corporations Act and Interpretation Act Definitions Applicable	
The definitions in the Business Corporations Act and the definitions and rules of construction in the Interpretation Act , with the necessary changes, so far as applicable, and unless the context requires otherwise, apply to these Articles as if they were an enactment. If there is a conflict between a definition in the Business Corporations Act and a definition or rule in the Interpretation Act relating to a term used in these Articles, the definition in the Business Corporations Act will prevail in relation to the use of the term in these Articles. If there is a conflict between these Articles and the Business Corporations Act , the Business Corporations Act will prevail.
PART 2
 SHARES AND SHARE CERTIFICATES

Article 2.1	Authorized Share Structure	
The authorized share structure of the Company consists of shares of the class or classes and series, if any, described in the Notice of Articles of the Company.

- 2 -

Article 2.2	Form of Share Certificate	
Each share certificate issued by the Company must comply with, and be signed as required by, the Business Corporations Act.

Article 2.3	Shareholder Entitled to Certificate, Acknowledgment or Written Notice	
Unless the shares of which the shareholder is the registered owner are shares which have been deemed by the Board to be a class of uncertificated shares, each shareholder is entitled on request, without charge, to (a) one share certificate representing the shares of each class or series of shares registered in the shareholder’s name or (b) a non-transferable written acknowledgment of the shareholder’s right to obtain such a share certificate, provided that in respect of a share held jointly by several persons, the Company is not bound to issue more than one share certificate or acknowledgment and delivery of a share certificate or acknowledgment for a share to one of several joint shareholders or to one of the shareholders’ duly authorized agents will be sufficient delivery to all. If a shareholder is the registered owner of uncertificated shares, the Company must, upon request by the shareholder, send without charge to the shareholder a written notice containing the information required by the Business Corporations Act within a reasonable time after the issue or transfer of such share.

Article 2.4	Delivery by Mail	
Any share certificate or non-transferable written acknowledgment of a shareholder’s right to obtain a share certificate, or written notice of the issue or transfer of an uncertificated share may be sent to the shareholder by mail at the shareholder’s registered address and neither the Company nor any director, officer or agent of the Company is liable for any loss to the shareholder because the share certificate, acknowledgement or written notice is lost in the mail or stolen.

Article 2.5	Replacement of Worn Out or Defaced Certificate or Acknowledgement	
If the directors are satisfied that a share certificate or a non-transferable written acknowledgment of the shareholder’s right to obtain a share certificate is worn out or defaced, they must, on production to them of the share certificate or acknowledgment, as the case may be, and on such other terms, if any, as they think fit:

 	(a)	order the share certificate or acknowledgment, as the case may be, to be cancelled; and	
 	 	 	
 	(b)	issue a replacement share certificate or acknowledgment, as the case may be.	

Article 2.6	Replacement of Lost, Stolen or Destroyed Certificate or Acknowledgment	
If a share certificate or a non-transferable written acknowledgment of a shareholder’s right to obtain a share certificate is lost, stolen or destroyed, a replacement share certificate or acknowledgment, as the case may be, must be issued to the person entitled to that share certificate or acknowledgment, as the case may be, if the requirements of the Business Corporations Act are satisfied and the directors receive:

- 3 -

 	(a)	proof satisfactory to them that the share certificate or acknowledgement is lost, stolen or destroyed; and	
 	 	 	
 	(b)	any indemnity the directors consider adequate.	

Article 2.7	Splitting Share Certificates	
If a shareholder surrenders a share certificate to the Company with a written request that the Company issue in the shareholder’s name two or more share certificates, each representing a specified number of shares and in the aggregate representing the same number of shares as the share certificate so surrendered, the Company must cancel the surrendered share certificate and issue replacement share certificates in accordance with that request.

Article 2.8	Certificate Fee	
There must be paid to the Company, in relation to the issue of any share certificate under Articles 2.5, 2.6 or 2.7, the amount, if any and which must not exceed the amount prescribed under the Business Corporations Act , determined by the directors.

Article 2.9	Recognition of Trusts	
Except as required by law or statute or these Articles, no person will be recognized by the Company as holding any share upon any trust, and the Company is not bound by or compelled in any way to recognize (even when having notice thereof) any equitable, contingent, future or partial interest in any share or fraction of a share or (except as by law or statute or these Articles provided or as ordered by a court of competent jurisdiction) any other rights in respect of any share except an absolute right to the entirety thereof in the shareholder.
PART 3
ISSUE OF SHARES

Article 3.1	Directors Authorized	
Subject to the Business Corporations Act and the rights of the holders of issued shares of the Company, the Company may issue, allot, sell or otherwise dispose of the unissued shares, and issued shares held by the Company, at the times, to the persons, including directors, in the manner, on the terms and conditions and for the issue prices (including any premium at which shares with par value may be issued) that the directors may determine The issue price for a share with par value must be equal to or greater than the par value of the share.

- 4 -

Article 3.2	Commissions and Discounts	
The Company may at any time pay a reasonable commission or allow a reasonable discount to any person in consideration of that person purchasing or agreeing to purchase shares of the Company from the Company or any other person or procuring or agreeing to procure purchasers for shares of the Company.

Article 3.3	Brokerage	
The Company may pay such brokerage fee or other consideration as may be lawful for or in connection with the sale or placement of its securities.

Article 3.4	Conditions of Issue	
Except as provided for by the Business Corporations Act , no share may be issued until it is fully paid. A share is fully paid when:

 	(a)	consideration is provided to the Company for the issue of the share by one or more of the following:	

 	(i)	past services performed for the Company;	
 	 	 	
 	(ii)	property;	
 	 	 	
 	(iii)	money; and	

 	(b)	the value of the consideration received by the Company equals or exceeds the issue price set for the share under Article 3.1.	

Article 3.5	Share Purchase Warrants and Rights	
Subject to the Business Corporations Act , the Company may issue share purchase warrants, options and rights upon such terms and conditions as the directors determine, which share purchase warrants, options and rights may be issued alone or in conjunction with debentures, debenture stock, bonds, shares or any other securities issued or created by the Company from time to time.
PART 4
SHARE REGISTERS

Article 4.1	Central Securities Register	
As required by and subject to the Business Corporations Act , the Company must maintain in British Columbia a central securities register. The directors may, subject to the Business Corporations Act , appoint an agent to maintain the central securities register. The directors may also appoint one or more agents, including the agent which keeps the central securities register, as transfer agent for its shares or any class or series of its shares, as the case may be, and the same or another agent as registrar for its shares or such class or series of its shares, as the case may be. The directors may terminate such appointment of any agent at any time and may appoint another agent in its place.

- 5 -

Article 4.2	Closing Register	
The Company must not at any time close its central securities register.
PART 5
SHARE TRANSFERS

Article 5.1	Registering Transfers	
A transfer of a share of the Company must not be registered unless:

 	(a)	except as exempted by the Business Corporations Act , a duly signed instrument of transfer in respect of the share (which may be a separate document or endorsed on the share certificate for the shares transferred) made by the shareholder or other appropriate person or by an agent who has actual authority to act on behalf of that person; has been received by the Company;	
 	 	 	
 	(b)	if a share certificate has been issued by the Company in respect of the share to be transferred, that share certificate has been surrendered to the Company; and	
 	 	 	
 	(c)	if a non-transferable written acknowledgment of the shareholder’s right to obtain a share certificate has been issued by the Company in respect of the share to be transferred, that acknowledgment has been surrendered to the Company.	

Article 5.2	Form of Instrument of Transfer	
The instrument of transfer in respect of any share of the Company must be either in the form, if any, on the back of the Company’s share certificates or in some other form that may be approved by the directors from time to time or by the transfer agent or registrar for those shares.

Article 5.3	Transferor Remains Shareholder	
Except to the extent that the Business Corporations Act otherwise provides, the transferor of shares is deemed to remain the holder of the shares until the name of the transferee is entered in a securities register of the Company in respect of the transfer.

Article 5.4	Signing of Instrument of Transfer	
If a shareholder, or his or her duly authorized attorney, signs an instrument of transfer in respect of shares registered in the name of the shareholder, the signed instrument of transfer constitutes a complete and sufficient authority to the Company and its directors, officers and agents to register the number of shares specified in the instrument of transfer or specified in any other manner, or, if no number is specified, all the shares represented by the share certificates or set out in the written acknowledgments deposited with the instrument of transfer, or if the shares are uncertificated shares, then all of the shares registered in the name of the shareholder on the central securities register:

- 6 -

 	(a)	in the name of the person named as transferee in that instrument of transfer; or	
 	 	 	
 	(b)	if no person is named as transferee in that instrument of transfer, in the name of the person on whose behalf the instrument is deposited for the purpose of having the transfer registered.	

Article 5.5	Enquiry as to Title Not Required	
Neither the Company nor any director, officer or agent of the Company is bound to inquire into the title of the person named in the instrument of transfer as transferee or, if no person is named as transferee in the instrument of transfer, of the person on whose behalf the instrument is deposited for the purpose of having the transfer registered or is liable for any claim related to registering the transfer by the shareholder or by any intermediate owner or holder of the shares, of any interest in the shares, of any share certificate representing such shares or of any written acknowledgment of a right to obtain a share certificate for such shares.

Article 5.6	Transfer Fee	
There must be paid to the Company, in relation to the registration of any transfer, the amount, if any, determined by the directors.
PART 6
TRANSMISSION OF SHARES

Article 6.1	Legal Personal Representative Recognized on Death	
In case of the death of a shareholder, the legal personal representative, or if the shareholder was a joint holder, the surviving joint holder, will be the only person recognized by the Company as having any title to the shareholder’s interest in the shares. Before recognizing a person as a legal personal representative, the directors may require proof of appointment by a court of competent jurisdiction, a grant of letters probate, letters of administration or such other evidence or documents as the directors consider appropriate.

Article 6.2	Rights of Legal Personal Representative	
The legal personal representative has the same rights, privileges and obligations that attach to the shares held by the shareholder, including the right to transfer the shares in accordance with these Articles, provided the documents required by the Business Corporations Act and the directors have been deposited with the Company.

- 7 -
PART 7
PURCHASE OF SHARES

Article 7.1	Company Authorized to Purchase Shares	
Subject to Article 7.2, the special rights and restrictions attached to the shares of any class or series and the Business Corporations Act , the Company may, if authorized by the directors, purchase or otherwise acquire any of its shares at the price and upon the terms specified in such resolution.

Article 7.2	Purchase When Insolvent	
The Company must not make a payment or provide any other consideration to purchase or otherwise acquire any of its shares if there are reasonable grounds for believing that:

 	(a)	the Company is insolvent; or	
 	 	 	
 	(b)	making the payment or providing the consideration would render the Company insolvent.	

Article 7.3	Sale and Voting of Purchased Shares	
If the Company retains a share redeemed, purchased or otherwise acquired by it, the Company may sell, gift or otherwise dispose of the share, but, while such share is held by the Company, it:

 	(a)	is not entitled to vote the share at a meeting of its shareholders;	
 	 	 	
 	(b)	must not pay a dividend in respect of the share; and	
 	 	 	
 	(c)	must not make any other distribution in respect of the share.	
PART 8
BORROWING POWERS

Article 8.1	Borrowing Powers	
The Company, if authorized by the directors, may:

 	(a)	borrow money in the manner and amount, on the security, from the sources and on the terms and conditions that they consider appropriate;	
 	 	 	
 	(b)	issue bonds, debentures and debt obligations either outright or as security for any liability or obligation of the Company or any other person and at such discounts or premiums and on such other terms as they consider appropriate;	
 	 	 	
 	(c)	guarantee the repayment of money by any other person or the performance of any obligation of any other person; and	

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 	(d)	mortgage, charge, whether by way of specific or floating charge, grant a security interest in, or give other security on, the whole or any part of the present and future assets and undertaking of the Company.	
PART 9
ALTERATIONS

Article 9.1	Alteration of Authorized Share Structure	

 	(a)	Subject to Article 9.2 and the Business Corporations Act , the Company may by ordinary resolution:	

 	(i)	subdivide or consolidate all or any of its unissued, or fully paid issued, shares;	
 	 	 	
 	(ii)	if the Company is authorized to issue shares of a class of shares with par value:	

 	(A)	decrease the par value of those shares; or	
 	 	 	
 	(B)	if none of the shares of that class of shares are allotted or issued, increase the par value of those shares;	

 	(iii)	change all or any of its unissued, or fully paid issued, shares with par value into shares without par value or any of its unissued shares without par value into shares with par value;	
 	 	 	
 	(iv)	alter the identifying name of any of its shares; or	
 	 	 	
 	(v)	otherwise alter its shares or authorized share structure when required or permitted to do so by the Business Corporations Act .	

 	(b)	Subject to Article 9.2 and the Business Corporations Act , the Company may by directors resolution:	

 	(i)	create one or more classes or series of shares or, if none of the shares of a class or series of shares are allotted or issued, eliminate that class or series of shares;	
 	 	 	
 	(ii)	increase, reduce or eliminate the maximum number of shares that the Company is authorized to issue out of any class or series of shares or establish a maximum number of shares that the Company is authorized to issue out of any class or series of shares for which no maximum is established;	

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Article 9.2	Special Rights and Restrictions	
Subject to the Business Corporations Act , the Company may by ordinary resolution:

 	(a)	create special rights or restrictions for, and attach those special rights or restrictions to, the shares of any class or series of shares, whether or not any or all of those shares have been issued; or	
 	 	 	
 	(b)	vary or delete any special rights or restrictions attached to the shares of any class or series of shares, whether or not any or all of those shares have been issued.	

Article 9.3	Change of Name	
The Company may by directors resolution authorize an alteration of its Notice of Articles in order to change its name or adopt or change any translation of that name.

Article 9.4	Other Alterations	
If the Business Corporations Act does not specify the type of resolution and these Articles do not specify another type of resolution, the Company may by ordinary resolution alter these Articles.
PART 10
 MEETINGS OF SHAREHOLDERS

Article 10.1	Annual General Meetings	
Unless an annual general meeting is deferred or waived in accordance with the Business Corporations Act , the Company must hold its first annual general meeting within 18 months after the date on which it was incorporated or otherwise recognized, and after that must hold an annual general meeting at least once in each calendar year and not more than 15 months after the last annual reference date at such time and place as may be determined by the directors.

Article 10.2	Resolution Instead of Annual General Meeting	
If all the shareholders who are entitled to vote at an annual general meeting consent by a unanimous resolution under the Business Corporations Act to all of the business that is required to be transacted at that annual general meeting, the annual general meeting is deemed to have been held on the date of the unanimous resolution. The shareholders must, in any unanimous resolution passed under thisArticle 10.2, select as the Company’s annual reference date a date that would be appropriate for the holding of the applicable annual general meeting.

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Article 10.3	Calling of Meetings of Shareholders	
The directors may, whenever they think fit, call a meeting of shareholders.

Article 10.4	Notice for Meetings of Shareholders	
The Company must send notice of the date, time and location of any meeting of shareholders, in the manner provided in these Articles, or in such other manner, if any, as may be prescribed by ordinary resolution (whether previous notice of the resolution has been given or not), to each shareholder entitled to attend the meeting, to each director and to the auditor of the Company, unless these Articles otherwise provide, at least the following number of days before the meeting:

 	(a)	if and for so long as the Company is a public company, 21 days;	
 	 	 	
 	(b)	otherwise, 10 days.	

Article 10.5	Record Date for Notice	
The directors may set a date as the record date for the purpose of determining shareholders entitled to notice of any meeting of shareholders. The record date must not precede the date on which the meeting is to be held by more than two months or, in the case of a general meeting requisitioned by shareholders under the Business Corporations Act , by more than four months. The record date must not precede the date on which the meeting is held by fewer than:

 	(a)	if and for so long as the Company is a public company, 21 days;	
 	 	 	
 	(b)	otherwise, 10 days.	
If no record date is set, the record date is 5 p.m. on the day immediately preceding the first date on which the notice is sent or, if no notice is sent, the beginning of the meeting.

Article 10.6	Record Date for Voting	
The directors may set a date as the record date for the purpose of determining shareholders entitled to vote at any meeting of shareholders. The record date must not precede the date on which the meeting is to be held by more than two months or, in the case of a general meeting requisitioned by shareholders under the Business Corporations Act , by more than four months. If no record date is set, the record date is 5 p.m. on the day immediately preceding the first date on which the notice is sent or, if no notice is sent, the beginning of the meeting.

Article 10.7	Failure to Give Notice and Waiver of Notice	
The accidental omission to send notice of any meeting to, or the non-receipt of any notice by, any of the persons entitled to notice does not invalidate any proceedings at that meeting. Any person entitled to notice of a meeting of shareholders may, in writing or otherwise, waive or reduce the period of notice of such meeting.

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Article 10.8	Notice of Special Business at Meetings of Shareholders	
If a meeting of shareholders is to consider special business within the meaning of Article 11.1, the notice of meeting must:

 	(a)	state the general nature of the special business; and	
 	 	 	
 	(b)	if the special business includes considering, approving, ratifying, adopting or authorizing any document or the signing of or giving of effect to any document, have attached to it a copy of the document or state that a copy of the document will be available for inspection by shareholders:	

 	(i)	at the Company’s records office, or at such other reasonably accessible location in British Columbia as is specified in the notice; and	
 	 	 	
 	(ii)	during statutory business hours on any one or more specified days before the day set for the holding of the meeting.	

Article 10.9	Place of Meetings	
In addition to any location in British Columbia, any general meeting may be held in any location outside British Columbia approved by a resolution of the directors.
PART 11
 PROCEEDINGS AT MEETINGS OF SHAREHOLDERS

Article 11.1	Special Business	
At a meeting of shareholders, the following business is special business:

 	(a)	at a meeting of shareholders that is not an annual general meeting, all business is special business except business relating to the conduct of or voting at the meeting;	
 	 	 	
 	(b)	at an annual general meeting, all business is special business except for the following:	

 	(i)	business relating to the conduct of or voting at the meeting;	
 	 	 	
 	(ii)	consideration of any financial statements of the Company presented to the meeting;	
 	 	 	
 	(iii)	consideration of any reports of the directors or auditor;	
 	 	 	
 	(iv)	the setting or changing of the number of directors;	
 	 	 	
 	(v)	the election or appointment of directors;	

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 	(vi)	the appointment of an auditor;	
 	 	 	
 	(vii)	the setting of the remuneration of an auditor;	
 	 	 	
 	(viii)	business arising out of a report of the directors not requiring the passing of a special resolution or an exceptional resolution;	
 	 	 	
 	(ix)	any other business which, under these Articles or the Business Corporations Act , may be transacted at a meeting of shareholders without prior notice of the business being given to the shareholders.	

Article 11.2	Special Majority	
The majority of votes required for the Company to pass a special resolution at a meeting of shareholders is two-thirds of the votes cast on the resolution.

Article 11.3	Quorum	
Subject to the special rights and restrictions attached to the shares of any class or series of shares, the quorum for the transaction of business at a meeting of shareholders is two persons who are, or who represent by proxy, shareholders who, in the aggregate, hold at least 5% of the issued shares entitled to be voted at the meeting.

Article 11.4	One Shareholder May Constitute Quorum	
If there is only one shareholder entitled to vote at a meeting of shareholders:

 	(a)	the quorum is one person who is, or who represents by proxy, that shareholder, and	
 	 	 	
 	(b)	that shareholder, present in person or by proxy, may constitute the meeting.	

Article 11.5	Other Persons May Attend	
The directors, the president (if any), the secretary (if any), the assistant secretary (if any), any lawyer for the Company, the auditor of the Company and any other persons invited by the directors are entitled to attend any meeting of shareholders, but if any of those persons does attend a meeting of shareholders, that person is not to be counted in the quorum and is not entitled to vote at the meeting unless that person is a shareholder or proxy holder entitled to vote at the meeting.

Article 11.6	Requirement of Quorum	
No business, other than the election of a chair of the meeting and the adjournment of the meeting, may be transacted at any meeting of shareholders unless a quorum of shareholders entitled to vote is present at the commencement of the meeting, but such quorum need not be present throughout the meeting.

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Article 11.7	Lack of Quorum	
If, within one-half hour from the time set for the holding of a meeting of shareholders, a quorum is not present:

 	(a)	in the case of a general meeting requisitioned by shareholders, the meeting is dissolved, and	
 	 	 	
 	(b)	in the case of any other meeting of shareholders, the meeting stands adjourned to the same day in the next week at the same time and place.	

Article 11.8	Lack of Quorum at Succeeding Meeting	
If, at the meeting to which the meeting referred to in Article 11.7(b)  was adjourned, a quorum is not present within one-half hour from the time set for the holding of the meeting, the person or persons present and being, or representing by proxy, one or more shareholders entitled to attend and vote at the meeting constitute a quorum.

Article 11.9	Chair	
The following individual is entitled to preside as chair at a meeting of shareholders:

 	(a)	the chair of the board, if any; or	
 	 	 	
 	(b)	if the chair of the board is absent or unwilling to act as chair of the meeting, the president, if any.	

Article 11.10	Selection of Alternate Chair	
If, at any meeting of shareholders, there is no chair of the board or president present within 15 minutes after the time set for holding the meeting, or if the chair of the board and the president are unwilling to act as chair of the meeting, or if the chair of the board and the president have advised the secretary, if any, or any director present at the meeting, that they will not be present at the meeting, the directors present must choose one of their number to be chair of the meeting or if all of the directors present decline to take the chair or fail to so choose or if no director is present, the shareholders entitled to vote at the meeting who are present in person or by proxy may choose any person present at the meeting to chair the meeting.

Article 1.1.11	Adjournments	
The chair of a meeting of shareholders may, and if so directed by the meeting must, adjourn the meeting from time to time and from place to place, but no business may be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.

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Article 11.12	Notice of Adjourned Meeting	
It is not necessary to give any notice of an adjourned meeting or of the business to be transacted at an adjourned meeting of shareholders except that, when a meeting is adjourned for 30 days or more, notice of the adjourned meeting must be given as in the case of the original meeting.

Article 11.13	Decisions by Show of Hands or Poll	
Subject to the Business Corporations Act , every motion put to a vote at a meeting of shareholders will be decided on a show of hands unless a poll, before or on the declaration of the result of the vote by show of hands, is directed by the chair or demanded by at least one shareholder entitled to vote who is present in person or by proxy.

Article 11.14	Declaration of Result	
The chair of a meeting of shareholders must declare to the meeting the decision on every question in accordance with the result of the show of hands or the poll, as the case may be, and that decision must be entered in the minutes of the meeting. A declaration of the chair that a resolution is carried by the necessary majority or is defeated is, unless a poll is directed by the chair or demanded under Article 11.13, conclusive evidence without proof of the number or proportion of the votes recorded in favour of or against the resolution.

Article 11.15	Motion Need Not be Seconded	
No motion proposed at a meeting of shareholders need be seconded unless the chair of the meeting rules otherwise, and the chair of any meeting of shareholders is entitled to propose or second a motion.

Article 11.16	Casting Vote	
In case of an equality of votes, the chair of a meeting of shareholders does not, either on a show of hands or on a poll, have a second or casting vote in addition to the vote or votes to which the chair may be entitled as a shareholder.

Article 11.17	Manner of Taking Poll	
Subject to Article 11.18, if a poll is duly demanded at a meeting of shareholders:

 	(a)	the poll must be taken:	

 	(i)	at the meeting, or within seven days after the date of the meeting, as the chair of the meeting directs; and	
 	 	 	
 	(ii)	in the manner, at the time and at the place that the chair of the meeting directs;	

 	(b)	the result of the poll is deemed to be the decision of the meeting at which the poll is demanded; and	

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 	(c)	the demand for the poll may be withdrawn by the person who demanded it.	

Article 11.18	Demand for Poll on Adjournment	
A poll demanded at a meeting of shareholders on a question of adjournment must be taken immediately at the meeting.

Article 11.19	Chair Must Resolve Dispute	
In the case of any dispute as to the admission or rejection of a vote given on a poll, the chair of the meeting must determine the dispute, and his or her determination made in good faith is final and conclusive.

Article 11.20	Casting of Votes	
On a poll, a shareholder entitled to more than one vote need not cast all the votes in the same way.

Article 11.21	Demand for Poll	
No poll may be demanded in respect of the vote by which a chair of a meeting of shareholders is elected.

Article 11.22	Demand for Poll Not to Prevent Continuance of Meeting	
The demand for a poll at a meeting of shareholders does not, unless the chair of the meeting so rules, prevent the continuation of a meeting for the transaction of any business other than the question on which a poll has been demanded.

Article 11.23	Retention of Ballots and Proxies	
The Company must, for at least three months after a meeting of shareholders, keep each ballot cast on a poll and each proxy voted at the meeting, and, during that period, make them available for inspection during normal business hours by any shareholder or proxyholder entitled to vote at the meeting. At the end of such three month period, the Company may destroy such ballots and proxies.
PART 12
 VOTES OF SHAREHOLDERS

Article 12.1	Number of Votes by Shareholder or by Shares	
Subject to any special rights or restrictions attached to any shares and to the restrictions imposed on joint shareholders under Article 12.3:

 	(a)	on a vote by show of hands, every person present who is a shareholder or proxy holder and entitled to vote on the matter has one vote; and	

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 	(b)	on a poll, every shareholder entitled to vote on the matter has one vote in respect of each share entitled to be voted on the matter and held by that shareholder and may exercise that vote either in person or by proxy.	

Article 12.2	Votes of Persons in Representative Capacity	
A person who is not a shareholder may vote at a meeting of shareholders, whether on a show of hands or on a poll, and may appoint a proxy holder to act at the meeting, if, before doing so, the person satisfies the chair of the meeting, or the directors, that the person is a legal personal representative or a trustee in bankruptcy for a shareholder who is entitled to vote at the meeting.

Article 12.3	Votes by Joint Holders	
If there are joint shareholders registered in respect of any share:

 	(a)	any one of the joint shareholders may vote at any meeting, either personally or by proxy, in respect of the share as if that joint shareholder were solely entitled to it; or	
 	 	 	
 	(b)	if more than one of the joint shareholders is present at any meeting, personally or by proxy, and more than one of them votes in respect of that share, then only the vote of the joint shareholder present whose name stands first on the central securities register in respect of the share will be counted.	

Article 12.4	Legal Personal Representatives as Joint Shareholders	
Two or more legal personal representatives of a shareholder in whose sole name any share is registered are, for the purposes of Article 12.3, deemed to be joint shareholders.

Article 12.5	Representative of a Corporate Shareholder	
If a corporation, that is not a subsidiary of the Company, is a shareholder, that corporation may appoint a person to act as its representative at any meeting of shareholders of the Company, and:

 	(a)	for that purpose, the instrument appointing a representative must:	

 	(i)	be received at the registered office of the Company or at any other place specified, in the notice calling the meeting, for the receipt of proxies, at least the number of business days specified in the notice for the receipt of proxies, or if no number of days is specified, two business days before the day set for the holding of the meeting; or	
 	 	 	
 	(ii)	be provided, at the meeting, to the chair of the meeting or to a person designated by the chair of the meeting;	

 	(b)	if a representative is appointed under this Article 12.5:	

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 	(i)	the representative is entitled to exercise in respect of and at that meeting the same rights on behalf of the corporation that the representative represents as that corporation could exercise if it were a shareholder who is an individual, including, without limitation, the right to appoint a proxy holder; and	
 	 	 	
 	(ii)	the representative, if present at the meeting, is to be counted for the purpose of forming a quorum and is deemed to be a shareholder present in person at the meeting.	
Evidence of the appointment of any such representative may be sent to the Company by written instrument, fax or any other method of transmitting legibly recorded messages.

Article 12.6	Proxy Provisions Do Not Apply to All Companies	
If and for so long as the Company is a public company or a pre-existing reporting company which has the Statutory Reporting Company Provisions as part of its Articles or to which the Statutory Reporting Company Provisions apply, Articles 12.7 to 12.15 apply only insofar as they are not inconsistent with any securities legislation n any province or territory of Canada or in the federal jurisdiction of the United States or in any states of the United States that is applicable to the Company and insofar as they are not inconsistent with the regulations and rules made and promulgated under that legislation and all administrative policy statements, blanket orders and rulings, notices and other administrative directions issued by securities commissions or similar authorities appointed under that legislation.

Article 12.7	Appointment of Proxy Holders	
Every shareholder of the Company, including a corporation that is a shareholder but not a subsidiary of the Company, entitled to vote at a meeting of shareholders of the Company may, by proxy, appoint one or more (but not more than five) proxy holders to attend and act at the meeting in the manner, to the extent and with the powers conferred by the proxy.

Article 12.8	Alternate Proxy Holders	
A shareholder may appoint one or more alternate proxy holders to act in the place of an absent proxy holder.

Article 12.9	When Proxy Holder Need Not Be Shareholder	
A person must not be appointed as a proxy holder unless the person is a shareholder, although a person who is not a shareholder may be appointed as a proxy holder if:

 	(a)	the person appointing the proxy holder is a corporation or a representative of a corporation appointed under Article 12.5;	

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 	(b)	the Company has at the time of the meeting for which the proxy holder is to be appointed only one shareholder entitled to vote at the meeting; or	
 	 	 	
 	(c)	the shareholders present in person or by proxy at and entitled to vote at the meeting for which the proxy holder is to be appointed, by a resolution on which the proxy holder is not entitled to vote but in respect of which the proxy holder is to be counted in the quorum, permit the proxy holder to attend and vote at the meeting.	

Article 12.10	Deposit of Proxy	
A proxy for a meeting of shareholders must:

 	(a)	be received at the registered office of the Company or at any other place specified, in the notice calling the meeting, for the receipt of proxies, at least the number of business days specified in the notice, or if no number of days is specified, two business days before the day set for the holding of the meeting; or	
 	 	 	
 	(b)	unless the notice provides otherwise, be provided, at the meeting, to the chair of the meeting or to a person designated by the chair of the meeting.	
A proxy may be sent to the Company by written instrument, fax or any other method of transmitting legibly recorded messages.

Article 12.11	Validity of Proxy Vote	
A vote given in accordance with the terms of a proxy is valid notwithstanding the death or incapacity of the shareholder giving the proxy and despite the revocation of the proxy or the revocation of the authority under which the proxy is given, unless notice in writing of that death, incapacity or revocation is received:

 	(a)	at the registered office of the Company, at any time up to and including the last business day before the day set for the holding of the meeting at which the proxy is to be used; or	
 	 	 	
 	(b)	by the chair of the meeting, before the vote is taken.	

Article 12.12	Form of Proxy	
A proxy, whether for a specified meeting or otherwise, must be either in the following form or in any other form approved by the directors or the chair of the meeting:
[ name of company ]
(the “ Company ”)
The undersigned, being a shareholder of the Company, hereby appoints [ name ] or, failing that person, [ name ] , as proxy holder for the undersigned to attend, act and vote for and on behalf of the undersigned at the meeting of shareholders of the Company to be held on [ month, day, year ] and at any adjournment of that meeting.

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Number of shares in respect of which this proxy is given (if no number is specified, then this proxy if given in respect of all shares registered in the name of the shareholder):

 	Signed [ month, day, year ]	

 	 	
 	[ Signature of shareholder ]	

 	 	
 	[ Name of shareholder – printed ]	

Article 12.13	Revocation of Proxy	
Subject to Article 12.14, every proxy may be revoked by an instrument in writing that is:

 	(a)	received at the registered office of the Company at any time up to and including the last business day before the day set for the holding of the meeting at which the proxy is to be used; or	
 	 	 	
 	(b)	provided, at the meeting, to the chair of the meeting.	

Article 12.14	Revocation of Proxy Must Be Signed	
An instrument referred to in Article 12.13 must be signed as follows:

 	(a)	if the shareholder for whom the proxy holder is appointed is an individual, the instrument must be signed by the shareholder or his or her legal personal representative or trustee in bankruptcy;	
 	 	 	
 	(b)	if the shareholder for whom the proxy holder is appointed is a corporation, the instrument must be signed by the corporation or by a representative appointed for the corporation under Article 12.5.	

Article 12.15	Production of Evidence of Authority to Vote	
The chair of any meeting of shareholders may, but need not, inquire into the authority of any person to vote at the meeting and may, but need not, demand from that person production of evidence as to the existence of the authority to vote.

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PART 13
DIRECTORS

Article 13.1	First Directors; Number of Directors	
The first directors are the persons designated as directors of the Company in the Notice of Articles that applies to the Company when it is recognized under the Business Corporations Act . The number of directors, excluding additional directors appointed under Article 14.8, is set at:

 	(a)	subject to paragraphs (b) and (c), the number of directors that is equal to the number of the Company’s first directors;	
 	 	 	
 	(b)	if the Company is a public company, the greater of three and the most recently set of:	

 	(i)	the number of directors set by ordinary resolution (whether or not previous notice of the resolution was given); and	
 	 	 	
 	(ii)	the number of directors set under Article 14.4;	

 	(c)	if the Company is not a public company, the most recently set of:	

 	(i)	the number of directors set by ordinary resolution (whether or not previous notice of the resolution was given); and	
 	 	 	
 	(ii)	the number of directors set under Article 14.4.	

Article 13.2	Change in Number of Directors	
If the number of directors is set under Article 13.1(b)(i) or Article 13.1(c)(i):

 	(a)	the shareholders may elect or appoint the directors needed to fill any vacancies in the board of directors up to that number;	
 	 	 	
 	(b)	if the shareholders do not elect or appoint the directors needed to fill any vacancies in the board of directors up to that number contemporaneously with the setting of that number, then the directors may appoint, or the shareholders may elect or appoint, directors to fill those vacancies.	

Article 13.3	Directors ’ Acts Valid Despite Vacancy	
An act or proceeding of the directors is not invalid merely because fewer than the number of directors set or otherwise required under these Articles is in office.

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Article 13.4	Qualifications of Directors	
A director is not required to hold a share in the capital of the Company as qualification for his or her office but must be qualified as required by the Business Corporations Act to become, act or continue to act as a director.

Article 13.5	Remuneration of Directors	
The directors are entitled to the remuneration for acting as directors, if any, as the directors may from time to time determine. If the directors so decide, the remuneration of the directors, if any, will be determined by the shareholders. That remuneration may be in addition to any salary or other remuneration paid to any officer or employee of the Company as such, who is also a director.

Article 13.6	Reimbursement of Expenses of Directors	
The Company must reimburse each director for the reasonable expenses that he or she may incur in and about the business of the Company.

Article 13.7	Special Remuneration for Directors	
If any director performs any professional or other services for the Company that in the opinion of the directors are outside the ordinary duties of a director, or if any director is otherwise specially occupied in or about the Company’s business, he or she may be paid remuneration fixed by the directors, or, at the option of that director, fixed by ordinary resolution, and such remuneration may be either in addition to, or in substitution for, any other remuneration that he or she may be entitled to receive.

Article 13.8	Gratuity, Pension or Allowance on Retirement of Director	
Unless otherwise determined by ordinary resolution, the directors on behalf of the Company may pay a gratuity or pension or allowance on retirement to any director who has held any salaried office or place of profit with the Company or to his or her spouse or dependants and may make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance.
PART 14
 ELECTION AND REMOVAL OF DIRECTORS

Article 14.1	Election at Annual General Meeting	
At every annual general meeting and in every unanimous resolution contemplated by Article 10.2:

 	(a)	the shareholders entitled to vote at the annual general meeting for the election of directors must elect, or in the unanimous resolution appoint, a board of directors consisting of the number of directors for the time being set under these Articles; and	

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 	(b)	all the directors cease to hold office immediately before the election or appointment of directors under paragraph (a), but are eligible for re-election or re-appointment.	

Article 14.2	Consent to be a Director	
No election, appointment or designation of an individual as a director is valid unless:

 	(a)	that individual consents to be a director in the manner provided for in the Business Corporations Act ;	
 	 	 	
 	(b)	that individual is elected or appointed at a meeting at which the individual is present and the individual does not refuse, at the meeting, to be a director; or	
 	 	 	
 	(c)	with respect to first directors, the designation is otherwise valid under the Business Corporations Act .	

Article 14.3	Failure to Elect or Appoint Directors	
If:

 	(a)	the Company fails to hold an annual general meeting, and all the shareholders who are entitled to vote at an annual general meeting fail to pass the unanimous resolution contemplated by Article 10.2, on or before the date by which the annual general meeting is required to be held under the Business Corporations Act ; or	
 	 	 	
 	(b)	the shareholders fail, at the annual general meeting or in the unanimous resolution contemplated by Article 10.2, to elect or appoint any directors;	
then each director then in office continues to hold office until the earlier of

 	(c)	the date on which his or her successor is elected or appointed; and	
 	 	 	
 	(d)	the date on which he or she otherwise ceases to hold office under the Business Corporations Act or these Articles.	

Article 14.4	Places of Retiring Directors Not Filled	
If, at any meeting of shareholders at which there should be an election of directors, the places of any of the retiring directors are not filled by that election, those retiring directors who are not re-elected and who are asked by the newly elected directors to continue in office will, if willing to do so, continue in office to complete the number of directors for the time being set pursuant to these Articles until further new directors are elected at a meeting of shareholders convened for that purpose. If any such election or continuance of directors does not result in the election or continuance of the number of directors for the time being set pursuant to these Articles, the number of directors of the Company is deemed to be set at the number of directors actually elected or continued in office.

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Article 14.5	Directors May Fill Casual Vacancies	
Any casual vacancy occurring in the board of directors may be filled by the directors.

Article 14.6	Remaining Directors Power to Act	
The directors may act notwithstanding any vacancy in the board of directors, but if the Company has fewer directors in office than the number set pursuant to these Articles as the quorum of directors, the directors may only act for the purpose of appointing directors up to that number or of summoning a meeting of shareholders for the purpose of filling any vacancies on the board of directors or, subject to the Business Corporations Act , for any other purpose.

Article 14.7	Shareholders May Fill Vacancies	
If the Company has no directors or fewer directors in office than the number set pursuant to these Articles as the quorum of directors, the shareholders may elect or appoint directors to fill any vacancies on the board of directors.

Article 14.8	Additional Directors	
Notwithstanding Articles 13.1 and 13.2, between annual general meetings or unanimous resolutions contemplated by Article 10.2, the directors may appoint one or more additional directors, but the number of additional directors appointed under this Article 14.8 must not at any time exceed:

 	(a)	one-third of the number of first directors, if, at the time of the appointments, one or more of the first directors have not yet completed their first term of office; or	
 	 	 	
 	(b)	in any other case, one-third of the number of the current directors who were elected or appointed as directors other than under this Article 14.8.	
Any director so appointed ceases to hold office immediately before the next election or appointment of directors under Article 14.1(a), but is eligible for re-election or reappointment.

Article 14.9	Ceasing to be a Director	
A director ceases to be a director when:

 	(a)	the term of office of the director expires;	
 	 	 	
 	(b)	the director dies;	

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 	(c)	the director resigns as a director by notice in writing provided to the Company or a lawyer for the Company; or	
 	 	 	
 	(d)	the director is removed from office pursuant to Article 14.10 or Article 14.11.	

Article 14.10	Removal of Director by Shareholders	
The Company may remove any director before the expiration of his or her term of office by special resolution. In that event, the shareholders may elect, or appoint by ordinary resolution, a director to fill the resulting vacancy. If the shareholders do not elect or appoint a director to fill the resulting vacancy contemporaneously with the removal, then the directors may appoint or the shareholders may elect, or appoint by ordinary resolution, a director to fill that vacancy.

Article 14.11	Removal of Director by Directors	
The directors may remove any director before the expiration of his or her term of office if the director is convicted of an indictable offence, or if the director ceases to be qualified to act as a director of a company and does not promptly resign, and the directors may appoint a director to fill the resulting vacancy.
ART 15
ALTERNATE DIRECTORS

Article 15.1	Appointment of Alternate Director	
Any director (an “ appointor ”) may by notice in writing received by the Company appoint any person (an “ appointee ”) who is qualified to act as a director to be his or her alternate to act in his or her place at meetings of the directors or committees of the directors at which the appointor is not present unless (in the case of an appointee who is not a director) the directors have reasonably disapproved the appointment of such person as an alternate director and have given notice to that effect to his or her appointor within a reasonable time after the notice of appointment is received by the Company.

Article 15.2	Notice of Meetings	
Every alternate director so appointed is entitled to notice of meetings of the directors and of committees of the directors of which his or her appointor is a member and to attend and vote as a director at any such meetings at which his or her appointor is not present.

Article 15.3	Alternate for More Than One Director Attending Meetings	
A person may be appointed as an alternate director by more than one director, and an alternate director:

 	(a)	will be counted in determining the quorum for a meeting of directors once for each of his or her appointors and, in the case of an appointee who is also a director, once more in that capacity;	

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 	(b)	has a separate vote at a meeting of directors for each of his or her appointors and, in the case of an appointee who is also a director, an additional vote in that capacity;	
 	 	 	
 	(c)	will be counted in determining the quorum for a meeting of a committee of directors once for each of his or her appointors who is a member of that committee and, in the case of an appointee who is also a member of that committee as a director, once more in that capacity;	
 	 	 	
 	(d)	has a separate vote at a meeting of a committee of directors for each of his or her appointors who is a member of that committee and, in the case of an appointee who is also a member of that committee as a director, an additional vote in that capacity.	

Article 15.4	Consent Resolutions	
Every alternate director, if authorized by the notice appointing him or her, may sign in place of his or her appointor any resolutions to be consented to in writing.

Article 15.5	Alternate Director Not an Agent	
Every alternate director is deemed not to be the agent of his or her appointor.

Article 15.6	Revocation of Appointment of Alternate Director	
An appointor may at any time, by notice in writing received by the Company, revoke the appointment of an alternate director appointed by him or her.

Article 15.7	Ceasing to be an Alternate Director	
The appointment of an alternate director ceases when:

 	(a)	his or her appointor ceases to be a director and is not promptly re-elected or re-appointed;	
 	 	 	
 	(b)	the alternate director dies;	
 	 	 	
 	(c)	the alternate director resigns as an alternate director by notice in writing provided to the Company or a lawyer for the Company;	
 	 	 	
 	(d)	the alternate director ceases to be qualified to act as a director; or	
 	 	 	
 	(e)	his or her appointor revokes the appointment of the alternate director.	

Article 15.8	Remuneration and Expenses of Alternate Director	
The Company may reimburse an alternate director for the reasonable expenses that would be properly reimbursed if he or she were a director, and the alternate director is entitled to receive from the Company such proportion, if any, of the remuneration otherwise payable to the appointor as the appointor may from time to time direct.

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PART 16
 POWERS AND DUTIES OF DIRECTORS

Article 16.1	Powers of Management	
The directors must, subject to the Business Corporations Act and these Articles, manage or supervise the management of the business and affairs of the Company and have the authority to exercise all such powers of the Company as are not, by the Business Corporations Act or by these Articles, required to be exercised by the shareholders of the Company.

Article 16.2	Appointment of Attorney of Company	
The directors may from time to time, by power of attorney or other instrument, under seal if so required by law, appoint any person to be the attorney of the Company for such purposes, and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the directors under these Articles and excepting the power to fill vacancies in the board of directors, to remove a director, to change the membership of, or fill vacancies in, any committee of the directors, to appoint or remove officers appointed by the directors and to declare dividends) and for such period, and with such remuneration and subject to such conditions as the directors may think fit. Any such power of attorney may contain such provisions for the protection or convenience of persons dealing with such attorney as the directors think fit. Any such attorney may be authorized by the directors to sub-delegate all or any of the powers, authorities and discretions for the time being vested in him or her.
PART 17
 DISCLOSURE OF INTEREST OF DIRECTORS

Article 17.1	Obligation to Account for Profits	
A director or senior officer who holds a disclosable interest (as that term is used in the Business Corporations Act ) in a contract or transaction into which the Company has entered or proposes to enter is liable to account to the Company for any profit that accrues to the director or senior officer under or as a result of the contract or transaction only if and to the extent provided in the Business Corporations Act .

Article 17.2	Restrictions on Voting by Reason of Interest	
A director who holds a disclosable interest in a contract or transaction into which the Company has entered or proposes to enter is not entitled to vote on any directors’ resolution to approve that contract or transaction, unless all the directors have a disclosable interest in that contract or transaction, in which case any or all of those directors may vote on such resolution.

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Article 17.3	Interested Director Counted in Quorum	
A director who holds a disclosable interest in a contract or transaction into which the Company has entered or proposes to enter and who is present at the meeting of directors at which the contract or transaction is considered for approval may be counted in the quorum at the meeting whether or not the director votes on any or all of the resolutions considered at the meeting.

Article 17.4	Disclosure of Conflict of Interest or Property	
A director or senior officer who holds any office or possesses any property, right or interest that could result, directly or indirectly, in the creation of a duty or interest that materially conflicts with that individual’s duty or interest as a director or senior officer, must disclose the nature and extent of the conflict as required by the Business Corporations Act .

Article 17.5	Director Holding Other Office in the Company	
A director may hold any office or place of profit with the Company, other than the office of auditor of the Company, in addition to his or her office of director for the period and on the terms (as to remuneration or otherwise) that the directors may determine.

Article 17.6	No Disqualification	
No director or intended director is disqualified by his or her office from contracting with the Company either with regard to the holding of any office or place of profit the director holds with the Company or as vendor, purchaser or otherwise, and no contract or transaction entered into by or on behalf of the Company in which a director is in any way interested is liable to be voided for that reason.

Article 17.7	Professional Services by Director or Officer	
Subject to the Business Corporations Act , a director or officer, or any person in which a director or officer has an interest, may act in a professional capacity for the Company, except as auditor of the Company, and the director or officer or such person is entitled to remuneration for professional services as if that director or officer were not a director or officer.

Article 17.8	Director or Officer in Other Corporations	
A director or officer may be or become a director, officer or employee of, or otherwise interested in, any person in which the Company may be interested as a shareholder or otherwise, and, subject to the Business Corporations Act , the director or officer is not accountable to the Company for any remuneration or other benefits received by him or her as director, officer or employee of, or from his or her interest in, such other person.

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PART 18
 PROCEEDINGS OF DIRECTORS

Article 18.1	Meetings of Directors	
The directors may meet together for the conduct of business, adjourn and otherwise regulate their meetings as they think fit, and meetings of the directors held at regular intervals may be held at the place, at the time and on the notice, if any, as the directors may from time to time determine.

Article 18.2	Voting at Meetings	
Questions arising at any meeting of directors are to be decided by a majority of votes and, in the case of an equality of votes, the chair of the meeting does not have a second or casting vote.

Article 18.3	Chair of Meetings	
The following individual is entitled to preside as chair at a meeting of directors:

 	(a)	the chair of the board, if any;	
 	 	 	
 	(b)	in the absence of the chair of the board, the president, if any, if the president is a director; or	
 	 	 	
 	(c)	any other director chosen by the directors if:	

 	(i)	neither the chair of the board nor the president, if a director, is present at the meeting within 15 minutes after the time set for holding the meeting;	
 	 	 	
 	(ii)	neither the chair of the board nor the president, if a director, is willing to chair the meeting; or	
 	 	 	
 	(iii)	the chair of the board and the president, if a director, have advised the secretary, if any, or any other director, that they will not be present at the meeting.	

Article 18.4	Meetings by Telephone or Other Communications Medium	
A director may participate in a meeting of the directors or of any committee of the directors in person or by telephone if all directors participating in the meeting, whether in person or by telephone or other communications medium, are able to communicate with each other. A director may participate in a meeting of the directors or of any committee of the directors by a communications medium other than telephone if all directors participating in the meeting, whether in person or by telephone or other communications medium, are able to communicate with each other and if all directors who wish to participate in the meeting agree to such participation. A director who participates in a meeting in a manner contemplated by this Article 18.4 is deemed for all purposes of the Business Corporations Act and these Articles to be present at the meeting and to have agreed to participate in that manner.

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Article 18.5	Calling of Meetings	
A director may, and the secretary or an assistant secretary of the Company, if any, on the request of a director must, call a meeting of the directors at any time.

Article 18.6	Notice of Meetings	
Other than for meetings held at regular intervals as determined by the directors pursuant to Article 18.1, reasonable notice of each meeting of the directors, specifying the place, day and time of that meeting must be given to each of the directors and the alternate directors by any method set out in Article 24.1 or orally or by telephone.

Article 18.7	When Notice Not Required	
It is not necessary to give notice of a meeting of the directors to a director or an alternate director if:

 	(a)	the meeting is to be held immediately following a meeting of shareholders at which that director was elected or appointed, or is the meeting of the directors at which that director is appointed; or	
 	 	 	
 	(b)	the director or alternate director, as the case may be, has waived notice of the meeting.	

Article 18.8	Meeting Valid Despite Failure to Give Notice	
The accidental omission to give notice of any meeting of directors to, or the non-receipt of any notice by, any director or alternate director, does not invalidate any proceedings at that meeting.

Article 18.9	Waiver of Notice of Meetings	
Any director or alternate director may send to the Company a document signed by him or her waiving notice of any past, present or future meeting or meetings of the directors and may at any time withdraw that waiver with respect to meetings held after that withdrawal. After sending a waiver with respect to all future meetings and until that waiver is withdrawn, no notice of any meeting of the directors need be given to that director and, unless the director otherwise requires by notice in writing to the Company, to his or her alternate director, and all meetings of the directors so held are deemed not to be improperly called or constituted by reason of notice not having been given to such director or alternate director.

Article 18.10	Quorum	
The quorum necessary for the transaction of the business of the directors may be set by the directors and, if not so set, is deemed to be set at two directors or, if the number of directors is set at one, is deemed to be set at one director, and that director may constitute a meeting.

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Article 18.11	Validity of Acts Where Appointment Defective	
Subject to the Business Corporations Act , an act of a director or officer is not invalid merely because of an irregularity in the election or appointment or a defect in the qualification of that director or officer.

Article 18.12	Consent Resolutions in Writing	
A resolution of the directors or of any committee of the directors may be passed without a meeting:

 	(a)	in all cases, if each of the directors entitled to vote on the resolution consents to it in writing; or	
 	 	 	
 	(b)	in the case of a resolution to approve a contract or transaction in respect of which a director has disclosed that he or she has or may have a disclosable interest, if each of the other directors who are entitled to vote on the resolution consents to it in writing.	
A consent in writing under this Article may be by signed document, fax, email or any other method of transmitting legibly recorded messages. A consent in writing may be in two or more counterparts which together are deemed to constitute one consent in writing. A resolution of the directors or of any committee of the directors passed in accordance with this Article 18.12 is effective on the date stated in the consent in writing or on the latest date stated on any counterpart and is deemed to be a proceeding at a meeting of directors or of the committee of the directors and to be as valid and effective as if it had been passed at a meeting of the directors or of the committee of the directors that satisfies all the requirements of the Business Corporations Act and all the requirements of these Articles relating to meetings of the directors or of a committee of the directors.
PART 19
 EXECUTIVE AND OTHER COMMITTEES

Article 19.1	Appointment and Powers of Executive Committee	
The directors may, by resolution, appoint an executive committee consisting of the director or directors that they consider appropriate, and this committee has, during the intervals between meetings of the board of directors, all of the directors’ powers, except:

 	(a)	the power to fill vacancies in the board of directors;	
 	 	 	
 	(b)	the power to remove a director;	
 	 	 	
 	(c)	the power to change the membership of, or fill vacancies in, any committee of the directors; and	

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 	(d)	such other powers, if any, as may be set out in the resolution or any subsequent directors’ resolution.	

Article 19.2	Appointment and Powers of Other Committees	
The directors may, by resolution:

 	(a)	appoint one or more committees (other than the executive committee) consisting of the director or directors that they consider appropriate;	
 	 	 	
 	(b)	delegate to a committee appointed under paragraph (a) any of the directors’ powers, except:	

 	(i)	the power to fill vacancies in the board of directors;	
 	 	 	
 	(ii)	the power to remove a director;	
 	 	 	
 	(iii)	the power to change the membership of, or fill vacancies in, any committee of the directors; and	
 	 	 	
 	(iv)	the power to appoint or remove officers appointed by the directors; and	

 	(c)	make any delegation referred to in paragraph (b) subject to the conditions set out in the resolution or any subsequent directors’ resolution.	

Article 19.3	Obligations of Committees	
Any committee appointed under Article 19.1 or Article 19.2, in the exercise of the powers delegated to it, must:

 	(a)	conform to any rules that may from time to time be imposed on it by the directors; and	
 	 	 	
 	(b)	report every act or thing done in exercise of those powers at such times as the directors may require.	

Article 19.4	Powers of Board	
The directors may, at any time, with respect to a committee appointed under Article 19.1 or Article 19.2:

 	(a)	revoke or alter the authority given to the committee, or override a decision made by the committee, except as to acts done before such revocation, alteration or overriding;	
 	 	 	
 	(b)	terminate the appointment of, or change the membership of, the committee; and	

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 	(c)	fill vacancies in the committee.	

Article 19.5	Committee Meetings	
Subject to Article 19.3(a) and unless the directors otherwise provide in the resolution appointing the committee or in any subsequent resolution, with respect to a committee appointed under Article 19.1 or Article 19.2:

 	(a)	the committee may meet and adjourn as it thinks proper;	
 	 	 	
 	(b)	the committee may elect a chair of its meetings but, if no chair of a meeting is elected, or if at a meeting the chair of the meeting is not present within 15 minutes after the time set for holding the meeting, the directors present who are members of the committee may choose one of their number to chair the meeting;	
 	 	 	
 	(c)	a majority of the members of the committee constitutes a quorum of the committee; and	
 	 	 	
 	(d)	questions arising at any meeting of the committee are determined by a majority of votes of the members present, and in case of an equality of votes, the chair of the meeting does not have a second or casting vote.	
PART 20
OFFICERS

Article 20.1	Directors May Appoint Officers	
The directors may, from time to time, appoint such officers, if any, as the directors determine and the directors may, at any time, terminate any such appointment.

Article 20.2	Functions, Duties and Powers of Officers	
The directors may, for each officer:

 	(a)	determine the functions and duties of the officer;	
 	 	 	
 	(b)	entrust to and confer on the officer any of the powers exercisable by the directors on such terms and conditions and with such restrictions as the directors think fit; and	
 	 	 	
 	(c)	revoke, withdraw, alter or vary all or any of the functions, duties and powers of the officer.	

Article 20.3	Qualifications	
No officer may be appointed unless that officer is qualified in accordance with the Business Corporations Act . One person may hold more than one position as an officer of the Company . Any person appointed as the chair of the board or as a managing director must be a director. Any other officer need not be a director.

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Article 20.4	Remuneration and Terms of Appointment	
All appointments of officers are to be made on the terms and conditions and at the remuneration (whether by way of salary, fee, commission, participation in profits or otherwise) that the directors think fit and are subject to termination at the pleasure of the directors, and an officer may in addition to such remuneration be entitled to receive, after he or she ceases to hold such office or leaves the employment of the Company, a pension or gratuity.
PART 21
INDEMNIFICATION

Article 21.1	Definitions	
In this Part 21:

 	(a)	“ eligible penalty ” means a judgment, penalty or fine awarded or imposed in, or an amount paid in settlement of, an eligible proceeding;	
 	 	 	
 	(b)	“ eligible proceeding ” means a legal proceeding or investigative action, whether current, threatened, pending or completed, in which a director, former director or alternate director of the Company (an “ eligible party ”) or any of the heirs and legal personal representatives of the eligible party, by reason of the eligible party being or having been a director or alternate director of the Company:	

 	(i)	is or may be joined as a party; or	
 	 	 	
 	(ii)	is or may be liable for or in respect of a judgment, penalty or fine in, or expenses related to, the proceeding;	

 	(c)	“ expenses ” has the meaning set out in the Business Corporations Act .	

Article 21.2	Mandatory Indemnification of Directors and Former Directors	
Subject to the Business Corporations Act , the Company must indemnify a director, former director or alternate director of the Company and his or her heirs and legal personal representatives against all eligible penalties to which such person is or may be liable, and the Company must, after the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by such person in respect of that proceeding. Each director and alternate director is deemed to have contracted with the Company on the terms of the indemnity contained in this Article 21.2.

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Article 21.3	Indemnification of Other Persons	
Subject to any restrictions in the Business Corporations Act , the Company may indemnify any person.

Article 21.4	Non-Compliance with Business Corporations Act	
The failure of a director, alternate director or officer of the Company to comply with the Business Corporations Act or these Articles does not invalidate any indemnity to which he or she is entitled under this Part.

Article 21.5	Company May Purchase Insurance	
The Company may purchase and maintain insurance for the benefit of any person (or his or her heirs or legal personal representatives) who:

 	(a)	is or was a director, alternate director, officer, employee or agent of the Company;	
 	 	 	
 	(b)	is or was a director, alternate director, officer, employee or agent of a corporation at a time when the corporation is or was an affiliate of the Company;	
 	 	 	
 	(c)	at the request of the Company, is or was a director, alternate director, officer, employee or agent of a corporation or of a partnership, trust, joint venture or other unincorporated entity;	
 	 	 	
 	(d)	at the request of the Company, holds or held a position equivalent to that of a director, alternate director or officer of a partnership, trust, joint venture or other unincorporated entity;	
against any liability incurred by him or her as such director, alternate director, officer, employee or agent or person who holds or held such equivalent position.
PART 22
DIVIDENDS

Article 22.1	Payment of Dividends Subject to Special Rights	
The provisions of this Part 22 are subject to the rights, if any, of shareholders holding shares with special rights as to dividends.

Article 22.2	Declaration of Dividends	
Subject to the Business Corporations Act , the directors may from time to time declare and authorize payment of such dividends as they may deem advisable.

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Article 22.3	No Notice Required	
The directors need not give notice to any shareholder of any declaration under Article 22.2.

Article 22.4	Record Date	
The directors may set a date as the record date for the purpose of determining shareholders entitled to receive payment of a dividend. The record date must not precede the date on which the dividend is to be paid by more than two months. If no record date is set, the record date is 5 p.m. on the date on which the directors pass the resolution declaring the dividend.

Article 22.5	Manner of Paying Dividend	
A resolution declaring a dividend may direct payment of the dividend wholly or partly by the distribution of specific assets or of fully paid shares or of bonds, debentures or other securities of the Company, or in any one or more of those ways.

Article 22.6	Settlement of Difficulties	
If any difficulty arises in regard to a distribution under Article 22.5, the directors may settle the difficulty as they deem advisable, and, in particular, may:

 	(a)	set the value for distribution of specific assets;	
 	 	 	
 	(b)	determine that cash payments in substitution for all or any part of the specific assets to which any shareholders are entitled may be made to any shareholders on the basis of the value so fixed in order to adjust the rights of all parties; and	
 	 	 	
 	(c)	vest any such specific assets in trustees for the persons entitled to the dividend.	

Article 22.7	When Dividend Payable	
Any dividend may be made payable on such date as is fixed by the directors.

Article 22.8	Dividends to be Paid in Accordance with Number of Shares	
All dividends on shares of any class or series of shares must be declared and paid according to the number of such shares held.

Article 22.9	Receipt by Joint Shareholders	
If several persons are joint shareholders of any share, any one of them may give an effective receipt for any dividend, bonus or other money payable in respect of the share.

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Article 22.10	Dividend Bears No Interest	
No dividend bears interest against the Company.

Article 22.11	Fractional Dividends	
If a dividend to which a shareholder is entitled includes a fraction of the smallest monetary unit of the currency of the dividend, that fraction may be disregarded in making payment of the dividend and that payment represents full payment of the dividend.

Article 22.12	Payment of Dividends	
Any dividend or other distribution payable in cash in respect of shares may be paid by cheque, made payable to the order of the person to whom it is sent, and mailed to the address of the shareholder, or in the case of joint shareholders, to the address of the joint shareholder who is first named on the central securities register, or to the person and to the address the shareholder or joint shareholders may direct in writing. The mailing of such cheque will, to the extent of the sum represented by the cheque (plus the amount of the tax required by law to be deducted), discharge all liability for the dividend unless such cheque is not paid on presentation or the amount of tax so deducted is not paid to the appropriate taxing authority.

Article 22.13	Capitalization of Surplus	
Notwithstanding anything contained in these Articles, the directors may from time to time capitalize any surplus of the Company and may from time to time issue, as fully paid, shares or any bonds, debentures or other securities of the Company as a dividend representing the surplus or any part of the surplus.
PART 23
 DOCUMENTS, RECORDS AND REPORTS

Article 23.1	Recording of Financial Affairs	
The directors must cause adequate accounting records to be kept to record properly the financial affairs and condition of the Company and to comply with the Business Corporations Act .

Article 23.2	Inspection of Accounting Records	
Unless the directors determine otherwise, or unless otherwise determined by ordinary resolution, no shareholder of the Company is entitled to inspect or obtain a copy of any accounting records of the Company.

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PART 24
NOTICES

Article 24.1	Method of Giving Notice	
Unless the Business Corporations Act or these Articles provides otherwise, a notice, statement, report or other record required or permitted by the Business Corporations Act or these Articles to be sent by or to a person may be sent by any one of the following methods:

 	(a)	mail addressed to the person at the applicable address for that person as follows:	

 	(i)	for a record mailed to a shareholder, the shareholder’s registered address;	
 	 	 	
 	(ii)	for a record mailed to a director or officer, the prescribed address for mailing shown for the director or officer in the records kept by the Company or the mailing address provided by the recipient for the sending of that record or records of that class;	
 	 	 	
 	(iii)	in any other case, the mailing address of the intended recipient;	

 	(b)	delivery at the applicable address for that person as follows, addressed to the person:	

 	(i)	for a record delivered to a shareholder, the shareholder’s registered address;	
 	 	 	
 	(ii)	for a record delivered to a director or officer, the prescribed address for delivery shown for the director or officer in the records kept by the Company or the delivery address provided by the recipient for the sending of that record or records of that class;	
 	 	 	
 	(iii)	in any other case, the delivery address of the intended recipient;	

 	(c)	sending the record by fax to the fax number provided by the intended recipient for the sending of that record or records of that class;	
 	 	 	
 	(d)	sending the record by email to the email address provided by the intended recipient for the sending of that record or records of that class;	
 	 	 	
 	(e)	physical delivery to the intended recipient.	

Article 24.2	Deemed Receipt of Mailing	
A record that is mailed to a person by ordinary mail to the applicable address for that person referred to in Article 24.1 is deemed to be received by the person to whom it was mailed on the day, Saturdays, Sundays and holidays excepted, following the date of mailing.

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Article 24.3	Certificate of Sending	
A certificate signed by the secretary, if any, or other officer of the Company or of any other corporation acting in that behalf for the Company stating that a notice, statement, report or other record was addressed as required by Article 24.1, prepaid and mailed or otherwise sent as permitted by Article 24.1 is conclusive evidence of that fact.

Article 24.4	Notice to Joint Shareholders	
A notice, statement, report or other record may be provided by the Company to the joint shareholders of a share by providing the notice to the joint shareholder first named in the central securities register in respect of the share.

Article 24.5	Notice to Trustees	
A notice, statement, report or other record may be provided by the Company to the persons entitled to a share in consequence of the death, bankruptcy or incapacity of a shareholder by:

 	(a)	mailing the record, addressed to them:	

 	(i)	by name, by the title of the legal personal representative of the deceased or incapacitated shareholder, by the title of trustee of the bankrupt shareholder or by any similar description; and	
 	 	 	
 	(ii)	at the address, if any, supplied to the Company for that purpose by the persons claiming to be so entitled; or	

 	(b)	if an address referred to in paragraph (a)(ii) has not been supplied to the Company, by giving the notice in a manner in which it might have been given if the death, bankruptcy or incapacity had not occurred.	
PART 25
SEAL

Article 25.1	Who May Attest Seal	
Except as provided in Article 25.2 and Article 25.3, the Company’s seal, if any, must not be impressed on any record except when that impression is attested by the signatures of:

 	(a)	any two directors;	
 	 	 	
 	(b)	any officer, together with any director;	
 	 	 	
 	(c)	if the Company only has one director, that director; or	
 	 	 	
 	(d)	any one or more directors or officers or persons as may be determined by the directors.	

- 39 -

Article 25.2	Sealing Copies	
For the purpose of certifying under seal a certificate of incumbency of the directors or officers of the Company or a true copy of any resolution or other document, despite Article 25.1, the impression of the seal may be attested by the signature of any director or officer.

Article 25.3	Mechanical Reproduction of Seal	
The directors may authorize the seal to be impressed by third parties on share certificates or bonds, debentures or other securities of the Company as they may determine appropriate from time to time. To enable the seal to be impressed on any share certificates or bonds, debentures or other securities of the Company, whether in definitive or interim form, on which facsimiles of any of the signatures of the directors or officers of the Company are, in accordance with the Business Corporations Act or these Articles, printed or otherwise mechanically reproduced, there may be delivered to the person employed to engrave, lithograph or print such definitive or interim share certificates or bonds, debentures or other securities one or more unmounted dies reproducing the seal and the chair of the board or any senior officer together with the secretary, treasurer, secretary-treasurer, an assistant secretary, an assistant treasurer or an assistant secretary-treasurer may in writing authorize such person to cause the seal to be impressed on such definitive or interim share certificates or bonds, debentures or other securities by the use of such dies. Share certificates or bonds, debentures or other securities to which the seal has been so impressed are for all purposes deemed to be under and to bear the seal impressed on them.
PART 26
PROHIBITIONS

Article 26.1	Definitions	
In this Part 26:

 	(a)	“ designated security ” means:	

 	(i)	a voting security of the Company;	
 	 	 	
 	(ii)	a security of the Company that is not a debt security and that carries a residual right to participate in the earnings of the Company or, on the liquidation or winding up of the Company, in its assets; or	
 	 	 	
 	(iii)	a security of the Company convertible, directly or indirectly, into a security described in paragraph (a) or (b);	

 	(b)	“ security ” has the meaning assigned in the Securities Act (British Columbia);	
 	 	 	
 	(c)	“ voting security ” means a security of the Company that:	

 	(i)	is not a debt security, and	

- 40 -

 	(ii)	carries a voting right either under all circumstances or under some circumstances that have occurred and are continuing.	

Article 26.2	Application	
Article 26.3 does not apply to the Company if and for so long as it is a public company or a pre-existing reporting company which has the Statutory Reporting Company Provisions as part of its Articles or to which the Statutory Reporting Company Provisions apply.

Article 26.3	Consent Required for Transfer of Shares or Designated Securities	
No share or designated security may be sold, transferred or otherwise disposed of without the consent of the directors and the directors are not required to give any reason for refusing to consent to any such sale, transfer or other disposition.
PART 27
 SPECIAL RIGHTS AND RESTRICTIONS ATTACHING TO THE COMMON SHARES AND THE PREFERRED SHARES

Article 27.1	Voting Rights	
The Common shares will be entitled to vote at all meetings of members of the Company except meetings at which only holders of a specified class of shares are entitled to vote.

Article 27.2	Dividend Rights on Common Shares	
Subject to the rights of the holders of the Preferred shares, the Common shares will be entitled to a dividend from time to time as determined by the directors.

Article 27.3	Dissolution	
Subject to the rights of the holders of the Preferred shares, in the event of the liquidation, dissolution or winding-up of the Company whether voluntary or involuntary, or any other distribution of the assets of the Company among its members for the purpose of winding up its affairs, the holders of the Common shares will be entitled to receive the remaining property of the Company.

Article 27.4	Issuance of Preferred Shares in Series	
The Preferred shares are issuable 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 rights, privileges, restrictions and conditions:

 	(a)	each series of Preferred shares may consist of such number of shares as may before the issue thereof be fixed by resolution of the directors;	

- 41 -

 	(b)	the directors of the Company will by resolution duly passed before the issue of any Preferred shares of any series determine the special rights and restrictions attaching to the Preferred shares of such series, including but without limiting or restricting the generality of the foregoing;	

 	 	(i)	the provision, if any, with respect to the rights of holders of such series to receive notice of and to attend and vote at any general meeting of the Company;	
 	 	 	 	
 	 	(ii)	the rights and obligations, if any, relating to the purchase or redemption by the Company of the Preferred shares of such series and a consideration for and the terms and conditions of such purchase or redemption;	
 	 	 	 	
 	 	(iii)	the right, if any, to convert any Preferred shares of such series into shares of another class;	
 	 	 	 	
 	 	(iv)	the terms and conditions of any share purchase plan or sinking fund; and	
 	 	 	 	
 	 	(v)	the restrictions, if any, respecting payment of dividends on any shares ranking junior to the Preferred shares.	

Article 27.5	Ranking	
The Preferred shares will rank on a parity with each other and with any other shares by their terms ranking equally therewith with respect to, on winding-up, repayment of the amount paid up on such shares of the Company, and will rank prior to the Common shares or any other shares ranking junior with respect to, on winding-up, repayment of the amount paid up on such shares.
PART 28
 NOMINATIONS OF DIRECTORS - ADVANCE NOTICE

 	A.	Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Company. Nominations of persons for election to the board of directors of the Company (the “ Board ” ) may be made at any annual meeting of shareholders, or at any special meeting of shareholders if one of the purposes for which the special meeting was called was the election of directors:	

 	i.	by or at the direction of the Board, including pursuant to a notice of meeting;	
 	 	 	
 	ii.	by or at the direction or request of one or more shareholders pursuant to a proposal made in accordance with the provisions of the British Columbia Business Corporations Act (the “ Act ” ), or a requisition of the shareholders made in accordance with the provisions of the Act; or	

- 42 -

 	iii.	by any person (a “ Nominating Shareholder ”):	

 	(a)	who, at the close of business on the date of the giving by the Nominating Shareholder of the notice provided for below in this Part and at the close of business on the record date for notice of such meeting, is entered in the securities register of the Company as a holder of one or more shares carrying the right to vote at such meeting or who beneficially owns shares that are entitled to be voted at such meeting; and	
 	 	 	
 	(b)	who complies with the notice procedures set forth below in this Part.	

 	B.	In addition to any other requirements under applicable laws, for a nomination to be made by a Nominating Shareholder, the Nominating Shareholder must have given notice thereof that is both timely (in accordance with paragraph C below) and in proper written form (in accordance with paragraph D below) to the Corporate Secretary of the Company at the principal office of the Company.	

 	C.	To be timely, a Nominating Shareholder’s notice to the Corporate Secretary of the Company must be made:	

 	i.	in the case of an annual meeting of shareholders, not less than 30 days prior to the date of the annual meeting of shareholders; provided, however, that in the event that the annual meeting of shareholders is to be held on a date that is less than 50 days after the date (the “ Notice Date ”) on which the first public announcement of the date of the annual meeting was made, notice by the Nominating Shareholder may be made not later than the close of business on the 10th day following the Notice Date; and	
 	 	 	
 	ii.	in the case of a special meeting (which is not also an annual meeting) of shareholders called for the purpose of electing directors (whether or not called for other purposes), not later than the close of business on the 15th day following the day on which the first public announcement of the date of the special meeting of shareholders was made.	

 	D.	To be in proper written form, a Nominating Shareholder’s notice to the Corporate Secretary of the Company must set forth:	

 	i.	as to each person whom the Nominating Shareholder proposes to nominate for election as a director:	

 	(a)	the name, age, business address and residential address of the person;	
 	 	 	
 	(b)	the principal occupation or employment of the person;	
 	 	 	
 	(c)	the citizenship of such person;	
 	 	 	
 	(d)	the class or series and number of shares in the capital of the Company which are controlled or which are owned beneficially or of record by the person as of the record date for the meeting of shareholders (if such date shall then have been made publicly available and shall have occurred) and as of the date of such notice; and	

- 43 -

 	(e)	any other information relating to the person that would be required to be disclosed in a dissident’s proxy circular in connection with solicitations of proxies for election of directors pursuant to the Act and Applicable Securities Laws (as defined below); and	

 	ii.	as to the Nominating Shareholder giving the notice, full particulars regarding any proxy, contract, agreement, arrangement, understanding or relationship pursuant to which such Nominating Shareholder has a right to vote or direct the voting of any shares of the Company and any other information relating to such Nominating Shareholder that would be required to be made in a dissident’s proxy circular in connection with solicitations of proxies for election of directors pursuant to the Act and Applicable Securities Laws (as defined below).	

 	E.	No person shall be eligible for election as a director of the Company unless nominated in accordance with the provisions of this Part; provided, however, that nothing in this Part shall be deemed to preclude discussion by a shareholder (as distinct from the nomination of directors) at a meeting of shareholders of any matter that is properly before such meeting pursuant to the provisions of the Act or the discretion of the Chairman. The Chairman of the meeting shall have the power and duty to determine whether a nomination was made in accordance with the procedures set forth in the foregoing provisions and, if any proposed nomination is not in compliance with such foregoing provisions, to declare that such defective nomination shall be disregarded.	

 	F.	For purposes of this Part:	

 	i.	“ public announcement ” shall mean disclosure in a press release reported by a national news service in Canada, or in a document publicly filed by the Company under its profile on the System of Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com and U.S. Securities and Exchange Commission (EDGAR) at www.sec.gov ; and	
 	 	 	
 	ii.	“ Applicable Securities Laws ” means the applicable securities legislation of each relevant province and territory of Canada, as amended from time to time, the rules, regulations and forms made or promulgated under any such statute and the published national instruments, multilateral instruments, policies, bulletins and notices of the securities commission and similar regulatory authority of each province and territory of Canada.	

 	G.	Notwithstanding any other provision of these Articles, notice given to the Corporate Secretary of the Company pursuant to this Part may only be given by personal delivery, facsimile transmission or by email (at such email address as stipulated from time to time by the Corporate Secretary of the Company for purposes of this notice), and shall be deemed to have been given and made only at the time it is served by personal delivery to the Corporate Secretary at the address of the principal executive offices of the Company, email (at the address as aforesaid) or sent by facsimile transmission (provided that receipt of confirmation of such transmission has been received); provided that if such delivery or electronic communication is made on a day which is a not a business day or later than 5:00 p.m. (Toronto time) on a day which is a business day, then such delivery or electronic communication shall be deemed to have been made on the subsequent day that is a business day.	

- 44 -

 	H.	Notwithstanding the foregoing, the Board may, in its sole discretion, waive any requirement in this Part.	

Execution Version
TRUST INDENTURE
between
PRIMERO MINING CORP.
- and -
COMPUTERSHARE TRUST COMPANY OF CANADA
 
Providing for the Issue of
Debentures
Dated as of February 9, 2015

TABLE OF CONTENTS

ARTICLE 1 INTERPRETATION	1	
 	 	
1.1	Definitions	1	
1.2	Meaning of “Outstanding”	10	
1.3	Headings	10	
1.4	Time of Essence	10	
1.5	References	10	
1.6	Certain Rules of Interpretation	11	
1.7	Day Not a Business Day	11	
1.8	Applicable Law	11	
1.9	Conflict	11	
1.10	Currency	11	
1. 11	Calculations	11	
1. 12	Severability	11	
1.13	Entire Agreement	12	
1. 14	Successors and Assigns	12	
1.15	Benefits of Indenture	12	
1.16	Schedules	12	
 	 	 	
ARTICLE 2 THE DEBENTURES	12	
 	 	
2.1	Limit of Debentures	12	
2.2	Terms of Debentures of Any Series	12	
2.3	Form of Debentures	14	
2.4	Form and Terms of Initial Debentures	14	
2.5	Certification and Delivery of Additional Debentures	22	
2.6	Issue of Global Debentures	23	
2.7	Execution of Debentures	24	
2.8	Certification	24	
2.9	Interim Debentures or Certificates	24	
2.10	Mutilation, Loss, Theft or Destruction	25	
2.11	Concerning Interest	25	
2.12	Debentures to Rank Pari Passu	26	
2.13	Payments of Amounts Due on Maturity	26	
2.14	Payment of Interest	27	
2.15	Withholding Tax	28	
 	 	 	
ARTICLE 3 REGISTRATION, TRANSFER, EXCHANGE AND OWNERSHIP	28	
 	 	
3.1	Fully- Registered Debentures	28	
3.2	Global Debentures	29	
3.3	Transferee Entitled to Registration	31	
3.4	No Notice of Trusts	31	
3.5	Registers Open for Inspection	31	
3.6	Exchanges of Debentures	31	
3.7	Closing of Registers	32	
3.8	Charges for Registration, Transfer and Exchange	32	
3.9	Ownership of Debentures	33	
3.10	Non- Certificated Inventory System	33	

- ii -

ARTICLE 4 REDEMPTION AND PURCHASE OF DEBENTURES AND CERTAIN PAYMENTS   ON MATURITY	34	
 	 	
4.1	Applicability of Article	34	
4.2	Partial Redemption	34	
4.3	Notice of Redemption	35	
4.4	Debentures Due on Redemption Date	35	
4.5	Deposit of Redemption Monies or Shares	36	
4.6	Right to Repay Redemption Price in Shares	36	
4.7	Failure to Surrender Debentures Called for Redemption	38	
4.8	Cancellation of Debentures Redeemed	39	
4.9	Purchase of Debentures by the Corporation	39	
4.10	Deposit of Maturity Monies	40	
4.11	Right to Repay Principal Amount in Shares	40	
 	 	 	
ARTICLE 5 SUBORDINATION OF DEBENTURES	43	
 	 	
5.1	Applicability of Article	43	
5.2	Order of Payment	43	
5.3	Obligation to Pay Not Impaired	44	
5.4	No Payment if Senior Indebtedness in Default	44	
5.5	Payment on Debentures Permitted	45	
5.6	Confirmation of Subordination	45	
5.7	Knowledge of Debenture Trustee	45	
5.8	Debenture Trustee May Hold Senior Indebtedness	46	
5.9	Rights of Holders of Senior Indebtedness Not Impaired	46	
5.10	Altering the Senior Indebtedness	46	
5.11	Additional Indebtedness	46	
5.12	Right of Debentureholder to Convert Not Impaired	46	
5.13	Invalidated Payments	46	
5.14	Obligations Created by Article 5	47	
5.15	Amendments to Article 5	47	
 	 	 	
ARTICLE 6 CONVERSION OF DEBENTURES	47	
 	 	
6.1	Applicability of Article	47	
6.2	Notice of Expiry of Conversion Privilege	47	
6.3	Revival of Right to Convert	48	
6.4	Manner of Exercise of Right to Convert	48	
6.5	Adjustment of Conversion Rate	49	
6.6	No Requirement to Issue Fractional Shares	53	
6.7	Corporation to Reserve Shares	54	
6.8	Cancellation of Converted Debentures	54	
6.9	Certificate as to Adjustment	54	
6.10	Notice of Special Matters	54	
6.11	Protection of Debenture Trustee	55	
6.12	Payment on Conversion	55	
 	 	 	
ARTICLE 7 COVENANTS OF THE CORPORATION	56	
 	 	
7.1	To Pay Principal, Premium (if any) and Interest	56	
7.2	To Pay Debenture Trustee’s Remuneration	56	
7.3	To Give Notice of Default	57	
7.4	Preservation of Existence, etc.	57	
7.5	Keeping of Books	57	

- iii -

7.6	Annual Certificate of Compliance	57	
7.7	No Dividend or Distributions on Shares if Event of Default	57	
7.8	Performance of Covenants by Debenture Trustee	57	
7.9	Maintain Listing	57	
 	 	 	
ARTICLE 8 DEFAULT	58	
 	 	
8.1	Events of Default	58	
8.2	Notice of Events of Default	59	
8.3	Waiver of Default	60	
8.4	Enforcement by the Debenture Trustee	60	
8.5	No Suits by Debentureholders	61	
8.6	Application of Monies by Debenture Trustee	62	
8.7	Notice of Payment by Debenture Trustee	63	
8.8	Debenture Trustee May Demand Production of Debentures	63	
8.9	Remedies Cumulative	63	
8.10	Judgment Against the Corporation	63	
8.11	Immunity of Directors, Officers and Others	63	
 	 	 	
ARTICLE 9 SATISFACTION AND DISCHARGE	63	
 	 	
9.1	Cancellation and Destruction	63	
9.2	Non- Presentation of Debentures	64	
9.3	Repayment of Unclaimed Monies or Shares	64	
9.4	Discharge	64	
9.5	Satisfaction	65	
9.6	Continuance of Rights, Duties and Obligations	66	
 	 	 	
ARTICLE 10 SHARE INTEREST PAYMENT ELECTION	67	
 	 	
10.1	Share Interest Payment Election	67	
 	 	 	
ARTICLE 11 SUCCESSORS	69	
 	 	
11.1	Restrictions on Amalgamation, Merger and Sale of Certain Assets, etc.	69	
11.2	Vesting of Powers in Successor	70	
 	 	 	
ARTICLE 12 COMPULSORY ACQUISITION	71	
 	 	
12.1	Definitions	71	
12.2	Offer for Debentures	71	
12.3	Offeror’s Notice to Dissenting Shareholders	71	
12.4	Delivery of Debenture Certificates	72	
12.5	Payment of Consideration to Debenture Trustee	72	
12.6	Consideration to be held in Trust	72	
12.7	Completion of Transfer of Debentures to Offeror	72	
12.8	Communication of Offer to the Corporation	73	
 	 	 	
ARTICLE 13 MEETINGS OF DEBENTUREHOLDERS	73	
 	 	
13.1	Right to Convene Meeting	73	
13.2	Notice of Meetings	73	
13.3	Chairman	75	
13.4	Quorum	75	
13.5	Power to Adjourn	75	
13.6	Show of Hands	75	
13.7	Poll	76	
13.8	Voting	76	

- iv -

13.9	Proxies	76	
13.10	Persons Entitled to Attend Meetings	77	
13.11	Powers Exercisable by Extraordinary Resolution	77	
13.12	Meaning of “Extraordinary Resolution”	79	
13.13	Powers Cumulative	79	
13.14	Minutes	79	
13.15	Instruments in Writing	80	
13.16	Binding Effect of Resolutions	80	
13.17	Evidence of Rights of Debentureholders	80	
13.18	Concerning Serial Meetings	80	
13.19	Record Dates	80	
 	 	 	
ARTICLE 14 NOTICES	81	
 	 	
14.1	Notice to the Corporation	81	
14.2	Notice to Debentureholders	81	
14.3	Notice to Debenture Trustee	82	
14.4	Mail Service Interruption	82	
 	 	 	
ARTICLE 15 CONCERNING THE DEBENTURE TRUSTEE	82	
 	 	
15.1	Trust Indenture Legislation	82	
15.2	No Conflict of Interest	82	
15.3	Replacement of Debenture Trustee	83	
15.4	Duties of Debenture Trustee	83	
15.5	Reliance Upon Declarations, Opinions, etc.	83	
15.6	Evidence and Authority to Debenture Trustee, Opinions, etc	84	
15.7	Officer’s Certificates Evidence	85	
15.8	Experts, Advisers and Agents	85	
15.9	Debenture Trustee May Deal in Debentures	85	
15.10	Investment of Monies Held by Debenture Trustee	85	
15.11	Debenture Trustee Not Ordinarily Bound	86	
15.12	Debenture Trustee Not Required to Give Security	86	
15.13	Debenture Trustee Not Bound to Act on the Corporation’s Request	86	
15.14	Debenture Trustee Protected in Acting	87	
15.15	Conditions Precedent to Debenture Trustee’s Obligations to Act Hereunder	87	
15.16	Authority to Carry on Business	87	
15.17	Compensation and Indemnity	87	
15.18	Anti- Money Laundering	88	
15.19	Acceptance of Trust	88	
15.20	Privacy Laws	88	
15.21	Force Majeure	89	
 	 	 	
ARTICLE 16 SUPPLEMENTAL INDENTURES	89	
 	 	
16.1	Supplemental Indentures	89	
 	 	 	
ARTICLE 17 RIGHTS OF RESCISSION	90	
 	 	
17.1	Rights of Rescission	90	
 	 	 	
ARTICLE 18 EXECUTION AND FORMAL DATE	91	
 	 	
18.1	Execution	91	
18.2	Contracts of the Corporation	91	
18.3	Formal Date	91	

TRUST INDENTURE
THIS TRUST INDENTURE is made as of the 9 th day of February, 2015.

BETWEEN:	PRIMERO MINING CORP. , a corporation governed under the laws of British Columbia (hereinafter referred to as the “ Corporation ”)	
 		
 	- and -	
 		
	COMPUTERSHARE TRUST COMPANY OF CANADA , a trust company incorporated under the federal laws of Canada (hereinafter referred to as the “ Debenture Trustee ”)	
WHEREAS the Corporation deems it necessary for its purposes to create and issue the Debentures to be created and issued in the manner hereinafter appearing;
WHEREAS the Corporation, under the laws relating to it, is duly authorized to create and issue the Initial Debentures as herein provided;
WHEREAS , when certified by the Debenture Trustee and issued as provided in this Indenture, all necessary steps have been duly enacted, passed and/or confirmed and other proceedings taken and conditions complied with, in each case by the Corporation, to make the creation and issue of the Debentures issued hereunder legal, valid and binding on the Corporation in accordance with the laws relating to the Corporation; and
WHEREAS the foregoing recitals are made as representations and statements of fact by the Corporation and not by the Debenture Trustee;
NOW THEREFORE THIS AGREEMENT WITNESSES that for good and valuable consideration mutually given and received, the receipt and sufficiency of which is hereby acknowledged, it is hereby agreed and declared as follows:
ARTICLE 1
INTERPRETATION

1.1	Definitions	
In this agreement and the recitals, unless there is something in the subject matter or context inconsistent therewith or unless otherwise expressly provided, the following terms shall have the respective meanings set out below and grammatical variations of such terms shall have corresponding meanings:

 	(a)	“ this Debenture Indenture ”, “ this Indenture ”, “ hereto ”, “ herein ”, “ hereby ”, “ hereunder ”, “ hereof ” and similar expressions refer to this Indenture and not to any particular Article, Section, subsection, clause, subdivision or other portion hereof and include any and every instrument supplemental or ancillary hereto;	
 	 	 	
 	(b)	“ 90% Redemption Right ” has the meaning ascribed thereto in Section 2.4(i)(vii);	
 	 	 	
 	(c)	“ 90% Redemption Right Notice ” has the meaning ascribed thereto in Section 2.4(i)(vii);	
 	 	 	
 	(d)	“ Acceptance Notice ” has the meaning ascribed thereto in Section 2.4(i)(iii);	

- 2 -

 	(e)	“ Additional Debentures ” means Debentures of any one or more series, other than the first series of Debentures, being the Initial Debentures, issued under this Indenture;	
 	 	 	
 	(f)	“ Affiliate ” and “ Associate ”, when used to indicate a relationship with a person or company, have the respective meanings as ascribed thereto in the Securities Act (Ontario);	
 	 	 	
 	(g)	“ Applicable Securities Legislation ” means applicable securities laws (including published rules, regulations, policies, blanket orders, rulings and instruments) in each of the Provinces of Canada, other than the Province of Québec;	
 	 	 	
 	(h)	“ Authorized Officer ” means authorized officer(s) of the Corporation;	
 	 	 	
 	(i)	“ Base Share ” has the meaning ascribed thereto in Section 2.4(j)(iii);	
 	 	 	
 	(j)	“ Beneficial Holder ” means any person who holds a beneficial interest in a Global Debenture as shown on the books of the Depository or a Depository Participant;	
 	 	 	
 	(k)	“ Business Day ” means any day which is not Saturday or Sunday or a statutory holiday in the Province of Ontario or the Province of British Columbia or any other day on which businesses of the Debenture Trustee and Canadian banks are generally closed;	
 	 	 	
 	(l)	“ Cash Change of Control ” means a Change of Control in which 10% or more of the consideration for the Shares in the transaction or transactions constituting the Change of Control consists of: (i) cash (other than cash payments for fractional Shares and cash payments made in respect of dissenters’ appraisal rights); (ii) trust units, limited partnership units or other participating equity securities of a trust, limited partnership or similar entity; (iii) equity securities or other property that is not traded or intended to be traded immediately following such transaction on a recognized stock exchange; (iv) other property that is not traded or intended to be traded immediately following such transaction or transactions on a recognized stock exchange; or (v) any combination of the consideration described in the foregoing subclauses (i) through (iv);	
 	 	 	
 	(m)	“ Cash Change of Control Conversion Period ” has the meaning ascribed thereto in Section 2.4(j)(i);	
 	 	 	
 	(n)	“ Cash Offer Price ” has the meaning ascribed thereto in Section 2.4(j)(ii);	
 	 	 	
 	(o)	“ Cash Settlement ” has the meaning ascribed thereto in Section 6.12;	
 	 	 	
 	(p)	“ CDS ” means CDS Clearing and Depository Services Inc.;	
 	 	 	
 	(q)	“ Change of Control ” means the occurrence of any of the following events:	

 	(i)	any event as a result of or following which any person or company (each as defined in the Securities Act (Ontario)) or their respective Affiliates, or group of persons and/or companies acting jointly or in concert (within the meaning of the Securities Act (Ontario) as at the date hereof) (any such group, a “ Group ”), directly or indirectly acquires the right to cast more than 50% of the votes that may be ordinarily cast at a general meeting of shareholders of the Corporation;	
 	 	 	
 	(ii)	any amalgamation, consolidation, merger or arrangement by the Corporation with or into any other person or company or of any person or company into the Corporation (other than pursuant to an internal reorganization solely among wholly-owned subsidiaries), unless immediately following such transaction, the persons who had been the Corporation’s shareholders immediately prior to such transaction hold securities giving them the right to cast more than 50% of the votes attached to all of the then-issued and outstanding shares of the entity resulting from such transaction; or	

- 3 -

 	(iii)	the conveyance, transfer, sale, lease or other disposition, directly or indirectly, of all or substantially all of the Corporation’s assets and properties and those of the Corporation’s Subsidiaries, taken as a whole, to another arm’s length person or company or Group;	

 	(r)	“ Change of Control Purchase Date ” has the meaning ascribed thereto to it in Section 2.4(i)(v);	
 	 	 	
 	(s)	“ Combination Settlement ” has the meaning ascribed thereto in Section 6.12;	
 	 	 	
 	(t)	“ Conversion Price ” means (i) with respect to the Initial Debentures, an amount equal to $1,000 divided by the then applicable Conversion Rate with respect to the Initial Debenture, and (ii) for any other series of Debentures which by their terms are convertible, the amount set upon their creation, as adjusted in accordance with the provisions of Article 6;	
 	 	 	
 	(u)	“ Conversion Rate ” means (i) with respect to the Initial Debentures, the conversion rate of 152.6718 Shares per $1,000 principal amount of Debentures for the Initial Debentures, as adjusted in accordance with the provisions of Article 6, and (ii) for any other series of Debentures which by their terms are convertible, the amount set upon their creation, as adjusted in accordance with the provisions of Article 6;	
 	 	 	
 	(v)	“ Corporation ” means Primero Mining Corp. and includes any successor to or of the Corporation that shall have complied with the provisions of Article 11;	
 	 	 	
 	(w)	“ Counsel ” means a barrister or solicitor or a firm of barristers or solicitors, who may be counsel for the Corporation, acceptable to the Debenture Trustee, acting reasonably;	
 	 	 	
 	(x)	“ Credit Facility ” means the $75 million revolving credit facility dated May 23, 2014 with a syndicate of lenders, as amended pursuant to a first amending agreement dated December 22, 2014 and the second amending agreement dated February 5, 2015;	
 	 	 	
 	(y)	“ Current Market Price ” for any applicable date means the VWAP of the Shares on the NYSE for the 20 consecutive Trading Days ending five Trading Days preceding the date of the applicable event (utilizing only days on which the Shares actually trade), calculated by determining daily VWAP for each of such 20 consecutive Trading Days and determining the arithmetic average of such 20 daily VWAPs. If the Shares are not listed on the NYSE, reference will be made for the purpose of the foregoing calculation to the principal securities exchange or market on which the Shares are listed or quoted (and converted to US dollars at the Bloomberg end of day rate of exchange for such date) or, if no such prices are available, Current Market Price shall be the fair value of the Shares as reasonably determined by the board of directors of the Corporation;	
 	 	 	
 	(z)	“ Date of Conversion ” has the meaning ascribed thereto in Section 6.4(b);	

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 	(aa)	“ Debenture Liabilities ” means the indebtedness, liabilities and obligations of the Corporation under Debentures issued under this Indenture of any series, including on account of principal, interest or otherwise but excluding the issuance of Shares upon any Conversion pursuant to Article 6, upon any redemption pursuant to Article 4, or at maturity pursuant to Article 4;	
 	 	 	
 	(bb)	“ Debenture Offer ” has the meaning ascribed thereto in Section 2.4(i)(i);	
 	 	 	
 	(cc)	“ Debenture Trustee ” means Computershare Trust Company of Canada or its successor or successors for the time being as trustee hereunder;	
 	 	 	
 	(dd)	“ Debentureholders ” or “ holders ” means the persons for the time being entered in the register for Debentures as registered holders of Debentures or any transferees of such persons by endorsement or delivery;	
 	 	 	
 	(ee)	“ Debentures ” means the debentures, notes or other evidences of indebtedness of the Corporation issued and certified hereunder, or deemed to be issued and certified hereunder, including, without limitation, the Initial Debentures, and for the time being outstanding, whether in definitive, uncertificated or interim form or in the form of Global Debentures;	
 	 	 	
 	(ff)	“ deemed year ” has the meaning ascribed thereto in Section 2.11(b);	
 	 	 	
 	(gg)	“ Defeased Debentures ” has the meaning ascribed thereto in Section 9.6(b);	
 	 	 	
 	(hh)	“ Depository ” means, with respect to the Debentures of any series issuable or issued in the form of one or more Global Debentures, the person designated as depository by the Corporation pursuant to Section 3.2 until a successor depository shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “ Depository ” shall mean each person who is then a depository hereunder, and if at any time there is more than one such person, “ Depository ” as used with respect to the Debentures of any series shall mean each depository with respect to the Global Debentures of such series and, in the case of the Initial Debentures, the Depository shall initially be CDS;	
 	 	 	
 	(ii)	“ Depository Participant ” means a broker, dealer, bank, other financial institution or other person for whom from time to time, a Depository effects book-entry for a Global Debenture deposited with the Depository;	
 	 	 	
 	(jj)	“ Directors ” means the directors of the Corporation on the date hereof or such directors as may, from time to time, be appointed or elected directors of the Corporation pursuant to the Corporation’s notice of articles and articles, and applicable laws, and “ Director ” means any one of them, and reference to action by the Directors means action by the Directors as a board;	
 	 	 	
 	(kk)	“ Effective Date ” has the meaning ascribed thereto in Section 2.4(j)(ii);	
 	 	 	
 	(ll)	“ Event of Default ” has the meaning ascribed thereto in Section 8.1;	
 	 	 	
 	(mm)	“ Expiration Date ” has the meaning ascribed thereto in Section 6.5(e);	
 	 	 	
 	(nn)	“ Expiration Time ” has the meaning ascribed thereto in Section 6.5(e);	
 	 	 	
 	(oo)	“ Expiry Date ” has the meaning ascribed thereto in Section 2.4(i)(ii);	

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 	(pp)	“ Expiry Time ” has the meaning ascribed thereto in Section 2.4(i)(ii);	
 	 	 	
 	(qq)	“ Extraordinary Resolution ” has the meaning ascribed thereto in Section 13.12;	
 	 	 	
 	(rr)	“ Freely-Tradeable ” means, in respect of any Shares or any other securities of the Corporation or any other person, as the case may be, that they (i) may be issued without the necessity of filing a prospectus or any other similar offering document (other than such prospectus or similar offering document that has already been filed) under Applicable Securities Legislation and such issue does not constitute a distribution (other than a distribution already qualified by prospectus or similar offering document or that is otherwise exempt from prospectus requirements) under Applicable Securities Legislation; and (ii) can be traded in Canada by the holder thereof without any restriction under Applicable Securities Legislation, such as hold periods, except in the case of a control distribution (as defined in the Applicable Securities Legislation) or any other trade prohibited under insider trading rules of Applicable Securities Legislation;	
 	 	 	
 	(ss)	“ Fully-Registered Debentures ” means the Debentures registered as to both principal, premium, if any, and interest;	
 	 	 	
 	(tt)	“ generally accepted accounting principles ” means generally accepted accounting principles in Canada, as amended from time to time, as applicable to the Corporation and for greater certainty includes International Financial Reporting Standards as and to the extent applicable to the Corporation;	
 	 	 	
 	(uu)	“ Global Debenture ” means a Debenture that is issued to and registered in the name of the Depository, or its nominee, pursuant to Section 2.6 for purposes of being held by or on behalf of the Depository as custodian for participants in the Depository’s book-entry only registration system or non-certificated inventory system;	
 	 	 	
 	(vv)	“ Government Obligations ” means securities issued or guaranteed by the United States Government or the Government of Canada or any province thereof;	
 	 	 	
 	(ww)	“ Group ” shall have the meaning ascribed thereto in the definition of “Change of Control”;	
 	 	 	
 	(xx)	“ Indenture Legislation ” has the meaning ascribed to it in Section 15.1(a);	
 	 	 	
 	(yy)	“ Initial Debentures ” means the Debentures designated as “5.75% Convertible Unsecured Subordinated Debentures” and described in Section 2.4;	
 	 	 	
 	(zz)	“ Interest Account ” has the meaning ascribed thereto in Section 10.1(h);	
 	 	 	
 	(aaa)	“ Interest Obligation ” means the obligation of the Corporation to pay interest on the Debentures, as and when the same becomes due;	
 	 	 	
 	(bbb)	“ Interest Payment Date ” means a date specified for a series of Debentures as the date on which an installment of interest on such Debentures shall be due and payable and which, for the Initial Debentures shall be semi-annually on February 28 and August 28 in each year, commencing on August 28, 2015, computed on the basis of a 360-day year composed of twelve 30-day months;	
 	 	 	
 	(ccc)	“ Make-Whole Premium ” has the meaning ascribed to it in Section 2.4(j)(i);	

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 	(ddd)	“ Make-Whole Premium Shares ” has the meaning ascribed thereto in Section 2.4(j)(ii);	
 	 	 	
 	(eee)	“ Material Subsidiary ” means a Subsidiary of the Corporation for which: (A) such Subsidiary’s share of the Corporation’s consolidated assets exceeds 20% of the consolidated assets of the Corporation calculated using the audited annual financial statements of the Corporation for the most recently completed financial year; or (B) the Corporation’s consolidated investments in and advances to such Subsidiary, as at the relevant date for the purposes of Section 8.1, exceeds 20% of the consolidated assets of the Corporation as at the last day of the most recently completed financial year of the Corporation; or (C) such Subsidiary’s proportionate share of the consolidated specified profit or loss of the Corporation exceeds 20% of the consolidated specified profit or loss of the Corporation calculated using the audited annual financial statements of the Corporation for the most recently completed financial year;	
 	 	 	
 	(fff)	“ Maturity Account ” means an account or accounts required to be established by the Corporation (and which shall be maintained by and subject to the control of the Debenture Trustee) for each series of Debentures pursuant to and in accordance with this Indenture;	
 	 	 	
 	(ggg)	“ Maturity Date ” means February 28, 2020 in respect of the Initial Debentures;	
 	 	 	
 	(hhh)	“ Maturity Notice ” has the meaning ascribed thereto in Section 2.4(f);	
 	 	 	
 	(iii)	“ NCI Letter of Instruction ” means the NCI System letter of instruction provided by the Depository to the Debenture Trustee in connection with the conversion of the Debentures;	
 	 	 	
 	(jjj)	“ NCI System ” means a non-certificated inventory system for Debentures maintained by the Depository, as may be changed, supplemented, replaced or otherwise modified from time to time;	
 	 	 	
 	(kkk)	“ NYSE ” means the New York Stock Exchange or its successor or successors;	
 	 	 	
 	(lll)	“ Offer Price ” has the meaning ascribed thereto in Section 2.4(i)(i);	
 	 	 	
 	(mmm)	“ Offering ” means the public offering by way of short form prospectus of the Corporation dated February 3, 2015 of $75 million aggregate principal amount of Initial Debentures ($86.25 million if the Over-Allotment Option is exercised in full);	
 	 	 	
 	(nnn)	“ Officer’s Certificate ” means a certificate of the Corporation signed by any one of the Directors or any one Authorized Officer, on behalf of the Corporation, in such capacity, and not in his or her personal capacity;	
 	 	 	
 	(ooo)	“ Original Purchaser ” has the meaning ascribed thereto in Section 17.1;	
 	 	 	
 	(ppp)	“ Over-Allotment Option ” means the option of the underwriters under the Offering to purchase up to an additional $11.25 million of Initial Debentures until 30 days after the closing of the Offering;	
 	 	 	
 	(qqq)	“ Periodic Offering ” means an offering of Debentures of a series from time to time, the specific terms of which Debentures, including, without limitation, the rate or rates of interest, if any, thereon, the stated maturity or maturities thereof and the redemption and conversion provisions, if any, with respect thereto, are to be determined by the Corporation upon the issuance of such Debentures from time to time pursuant to a supplemental indenture;	

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 	(rrr)	“ Person ” means and includes individuals, corporations, limited partnerships, general partnerships, joint stock companies, limited liability companies, joint ventures, associations, companies, trusts, banks, trust companies, pension funds, business trusts or other organizations, whether or not legal entities and governments, governmental agencies and political subdivisions thereof;	
 	 	 	
 	(sss)	“ Physical Settlement ” has the meaning ascribed thereto in Section 6.12;	
 	 	 	
 	(ttt)	“ Primero Group ” means the Corporation together with its Subsidiaries;	
 	 	 	
 	(uuu)	“ Privacy Laws ” has the meaning ascribed thereto in Section 15.20;	
 	 	 	
 	(vvv)	“ Prospectus ” means the (final) short form prospectus of the Corporation dated February 3, 2015 in respect of the Offering;	
 	 	 	
 	(www)	“ Purchased Shares ” has the meaning ascribed thereto in Section 6.5(e);	
 	 	 	
 	(xxx)	“ Rescission Period ” has the meaning ascribed thereto in Section 17.1;	
 	 	 	
 	(yyy)	“ Redemption Date ” has the meaning ascribed thereto in Section 4.3;	
 	 	 	
 	(zzz)	“ Redemption Notice ” has the meaning ascribed thereto in Section 4.3;	
 	 	 	
 	(aaaa)	“ Redemption Price ” means, in respect of a Debenture, the amount, excluding interest, payable on the Redemption Date fixed for such Debenture, which amount may be payable by the issuance of Freely-Tradeable Shares as provided for in Section 4.6;	
 	 	 	
 	(bbbb)	“ Senior Creditor ” means a holder or holders of Senior Indebtedness and includes any agent or agents, representative or representatives, or trustee or trustees of any such holder or holders;	
 	 	 	
 	(cccc)	“ Senior Indebtedness ” means the principal of, premium, if any, and interest on and other amounts in respect of, all unsubordinated indebtedness of the Corporation (including indebtedness under the Credit Facility) and indebtedness preferred by mandatory provisions of law (whether outstanding as at the date hereof or thereafter incurred), other than (i) indebtedness evidenced by the Debentures and (ii) all other existing and future debentures or other instruments of the Corporation which, by the terms of the instrument creating or evidencing the indebtedness, is expressed to be pari passu with, or subordinate in right of payment to, the Debentures or other indebtedness ranking pari passu with the Debentures;	
 	 	 	
 	(dddd)	“ Senior Security ” means all mortgages, hypothecs, liens, pledges, charges (whether fixed or floating), security interests or other encumbrances of any kind, contingent or absolute, held by or on behalf of any Senior Creditor and in any manner securing any Senior Indebtedness;	
 	 	 	
 	(eeee)	“ Settlement Method ” has the meaning ascribed thereto in Section 6.12;	
 	 	 	
 	(ffff)	“ Share Bid Request ” means a request for bids to purchase Shares (to be issued by the Corporation on the Share Delivery Date) made by the Debenture Trustee in accordance with the Share Interest Payment Election Notice and that shall make the acceptance of any bid conditional upon the acceptance of sufficient bids to result in aggregate proceeds from such issue and sale of Shares that, together with the cash payments by the Corporation in lieu of fractional Shares, if any, equal the Interest Obligation;	

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 	(gggg)	“ Share Delivery Date ” means a date, not more than 90 days and not less than one Business Day prior to the applicable Interest Payment Date, upon which Shares are issued by the Corporation and delivered to the Debenture Trustee for sale on behalf of the Corporation pursuant to Share Purchase Agreements (together with the cash payments by the Corporation, if any, required to be made in order to pay in full the applicable Interest Obligation);	
 	 	 	
 	(hhhh)	“ Share Interest Payment Election ” means an election to satisfy an Interest Obligation on the applicable Interest Payment Date in the manner described in the Share Interest Payment Election Notice;	
 	 	 	
 	(iiii)	“ Share Interest Payment Election Amount ” means the sum of the amount of the aggregate proceeds resulting from the sale of Shares on the Share Delivery Date pursuant to acceptable bids obtained pursuant to the Share Bid Requests, together with any amount paid by the Corporation in respect of fractional Shares pursuant to Section 10.1(g), that is equal to the aggregate amount of the Interest Obligation in respect of which the Share Interest Payment Election Notice was delivered;	
 	 	 	
 	(jjjj)	“ Share Interest Payment Election Notice ” means a written notice made by the Corporation to the Debenture Trustee specifying:	

 	(i)	the Interest Obligation to which the election relates;	
 	 	 	
 	(ii)	the Share Interest Payment Election Amount;	
 	 	 	
 	(iii)	the investment banks, brokers or dealers through which the Debenture Trustee shall seek bids to purchase the Shares and the conditions of such bids, which may include the minimum number of Shares, minimum price per Share, timing for closing for bids and such other matters as the Corporation may specify; and	
 	 	 	
 	(iv)	that the Debenture Trustee shall accept through the investment banks, brokers or dealers selected by the Corporation only those bids which comply with such notice;	

 	(kkkk)	“ Share Proceeds Investment ” has the meaning ascribed thereto in Section 10.1(h);	
 			
	(llll)	“ Share Purchase Agreement ” means an agreement in customary form among the Corporation, the Debenture Trustee and the persons making acceptable bids pursuant to a Share Bid Request, which complies with all applicable laws, including the Applicable Securities Legislation and the rules and regulations of any stock exchange on which the Debentures or Shares are then listed;	
 			
 	(mmmm)	“ Share Redemption Right ” has the meaning ascribed thereto in Section 4.6(a);	
 			
 	(nnnn)	“ Share Repayment Right ” has the meaning ascribed thereto in Section 4.11(a);	
 			
 	(oooo)	“ Share Settlement Portion ” has the meaning ascribed thereto in Section 6.12(d)(iii);	

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 	(pppp)	“ Shares ” means common shares of the Corporation, as such common shares are constituted on the date of execution and delivery of this Indenture; provided that in the event of a change or a subdivision, redivision, reduction, combination or consolidation thereof, any reclassification, capital reorganization, consolidation, amalgamation, arrangement, merger, sale or conveyance or liquidation, dissolution or winding-up, or such successive changes, subdivisions, redivisions, reductions, combinations or consolidations, reclassifications, capital reorganizations, consolidations, amalgamations, arrangements, mergers, sales or conveyances or liquidations, dissolutions or windings-up, then, subject to adjustments, if any, having been made in accordance with the provisions of Section 6.5, “ Shares ” shall mean the shares or other securities or property resulting from such change, subdivision, redivision, reduction, combination or consolidation, reclassification, capital reorganization, consolidation, amalgamation, arrangement, merger, sale or conveyance or liquidation, dissolution or winding- up;	
 	 	 	
 	(qqqq)	“ Subsidiary ” when used to indicate a relationship with a person or company, has the same meaning as set out in Section 2(2) of the Business Corporations Act (British Columbia);	
 	 	 	
 	(rrrr)	“ Successor ” has the meaning ascribed thereto in Section 11.1(a);	
 	 	 	
 	(ssss)	“ Tax Act ” means the Income Tax Act (Canada) as amended from time to time;	
 	 	 	
 	(tttt)	“ Time of Expiry ” means the time of expiry of certain rights (as set out in Section 2.4(e)) with respect to the conversion of Debentures under Article 6, which is to be set out for each series of Debentures which by their terms are to be convertible;	
 	 	 	
 	(uuuu)	“ Trading Day ” means, with respect to the NYSE, the TSX or other market for securities, any day on which such exchange or market is open for trading or quotation;	
 	 	 	
 	(vvvv)	“ Trailing Market Price ” for any applicable date means the VWAP of the Shares on the NYSE for the 20 consecutive Trading Days commencing on the day immediately following such date (utilizing only days on which the Shares actually trade), calculated by determining daily VWAP for each of such 20 consecutive Trading Days and determining the arithmetic average of such 20 daily VWAPs. If the Shares are not listed on the NYSE, reference will be made for the purpose of the foregoing calculation to the principal securities exchange or market on which the Shares are listed or quoted (and converted to US dollars at the Bloomberg end of day rate of exchange for such date) or, if no such prices are available, Trailing Market Price shall be the fair value of the Shares as reasonably determined by the board of directors of the Corporation;	
 	 	 	
 	(wwww)	“ TSX ” means the Toronto Stock Exchange or its successor or successors;	
 	 	 	
 	(xxxx)	“ United States ” means the United States of America, its territories and possessions, any state of the United States and the District of Columbia;	
 	 	 	
 	(yyyy)	“ VWAP ” means the volume-weighted average trading price of the Shares for the applicable day or period; and	
 	 	 	
 	(zzzz)	“ Written Direction of the Corporation ” means an instrument in writing signed by any Director of the Corporation or any Authorized Officer of the Corporation on behalf of the Corporation.	

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1.2	Meaning of “ Outstanding ”	
Every Debenture certified and delivered by the Debenture Trustee, or issued as an electronic position on the register of Debentureholders to be maintained by the Debenture Trustee, hereunder shall be deemed to be outstanding until it is cancelled, converted, repurchased, redeemed or delivered to the Debenture Trustee for cancellation, repurchase, conversion or redemption and monies and/or Shares, as the case may be, for the payment thereof shall have been set aside under Article 9, provided that:

 	(a)	Debentures which have been partially redeemed, purchased or converted shall be deemed to be outstanding only to the extent of the unredeemed, unpurchased or unconverted part of the principal amount thereof;	
 	 	 	
 	(b)	when a new Debenture has been issued in substitution for a Debenture which has been lost, stolen or destroyed, only one of such Debenture shall be counted for the purpose of determining the aggregate principal amount of Debentures outstanding; and	
 	 	 	
 	(c)	for the purposes of any provision of this Indenture entitling holders of outstanding Debentures to vote, sign consents, requisitions or other instruments or take any other action under this Indenture, or to constitute a quorum of any meeting of Debentureholders, Debentures owned directly or indirectly, by the Corporation or a Subsidiary of the Corporation shall be disregarded except that:	

 	(i)	for the purpose of determining whether the Debenture Trustee shall be protected in relying on any such vote, consent, requisition or other instrument or action, or on the holders of Debentures present or represented at any meeting of Debentureholders, only the Debentures which the Debenture Trustee knows are so owned shall be so disregarded;	
 	 	 	
 	(ii)	Debentures so owned which have been pledged in good faith other than to the Corporation or a Subsidiary of the Corporation shall not be so disregarded if the pledgee shall establish to the satisfaction of the Debenture Trustee the pledgee’s right to vote such Debentures, sign consents, requisitions or other instruments or take such other actions in his discretion free from the control of the Corporation or a Subsidiary of the Corporation; and	
 	 	 	
 	(iii)	Debentures so owned shall not be disregarded if they are the only Debentures outstanding.	

1.3	Headings	
The headings, the table of contents and the division of this Indenture into Articles and Sections are for convenience of reference only and shall not affect the interpretation of this Indenture.

1.4	Time of Essence	
Time shall be of the essence of this Indenture.

1.5	References	
Unless otherwise specified in this Indenture:

 	(a)	references to Articles, Sections and Schedules are to Articles, Sections and Schedules in this Indenture; and	

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 	(b)	“hereto” “herein”“hereby” “hereunder”“hereof”and similar expressions, without reference to a particular provision, refer to this Indenture.	

1.6	Certain Rules of Interpretation	
Unless otherwise specified in this Indenture:

 	(a)	the singular includes the plural and vice versa ; and	
 	 	 	
 	(b)	references to any gender shall include references to all genders.	

1.7	Day Not a Business Day	
In the event that any day on or before which any action is required to be taken hereunder is not a Business Day, then such action shall be required to be taken at or before the requisite time on the next succeeding day that is a Business Day.

1.8	Applicable Law	
This Indenture and the Debentures shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein. For the purpose of all legal proceedings, this Indenture will be deemed to have been performed in the Province of Ontario and the courts of the Province of Ontario will have jurisdiction to entertain any action arising under this Agreement. The Corporation and the Debenture Trustee attorn to the jurisdiction of the courts of Province of Ontario.

1.9	Conflict	
In the event of a conflict or inconsistency between a provision in the body of this Indenture and in the Debentures issued hereunder, the provision in the body of this Indenture shall prevail to the extent of the inconsistency.

1.10	Currency	
Unless otherwise indicated, all dollar amounts expressed in this Indenture and in the Debentures are in lawful money of the United States and all payments required to be made hereunder and thereunder shall be made in United States dollars.

1.11	Calculations	
The Corporation shall be responsible for making all calculations called for hereunder including, without limitation, calculations of Current Market Price, Trailing Market Price and calculations made pursuant to Sections 2.4(i) and (j). The Corporation shall make such calculations in good faith and, absent manifest error, the Corporation’s calculations shall be final and binding on holders and the Debenture Trustee. The Corporation will provide a schedule of its calculations to the Debenture Trustee and the Debenture Trustee shall be entitled to rely conclusively on the accuracy of such calculations without independent verification.

1.12	Severability	
Each of the provisions in this Indenture is distinct and severable and a declaration of invalidity or unenforceability of any such provision or part thereof by a court of competent jurisdiction shall not affect the validity or enforceability of any of the other provisions hereof.

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1.13	Entire Agreement	
This Indenture and all supplemental indentures and schedules hereto and thereto, and the Debentures issued hereunder and thereunder, together constitute the entire agreement between the parties hereto with respect to the indebtedness created hereunder and thereunder and under the Debentures and supersedes as of the date hereof all prior memoranda, agreements, negotiations, discussions and term sheets, whether oral or written, with respect to the indebtedness created hereunder or thereunder and under the Debentures.

1.14	Successors and Assigns	
All covenants and agreements in this Indenture by the Corporation shall bind its successors, whether expressed or not. All covenants and agreements of the Debenture Trustee in this Indenture shall bind its successors.

1.15	Benefits of Indenture	
Nothing in this Indenture or in the Debentures, express or implied, shall give to any person, other than the parties hereto and their successors hereunder, any paying agent, the holders of Debentures, the Senior Creditors, the Directors and (to the extent provided in Sections 8.11 and 18.2) the holders of Shares, any benefit or any right, remedy or claim under this Indenture.

1.16	Schedules	
The following Schedules are incorporated into and form a part of the Indenture: Schedule “A” Form of Global Debenture Schedule “B” Form of Redemption Notice Schedule “C” Form of Maturity Notice Schedule “D” Form of Notice of Conversion
In the event of any inconsistency in such Schedules and the body of this Indenture, the latter shall prevail to the extent of the inconsistency.
ARTICLE 2
THE DEBENTURES

2.1	Limit of Debentures	
Subject to the limitation in respect of the Initial Debentures set out in Section 2.4(a), the aggregate principal amount of Debentures authorized to be issued under this Indenture is unlimited, but Debentures may be issued only upon and subject to the conditions and limitations herein set out and as authorized by resolution of the Directors.

2.2	Terms of Debentures of Any Series	
The Debentures may be issued in one or more series. There shall be established herein or in or pursuant to one or more indentures supplemental hereto, prior to the initial issuance of Debentures of any particular series (other than the Initial Debentures, which are provided for in Section 2.4):

 	(a)	the designation of the Debentures of the series, which shall distinguish the Debentures of the series from the Debentures of all other series;	

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 	(b)	any limit upon the aggregate principal amount of the Debentures of the series that may be certified and delivered under this Indenture (except for Debentures certified and delivered upon registration of, transfer of, amendment of, or in exchange for, or in lieu of, other Debentures of the series pursuant to Sections 2.9, 2.10, 3.2, 3.3 and 3.6);	
 	 	 	
 	(c)	the date or dates on which the principal of the Debentures of the series is payable;	
 	 	 	
 	(d)	the rate or rates at which the Debentures of the series shall bear interest, if any, the date or dates from which such interest shall accrue, on which such interest shall be payable and on which a record, if any, shall be taken for the determination of holders to whom such interest shall be payable and/or the method or methods by which such rate or rates or date or dates shall be determined;	
 	 	 	
 	(e)	the place or places where the principal of and any interest on Debentures of the series shall be payable or where any Debentures of the series may be surrendered for registration of transfer or exchange;	
 	 	 	
 	(f)	the right, if any, of the Corporation to redeem Debentures of the series, in whole or in part, at its option and the period or periods within which, the price or prices at which and any terms and conditions upon which, Debentures of the series may be so redeemed, pursuant to any sinking fund or otherwise;	
 	 	 	
 	(g)	the obligation, if any, of the Corporation to redeem, purchase or repay Debentures of the series pursuant to any mandatory redemption, sinking fund or analogous provisions or at the option of a holder thereof and the price or prices at which, the period or periods within which, the date or dates on which, and any terms and conditions upon which, Debentures of the series shall be redeemed, purchased or repaid, in whole or in part, pursuant to such obligations;	
 	 	 	
 	(h)	if other than denominations of $1,000 and any integral multiple thereof, the denominations in which Debentures of the series shall be issuable;	
 	 	 	
 	(i)	subject to the provisions of this Indenture, any trustees, Depositories, authenticating or paying agents, transfer agents or registrars or any other agents with respect to the Debentures of the series;	
 	 	 	
 	(j)	any other events of default or covenants with respect to the Debentures of the series;	
 	 	 	
 	(k)	whether and under what circumstances the Debentures of the series will be convertible into or exchangeable for securities of any Person;	
 	 	 	
 	(l)	whether the Debentures of the series will be guaranteed by any Person and the terms of any such guarantee;	
 	 	 	
 	(m)	the form and terms of the Debentures of the series;	
 	 	 	
 	(n)	if applicable, that the Debentures of the series shall be issuable in whole or in part as one or more Global Debentures and, in such case, the Depository or Depositories for such Global Debentures in whose name, or whose nominee’s name, the Global Debentures will be registered, and any circumstances other than or in addition to those set out in Section 2.9 or 3.2 or those applicable with respect to any specific series of Debentures, as the case may be, in which any such Global Debenture may be exchanged for Fully-Registered Debentures, or transferred to and registered in the name of a person other than the Depository for such Global Debentures or a nominee thereof;	

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 	(o)	if other than United States currency, the currency in which the Debentures of the series are issuable; and	
 	 	 	
 	(p)	any other terms of the Debentures of the series (which terms shall not be inconsistent with the provisions of this Indenture).	
All Debentures of any one series shall be substantially identical, except as may otherwise be established herein or by or pursuant to a resolution of the Directors, Officer’s Certificate or in an indenture supplemental hereto. All Debentures of any one series need not be issued at the same time and may be issued from time to time, including pursuant to a Periodic Offering, consistent with the terms of this Indenture, if so provided herein, by or pursuant to such resolution of the Directors, Officer’s Certificate or in an indenture supplemental hereto.

2.3	Form of Debentures	
Except in respect of the Initial Debentures, the form of which is provided for herein, the Debentures of each series shall be substantially in such form or forms (not inconsistent with this Indenture) as shall be established herein or by or pursuant to one or more resolutions of the Directors (as set out in a resolution of the Directors or to the extent established pursuant to, rather than set out in, a resolution of the Directors, in an Officer’s Certificate detailing such establishment) or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture and may have imprinted or otherwise reproduced thereon such legend or legends or endorsements, not inconsistent with the provisions of this Indenture, as may be required to comply with any law or with any rules or regulations pursuant thereto or with any rules or regulations of any securities exchange or securities regulatory authority or to conform to general usage, all as may be determined by the Directors or Authorized Officer executing such Debentures on behalf of the Corporation, as conclusively evidenced by his or her execution of such Debentures.

2.4	Form and Terms of Initial Debentures	

 	(a)	The first series of Debentures (the “ Initial Debentures ”) authorized for issuance on the date hereof is limited to an aggregate principal amount of not more than $86.25 million (including the Over-Allotment Option) and shall be designated as “5.75% Convertible Unsecured Subordinated Debentures due February 28, 2020”.	
 	 	 	
 	(b)	The Initial Debentures, including any issued pursuant to the Over-Allotment Option, if applicable, shall be dated February 9, 2015. The Initial Debentures shall mature on the Maturity Date. The Initial Debentures shall bear interest from and including February 9, 2015 at the rate of 5.75% per annum, payable in US dollars semi-annually in arrears on February 28 and August 28 in each year computed on the basis of a 360-day year composed of twelve 30-day months. The first such payment will fall due on August 28, 2015 and the last such payment (representing interest payable from and including the last Interest Payment Date to, but excluding, the Maturity Date or the earlier date of redemption, repayment or conversion of the Initial Debentures) will fall due on the Maturity Date or the earlier date of redemption, repayment or conversion, payable after as well as before maturity and after as well as before default, with interest on amounts after maturity or in default at the same rate, compounded semi-annually, computed on the basis of a 360 -day year composed of twelve 30-day months. For certainty, the first interest payment will include interest accrued and unpaid from and including February 9, 2015 to, but excluding, August 28, 2015 which will be equal to $31.78 for each $1,000 principal amount of the Initial Debentures. The Debenture Trustee shall be entitled to rely on the calculations of the Corporation, which shall be provided by the Corporation ten Business Days prior to any Interest Payment Date.	

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 	(c)	The Initial Debentures are redeemable by the Corporation in accordance with the terms of Article 4 of the Indenture, provided that the Initial Debentures will not be redeemable before February 28, 2018 (except in limited circumstances following a Change of Control as provided herein). On and after February 28, 2018 and prior to February 28, 2020, the Initial Debentures may be redeemed in whole or in part from time to time at the option of the Corporation on notice as provided for in Section 4.3 and at a price equal to the principal amount thereof plus accrued and unpaid interest thereon, if any, up to but excluding the Redemption Date, provided that the Current Market Price on the date on which such notice of redemption is given is at least 125% of the Conversion Price in respect of the Initial Debentures and the Corporation shall have provided to the Debenture Trustee an Officer’s Certificate confirming such Current Market Price. The Redemption Notice for the Initial Debentures shall be in the form of Schedule B to this Indenture.	
 	 	 	
 	(d)	The Initial Debentures are hereby subordinated to the Senior Indebtedness of the Corporation in accordance with the provisions of Article 5 of the Indenture. The Initial Debentures rank pari passu with each other Debenture issued under this Indenture or under indentures supplemental to this Indenture (regardless of their actual date or terms of issue) and, except as prescribed by law, with all other present and future subordinated and unsecured indebtedness of the Corporation, other than Senior Indebtedness.	
 	 	 	
 	(e)	Upon and subject to the provisions and conditions of Article 6 of the Indenture, the holder of each Initial Debenture shall have the right at such holder’s option, at any time prior to the close of business on the earliest of (i) the Business Day immediately preceding the Maturity Date, (ii) the Business Day immediately preceding the Redemption Date specified by the Corporation for redemption of the Initial Debentures by notice to the holders of Initial Debentures in accordance with Sections 2.4(c) and 4.3 of this Indenture and (iii) the Business Day immediately preceding the payment date in the event the Corporation is required to offer to repurchase the Debentures in the event of a Change of Control in accordance with Section 2.4(i) of this Indenture (the earliest of which will be the “ Time of Expiry ” for the purposes of Article 6 of the Indenture in respect of the Initial Debentures), to convert the whole or, in the case of an Initial Debenture of a denomination in excess of $1,000, any part which is $1,000 or an integral multiple thereof, of the principal amount of such Initial Debenture into fully-paid and non- assessable Freely Tradeable Shares at the Conversion Rate in respect of the Initial Debentures in effect on the Date of Conversion. Notwithstanding the foregoing, no Initial Debentures may be converted during the five Business Days preceding any applicable Interest Payment Date. Other than in the case of maturity, a conversion notice received during such period will be deemed received as of the date the registers are next opened.	
 	 	 	
 		The Conversion Rate in effect on the date hereof for the number of Shares to be issued upon the conversion of Initial Debentures shall be equal to 152.6718 Shares to be issued for each $1,000 principal amount of Initial Debentures so converted, resulting in a Conversion Price equal to approximately $6.55 for each Share to be issued upon the conversion of Initial Debentures, subject to the terms of Section 6.6. Holders converting their Initial Debentures will receive interest that has accrued but not been paid from the issuance date of the Initial Debentures or the most recently completed Interest Payment Date (as applicable) to but excluding the Date of Conversion. Holders converting their Initial Debentures on an Interest Payment Date will receive the applicable interest payment. The Conversion Rate applicable to the Shares, securities or other property receivable on the conversion of the Initial Debentures is subject to adjustment pursuant to the provisions of Section 6.5.	

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 	(f)	On redemption or on maturity of the Initial Debentures, the Corporation may, at its option and subject to the provisions of Sections 4.6 and 4.11 of the Indenture as applicable, and subject to regulatory approval and Applicable Securities Legislation, elect to satisfy its obligation to pay all or a portion of the principal amount of the Initial Debentures by issuing and delivering to the holders of Initial Debentures Freely-Tradeable Shares. If the Corporation elects to exercise such option, it shall deliver a maturity notice (the “ Maturity Notice ”) to the holders of the Initial Debentures in the form of Schedule C.	
 	 	 	
 	(g)	The initial Debentures shall be issued in denominations of $1,000 and integral multiples of $1,000 and the Debenture Trustee is hereby appointed as registrar and transfer agent for the Initial Debentures. Each Initial Debenture and the certificate of the Debenture Trustee endorsed thereon shall be issued in substantially the form set out in Schedule A to this Indenture, and may have imprinted or otherwise reproduced thereon such legend or legends or endorsements, not inconsistent with the provisions of this Indenture, as may be required to comply with any law or with any rules or regulations pursuant thereto or with any rules or regulations of any securities exchange or securities regulatory authority or to conform with general usage, all as may be determined by Directors or an Authorized Officer executing such Initial Debenture in accordance with Section 2.7 hereof, as conclusively evidenced by his or her execution of an Initial Debenture. Each Initial Debenture shall additionally bear such distinguishing letters and numbers as the Debenture Trustee shall approve. Notwithstanding the foregoing, an Initial Debenture may be in such other form or forms as may, from time to time, be approved by a resolution of the Directors or as specified in an Officer’s Certificate. The Initial Debentures may be engraved, lithographed, printed, mimeographed or typewritten or partly in one form and partly in another, including non-certificated electronic form.	
 	 	 	
 		The Initial Debentures shall be issued as one or more Global Debentures, which may be held as an electronic position on the register of Debentureholders in the NCI System, and the Depository for the Initial Debentures shall be CDS. The Global Debentures and electronic position, as applicable, shall be registered in the name of the Depository (or any nominee of the Depository). No Beneficial Holder will receive definitive certificates representing their interest in Initial Debentures except as provided in Section 3.2 of the Indenture. A Global Debenture may be exchanged for Initial Debentures in registered form that are not Global Debentures, or transferred to and registered in the name of a person other than the Depository for such Global Debentures or a nominee thereof as provided in Section 3.2 .	
 	 	 	
 	(h)	Upon and subject to the provisions and conditions of Article 10 and provided no Event of Default has occurred and is continuing, the Corporation may elect, from time to time, subject to applicable regulatory approval and Applicable Securities Legislation, to raise funds to satisfy all or part of the Interest Obligation on the Initial Debentures on any Interest Payment Date (including, for greater certainty, following conversion or upon maturity or redemption) by delivering Shares to the Debenture Trustee for sale by the Debenture Trustee on behalf of the Corporation through the facilities of a registered broker/dealer. The Debenture Trustee will only deliver such Shares to the buyers selected by the Corporation and at the price determined by the Corporation as instructed in writing by the Corporation.	

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 	(i)	Within 30 days following the occurrence of a Change of Control, the Corporation shall be obligated to offer to purchase in cash all Initial Debentures then outstanding. The terms and conditions of such obligation (in addition to complying with Applicable Securities Legislation) are set out below:	

 	(i)	Within 30 days following the occurrence of a Change of Control, the Corporation shall deliver to the Debenture Trustee a notice in writing stating that there has been a Change of Control and specifying the date on which such Change of Control occurred and the circumstances or events giving rise to such Change of Control together with an offer in writing (the “ Debenture Offer ”) to purchase all of the Initial Debentures then outstanding from the holders thereof at a price per Initial Debenture equal to 100% of the principal amount thereof together with accrued and unpaid interest thereon in cash up to but excluding the Change of Control Purchase Date (the “ Offer Price ”). The Debenture Trustee will promptly thereafter deliver, by prepaid courier or mail, the Debenture Offer to the holders of all Initial Debentures then outstanding, at their addresses appearing in the registers of holders of Initial Debentures maintained by the Debenture Trustee.	
 	 	 	
 	(ii)	The Debenture Offer shall specify the date (the “ Expiry Date ”) and time (the “ Expiry Time ”) on which the Debenture Offer shall expire which date and time shall not, unless otherwise required by Applicable Securities Legislation, be earlier than the close of business on the 35 th day and not later than the close of business on the 60 th day following the date on which such Debenture Offer is made.	
 	 	 	
 	(iii)	The Debenture Offer shall specify that the Debenture Offer may be accepted by the holders of Initial Debentures by tendering the Initial Debentures so held by them to the Debenture Trustee at its offices in Toronto, Ontario at or before the Expiry Time together with an acceptance notice (the “ Acceptance Notice ”) in form and substance acceptable to the Debenture Trustee.	
 	 	 	
 	(iv)	The Debenture Offer shall state that holders of Initial Debentures may accept the Debenture Offer in respect of all or a portion (in a minimum amount of $1,000 principal amount and multiples thereof) of their Initial Debentures.	
 	 	 	
 	(v)	The Debenture Offer shall specify a date (the “ Change of Control Purchase Date ”) no later than the third Business Day following the Expiry Date on which the Corporation shall take up and pay for all Initial Debentures duly tendered in acceptance of the Debenture Offer.	
 	 	 	
 	(vi)	The Corporation shall on or before 11:00 a.m. (Toronto time) on the Business Day immediately prior to the Change of Control Purchase Date pay to the Debenture Trustee by wire transfer or such other means as may be acceptable to the Debenture Trustee, an amount of money sufficient to pay the aggregate Offer Price in respect of all Initial Debentures duly tendered to the Debenture Offer (less any tax required by law to be deducted). The Debenture Trustee, on behalf of the Corporation, will pay the Offer Price to the holders of Initial Debentures in the respective amounts to which they are entitled in accordance with the Debenture Offer as aforesaid.	

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 	(vii)	If holders of 90% or more of the aggregate principal amount of Initial Debentures outstanding on the date the Corporation delivers the Debenture Offer to the Debenture Trustee accept the Debenture Offer, the Corporation shall have the right (the “ 90% Redemption Right ”), upon written notice (the “ 90% Redemption Right Notice ”) provided to the Debenture Trustee within ten Business Days following the Expiry Date, to redeem on the purchase date specified in the 90% Redemption Right Notice all the Initial Debentures remaining outstanding at the Offer Price and on the other terms and conditions provided herein. Upon receipt of such notice by the Debenture Trustee, the Debenture Trustee shall promptly provide written notice to each holder of outstanding Initial Debentures (other than those that have accepted the Debenture Offer) that:	

 	(A)	the Corporation has exercised the 90% Redemption Right and is purchasing all outstanding Initial Debentures effective as at the Change of Control Purchase Date at the Offer Price;	
 	 	 	
 	(B)	such holder must surrender its Initial Debentures to the Debenture Trustee within ten days after the sending of such notice; provided that with respect to a Global Debenture, the obligation to surrender an Initial Debenture to the Debenture Trustee shall be satisfied if the Debenture Trustee makes a notation on the adjustment table to the Global Debenture of the principal amount thereof so transferred; and	
 	 	 	
 	(C)	the rights of such holder under the terms of the Initial Debentures and this Indenture shall cease effective as of the Change of Control Purchase Date provided the Corporation has, on or before the date on which the Corporation delivers the 90% Redemption Notice to the Debenture Trustee, paid the aggregate Offer Price to, or to the order of, the Debenture Trustee and thereafter such holder’s Initial Debentures shall not be considered to be outstanding and such holder shall not have any rights hereunder except to receive such Offer Price to which such holder is entitled upon surrender and delivery of such holder’s Initial Debentures in accordance with the Indenture.	

 	(viii)	The Corporation shall on or before 11:00 a.m. (Toronto time) on the Business Day immediately prior to date on which the Corporation delivers the 90% Redemption Right Notice pay to the Debenture Trustee by wire transfer or such other means as may be acceptable to the Debenture Trustee an amount of money sufficient to pay the aggregate Offer Price in respect of all Initial Debentures to be redeemed pursuant to the 90% Redemption Right (less any tax required by law to be deducted). The Debenture Trustee, on behalf of the Corporation, will pay the Offer Price to the holders of Initial Debentures in the respective amounts to which they are entitled in accordance with the exercise of the 90% Redemption Right as aforesaid upon surrender and delivery of such holders’ Initial Debentures.	
 	 	 	
 	(ix)	The Initial Debentures in respect of which the Corporation has made payment to the Debenture Trustee in accordance with the terms of this Section 2.4(i) (or the portion thereof tendered in acceptance of the Debenture Offer) shall thereafter no longer be considered to be outstanding under this Indenture. All Initial Debentures in respect of which payment of the Offer Price has been so made shall be cancelled by the Debenture Trustee.	

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 	(x)	In the event a portion of the principal amount only of an Initial Debenture is tendered by a holder thereof in acceptance of the Debenture Offer, the Corporation shall execute and deliver to the Debenture Trustee and the Debenture Trustee shall certify and deliver to the holder, without charge to such holder, a certificate (if applicable) or such other evidence of ownership representing the principal amount of the Initial Debenture not so tendered in acceptance of the Debenture Offer.	

 	(j)	In addition to the requirements of Section 2.4(i) in respect of a Change of Control, the following provisions shall apply in respect of the occurrence of a Cash Change of Control occurring on or before the Maturity Date:	

 	(i)	During the period beginning on the occurrence of a Cash Change of Control and ending immediately prior to the expiry of the Debenture Offer (the “ Cash Change of Control Conversion Period ”), holders of Initial Debentures will be entitled to convert their Initial Debentures, in whole or in part, and receive, in addition to the number of Shares they would otherwise be entitled to receive in accordance with the provisions and conditions of Section 2.4(e) and Article 6, an additional number of Shares (or cash or other property or securities in substitution therefor) per $1,000 principal amount of Initial Debentures as set out in subsections (ii), (iii), (iv), (v), (vi) and (vii) of this Section 2.4(j) (the “ Make-Whole Premium ”).	
 	 	 	
 	(ii)	The number of additional Shares per $1,000 principal amount of Initial Debentures constituting the Make-Whole Premium (the “ Make-Whole Premium Shares ”) will be determined by reference to the table following subsection (iii) below and is based on the date on which the Cash Change of Control becomes effective (the “ Effective Date ”) and the price paid per Share in the transaction constituting the Change of Control (the “ Cash Offer Price ”), converted (if applicable) to US dollars at the Bloomberg end of day rate of exchange on the Effective Date. If holders of Shares receive (or are entitled and able in all circumstances to receive) only cash in the transaction constituting the Change of Control, the Cash Offer Price shall be the cash amount paid per Share, converted (if applicable) to US dollars at the Bloomberg end of day rate of exchange on the Effective Date. Otherwise, the Cash Offer Price shall be equal to the Current Market Price of the Shares on the day immediately preceding the Effective Date of such transaction.	
 	 	 	
 	(iii)	The following table shows the number of Make-Whole Premium Shares for each hypothetical Cash Offer Price and Effective Date set out below, expressed as additional Shares per $1,000 principal amount of Initial Debentures. For the avoidance of doubt, the Corporation shall not be obliged to pay the Make-Whole Premium otherwise than by issuance of the applicable number of Shares in excess of the number of Shares to which holders would otherwise have been entitled at the Conversion Price (the “ Base Shares ”) upon conversion of the Initial Debentures in accordance with the provisions and conditions of Sections 2.4(e) and Article 6.	

Cash Offer	 	 	 	 	 	 	
      Price	February	February	February	February	February	February	
($)	9, 2015	28, 2016	28, 2017	28, 2018	28, 2019	  28, 2020	
 	 	 	 	 	 	 	
$4.84	60.0785	56.2624	53.9398	53.9398	53.9398	53.9398	
 	 	 	 	 	 	 	
$5.00	56.6440	52.6100	49.8540	48.9240	48.7020	47.3282	
 	 	 	 	 	 	 	
$5.25	51.8419	47.5162	44.2610	42.7733	41.4990	37.8044	

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Cash Offer	 	 	 	 	 	 	
Price	February	February	February	February	February	February	
($)	9, 2015	28, 2016	  28, 2017	28, 2018	28, 2019	28, 2020	
 	 	 	 	 	 	 	
$5.50	47.6364	43.0709	39.3709	37.4036	35.3055	35.2855	
 	 	 	 	 	 	 	
$5.75	43.9374	39.1757	35.0852	32.6939	29.9913	27.3809	
 	 	 	 	 	 	 	
$6.00	40.6717	35.7567	31.3183	28.5400	25.4417	20.1333	
 	 	 	 	 	 	 	
$6.25	37.7776	32.7440	28.0048	24.8544	21.5536	13.4672	
 	 	 	 	 	 	 	
$6.50	35.2031	30.0831	25.0862	21.5662	18.2277	7.3138	
 	 	 	 	 	 	 	
$6.75	32.9067	27.7304	22.5141	18.6178	15.3793	1.6148	
 	 	 	 	 	 	 	
$7.00	30.8514	25.6414	20.2471	15.9557	12.9257	-	
 	 	 	 	 	 	 	
$7.50	27.3467	22.1333	16.4907	11.3480	8.9573	-	
 	 	 	 	 	 	 	
$8.00	24.4913	19.3388	13.5813	7.5125	5.8850	-	
 	 	 	 	 	 	 	
$8.50	22.1400	17.0941	11.3341	4.3259	3.4318	-	
 	 	 	 	 	 	 	
$9.00	20.1822	15.2756	9.6033	1.7467	1.4500	-	
 	 	 	 	 	 	 	
$9.50	18.5389	13.7916	8.2716	0.2853	0.2842	-	
 	 	 	 	 	 	 	
$10.00	17.1440	12.5670	7.2430	0.1030	0.1020	-	
 	 	 	 	 	 	 	
$12.50	12.5432	8.8136	4.6096	-	-	-	
 	 	 	 	 	 	 	
$15.00	10.0147	6.9540	3.6013	-	-	-	
 	 	 	 	 	 	 	
$17.50	8.4074	5.8314	3.0366	-	-	-	
 	 	 	 	 	 	 	
$20.00	7.2785	5.0565	2.6460	-	-	-	

 	(iv)	The actual Cash Offer Price and Effective Date may not be set out on the table above, in which case:	

 	(A)	if the actual Cash Offer Price on the Effective Date is between two Cash Offer Prices on the table and/or the actual Effective Date is between two Effective Dates on the table, the number of Make-Whole Premium Shares will be determined by a straight-line interpolation between the Make-Whole Premium set out for the two Cash Offer Prices and/or the two Effective Dates on the table based on a 365-day year, as applicable;	
 	 	 	
 	(B)	if the Cash Offer Price on the Effective Date exceeds $20.00 per Share, subject to adjustment as described below, the Make-Whole Premium and the number of Make-Whole Premium Shares to be issued will be zero; and	
 	 	 	
 	(C)	if the Cash Offer Price on the Effective Date is less than $4.84 per Share, subject to adjustment as described below, the Make-Whole Premium and the number of Make-Whole Premium Shares to be issued will be zero.	

 	(v)	The Cash Offer Prices set out in the table above will be adjusted as of any date on which the Conversion Rate of the Initial Debentures is adjusted. The adjusted Cash Offer Prices will equal the Cash Offer Prices applicable immediately prior to such adjustment multiplied by a fraction, the numerator of which is the Conversion Rate immediately prior to the adjustment giving rise to the Cash Offer Price adjustment and the denominator of which is the Conversion Rate as so adjusted. The number of Make-Whole Premium Shares set out in the table above will be adjusted in the same manner as the Conversion Rate as set out under Section 6.5, other than as a result of an adjustment to the Conversion Rate by adding the Make-Whole Premium as described above. The provisions of Section 6.11 shall be applicable in connection with determinations under this Section 2.4(j) .	

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 	(vi)	Notwithstanding the foregoing, if the Date of Conversion of any Initial Debentures occurs during the period beginning on the tenth Trading Day on the principal exchange on which the Shares are then listed prior to the Effective Date and ending at the close of business on the Effective Date, the holders of such Initial Debentures shall, on conversion of their Initial Debentures, be entitled to receive the relevant number of Make-Whole Premium Shares (as may be adjusted pursuant to Section 6.5) only on the Business Day immediately following the Effective Date and, for greater certainty, only if the Change of Control occurs. The Base Shares shall be issued in accordance with the terms of this Indenture applicable to a conversion of Initial Debentures otherwise than during the Cash Change of Control Conversion Period, including at the then-applicable Conversion Price.	
 	 	 	
 	(vii)	The Make-Whole Premium Shares shall be deemed to have been issued upon conversion of Initial Debentures on the Business Day immediately following the Effective Date. Section 6.5 shall apply to such conversion and, for greater certainty, the former holders of Initial Debentures in respect of which the Make- Whole Premium Shares are issuable shall be entitled to receive and shall accept, in lieu of the Make-Whole Premium Shares, the number of shares or other securities or property of the Corporation or of the person or other entity resulting from the transaction that constitutes the Cash Change of Control that such holders would have been entitled to receive if such holders had been the registered holders of the applicable number of Make-Whole Premium Shares on the Effective Date.	
 	 	 	
 	(viii)	Except as otherwise provided in this Section 2.4(j), all other provisions of this Indenture applicable to a conversion of Initial Debentures shall apply to a conversion of Initial Debentures during the Cash Change of Control Conversion Period.	

 	(k)	The Debenture Trustee shall be provided with the documents and instruments referred to in Sections 2.5(b), (c) and (d) with respect to the Initial Debentures prior to the issuance of the Initial Debentures.	
 	 	 	
 	(l)	Notwithstanding any other provision in this Indenture, if prior to the last date that is five (5) years plus one day from the last date of original issuance of the Initial Debentures, holders of Initial Debentures would otherwise be entitled to receive upon conversion of the Initial Debentures, any property (including cash) or securities that would not constitute “prescribed securities” for the purposes of clause 212(1)(b)(vii)(E) of the Tax Act as it applied immediately before January 1, 2008 (referred to herein as “ineligible consideration”), such holders of Initial Debentures shall not be entitled to receive such ineligible consideration but the Corporation or its successor or acquiror, as the case may be, shall have the right (at the sole option of the Corporation or such successor or acquiror, as the case may be) to deliver either such ineligible consideration or “prescribed securities” for the purposes of clauses 212(1)(b)(vii)(E) of the Tax Act as it applied immediately before January 1, 2008, with a market value (as conclusively determined by the board of directors of the Corporation) equal to the market value of such ineligible consideration.	

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 	(m)	The Debenture Trustee shall be entitled to rely on calculations of the Corporation with regards to any calculations pursuant to this Section 2.4.	

2.5	Certification and Delivery of Additional Debentures	
The Corporation may from time to time request the Debenture Trustee to certify and deliver Additional Debentures of any series by delivering to the Debenture Trustee the documents referred to below in this Section 2.5 whereupon the Debenture Trustee shall certify such Additional Debentures and cause the same to be delivered in accordance with the Written Direction of the Corporation referred to below or pursuant to such procedures acceptable to the Debenture Trustee as may be specified from time to time by a Written Direction of the Corporation. The maturity date, issue date, interest rate (if any) and any other terms of the Additional Debentures of such series shall be set out in a supplemental indenture or determined by or pursuant to such Written Direction of the Corporation and procedures. In certifying such Additional Debentures, the Debenture Trustee shall be entitled to receive and shall be fully protected in relying upon, unless and until such documents have been superseded or revoked:

 	(a)	an Officer’s Certificate and/or executed supplemental indenture by or pursuant to which the form and terms of such Additional Debentures were established;	
 	 	 	
 	(b)	a Written Direction of the Corporation addressed to the Debenture Trustee requesting certification and delivery of such Additional Debentures and setting forth delivery instructions, provided that, with respect to Debentures of a series subject to a Periodic Offering:	

 	(i)	such Written Direction of the Corporation may be delivered by the Corporation to the Debenture Trustee prior to the delivery to the Debenture Trustee of such Additional Debentures of such series for certification and delivery;	
 	 	 	
 	(ii)	the Debenture Trustee shall certify and deliver Additional Debentures of such series for original issue from time to time, in an aggregate principal amount not exceeding the aggregate principal amount, if any, established for such series, pursuant to a Written Direction of the Corporation or pursuant to procedures acceptable to the Debenture Trustee as may be specified from time to time by a Written Direction of the Corporation; and	
 	 	 	
 	(iii)	the maturity date or dates, issue date or dates, interest rate or rates (if any) and any other terms of Additional Debentures of such series shall be determined by an executed supplemental indenture or by Written Direction of the Corporation or pursuant to such procedures;	

 	(c)	an opinion of Counsel, in form and substance satisfactory to the Debenture Trustee, acting reasonably, to the effect that all requirements imposed by this Indenture or by law in connection with the proposed issue of Additional Debentures have been complied with, subject to the delivery of certain documents or instruments specified in such opinion; and	
 	 	 	
 	(d)	an Officer’s Certificate addressed to the Debenture Trustee certifying that the Corporation is not in default under this Indenture, that the terms and conditions for the certification and delivery of Additional Debentures (including those set out in Section 15.6), have been complied with subject to the delivery of any documents or instruments specified in such Officer’s Certificate and that no Event of Default exists or will exist upon such certification and delivery.	

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2.6	Issue of Global Debentures	

 	(a)	The Corporation may specify that the Debentures of a series are to be issued in whole or in part as one or more Global Debentures registered in the name of a Depository, or its nominee, designated by the Corporation in the Written Direction of the Corporation delivered to the Debenture Trustee at the time of issue of such Debentures, and in such event the Corporation shall execute and the Debenture Trustee shall certify and deliver one or more Global Debentures that shall:	

 	(i)	represent an aggregate amount equal to the principal amount of the outstanding Debentures of such series to be represented by one or more Global Debentures;	
 	 	 	
 	(ii)	be released by the Debenture Trustee as instructed by the Corporation for further delivery to such Depository or pursuant to such Depository’s instructions; and	
 	 	 	
 	(iii)	bear a legend substantially to the following effect:	

“THIS DEBENTURE IS A GLOBAL DEBENTURE WITHIN THE MEANING OF THE INDENTURE HEREIN REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE THEREOF. THIS DEBENTURE MAY NOT BE TRANSFERRED TO OR EXCHANGED FOR DEBENTURES REGISTERED IN THE NAME OF ANY PERSON OTHER THAN THE DEPOSITORY OR A NOMINEE THEREOF AND NO SUCH TRANSFER MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE TRUST INDENTURE DATED AS OF THE 9 th DAY OF FEBRUARY, 2015 BETWEEN PRIMERO MINING CORP. AND COMPUTERSHARE TRUST COMPANY OF CANADA (THE “ INDENTURE ”). EVERY DEBENTURE AUTHENTICATED AND DELIVERED UPON REGISTRATION OF, TRANSFER OF, OR IN EXCHANGE FOR, OR IN LIEU OF, THIS DEBENTURE SHALL BE A GLOBAL DEBENTURE SUBJECT TO THE FOREGOING, EXCEPT IN SUCH LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.	
	
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF CDS CLEARING AND DEPOSITORY SERVICES INC. (“ CDS ”) TO PRIMERO MINING CORP. OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IN RESPECT THEREOF IS REGISTERED IN THE NAME OF CDS & CO., OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CDS (AND ANY PAYMENT IS MADE TO CDS & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CDS), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED HOLDER HEREOF, CDS & CO., HAS A PROPERTY INTEREST IN THE SECURITIES REPRESENTED BY THIS CERTIFICATE HEREIN AND IT IS A VIOLATION OF ITS RIGHTS FOR ANOTHER PERSON TO HOLD, TRANSFER OR DEAL WITH THIS CERTIFICATE.”	

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 	(b)	Each Depository designated for a Global Debenture must, at the time of its designation and at all times while it serves as such Depository, be a clearing agency registered or designated under the securities legislation of the jurisdiction where the Depository has its principal offices.	

2.7	Execution of Debentures	
All Debentures shall be signed (either manually or by facsimile or scanned signature) by any one Director or Authorized Officer, on behalf of the Corporation, holding office at the time of signing. A facsimile or scanned signature upon a Debenture shall for all purposes of this Indenture be deemed to be the signature of the person whose signature it purports to be. Notwithstanding that any person whose signature, either manual or in facsimile or scan, appears on a Debenture as Director or Authorized Officer on behalf of the Corporation, may no longer hold such office at the date of the Debenture or at the date of the certification and delivery thereof, such Debenture shall be valid and binding upon the Corporation and entitled to the benefits of this Indenture.

2.8	Certification	
No Debenture shall be issued or, if issued, shall be obligatory on the Corporation or shall entitle the holder to the benefits of this Indenture, until it has been manually certified by or on behalf of the Debenture Trustee substantially in the form set out in this Indenture, in the relevant supplemental indenture, or in some other form approved by the Debenture Trustee. Such certification on any Debenture shall be conclusive evidence that such Debenture is duly issued, is a valid obligation of the Corporation and the holder is entitled to the benefits hereof.
The certificate of the Debenture Trustee signed on the Debentures, or interim Debentures hereinafter mentioned, shall not be construed as a representation or warranty by the Debenture Trustee as to the validity of this Indenture or of the Debentures or interim Debentures or as to the issuance of the Debentures or interim Debentures and the Debenture Trustee shall in no respect be liable or answerable for the use made of the Debentures or interim Debentures or any of them or the proceeds thereof. The certificate of the Debenture Trustee signed on the Debentures or interim Debentures shall, however, be a representation and warranty by the Debenture Trustee that the Debentures or interim Debentures have been duly certified by or on behalf of the Debenture Trustee pursuant to the provisions of this Indenture.

2.9	Interim Debentures or Certificates	
Pending the delivery of definitive Debentures of any series to the Debenture Trustee, the Corporation may issue and the Debenture Trustee may certify in lieu thereof interim Debentures in such forms and in such denominations and signed in such manner as provided herein, entitling the holders thereof to definitive Debentures of the series when the same are ready for delivery; or the Corporation may execute and the Debenture Trustee may certify a temporary Debenture for the whole principal amount of Debentures of the series then authorized to be issued hereunder in such amounts not exceeding in the aggregate the principal amount of the temporary Debenture so delivered to it, as the Corporation, and the Debenture Trustee may approve entitling the holders thereof to definitive Debentures of the series when the same are ready for delivery; and, when so issued and certified, such interim or temporary Debentures or interim certificates shall, for all purposes but without duplication, rank in respect of this Indenture equally with Debentures duly issued hereunder and, pending the exchange thereof for definitive Debentures, the holders of the interim or temporary Debentures or interim certificates shall be deemed without duplication to be Debentureholders and entitled to the benefit of this Indenture to the same extent and in the same manner as though the said exchange had actually been made. Forthwith after the Corporation shall have delivered the definitive Debentures to the Debenture Trustee, the Debenture Trustee shall cancel such temporary Debentures, if any, and shall call in for exchange all interim Debentures or certificates that shall have been issued and forthwith after such exchange shall cancel the same. No charge shall be made by the Corporation or the Debenture Trustee to the holders of such interim or temporary Debentures or interim certificates for the exchange thereof.

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2.10	Mutilation, Loss, Theft or Destruction	
In case any of the Debentures issued hereunder shall become mutilated or be lost, stolen or destroyed, the Corporation, in its discretion, may issue, and thereupon the Debenture Trustee shall certify and deliver, a new Debenture upon surrender and cancellation of the mutilated Debenture, or in the case of a lost, stolen or destroyed Debenture, in lieu of and in substitution for the same, and the substituted Debenture shall be in a form approved by the Debenture Trustee and shall be entitled to the benefits of this Indenture and rank equally in accordance with its terms with all other Debentures issued or to be issued hereunder. The new or substituted Debenture may have endorsed upon it the fact that it is in replacement of a previous Debenture. In case of loss, theft or destruction the applicant for a substituted Debenture shall furnish to the Corporation and to the Debenture Trustee such evidence of the loss, theft or destruction of the Debenture and such other documents as shall be satisfactory to them in their discretion and shall also furnish a surety bond and an indemnity satisfactory to them in their discretion. The applicant shall pay all reasonable expenses incidental to the issuance of any substituted Debenture.

2.11	Concerning Interest	

 	(a)	Except as may otherwise be provided in this Indenture or in any supplemental indenture or in a Written Direction of the Corporation in respect of a series of Debentures and subject to Section 2.4(b) with respect to the calculation of interest in respect of the initial interest payment to be paid on the Initial Debentures, all Debentures issued hereunder, whether originally or upon exchange or in substitution for previously issued Debentures which are interest bearing, shall bear interest (i) from and including their issue date provided that all the Initial Debentures (including the Initial Debentures that may be issued after the date hereof if the Over-Allotment Option is exercised) shall bear interest from and including the date hereof, or (ii) from and including the last Interest Payment Date in respect of which interest shall have been paid or made available for payment on the outstanding Debentures of that series, whichever shall be the later, or, in respect of Debentures subject to a Periodic Offering, from and including their issue date or from and including the last Interest Payment Date to which interest shall have been paid or made available for payment on such Debentures, in all cases, to but excluding the next Interest Payment Date. All interest shall accrue from day to day and shall be payable in arrears. Interest payable in a calendar year shall be payable semi -annually in arrears. Interest on all Debentures issued hereunder shall accrue up to, but not including the maturity date specified in the relevant Debenture (and in the case of the Initial Debentures, the Maturity Date), the Redemption Date or the Date of Conversion, as applicable, for such Debentures, unless, upon due presentation, payment of principal or delivery of amounts, securities or other property payable or deliverable hereunder and payment of any accrued and unpaid interest or other amounts payable hereunder is improperly withheld or refused.	

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 	(b)	Unless otherwise specifically provided in the terms of the Debentures of any series, interest shall be computed on the basis of a 360-day year composed of twelve 30-day months. Subject to Section 2.4(b) in respect of the method for calculating the amount of interest to be paid on the Initial Debentures on the first Interest Payment Date in respect thereof, with respect to any series of Debentures, whenever interest is computed on a basis of a year (the “ deemed year ”) which contains fewer days than the actual number of days in the calendar year of calculation, such rate of interest shall be expressed as a yearly rate for purposes of the Interest Act (Canada) by multiplying such rate of interest by the actual number of days in the calendar year of calculation and dividing it by the number of days in the deemed year.	
 	 	 	
 	(c)	For the purposes solely of disclosure under the Interest Act (Canada), whenever interest to be paid on the Debentures is to be calculated on the basis of a year of 360 days consisting of twelve 30-day months, the yearly rate of interest to which the rate used in such calculation is equivalent during any particular period is the rate so used multiplied by a fraction of which:	

 	(i)	the numerator is the product of:	

 	(A)	the actual number of days in the calendar year in which such period ends, and	
 	 	 	
 	(B)	the sum of (I) the product of 30 and the number of complete months elapsed in the relevant period and (II) the number of days elapsed in any incomplete month in the relevant period, and	

 	(ii)	the denominator is the product of (i) 360 and (ii) the actual number of days in the relevant period.	

2.12	Debentures to Rank Pari Passu	
The Debentures will be direct unsecured subordinated obligations of the Corporation. Each Debenture will rank pari passu with each other Debenture (regardless of their actual date or terms of issue) and, subject to statutory preferred exceptions, with all other present and future subordinated and unsecured indebtedness of the Corporation (other than Senior Indebtedness).

2.13	Payments of Amounts Due on Maturity	
Except as may otherwise be provided herein or in any supplemental indenture in respect of any series of Debentures and subject to Section 4.11, payments of amounts due upon maturity of the Debentures will be made in the following manner. The Corporation will establish and maintain with the Debenture Trustee a Maturity Account for each series of Debentures. Each such Maturity Account shall be maintained by and be subject to the control of the Debenture Trustee for the purposes of this Indenture. On or before 11:00 a.m. (Toronto time) on the Business Day immediately prior to each maturity date for Debentures outstanding from time to time under this Indenture, the Corporation will deposit in the applicable Maturity Account in US dollars an amount sufficient to pay the cash amount payable in respect of such Debentures (including the principal amount together with any accrued and unpaid interest thereon less any tax required by law to be deducted or withheld), provided the Corporation may elect to satisfy this requirement by providing the Debenture Trustee with one or more certified cheques, or with funds by electronic transfer, for such amounts required under this Section 2.13 post-dated to the applicable maturity date. The Debenture Trustee, on behalf of the Corporation, will pay to each holder entitled to receive payment the principal amount of and premium (if any) and accrued and unpaid interest on the Debenture, upon surrender of the Debenture at any branch of the Debenture Trustee designated for such purpose from time to time by the Corporation and the Debenture Trustee. The delivery of such funds to the Debenture Trustee for deposit to the applicable Maturity Account will satisfy and discharge the liability of the Corporation for the Debentures to which the delivery of funds relates to the extent of the amount delivered (plus the amount of any tax deducted as aforesaid and remitted to the appropriate governmental authority) and such Debentures will thereafter to that extent not be considered as outstanding under this Indenture and such holder will have no other right in regard thereto other than to receive out of the money so deposited or made available the amount to which such holder is entitled.

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2.14	Payment of Interest	
The following provisions shall apply to the Debentures, except as otherwise provided in Section 2.4(b) or permitted by Article 5 and Article 10 or specified in a resolution of the Directors, an Officer’s Certificate or a supplemental indenture relating to a particular series of Additional Debentures:

 	(a)	As interest becomes due on each Debenture (except at maturity, on conversion or on redemption, when interest shall be paid upon surrender of such Debenture) the Corporation, either directly or through the Debenture Trustee or any agent of the Debenture Trustee, shall send or forward a cheque dated the Interest Payment Date by prepaid ordinary mail, or if agreed to by the Debentureholders, electronic transfer of funds, or such other means as may be agreed to by the Debenture Trustee and the Debentureholders, payment of such interest (less any tax required to be withheld therefrom) to the order of the registered holder of such Debenture appearing on the registers maintained by the Debenture Trustee at the close of business on the fifth Business Day prior to the applicable Interest Payment Date and addressed to the holder at the holder’s last address appearing on the register, unless such holder otherwise directs. If payment is made by cheque, such cheque shall be forwarded at least three Business Days prior to each date on which interest becomes due and if payment is made by other means (such as electronic transfer of funds, provided the Debenture Trustee must receive confirmation of receipt of funds prior to being able to wire funds to holders), such payment shall be made in a manner whereby the holder receives credit for such payment on the date such interest on such Debenture becomes due. The mailing of such cheque or the making of such payment by other means shall, to the extent of the sum represented thereby, plus the amount of any tax withheld as aforesaid and remitted to the appropriate governmental authority, satisfy and discharge all liability for interest on such Debenture, unless in the case of payment by cheque, such cheque is not paid at par on presentation. In the event of non-receipt of any cheque for interest by the person to whom it is so sent as aforesaid, the Corporation or the Debenture Trustee will issue to such person a replacement cheque for a like amount upon being furnished with such evidence of non- receipt as it shall reasonably require and upon being indemnified to its satisfaction. Notwithstanding the foregoing, if the Corporation is prevented by circumstances beyond its control (including, without limitation, any interruption in mail service) from making payment of any interest due on each Debenture in the manner provided above, the Corporation may make payment of such interest or make such interest available for payment in any other manner acceptable to the Debenture Trustee with the same effect as though payment had been made in the manner provided above.	
 	 	 	
 	(b)	Notwithstanding Section 2.14(a), if a series of Debentures is represented by one or more Global Debentures, then all payments of interest on the Global Debentures shall be made by electronic funds transfer or cheque made payable to the Depository or its nominee on the day interest is payable for subsequent payment to Beneficial Holders of interests in the applicable Global Debenture, unless the Corporation and the Depository otherwise agree. None of the Corporation, the Debenture Trustee or any agent of the Debenture Trustee for any Debenture issued as a Global Debenture will be liable or responsible to any person for any aspect of the records related to or payments made on account of beneficial interests in any Global Debenture or for maintaining, reviewing, or supervising any records relating to such beneficial interests.	

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2.15	Withholding Tax	
The Corporation will be entitled to deduct and withhold any applicable taxes or similar charges imposed or levied by or on behalf of the Canadian government or of any Province or territory thereof or any authority or agency therein or thereof having power to tax, including pursuant to the Tax Act, from any payment to be made on or in connection with the Debentures and, provided that the Corporation forthwith remits such withheld amount to such government, authority or agency and files all required forms in respect thereof and, at the same time, provides copies of such remittance and filing to the Debenture Trustee, for forwarding to the relevant Debentureholder, the amount of any such deduction or withholding will be considered an amount paid in satisfaction of the Corporation’s obligations under the Debentures and there is no obligation on the Corporation to gross-up amounts paid to a holder in respect of such deductions or withholdings. The Corporation shall provide the Debenture Trustee, for forwarding to the relevant Debentureholder, with copies of receipts or other communications relating to the remittance of such withheld amount or the filing of such forms received from such government, authority or agency promptly after receipt thereof.
The Debenture Trustee shall have no obligation to verify any payments under the Tax Act or any provision of provincial, state, local or foreign tax law. The Debenture Trustee shall at all times be indemnified and held harmless by the Corporation from and against any personal liabilities of the Debenture Trustee incurred in connection with the failure of the Corporation or its agents, to report, remit or withhold taxes as required by the Tax Act or otherwise failing to comply with the Tax Act. This indemnification shall survive the resignation or removal of the Debenture Trustee and the termination of this Indenture solely to the extent that such liabilities have been incurred in connection with taxation years occurring during the term of this Indenture.
ARTICLE 3
 REGISTRATION, TRANSFER, EXCHANGE AND OWNERSHIP

3.1	Fully-Registered Debentures	

 	(a)	With respect to each series of Debentures issuable as Fully-Registered Debentures, the Corporation shall cause to be kept by and at the principal offices of the Debenture Trustee in Toronto, Ontario and by the Debenture Trustee or such other registrar as the Corporation, with the approval of the Debenture Trustee, may appoint at such other place or places, if any, as may be specified in the Debentures of such series or as the Corporation may designate with the approval of the Debenture Trustee, a register in which shall be entered the names and addresses of the holders of Fully-Registered Debentures and particulars of the Debentures held by them respectively and of all transfers of Fully-Registered Debentures. Such registration shall be noted on the Debentures by the Debenture Trustee or other registrar unless a new Debenture shall be issued upon such transfer.	
 	 	 	
 	(b)	No transfer of a Fully-Registered Debenture shall be valid unless made on such register referred to in Section 3.1(a) by the registered holder or such holder’s executors, administrators or other legal representatives or an attorney duly appointed by an instrument in writing in form and execution satisfactory to the Debenture Trustee or other registrar upon surrender of the Debenture together with a duly-executed form of transfer acceptable to the Debenture Trustee and upon compliance with such other reasonable requirements as the Debenture Trustee or other registrar may prescribe, nor unless the name of the transferee shall have been noted on the Debenture by the Debenture Trustee or other registrar, whereupon new Debentures will be issued in authorized denominations in the same aggregate principal amount as the Debentures so transferred, registered in the names of the transferees.	

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3.2	Global Debentures	

 	(a)	With respect to each series of Debentures issuable in whole or in part as one or more Global Debentures, the Corporation shall cause to be kept by and at the principal offices of the Debenture Trustee in Toronto, Ontario and by the Debenture Trustee or such other registrar as the Corporation, with the approval of the Debenture Trustee, may appoint at such other place or places, if any, as the Corporation may designate with the approval of the Debenture Trustee, a register in which shall be entered the name and address of the holder of each such Global Debenture (being the Depository, or its nominee, for such Global Debenture) as holder thereof and particulars of the Global Debenture held by it, and of all transfers thereof. If any Debentures of such series are at any time not Global Debentures, the provisions of Section 3.1 shall govern with respect to registrations and transfers of such Debentures.	
 	 	 	
 	(b)	Notwithstanding any other provision of this Indenture, a Global Debenture may not be transferred by the registered holder thereof and accordingly, no definitive certificates shall be issued to Beneficial Holders except in the following circumstances or as otherwise specified in a resolution of the Directors, an Officer’s Certificate or a supplemental indenture relating to a particular series of Additional Debentures:	

 	(i)	Global Debentures may be transferred by a Depository to a nominee of such Depository or by a nominee of a Depository to such Depository or to another nominee of such Depository or by a Depository or its nominee to a successor Depository or its nominee;	
 	 	 	
 	(ii)	Global Debentures may be transferred at any time after (i) the Depository for such Global Debentures or the Corporation has notified the Debenture Trustee that the Depository is unwilling or unable to continue as Depository for such Global Debentures, or (ii) the Depository ceases to be a clearing agency or otherwise ceases to be eligible to be a Depository under Section 2.6(b), provided in each case that at the time of such transfer the Debenture Trustee and the Corporation are unable to locate a qualified successor Depository for such Global Debentures;	
 	 	 	
 	(iii)	Global Debentures may be transferred at any time after the Corporation has determined, in its sole discretion, with the consent of the Debenture Trustee to terminate the book-entry only registration system in respect of such Global Debentures and has communicated such determination to the Debenture Trustee in writing;	
 	 	 	
 	(iv)	Global Debentures may be transferred at any time after the Debenture Trustee has determined that an Event of Default has occurred and is continuing with respect to the Debentures of the series issued as a Global Debenture, provided that Beneficial Holders of the Debentures representing, in the aggregate, more than 25% of the aggregate principal amount of the Debentures of such series advise the Depository in writing, through the Depository Participants, that the continuation of the book- entry only registration system for such series of Debentures is no longer in their best interest and also provided that at the time of such transfer the Debenture Trustee has not waived the Event of Default pursuant to Section 8.3;	

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 	(v)	Global Debentures may be transferred if required by applicable law; or	
 	 	 	
 	(vi)	Global Debentures may be transferred if the book-entry only registration system ceases to exist.	

 	(c)	With respect to the Global Debentures, unless and until definitive certificates have been issued to Beneficial Holders of the Debentures pursuant to subsection 3.2(b):	

 	(i)	the Corporation and the Debenture Trustee may deal with the Depository for all purposes (including paying interest on the Debentures) as the sole holder of such series of Debentures and the authorized representative of the Beneficial Holders;	
 	 	 	
 	(ii)	the rights of the Beneficial Holders of the Debentures shall be exercised only through the Depository and shall be limited to those established by law and agreements between such Beneficial Holders and the Depository or the Depository Participants;	
 	 	 	
 	(iii)	the Depository will make book-entry transfers among the Depository Participants; and	
 	 	 	
 	(iv)	whenever this Indenture requires or permits actions to be taken based upon instructions or directions of Debentureholders evidencing a specified percentage of the outstanding Debentures, the Depository shall be deemed to be counted in that percentage only to the extent that it has received instructions to such effect from the Beneficial Holders of the Debentures or the Depository Participants, and has delivered such instructions to the Debenture Trustee.	

 	(d)	Whenever a notice or other communication is required to be provided to Debentureholders, unless and until definitive certificate(s) have been issued to Beneficial Holders of the Debentures pursuant to this Section 3.2, the Debenture Trustee shall provide all such notices and communications to the Depository for forwarding by the Depository to such Beneficial Holders in accordance with Applicable Securities Legislation. Upon the termination of the book-entry only registration system on the occurrence of one of the conditions specified in Section 3.2(b) with respect to a series of Debentures issued hereunder, the Debenture Trustee shall notify all applicable Depository Participants and Beneficial Holders, through the Depository, of the availability of definitive Debenture certificates. Upon surrender by the Depository of the certificate(s) representing the Global Debentures and receipt of new registration instructions from the Depository, the Debenture Trustee shall deliver the definitive Debenture certificates for such Debentures to the holders thereof in accordance with the new registration instructions and thereafter, the registration and transfer of such Debentures will be governed by Section 3.1 and the remaining Sections of this Article 3, as applicable.	
 	 	 	
 	(e)	Notwithstanding any other provisions of this Indenture or the Debentures, transfers and exchanges of Debentures and beneficial interests in Global Debentures shall be made in accordance the applicable rules and guidelines of the Securities Transfer Association of Canada.	

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3.3	Transferee Entitled to Registration	
The transferee of a Debenture shall be entitled, after the appropriate form of transfer is lodged with the Debenture Trustee or other registrar and upon compliance with all other conditions in that behalf required by this Indenture or by law, to be entered on the register as the owner of such Debenture free from all equities or rights of compensation or counterclaim between the Corporation and the transferor or any previous holder of such Debenture, save in respect of equities of which the Corporation is required to take notice by statute or by order of a court of competent jurisdiction.

3.4	No Notice of Trusts	
Neither the Corporation nor the Debenture Trustee nor any registrar shall be bound to take notice of or see to the execution of any trust whether express, implied or constructive, in respect of any Debenture, and may transfer the same on the direction of the person registered as the holder thereof, whether named as trustee or otherwise, as though that person were the beneficial owner thereof.

3.5	Registers Open for Inspection	
The registers referred to in Sections 3.1 and 3.2 shall, during regular business hours of the Debenture Trustee, be open for inspection by the Corporation, the Debenture Trustee or any Debentureholder. Every registrar, including the Debenture Trustee, shall from time to time when requested so to do by the Corporation or by the Debenture Trustee, in writing, furnish the Corporation or the Debenture Trustee, as the case may be, with a list of names and addresses of holders of registered Debentures entered on the register kept by them and showing the principal amount and serial numbers of the Debentures held by each such holder, provided the Debenture Trustee shall be entitled to charge a reasonable fee to provide such a list.

3.6	Exchanges of Debentures	

 	(a)	Subject to Section 3.7, Debentures in any authorized form or denomination, other than Global Debentures, may be exchanged for Debentures in any other authorized form or denomination, of the same series and date of maturity, bearing the same interest rate and of the same aggregate principal amount as the Debentures so exchanged.	
 	 	 	
 	(b)	In respect of exchanges of Debentures permitted by Section 3.6(a), Debentures of any series may be exchanged only at the principal offices of the Debenture Trustee in Toronto, Ontario or at such other place or places, if any, as may be specified in the Debentures of such series and at such other place or places as may from time to time be designated by the Corporation with the approval of the Debenture Trustee. Any Debentures tendered for exchange shall be surrendered to the Debenture Trustee. The Corporation shall execute and the Debenture Trustee shall certify all Debentures necessary to carry out exchanges as aforesaid. All Debentures surrendered for exchange shall be cancelled.	
 	 	 	
 	(c)	Debentures issued in exchange for Debentures which at the time of such issue have been selected or called for redemption at a later date shall be deemed to have been selected or called for redemption in the same manner and shall have noted thereon a statement to that effect.	

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3.7	Closing of Registers	

 	(a)	Neither the Corporation nor the Debenture Trustee nor any registrar shall be required to:	

 	(i)	make transfers or exchanges of Fully-Registered Debentures on any Interest Payment Date or during the five preceding Business Days;	
 	 	 	
 	(ii)	make conversions of Fully-Registered Debentures on any Interest Payment Date or during the five preceding Business Days;	
 	 	 	
 	(iii)	make conversions of Fully-Registered Debentures on any applicable maturity date for such Debentures or during such greater period prior to an applicable maturity date as directed in writing by the Corporation (which period shall not exceed the five Business Days preceding the applicable date of maturity);	
 	 	 	
 	(iv)	make transfers or exchanges of any Debentures on the day of any selection by the Debenture Trustee of Debentures to be redeemed or during the five preceding Business Days; or	
 	 	 	
 	(v)	make transfers or exchanges of any Debentures which will have been selected or called for redemption unless upon due presentation thereof for redemption such Debentures shall not be redeemed.	

 	(b)	Subject to any restriction herein provided, the Corporation with the approval of the Debenture Trustee may at any time close any register for any series of Debentures, other than those kept at the principal offices of the Debenture Trustee in Toronto, Ontario, and transfer the registration of any Debentures registered thereon to another register (which may be an existing register) and thereafter such Debentures shall be deemed to be registered on such other register. Notice of such transfer shall be given to the holders of such Debentures.	

3.8	Charges for Registration, Transfer and Exchange	
For each Debenture exchanged, registered, transferred or discharged from registration, the Debenture Trustee or other registrar, except as otherwise herein provided, may make a reasonable charge for its services and in addition may charge a reasonable sum for each new Debenture issued (such amounts to be agreed upon from time to time by the Debenture Trustee and the Corporation), and payment of such charges and reimbursement of the Debenture Trustee or other registrar for any stamp taxes or governmental or other charges required to be paid shall be made by the party requesting such exchange, registration, transfer or discharge from registration as a condition precedent thereto. Notwithstanding the foregoing provisions, no charge shall be made to a Debentureholder hereunder:

 	(a)	for any exchange, registration, transfer or discharge from registration of any Debenture applied for within a period of two months from the date of the first delivery of Debentures of that series or, with respect to Debentures subject to a Periodic Offering, within a period of two months from the date of delivery of any such Debenture;	
 	 	 	
 	(b)	for any exchange of any interim or temporary Debenture or interim certificate that has been issued under Section 2.9 for a definitive Debenture;	
 	 	 	
 	(c)	for any exchange of a Global Debenture as contemplated in Section 3.2;	
 	 	 	
 	(d)	for any exchange of any Debenture resulting from a partial redemption under Section 4.2;	

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 	(e)	for any exchange of any Debenture resulting from a partial conversion under Section 6.4(d); or	
 	 	 	
 	(f)	for any exchange of any Debenture resulting from a partial purchase under Section 2.4(i).	

3.9	Ownership of Debentures	

 	(a)	Unless otherwise required by law, the person in whose name any registered Debenture is registered shall for all the purposes of this Indenture be and be deemed to be the owner thereof and payment of or on account of the principal of and premium, if any, on such Debenture and interest thereon shall be made to such registered holder.	
 	 	 	
 	(b)	Neither the Corporation nor the Debenture Trustee shall have any liability for:	

 	(i)	any aspect of the records relating to the beneficial ownership of the Debentures held by a Depository or of the payments relating thereto; or	
 	 	 	
 	(ii)	maintaining, supervising or reviewing any such records relating to the Debentures.	

 	(c)	The registered holder for the time being of any registered Debenture shall be entitled to the principal, premium, if any, and/or interest evidenced by such instruments, respectively, free from all equities or rights of compensation or counterclaim between the Corporation and the original or any intermediate holder thereof and all persons may act accordingly and the payment to any such registered holder for any such principal, premium or interest shall be a good discharge to the Corporation and/or the Debenture Trustee for the same and neither the Corporation nor the Debenture Trustee shall be bound to inquire into the title of any such registered holder.	
 	 	 	
 	(d)	Where Debentures are registered in more than one name, the principal, premium, if any, and interest from time to time payable in respect thereof may be paid to the order of all or any of such holders, failing written instructions from them to the contrary, and the payment to any one of such holders therefore shall be a valid discharge, to the Debenture Trustee, any registrar and to the Corporation.	
 	 	 	
 	(e)	In the case of the death of one or more joint holders of any Debenture the principal, premium, if any, and interest from time to time payable thereon may be paid to the order of the registered holders and the payment to any such registered holder shall be a valid discharge to the Debenture Trustee and any registrar and to the Corporation.	

3.10	Non-Certificated Inventory System	

 	(a)	Notwithstanding anything to the contrary set out herein, all Global Debentures issued or to be issued to the Depository may, in the case of previously issued Debentures, be surrendered to the Debenture Trustee for, or, in the case of newly issued Debentures, may be directly registered as, an electronic position on the register of Debentureholders to be maintained by the Debenture Trustee in accordance with Section 3.2. In such case, the Debentures will be represented electronically through the NCI System. All Debentures maintained in such electronic position will be legal, valid, binding and enforceable obligations of the Company, entitling the registered holders thereof to the same benefits as those registered holders who hold Debentures in physical form. This Indenture and the provisions contained herein will apply, mutatis mutandis , to such Debentures held in such electronic position.	

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 	(b)	It is understood and agreed by the parties that, unless the Debenture Trustee is not in a position to perform electronic conversions, in every instance where Debentures held in an electronic position through the Depository are to be converted in whole or in part, such Debentures being converted shall not be certificated, and it shall be sufficient for the Debenture Trustee to convert such Debentures upon receiving either the attached Notice of Conversion executed by the Depository or an NCI Letter of Instruction in a form agreed upon by the Debenture Trustee and the Depository, or such other form as they may require from time to time.	
ARTICLE 4
 REDEMPTION AND PURCHASE OF DEBENTURES AND CERTAIN PAYMENTS ON MATURITY

4.1	Applicability of Article	
Subject to regulatory approval and (in the case of the Initial Debentures) Section 2.4(c), the Corporation shall have the right at its option to redeem, either in whole at any time or in part from time to time before maturity, either by payment of money, by issuance of Freely-Tradeable Shares as provided in Section 4.6, or any combination thereof, any Debentures issued hereunder of any series which by their terms are made so redeemable (subject, however, to any applicable restriction on the redemption of Debentures of such series) at such rate or rates of premium, if any, and on such date or dates and in accordance with such other provisions as shall have been determined at the time of issue of such Debentures and as shall have been expressed in this Indenture, in the Debentures, in an Officer’s Certificate, or in a supplemental indenture authorizing or providing for the issue thereof, or in the case of Additional Debentures issued pursuant to a Periodic Offering, in the Written Direction of the Corporation requesting the certification and delivery thereof.
Subject to regulatory approval and Article 5 hereof, the Corporation shall also have the right at its option to repay, either in whole or in part, on redemption or maturity, either by payment of money in accordance with Sections 2.13 and 4.10, by issuance of Freely-Tradeable Shares as provided in Sections 4.6 and 4.11, as applicable, or any combination thereof, the principal amount of any Debentures issued hereunder of any series which by their terms are made so repayable on redemption or maturity (subject however, to any applicable restriction on the repayment of the principal amount of the Debentures of such series) at such rate or rates of premium, if any, and on such date or dates and in accordance with such other provisions as shall have been determined at the time of issue of such Debenture and shall have been expressed in this Indenture, in the Debentures, in an Officer’s Certificate, or in a supplemental indenture authorizing or providing for the issue thereof, or in the case of Additional Debentures issued pursuant to a Periodic Offering, in the Written Direction of the Corporation requesting the certification and delivery thereof.

4.2	Partial Redemption	
If less than all the Debentures of any series for the time being outstanding are at any time to be redeemed, or if a portion of the Debentures being redeemed are being redeemed for cash and a portion of such Debentures are being redeemed by the payment of Freely-Tradeable Shares pursuant to Section 4.6, the Debentures to be so redeemed shall be selected by the Debenture Trustee on a pro rata basis to the nearest multiple of $1,000 in accordance with the principal amount of the Debentures registered in the name of each holder or in such other manner as the Debenture Trustee deems equitable, subject to the approval of the TSX or such other exchange on which the Debentures are then listed, as may be required from time to time. Unless otherwise specifically provided in the terms of any series of Debentures, no Debenture shall be redeemed in part unless the principal amount redeemed is $1,000 or a multiple thereof. For this purpose, the Debenture Trustee may make, and from time to time vary, regulations with respect to the manner in which such Debentures may be drawn for redemption in part or for redemption in cash and regulations so made shall be valid and binding upon all holders of such Debentures notwithstanding the fact that as a result thereof one or more of such Debentures may become subject to redemption in part only or for cash only. In the event that one or more of such Debentures becomes subject to redemption in part only, upon surrender of any such Debentures for payment of the Redemption Price, together with interest accrued to but excluding the Redemption Date, the Corporation shall execute and the Debenture Trustee shall certify and deliver without charge to the holder thereof or upon the holder’s order one or more new Debentures for the unredeemed part of the principal amount of the Debenture or Debentures so surrendered or, with respect to a Global Debenture, the Debenture Trustee shall make notations on the Global Debenture of the principal amount thereof so redeemed. Unless the context otherwise requires, the terms “Debenture” or “Debentures” as used in this Article 4 shall be deemed to mean or include any part of the principal amount of any Debenture which in accordance with the foregoing provisions has become subject to redemption.

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4.3	Notice of Redemption	
Notice of redemption (the “ Redemption Notice ”) of any series of Debentures shall be given to the holders of the Debentures so to be redeemed not more than 60 days nor, subject to Section 4.6(b), less than 30 days prior to the date fixed for redemption (the “ Redemption Date ”) in the manner provided in Section 14.2. Every such notice shall specify the aggregate principal amount of Debentures called for redemption, the Redemption Date, the Redemption Price together with accrued and unpaid interest to but excluding the Redemption Date, and, if applicable, the portion to be redeemed for cash and the portion to be redeemed by issuing Freely-Tradeable Shares and the places of payment and shall state that interest upon the principal amount of Debentures called for redemption shall cease to accrue and be payable on and after the Redemption Date. In addition, unless all the outstanding Debentures are to be redeemed, the Redemption Notice shall specify:

 	(a)	the distinguishing letters and numbers of the registered Debentures which are to be redeemed (or of such thereof as are registered in the name of such Debentureholder);	
 	 	 	
 	(b)	in the case of a published notice, the distinguishing letters and numbers of the Debentures which are to be redeemed or, if such Debentures are selected pro rata or by other similar system, such particulars as may be sufficient to identify the Debentures so selected;	
 	 	 	
 	(c)	in the case of a Global Debenture, that the redemption will take place in such manner as may be agreed upon by the Depository, the Debenture Trustee and the Corporation; and	
 	 	 	
 	(d)	in all cases, the principal amounts of such Debentures or, if any such Debenture is to be redeemed in part only, the principal amount of such part.	
In the event that all Debentures to be redeemed are registered Debentures, publication shall not be required.
In the event that a holder of Debentures exercises its conversion right pursuant to Article 6 following the Corporation giving a Redemption Notice, such holder shall be entitled to receive accrued and unpaid interest thereon, in addition to the applicable number of Shares to be received on conversion, for the period from the latest Interest Payment Date up to, but excluding, the date of conversion.

4.4	Debentures Due on Redemption Date	
Notice having been given as aforesaid, all the Debentures so called for redemption shall thereupon be and become due and payable at the Redemption Price, together with accrued and unpaid interest to but excluding the Redemption Date, on the Redemption Date specified in such notice, in the same manner and with the same effect as if it were the date of maturity specified in such Debentures, anything therein or herein to the contrary notwithstanding, and from and after such Redemption Date, if the monies necessary to redeem, or the Shares to be issued to redeem, such Debentures shall have been deposited as provided in Section 4.5 and affidavits or other proof satisfactory to the Debenture Trustee as to the publication and/or mailing of such notices shall have been lodged with it, interest upon the Debentures shall cease. If any question shall arise as to whether any notice has been given as above provided and such deposit made, such question shall be decided by the Debenture Trustee whose decision shall be final and binding upon all parties in interest.

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4.5	Deposit of Redemption Monies or Shares	
Redemption of Debentures shall be provided for by the Corporation depositing with the Debenture Trustee or any paying agent to the order of the Debenture Trustee, on or before 11:00 a.m. (Toronto Time) on the Business Day immediately prior to the Redemption Date specified in such notice, such sums of money, or certificates representing such Shares, or both as the case may be, as may be sufficient to pay the Redemption Price of the Debentures so called for redemption, plus accrued and unpaid interest thereon up to but excluding the Redemption Date, provided the Corporation may elect to satisfy this requirement by providing the Debenture Trustee with one or more certified cheques or wire transfer for such amounts required under this Section 4.5 post-dated to the Redemption Date or by providing the Debenture Trustee with such funds through electronic transfer of funds on the Business Day immediately prior to the Redemption Date. The Corporation shall also deposit with the Debenture Trustee a sum of money sufficient to pay any reasonable charges or expenses which may be incurred by the Debenture Trustee in connection with such redemption. Every such deposit shall be irrevocable. From the sums so deposited, or certificates so deposited, or both, the Debenture Trustee shall pay or cause to be paid, or issue or cause to be issued, to the holders of such Debentures so called for redemption, upon surrender of such Debentures, the principal, premium (if any) and interest (if any) to which they are respectively entitled on redemption, less applicable withholding taxes, if any.

4.6	Right to Repay Redemption Price in Shares	

 	(a)	Subject to the other provisions of this Section 4.6 and applicable regulatory approval, the Corporation may, at its option, in exchange for or in lieu of paying the Redemption Price in money, elect to satisfy its obligation to pay all or any portion of the principal amount of Debentures due upon redemption by issuing and delivering to holders on the Redemption Date that number of Freely-Tradeable Shares obtained by dividing the principal amount of the Debentures by 95% of the Current Market Price on the Redemption Date (the “ Share Redemption Right ”).	
 	 	 	
 	(b)	The Corporation shall exercise the Share Redemption Right by so specifying in the Redemption Notice which shall be delivered to the Debenture Trustee and the holders of Debentures to be so redeemed not more than 60 days and not less than 40 days prior to the Redemption Date in the manner provided in Section 14.2 . The Redemption Notice shall also specify the aggregate principal amount of Debentures in respect of which it is exercising the Share Redemption Right.	
 	 	 	
 	(c)	The Corporation’s right to exercise the Share Redemption Right shall be conditional upon the following conditions being met on the Business Day preceding the Redemption Date:	

 	(i)	the issuance of the Shares on the exercise of the Share Redemption Right shall be made in accordance with Applicable Securities Legislation and such Shares shall be issued as Freely-Tradeable Shares;	

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 	(ii)	such Freely-Tradeable Shares shall be listed or approved for listing (subject only to customary conditions) on each stock exchange on which the Shares are then listed;	
 	 	 	
 	(iii)	the Corporation shall be a reporting issuer in good standing under Applicable Securities Legislation where the distribution of such Freely-Tradeable Shares occurs;	
 	 	 	
 	(iv)	no Event of Default shall have occurred and be continuing;	
 	 	 	
 	(v)	the receipt by the Debenture Trustee of an Officer’s Certificate stating that conditions (i), (ii), (iii) and (iv) above have been satisfied and setting forth the number of Shares to be delivered for each $1,000 principal amount of Debentures and the Current Market Price of the Shares on the Redemption Date; and	
 	 	 	
 	(vi)	the receipt by the Debenture Trustee of an opinion of Counsel to the effect that such Shares have been duly authorized and, when issued and delivered pursuant to the terms of this Indenture in payment of the Redemption Price, will be validly issued as fully paid and non-assessable, that conditions (i) and (ii) above have been satisfied and that, relying exclusively on a list of issuers in default maintained by the relevant securities authorities, condition (iii) above is satisfied, except that the opinion in respect of condition (iii) need not be expressed with respect to those provinces where such lists are not maintained.	
If the foregoing conditions are not satisfied prior to the close of business on the Business Day preceding the Redemption Date, the Corporation shall pay the Redemption Price in cash in accordance with Section 4.5 unless the Debentureholder waives the conditions which are not satisfied by way of Extraordinary Resolution. When the Corporation determines the actual number of Shares to be issued pursuant to the Corporation’s exercise of its Share Redemption Right, it will issue a press release on a national newswire disclosing the Current Market Price and such actual number of Shares.

 	(d)	In the event that the Corporation duly exercises its Share Redemption Right, the Corporation shall on or before 11:00 a.m. (Toronto time) on the Business Day immediately prior to the Redemption Date, deliver to the Debenture Trustee, for delivery to and on account of the holders of the Debentures, upon the due presentation and surrender of the Debentures, certificates representing the Freely-Tradeable Shares to which such holders are entitled. From the certificates so deposited and the amounts payable by the Debenture Trustee pursuant to Section 4.5, the Debenture Trustee must pay or cause to be paid, to the holders of such Debentures the Redemption Price of the Debentures called for redemption in the amounts to which they are respectively entitled on the Redemption Date plus accrued and unpaid interest up to but excluding the Redemption Date and deliver to such holders the certificates to which such holders are entitled.	
 	 	 	
 	(e)	No fractional Shares shall be delivered upon the exercise of the Share Redemption Right but, in lieu thereof, the Corporation shall pay to the Debenture Trustee for the account of the holders, at the time contemplated in Section 4.6(d), the cash equivalent thereof determined on the basis of the Current Market Price of the Shares on the Redemption Date (less tax required to be deducted, if any).	
 	 	 	
 	(f)	A holder of Debentures shall be treated as the shareholder of record of the Freely- Tradeable Shares issued on due exercise by the Corporation of its Share Redemption Right effective immediately after the close of business on the Redemption Date, and shall be entitled to all substitutions therefor, all income earned thereon or accretions thereto and all dividends or distributions (including dividends or distributions in kind) thereon and arising thereafter.	

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 	(g)	The Corporation shall at all times reserve and keep available out of its authorized Shares (if the number thereof is or becomes limited), solely for the purpose of issue and delivery upon the exercise of the Corporation’s Share Redemption Right as provided herein, and shall issue to Debentureholders to whom Freely-Tradeable Shares will be issued pursuant to exercise of the Share Redemption Right, such number of Freely-Tradeable Shares as shall be issuable in such event. All Freely-Tradeable Shares which shall be so issuable shall be duly and validly issued as fully paid and non-assessable.	
 	 	 	
 	(h)	The Corporation shall comply with all Applicable Securities Legislation regulating the issue and delivery of Freely-Tradeable Shares upon exercise of the Share Redemption Right and shall cause to be listed and posted for trading such Shares on each stock exchange on which the Shares are then listed.	
 	 	 	
 	(i)	The Corporation shall from time to time promptly pay, or make provision satisfactory to the Debenture Trustee for the payment of, all taxes and charges which may be imposed by the laws of Canada or any province thereof (except income tax, withholding tax or security transfer tax, if any) which shall be payable with respect to the issuance or delivery of Freely-Tradeable Shares to holders upon exercise of the Share Redemption Right pursuant to the terms of the Debentures and of this Indenture.	
 	 	 	
 	(j)	If the Corporation elects to satisfy its obligation to pay all or any portion of the Redemption Price by issuing Freely-Tradeable Shares in accordance with this Section 4.6 and if the Redemption Price (or any portion thereof) to which a holder is entitled is subject to withholding taxes and the amount of the cash payment of the Redemption Price, if any, is insufficient to satisfy such withholding taxes, the Debenture Trustee, only upon receipt of a Written Direction of the Corporation but for the account of the holder, shall sell, or cause to be sold through the investment banks, brokers or dealers selected by the Corporation, out of the Freely-Tradeable Shares issued by the Corporation for this purpose, such number of Freely-Tradeable Shares that together with the cash payment of the Redemption Price, if any, is sufficient to yield net proceeds (after payment of all costs) to cover the amount of taxes required to be withheld, and shall remit same on behalf of the Corporation to the proper tax authorities within the period of time prescribed for this purpose under applicable laws. Any amount of net proceeds (after payment of all costs) in excess of the amount required to cover applicable tax required by applicable law to be withheld will be remitted to the Debentureholder.	
 	 	 	
 	(k)	Interest accrued and unpaid on the Debentures on the Redemption Date will be paid, less applicable withholding taxes, if any, to holders of Debentures, in cash, in the manner contemplated in Section 2.15 subject to the ability of the Corporation to issue Shares as provided in Article 10 .	

4.7	Failure to Surrender Debentures Called for Redemption	
In case the holder of any Debenture so called for redemption shall fail on or before the Redemption Date to so surrender such holder’s Debenture, or shall not within such time accept payment of the Redemption Price payable, or take delivery of certificates representing such Shares issuable in respect thereof, or give such receipt therefor, if any, as the Debenture Trustee may require, such redemption monies may be set aside in trust, without interest, or such certificates may be held in trust, either in the deposit department of the Debenture Trustee or in a chartered bank, and such setting aside shall for all purposes be deemed a payment to the Debentureholder of the sum or Shares so set aside and, to that extent, the Debenture shall thereafter not be considered as outstanding hereunder and the Debentureholder shall have no other right except to receive payment out of the monies so paid and deposited, or take delivery of the certificates so deposited, or both, upon surrender and delivery up of such holder’s Debenture of the Redemption Price, as the case may be, of such Debenture plus any accrued and unpaid interest thereon to but excluding the Redemption Date. In the event that any money, or certificates for Shares, required to be deposited hereunder with the Debenture Trustee or any depository or paying agent on account of principal, premium, if any, or interest, if any, on Debentures issued hereunder shall remain so deposited for a period of six years from the Redemption Date, then such monies or certificates for Shares, together with any accumulated interest thereon or any distribution paid thereon, shall at the end of such period be paid over or delivered over by the Debenture Trustee or such depository or paying agent to the Corporation on its demand, and thereupon the Debenture Trustee shall not be responsible to Debentureholders for any amounts owing to them and subject to applicable law, thereafter the holder of a Debenture in respect of which such money was so repaid to the Corporation shall have no rights in respect thereof except to obtain payment of the money or certificates due from the Corporation, subject to any prescription period provided by the laws of the Province of Ontario. Notwithstanding the foregoing, the Debenture Trustee will pay any remaining funds prior to the expiry of six years after the Redemption Date to the Corporation upon receipt from the Corporation or one of its Subsidiaries of an uncontested letter of credit from a Canadian chartered bank in an amount equal to or in excess of the amount of the remaining funds. If the remaining funds are paid to the Corporation prior to the expiry of six years after the Redemption Date, the Corporation shall, prior to the payment by the Debenture Trustee, pay the Debenture Trustee the amounts required to be paid by the Debenture Trustee to a holder of a Debenture pursuant to the redemption after the date of such payment of the remaining funds to the Corporation but prior to six years after the redemption.

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4.8	Cancellation of Debentures Redeemed	
Subject to the provisions of Sections 4.2 and 4.9 as to Debentures redeemed or purchased in part, all Debentures redeemed and paid under this Article 4 shall forthwith be delivered to the Debenture Trustee and cancelled and no Debentures shall be issued in substitution therefor.

4.9	Purchase of Debentures by the Corporation	
Unless otherwise specifically provided with respect to a particular series of Debentures and subject to the provisions of Section 12.2, the Corporation and any of its Affiliates may at any time and from time to time, purchase Debentures in the market (which shall include purchases from or through an investment dealer or a firm holding membership on a recognized stock exchange) or by tender or by private contract, at any price, subject to regulatory requirements (including Applicable Securities Legislation); provided, however, that if an Event of Default has occurred and is continuing, the Corporation and its Affiliates will not have the right to so purchase Debentures. All Debentures so purchased shall be delivered to the Debenture Trustee and cancelled and no Debentures shall be issued in substitution therefor.
If, upon an invitation for tenders, more Debentures are tendered at the same lowest price that the Corporation or an Affiliate is prepared to accept, the Debentures to be purchased by the Corporation or by such Affiliate shall be selected by the Debenture Trustee on a pro rata basis or in such other manner consented to by the TSX or such other exchange on which the Debentures are then listed which the Debenture Trustee considers appropriate, from the Debentures tendered by each tendering Debentureholder who tendered at such lowest price. For this purpose the Debenture Trustee may make, and from time to time amend, regulations with respect to the manner in which Debentures may be so selected, and regulations so made shall be valid and binding upon all Debentureholders, notwithstanding the fact that as a result thereof one or more of such Debentures become subject to purchase in part only.

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The holder of a Debenture of which a part only is purchased, upon surrender of such Debenture for payment, shall be entitled to receive, without expense to such holder, one or more new Debentures for the unpurchased part so surrendered, and the Debenture Trustee shall certify and deliver such new Debenture or Debentures upon receipt of the Debenture so surrendered or, with respect to a Global Debenture, the Debenture Trustee shall make notations on the Global Debenture of the principal amount thereof so purchased.

4.10	Deposit of Maturity Monies	
Subject to Section 4.11, payment on maturity of Debentures shall be provided for by the Corporation depositing with the Debenture Trustee or any paying agent to the order of the Debenture Trustee, on or before 11:00 a.m. (Toronto time) on the Business Day immediately prior to the applicable maturity date such sums of money and/or Shares as may be sufficient to pay the principal amount of the Debentures, together with a sum of money sufficient to pay all accrued and unpaid interest thereon up to but excluding the maturity date, provided the Corporation may elect to satisfy this requirement by providing the Debenture Trustee with one or more certified cheques or with funds by electronic transfer, for such amounts required under this Section 4.10. The Corporation shall also deposit with the Debenture Trustee a sum of money sufficient to pay any reasonable charges or expenses which may be incurred by the Debenture Trustee in connection therewith. Every such deposit shall be irrevocable. From the sums so deposited, the Debenture Trustee shall pay or cause to be paid to the holders of such Debentures, upon surrender of such Debentures, the principal, premium (if any) and interest (if any) to which they are respectively entitled on maturity.

4.11	Right to Repay Principal Amount in Shares	

 	(a)	Subject to the other provisions of this Section 4.11 and to applicable regulatory approval, the Corporation may, at its option, in exchange for or in lieu of paying all or any portion of the principal amount of the Debentures outstanding in money, elect to satisfy its obligation to repay all or any portion of the principal amount of the Debentures outstanding by issuing and delivering to holders on the applicable maturity date that number of Freely-Tradeable Shares obtained by dividing the principal amount of the Debentures by 95% of the Current Market Price of the Shares on the applicable maturity date (the “ Share Repayment Right ”).	
 	 	 	
 	(b)	The Corporation shall exercise the Share Repayment Right by so specifying in the Maturity Notice, which shall be delivered to the Debenture Trustee and the holders of Debentures not more than 60 days and not less than 40 days prior to the applicable maturity date, and which shall also specify the aggregate principal amount of Debentures in respect of which it is exercising the Share Repayment Right on the applicable maturity date. The Maturity Notice shall state that if the requirements to make a Share Repayment are not met two Business Days prior to the Maturity date that the principal shall be satisfied in cash.	
 	 	 	
 	(c)	The Corporation’s right to exercise the Share Repayment Right shall be conditional upon the following conditions being met on the Business Day preceding the applicable maturity date:	

 	(i)	the issuance of the Shares on the exercise of the Share Repayment Right shall be made in accordance with Applicable Securities Legislation and such Shares shall be issued as Freely-Tradeable Shares;	

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 	(ii)	such Freely-Tradeable Shares shall be listed or approved for listing (subject only to customary conditions) on each stock exchange on which the Shares are then listed;	
 	 	 	
 	(iii)	the Corporation shall be a reporting issuer in good standing under Applicable Securities Legislation where the distribution of such Freely-Tradeable Shares occurs;	
 	 	 	
 	(iv)	no Event of Default shall have occurred and be continuing;	
 	 	 	
 	(v)	the receipt by the Debenture Trustee of an Officer’s Certificate stating that conditions (i), (ii), (iii) and (iv) above have been satisfied and setting forth the number of Shares to be delivered for each $1,000 principal amount of Debentures and the Current Market Price of the Shares on the applicable maturity date; and	
 	 	 	
 	(vi)	the receipt by the Debenture Trustee of an opinion of Counsel to the effect that such Shares have been duly authorized and, when issued and delivered pursuant to the terms of this Indenture in payment of the principal amount of the Debentures outstanding will be validly issued as fully paid and non-assessable, that conditions (i) and (ii) above have been satisfied and that, relying exclusively on lists of issuers in default maintained by the relevant securities authorities, condition (iii) above is satisfied, except that the opinion in respect of condition (iii) need not be expressed with respect to those provinces where such lists are not maintained.	
If the foregoing conditions are not satisfied prior to the close of business two Business Days preceding the applicable maturity date, the Corporation shall pay the principal amount of the Debentures outstanding in cash in accordance with Sections 2.13 and 4.10, unless the Debentureholder waives the conditions which are not satisfied.

 	(d)	In the event that the Corporation duly exercises its Share Repayment Right, the Corporation shall on or before 11:00 a.m. (Toronto time) on the Business Day immediately prior to the applicable maturity date, deliver to the Debenture Trustee, for delivery to and on account of the holders, upon the due presentation and surrender of the Debenture, certificates representing the Freely-Tradeable Shares to which such holders are entitled. The Corporation shall also deposit with the Debenture Trustee a sum of money sufficient to pay any reasonable charges or expenses which may be incurred by the Debenture Trustee in connection with the Share Repayment Right. Every such deposit shall be irrevocable. From the certificates so deposited in addition to amounts payable by the Debenture Trustee pursuant to Sections 2.13 and 4.10, the Debenture Trustee shall pay or cause to be paid, to the holders of such Debentures, upon surrender of such Debentures, the principal amount of and premium (if any) on the Debentures to which they are respectively entitled on maturity and deliver to such holders the certificates to which such holders are entitled. The delivery of such certificates to the Debenture Trustee will satisfy and discharge the liability of the Corporation for the Debentures to which the delivery of certificates relates to the extent of the amount delivered (plus the amount of any Shares sold to pay applicable taxes in accordance with this Section 4.11) and such Debentures will thereafter to that extent not be considered as outstanding under this Indenture and such holder will have no other right in regard thereto other than to receive out of the certificates so delivered, the certificate(s) to which it is entitled.	
 	 	 	
 	(e)	No fractional Freely-Tradeable Shares shall be delivered upon the exercise of the Share Repayment Right but, in lieu thereof, the Corporation shall pay to the Debenture Trustee for the account of the holders, at the time contemplated in Section 4.11(d), the cash equivalent thereof determined on the basis of the Current Market Price of the Shares on the applicable maturity date (less any tax required to be deducted, if any). The Debenture Trustee shall be entitled to rely on the calculations of the Corporation.	

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 	(f)	A holder shall be treated as the shareholder of record of the Freely-Tradeable Shares issued on due exercise by the Corporation of its Share Repayment Right effective immediately after the close of business on the applicable maturity date, and shall be entitled to all substitutions therefor, all income earned thereon or accretions thereto and all dividends or distributions (dividends or distributions in kind) thereon and arising thereafter, and in the event that the Debenture Trustee receives the same, it shall hold the same in trust for the benefit of such holder.	
 	 	 	
 	(g)	The Corporation shall at all times reserve and keep available out of its authorized Shares (if the number thereof is or becomes limited), solely for the purpose of issue and delivery upon the exercise of the Share Repayment Right as provided herein, and shall issue to Debentureholders to whom Freely-Tradeable Shares will be issued pursuant to exercise of the Share Repayment Right, such number of Freely-Tradeable Shares as shall be issuable in such event. All Freely-Tradeable Shares which shall be so issuable shall be duly and validly issued as fully paid and non-assessable.	
 	 	 	
 	(h)	The Corporation shall comply with all Applicable Securities Legislation regulating the issue and delivery of Freely-Tradeable Shares upon exercise of the Share Repayment Right and shall cause to be listed and posted for trading such Freely-Tradeable Shares on each stock exchange on which the Shares are then listed.	
 	 	 	
 	(i)	The Corporation shall from time to time promptly pay, or make provision satisfactory to the Debenture Trustee for the payment of, all taxes and charges which may be imposed by the laws of Canada or any province thereof (except income tax, withholding tax or security transfer tax, if any) which shall be payable with respect to the issuance or delivery of Freely-Tradeable Shares to holders upon exercise of the Share Repayment Right pursuant to the terms of the Debentures and of this Indenture.	
 	 	 	
 	(j)	If the Corporation elects to satisfy its obligation to pay all or any portion of the principal amount of Debentures due on maturity by issuing Freely-Tradeable Shares in accordance with this Section 4.11 and if the principal amount (or any portion thereof) to which a holder is entitled is subject to withholding taxes and the amount of the cash payment of the principal amount due on maturity, if any, is insufficient to satisfy such withholding taxes, the Debenture Trustee, only upon receipt of a Written Direction of the Corporation but for the account of the holder, shall sell, or cause to be sold, through the investment banks, brokers or dealers selected by the Corporation, out of the Freely-Tradeable Shares issued by the Corporation for this purpose, such number of Freely-Tradeable Shares that together with the cash component of the principal amount due on maturity is sufficient to yield net proceeds (after payment of all costs) to cover the amount of taxes required to be withheld, and shall remit same on behalf of the Corporation to the proper tax authorities within the period of time prescribed for this purpose under applicable laws.	
 	 	 	
 	(k)	Interest accrued and unpaid on the Debentures on the applicable maturity date will be paid, less applicable withholding taxes, if any, to holders of Debentures, in cash, in the manner contemplated in Section 2.14, subject to the ability of the Corporation to issue Shares as provided in Article 10 .	

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ARTICLE 5
SUBORDINATION OF DEBENTURES

5.1	Applicability of Article	
The indebtedness, liabilities and obligations evidenced by any Debentures issued hereunder of any series which by their terms are subordinate, including on account of principal, premium, if any, interest or otherwise, but excluding the issuance of Shares or other securities in accordance with Article 6, any redemption by the issuance of Shares pursuant to Article 4, or by the issuance of Shares at maturity pursuant to Article 4 (collectively, the “ Debenture Liabilities ”), shall be subordinated and postponed and subject in right of payment, to the extent and in the manner hereinafter set out in the following sections of this Article 5, to the prior full and final payment of all existing and future Senior Indebtedness of the Corporation and each holder of any such Debenture by his acceptance thereof, whether directly or on its behalf, agrees to and shall be bound by the provisions of this Article 5.

5.2	Order of Payment	
In the event of the Corporation’s insolvency or bankruptcy proceedings or any receivership, liquidation or reorganization or other similar proceedings relating to the Corporation or its property or assets or in the event of any proceedings for voluntary liquidation, dissolution or other winding-up whether or not involving insolvency or bankruptcy, or any marshalling of its assets and liabilities:

 	(a)	all Senior Indebtedness shall first be paid indefeasibly in full, in cash before any payment or distribution of any kind or character is made on account of the principal of or interest on the indebtedness evidenced by the Debentures;	
 	 	 	
 	(b)	any payment or distribution of assets of the Corporation, whether in cash, property or securities, to which the holders of the Debentures or the Debenture Trustee on behalf of such holders would be entitled except for the provisions of this Article 5 shall be paid or delivered by the trustee in bankruptcy, receiver, assignee for the benefit of creditors, or other liquidating agent making such payment or distribution, directly to the holders of such Senior Indebtedness or their representative or representatives, or to the trustee or trustees under any indenture pursuant to which any instruments evidencing any of such Senior Indebtedness may have been issued, to the extent necessary to pay all Senior Indebtedness in full after giving effect to any concurrent payment or distribution, or provision therefor, to the holders of such Senior Indebtedness; and	
 	 	 	
 	(c)	the Senior Creditors or a receiver or a receiver-manager of the Corporation or of all or part of its assets or any other enforcement agent may sell, mortgage, or otherwise dispose of the Corporation assets in whole or in part, free and clear of all Debenture Liabilities and without the approval of the Debentureholders or the Debenture Trustee or any requirement to account to the Debenture Trustee or the Debentureholders.	
The rights and priority of the Senior Indebtedness and the subordination pursuant hereto shall not be affected by:

 	(i)	whether or not the Senior Indebtedness is secured;	
 	 	 	
 	(ii)	the time, sequence or order of creating, granting, executing, delivering of, or registering, perfecting or failing to register or perfect any security notice, caveat, financing statement or other notice in respect of the Senior Security;	

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 	(iii)	the time or order of the attachment, perfection or crystallization of any security constituted by the Senior Security;	
 	 	 	
 	(iv)	the taking of any collection, enforcement or realization proceedings pursuant to the Senior Security;	
 	 	 	
 	(v)	the date of obtaining of any judgment or order of any bankruptcy court or any court administering bankruptcy, insolvency or similar proceedings as to the entitlement of the Senior Creditors, or any of them or the Debentureholders or any of them to any money or property of the Corporation;	
 	 	 	
 	(vi)	the failure to exercise any power or remedy reserved to the Senior Creditors under the Senior Security or to insist upon a strict compliance with any terms thereof;	
 	 	 	
 	(vii)	whether any Senior Security is now perfected, hereafter ceases to be perfected, is avoidable by any trustee in bankruptcy or like official or is otherwise set aside, invalidated or lapses;	
 	 	 	
 	(viii)	the date of giving or failing to give notice to or making demand upon the Corporation;	
 	 	 	
 	(ix)	any amendment, modification, increase, extension, renewal, replacement of any Senior Indebtedness or Senior Security; or	
 	 	 	
 	(x)	any other matter whatsoever.	

5.3	Obligation to Pay Not Impaired	
Nothing contained in this Article 5 or elsewhere in this Indenture or in the Debentures is intended to or shall impair, as between the Corporation, its creditors other than the holders of Senior Indebtedness, and the holders of the Debentures, the obligation of the Corporation, which is absolute and unconditional, to pay to the holders of the Debentures the principal, premium, if any, and interest on the Debentures, as and when the same shall become due and payable in accordance with their terms, or affect the relative rights of the holders of the Debentures and creditors of the Corporation other than the holders of the Senior Indebtedness, nor shall anything herein or therein prevent the Debenture Trustee or the holder of any Debenture from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this Article 5 of the holders of Senior Indebtedness.

5.4	No Payment if Senior Indebtedness in Default	
Upon the maturity of any Senior Indebtedness by lapse of time, acceleration or otherwise, or any enforcement of any Senior Indebtedness, then, except as provided in Section 5.7, all principal of, premium (if any) and interest on all such matured Senior Indebtedness shall first be paid in full, or shall first have been duly provided for, before any payment is made on account of principal of, premium (if any) or interest on the Debentures.
In case of default with respect to any Senior Indebtedness permitting the holders thereof to accelerate the maturity thereof, unless and until such default shall have been cured or waived or shall have ceased to exist, no payment (by purchase of Debentures or otherwise) shall be made by the Corporation with respect to the principal of, premium, if any, or interest on the Debentures and neither the Debenture Trustee nor the holders of Debentures shall be entitled to demand, accelerate, institute proceedings for the collection of, or receive any payment or benefit (including without limitation by set-off, combination of accounts or otherwise in any manner whatsoever) on account of the Debentures after the happening of such a default (except as provided in Section 5.7), and unless and until such default shall have been cured or waived or shall have ceased to exist, such payments shall be held in trust for the benefit of, and, if and when such Senior Indebtedness shall have become due and payable, shall be paid over to, the holders of the Senior Indebtedness or their representative or representatives or to the trustee or trustees under any indenture under which any instruments evidencing an amount of the Senior Indebtedness remaining unpaid until all such Senior Indebtedness shall have been paid in full, after giving effect to any concurrent payment or distribution to the holders of such Senior Indebtedness; provided, however, that the foregoing shall in no way prohibit, restrict or prevent the Debenture Trustee from taking such actions as may be necessary to preserve claims of the Debenture Trustee and/or the holders of the Debentures under this Indenture in any bankruptcy, reorganization or insolvency proceeding (including, without limitation, the filing of proofs of claim in any such bankruptcy, reorganization or insolvency proceedings by or against the Corporation or its Subsidiaries and exercising its rights to vote as an unsecured creditor under any such bankruptcy, reorganization or insolvency proceedings commenced by or against the Corporation or its Subsidiaries).

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The fact that any payment hereunder is prohibited by this Section 5.4 shall not prevent the failure to make such payment from being an Event of Default hereunder.

5.5	Payment on Debentures Permitted	
Nothing contained in this Article 5 or elsewhere in this Indenture, or in any of the Debentures, shall affect the obligation of the Corporation to make, or prevent the Corporation from making, at any time except as prohibited by Section 5.2 or 5.4, any payment of principal of or interest on the Debentures. The fact that any such payment is prohibited by Section 5.2 or 5.4 shall not prevent the failure to make such payment from being an Event of Default hereunder. Nothing contained in this Article 5 or elsewhere in this Indenture, or in any of the Debentures, shall prevent the conversion of the Debentures or, except as prohibited by Section 5.2 or 5.4, the application by the Debenture Trustee of any moneys deposited with the Debenture Trustee hereunder for the purpose, to the payment of or on account of the Debenture Liabilities.

5.6	Confirmation of Subordination	
Each holder of Debentures by his acceptance thereof authorizes and directs the Debenture Trustee on his behalf to take such action as may be necessary or appropriate to effect the subordination as provided in this Article 5 and appoints the Debenture Trustee his attorney-in-fact for any and all such purposes. This appointment shall be irrevocable. Upon request of the Corporation, and upon being furnished an Officer’s Certificate stating that one or more named persons are Senior Creditors, and specifying the amount and nature of the Senior Indebtedness of such Senior Creditors, the Debenture Trustee shall enter into a written agreement or agreements with the Corporation and the person or persons named in such Officer’s Certificate providing that such person or persons are entitled to all the rights and benefits of this Article 5 as a Senior Creditor specified in such Officer’s Certificate and for such other matters as the Senior Creditors and the Corporation may agree upon. Such agreement shall be conclusive evidence that the indebtedness specified therein is Senior Indebtedness. However, nothing herein shall impair the rights of any Senior Creditor who has not entered into such an agreement.

5.7	Knowledge of Debenture Trustee	
Notwithstanding the provisions of this Article 5, the Debenture Trustee will not be charged with knowledge of the existence of any fact that would prohibit the making of any payment of monies to or by the Debenture Trustee, or the taking of any other action by the Debenture Trustee, unless and until the Debenture Trustee has received written notice thereof from the Corporation, any Debentureholder, any Senior Creditor or a trustee on behalf of any one or more of the Senior Creditors, and such notice to the Debenture Trustee shall be deemed to be notice to holders of the Debentures. The Debenture Trustee will notify holders of Debentures of such notice as soon as reasonably practicable after receipt thereof.

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5.8	Debenture Trustee May Hold Senior Indebtedness	
The Debenture Trustee is entitled to all the rights set out in this Article 5 with respect to any Senior Indebtedness at the time held by it, to the same extent as any other holder of Senior Indebtedness, and nothing in this Indenture deprives the Debenture Trustee of any of its rights as such holder.

5.9	Rights of Holders of Senior Indebtedness Not Impaired	
No right of any present or future holder of any Senior Indebtedness to enforce the subordination herein will at any time or in any way be prejudiced or impaired by any act or failure to act on the part of the Corporation or by any non-compliance by the Corporation with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof which any such holder may have or be otherwise charged with.

5.10	Altering the Senior Indebtedness	
The holders of the Senior Indebtedness have the right to extend, renew, revise, restate, modify or amend the terms of the Senior Indebtedness (including increasing the principal amount of the Senior Indebtedness) or the Senior Security therefor and to release, sell or exchange such security and otherwise to deal freely with the Corporation, all without notice to or consent of the Debentureholders or the Debenture Trustee and without affecting the liabilities and obligations of the parties to this Indenture or the Debentureholders or the Debenture Trustee.

5.11	Additional Indebtedness	
This Indenture does not restrict the Corporation or any other entity of the Primero Group from incurring additional indebtedness for borrowed money or otherwise or hypothecating, mortgaging, pledging or charging its real (immoveable) or personal (moveable) property or properties to secure any indebtedness or other financing.

5.12	Right of Debentureholder to Convert Not Impaired	
The subordination of the Debentures to the Senior Indebtedness and the provisions of this Article 5 do not impair in any way the right of a Debentureholder to convert its Debentures pursuant to Article 6.

5.13	Invalidated Payments	
In the event that any of the Senior Indebtedness shall be paid in full and subsequently, for whatever reason, such formerly paid or satisfied Senior Indebtedness becomes unpaid or unsatisfied, the terms and conditions of this Article 5 shall be reinstated and the provisions of this Article 5 shall again be operative until all Senior Indebtedness is repaid in full, provided that such reinstatement shall not give the Senior Creditors any rights or recourses against the Debenture Trustee or the Debentureholders for amounts paid to the Debentureholders or on account of the Debentures subsequent to such payment or satisfaction in full and prior to such reinstatement.

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5.14	Obligations Created by Article 5	
The Corporation and the Debenture Trustee, in its capacity as trustee hereunder and not in its corporate personal capacity, agree, and each holder by its acceptance of a Debenture likewise agrees, that:

 	(a)	the provisions of this Article 5 are an inducement and consideration to each holder of Senior Indebtedness to give or continue credit to the Corporation, the Corporation’s Subsidiaries or others or to acquire Senior Indebtedness;	
 	 	 	
 	(b)	each holder of Senior Indebtedness may accept the benefit of this Article 5 on the terms and conditions set out in this Article 5 by giving or continuing credit to the Corporation, the Corporation’s Subsidiaries or others or by acquiring or having outstanding as of the date hereof Senior Indebtedness, in each case without notice to the Debenture Trustee and without establishing actual reliance on this Article 5; and	
 	 	 	
 	(c)	each obligation created by this Article 5 is created for the benefit of the holders of Senior Indebtedness.	

5.15	Amendments to Article 5	
Each of the Corporation and the Debenture Trustee (relying on the opinion of Counsel) agrees, and each holder of a Debenture, by his acceptance thereof, likewise agrees, not to make any changes to this Indenture or the Debentures, including this Article 5 or the definition of Senior Indebtedness, which prejudice the rights of the holders of Senior Indebtedness under this Article 5 without the consent of the holders of Senior Indebtedness or their representative or the trustee under any indenture under which any instruments evidencing any of such Senior Indebtedness may have been issued.
ARTICLE 6
CONVERSION OF DEBENTURES

6.1	Applicability of Article	
Any Debentures issued hereunder of any series which by their terms are convertible (subject, however, to any applicable restriction of the conversion of Debentures of such series) will be convertible into Freely-Tradeable Shares or, if applicable, other securities or property, at such conversion rate or rates, and on such date or dates and in accordance with such other provisions as shall have been determined at the time of issue of such Debentures and shall have been expressed in this Indenture, in such Debentures, in an Officer’s Certificate, or in a supplemental indenture authorizing or providing for the issue thereof.
Such right of conversion shall extend only to the maximum number of whole Shares into which the aggregate principal amount of the Debenture or Debentures surrendered for conversion at any one time by the holder thereof may be converted. Fractional interests in Shares shall be adjusted for in the manner provided in Section 6.6 .

6.2	Notice of Expiry of Conversion Privilege	
Notice of the expiry of the conversion privileges of the Debentures, shall be given by or on behalf of the Corporation, not more than 60 days and not less than 30 days prior to the date fixed for the Time of Expiry, in the manner provided in Section 14.2.

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6.3	Revival of Right to Convert	
If the redemption of any Debenture called for redemption by the Corporation is not made or the payment of the purchase price of any Debenture which has been tendered in acceptance of an offer by the Corporation to purchase Debentures for cancellation is not made, in the case of a redemption upon due surrender of such Debenture or in the case of a purchase on the date on which such purchase is required to be made, as the case may be, then, provided the Time of Expiry has not passed, the right to convert such Debentures shall revive and continue as if such Debenture had not been called for redemption or tendered in acceptance of the Corporation’s offer, respectively.

6.4	Manner of Exercise of Right to Convert	

 	(a)	The holder of a Debenture desiring to convert such Debenture in whole or in part into Shares shall surrender such Debenture to the Debenture Trustee at its principal offices in Toronto, Ontario together with the conversion notice in the form attached hereto as Schedule D duly executed by the holder or his executors or administrators or other legal representatives or his or their attorney duly appointed by an instrument in writing in form and executed in a manner satisfactory to the Debenture Trustee, exercising his right to convert such Debenture in accordance with the provisions of this Article 6; provided that with respect to a Global Debenture, the obligation to surrender a Debenture to the Debenture Trustee shall be satisfied if the Debenture Trustee makes notation on the Global Debenture of the principal amount thereof so converted and the Debenture Trustee is provided with all other documentation which it may request. Such Debentureholder shall be or, subject to payment of all applicable stamp or security transfer taxes or other governmental charges and compliance with all reasonable requirements of the Debenture Trustee, his nominee(s) or assignee(s) shall be entitled to be, entered in the books of the Corporation as at the Date of Conversion (or such later date as is specified in Section 6.4(b)) as the holder of the number of Shares into which such Debenture is convertible as of the Business Day immediately following the Date of Conversion in accordance with the provisions of this Article 6 and, as soon as practicable thereafter, the Corporation shall (i) deliver to such Debentureholder or, subject as aforesaid, his nominee(s) or assignee(s), a certificate or certificates for such Shares and (ii) make or cause to be made any payment of interest to which such holder is entitled in accordance with Section 6.4(e) hereof or in respect of fractional Shares as provided in Section 6.6.	
 	 	 	
 	(b)	For the purposes of this Article 6, a Debenture shall be deemed to be surrendered for conversion on the date on which it is so surrendered when the register of the Debenture Trustee is open and in accordance with the provisions of this Article 6 or, in the case of a Global Debenture, on the date which the Debenture Trustee received notice of and all necessary documentation in respect of the exercise of the conversion rights and, in the case of a Debenture so surrendered by post or other means of transmission, on the date on which it is received by the Debenture Trustee at its offices specified in Section 6.4(a); provided that if a Debenture is surrendered for conversion on a day on which the register of Shares is closed the person or persons entitled to receive Shares shall become the holder or holders of record of such Shares as at the date on which such register is next reopened (in each case, the “ Date of Conversion ”).	
 	 	 	
 	(c)	Any part, being $1,000 or an integral multiple thereof, of a Debenture in a denomination in excess of $1,000 may be converted as provided in this Article and all references in this Indenture to conversion of Debentures shall be deemed to include conversion of such part.	

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 	(d)	Upon a holder of any Debenture exercising the right of conversion in respect of only a part of the Debenture and surrendering such Debenture to the Debenture Trustee, in accordance with Section 6.4(a) the Debenture Trustee shall cancel the same and shall without charge forthwith certify and deliver to the holder a new Debenture or Debentures in an aggregate principal amount equal to the unconverted part of the principal amount of the Debenture so surrendered or, with respect to a Global Debenture, the Debenture Trustee shall make notations on the Global Debenture of the principal amount thereof so converted.	
 	 	 	
 	(e)	The holder of a Debenture surrendered for conversion in accordance with this Section 6.4 shall be entitled (subject to any applicable restriction on the right to receive interest on conversion of Debentures of any series) to receive, as the case may be, accrued and unpaid interest in respect thereof from and including the last Interest Payment Date to but excluding the Date of Conversion. The Shares issued upon such conversion shall participate only in respect of distributions or dividends declared in favour of shareholders of record on and after the Business Day immediately after the Date of Conversion or such later date as such holder shall become the holder of record of such Shares pursuant to Section 6.4(b), from which applicable date such Shares will for all purposes be and be deemed to be issued and outstanding as fully paid and non-assessable Shares.	
 	 	 	
 	(f)	In the event of a conversion of Debentures into Freely-Tradeable Shares where the holder is subject to withholding taxes, the Debenture Trustee, only upon receipt of Written Direction of the Corporation but for the account of the holder, shall sell, or cause to be sold through the investment banks, brokers or dealers selected by the Corporation, out of the Freely-Tradeable Shares issued by the Corporation for this purpose, such number of Freely-Tradeable Shares that together with any cash payment in lieu of fractional Shares, if any, is sufficient to yield net proceeds (after payment of all costs) to cover the amount of taxes required to be withheld, and shall remit same on behalf of the Corporation to the proper tax authorities within the period of time prescribed for this purpose under applicable laws. Any amount of net proceeds (after payment of all costs) in excess of the amount required by applicable law to be withheld will be remitted to the Debentureholder.	

6.5	Adjustment of Conversion Rate	
The Conversion Rate in effect at any date shall be subject to adjustment from time to time as set out below.

 	(a)	If and whenever at any time prior to the Time of Expiry the Corporation shall (i) subdivide or redivide the outstanding Shares into a greater number of shares, (ii) reduce, combine or consolidate the outstanding Shares into a smaller number of shares, or (iii) issue Shares or securities convertible into Shares to the holders of all or substantially all of the outstanding Shares by way of a dividend or other distribution, the Conversion Rate in effect on the effective date of such subdivision, redivision, reduction, combination or consolidation or on the record date for such issue of Shares by way of a dividend or other distribution, as the case may be, shall in the case of any of the events referred to in (i) and (iii) above be increased in proportion to the number of outstanding Shares resulting from such subdivision, redivision, dividend or distribution, or shall, in the case of any of the events referred to in (ii) above, be decreased in proportion to the number of outstanding Shares resulting from such reduction, combination or consolidation. Such adjustment shall be made successively whenever any event referred to in this Section 6.5(a) shall occur. Any such issue of Shares by way of a dividend or distribution shall be deemed to have been made on the record date for the dividend or distribution for the purpose of calculating the number of outstanding Shares under subsections (b) and (c) of this Section 6.5 .	

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 	(b)	If and whenever at any time prior to the Time of Expiry the Corporation shall fix a record date for the issuance of options, rights or warrants to all or substantially all the holders of its outstanding Shares entitling them, for a period expiring not more than 45 days after such record date, to subscribe for or purchase Shares (or securities convertible into Shares) at a price per share (or having a conversion or exchange price per share) that is less than 95% of the Current Market Price of a Share on such record date, the Conversion Rate shall be adjusted immediately after such record date so that it shall equal the rate determined by multiplying the Conversion Rate in effect on such record date by a fraction, of which the denominator shall be the total number of Shares outstanding on such record date plus a number of Shares equal to the quotient obtained by dividing the aggregate price of the total number of additional Shares offered for subscription or purchase (or the aggregate conversion or exchange price of the convertible securities so offered) by such Current Market Price per Share, and of which the numerator shall be the total number of Shares outstanding on such record date plus the total number of additional Shares offered for subscription or purchase (or into which the convertible securities so offered are convertible). Such adjustment shall be made successively whenever such a record date is fixed. To the extent that any such options, rights or warrants are not so issued or any such options, rights or warrants are not exercised prior to the expiration thereof, the Conversion Rate shall be readjusted to the Conversion Rate which would then be in effect if such record date had not been fixed or to the Conversion Rate which would then be in effect if only the number of Shares (or securities convertible into Shares) actually issued upon the exercise of such options, rights or warrants were included in such fraction, as the case may be.	
 	 	 	
 	(c)	If and whenever at any time prior to the Time of Expiry the Corporation shall fix a record date for the making of a distribution to all or substantially all the holders of its outstanding Shares of (i) shares of any class other than Shares and other than shares distributed to holders of Shares who have elected to receive dividends or other distributions in the form of such shares in lieu of dividends or distributions paid in the ordinary course, (ii) rights, options or warrants (excluding rights, options or warrants described in (b) above), (iii) evidences of its indebtedness, or (iv) other assets (including cash dividends) then, in each such case, the Conversion Rate shall be adjusted immediately after such record date so that it shall equal the rate determined by multiplying the Conversion Rate in effect on such record date by a fraction, of which the denominator shall be (A) the total number of Shares outstanding on such record date multiplied by the Current Market Price per Share on such record date, less (B) the fair market value, in US dollars (as determined in good faith by the Directors, with the approval of the TSX, which determination shall be conclusive), of such shares or rights, options or warrants or evidences of indebtedness or assets so distributed, and of which the numerator shall be the total number of Shares outstanding on such record date multiplied by such Current Market Price per Share. Such adjustment shall be made successively whenever such a record date is fixed. To the extent that such distribution is not so made, the Conversion Rate shall be re-adjusted to the Conversion Rate which would then be in effect if such record date had not been fixed or to the Conversion Rate which would then be in effect based upon such shares or rights, options or warrants or evidences of indebtedness or assets actually distributed, as the case may be.	

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 	(d)	If and whenever at any time prior to the Time of Expiry, there is a reclassification of the Shares or a capital reorganization or recapitalization or change of the Corporation other than as described in Section 6.5(a) or a consolidation, amalgamation, statutory arrangement, binding share exchange, acquisition of the Corporation or merger of the Corporation with or into any other person or other entity or other combination pursuant to which the Shares are converted into or acquired for cash, securities or other property; or any sale or conveyance of the property and assets of the Corporation as an entirety or substantially as an entirety to any other person (other than a direct or indirect wholly owned Subsidiary of the Corporation) or a liquidation, dissolution or winding-up of the Corporation, any holder of a Debenture who has not exercised its right of conversion prior to the effective time of such reclassification, capital reorganization, recapitalization, change, consolidation, amalgamation, arrangement, binding share exchange, acquisition, merger, sale, conveyance, liquidation, dissolution or winding-up, upon the exercise of such right thereafter, shall be entitled to receive and shall accept, in lieu of the number of Shares then sought to be acquired by it, the kind and amount of cash, the number of shares or other securities or property of the Corporation or of the person or other entity resulting from such reclassification, capital reorganization, recapitalization, change, consolidation, amalgamation, arrangement, binding share exchange, acquisition, merger, or to which such sale or conveyance may be made or which holders of Shares receive pursuant to such liquidation, dissolution or winding-up, as the case may be, that such holder of a Debenture would have been entitled to receive on such reclassification, capital reorganization, recapitalization, change, consolidation, amalgamation, arrangement, binding share exchange, acquisition or merger, sale, conveyance, liquidation, dissolution or winding-up, if, on the record date or the effective date thereof, as the case may be, the holder had been the registered holder of the number of Shares sought to be acquired by it and to which it was entitled to acquire upon the exercise of the conversion right. The Corporation shall give notice in writing to Debentureholders at least 30 days prior to the record date or effective date thereof and by press release stating the consideration into which the Debentures will be convertible after the record date or effective date thereof. If determined appropriate by the Directors to give effect to or to evidence the provisions of this Section 6.5(d), the Corporation, its successor, or such purchasing person or other entity, as the case may be, shall, prior to or contemporaneously with any such reclassification, capital reorganization, recapitalization, change, consolidation, amalgamation, arrangement, binding share exchange, acquisition, merger, sale, conveyance, liquidation, dissolution or winding-up or other similar transaction, enter into an indenture which shall provide, to the extent possible, for the application of the provisions set out in this Indenture with respect to the rights and interests thereafter of the holder of Debentures to the end that the provisions set out in this Indenture shall thereafter correspondingly be made applicable, as nearly as may reasonably be, with respect to any shares or other securities or property to which a holder of Debentures is entitled on the exercise of its conversion rights thereafter. Any indenture entered into between the Corporation and the Debenture Trustee pursuant to the provisions of this Section 6.5(d) shall be a supplemental indenture entered into pursuant to the provisions of Article 16. Any indenture entered into between the Corporation, any successor to the Corporation or such purchasing person or other entity and the Debenture Trustee shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided in this Section 6.5(d) and which shall apply to successive reclassifications, capital reorganizations, recapitalizations, changes, consolidations, amalgamations, binding share exchanges, acquisitions, mergers, sales, transfers, dispositions and to any successive liquidation, dissolution or winding up or other similar transaction.	

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 	(e)	If any issuer bid made by the Corporation or any of its Subsidiaries for all or any portion of Shares shall expire, then, if the issuer bid shall require the payment to shareholders of consideration per Share having a fair market value (determined as provided below) that exceeds the Current Market Price on the last date (the “ Expiration Date ”) tenders could have been made pursuant to such issuer bid (as it may be amended) (the last time at which such tenders could have been made on the Expiration Date is hereinafter sometimes called the “ Expiration Time ”), then the Conversion Rate shall be adjusted so that the same shall equal the rate determined by multiplying the Conversion Rate in effect immediately preceding the close of business on the Expiration Date by a fraction of which (i) the numerator shall be the sum of (A) the fair market value of the aggregate consideration (the fair market value as determined in good faith by the board of directors of the Corporation, with the approval of the TSX, whose determination shall be conclusive evidence of such fair market value and which shall be evidenced by an Officer’s Certificate delivered to the Trustee) payable to shareholders based on the acceptance (up to any maximum specified in the terms of the issuer bid) of all Shares validly tendered and not withdrawn as of the Expiration Time (the Shares deemed so accepted, up to any such maximum, being referred to as the “ Purchased Shares ”) and (B) the product of the number of Shares outstanding (less any Purchased Shares) at the Expiration Time and the Current Market Price on the Expiration Date and (ii) the denominator of which shall be the product of the number of Shares outstanding (including Purchased Shares) at the Expiration Time multiplied by the Current Market Price on the Expiration Date, such increase to become effective immediately preceding the opening of business on the Business Day following the Expiration Date. In the event that the Corporation is obligated to purchase Shares pursuant to any such issuer bid, but the Corporation is permanently prevented by applicable law or stock exchange rules from effecting any or all such purchases or any or all such purchases are rescinded, the Conversion Rate shall again be adjusted to be the Conversion Rate which would have been in effect based upon the number of Shares actually purchased, if any. If the application of this Section 6.5(e) to any issuer bid would result in a decrease in the Conversion Rate, no adjustment shall be made for such issuer bid under this Section 6.5(e).	
 	 	 	
 		For purposes of this Section 6.5(e), the term “issuer bid” shall mean an issuer bid under Applicable Securities Legislation or a take-over bid under Applicable Securities Legislation by a Subsidiary of the Corporation for the Shares and all references to “purchases” of Shares in issuer bids (and all similar references) shall mean and include the purchase of Shares in issuer bids and all references to “tendered Shares” (and all similar references) shall mean and include Shares tendered in issuer bids.	
 	 	 	
 	(f)	In any case in which this Section 6.5 shall require that an adjustment shall become effective immediately after a record date for an event referred to herein, the Corporation may defer, until the occurrence of such event, issuing to the holder of any Debenture converted after such record date and before the occurrence of such event the additional Shares issuable upon such conversion by reason of the adjustment required by such event before giving effect to such adjustment; provided, however, that the Corporation shall deliver to such holder an appropriate instrument evidencing such holder’s right to receive such additional Shares upon the occurrence of the event requiring such adjustment and the right to receive any distributions made on such additional Shares declared in favour of holders of record of Shares on and after the Date of Conversion or such later date as such holder would, but for the provisions of this Section 6.5(e), have become the holder of record of such additional Shares pursuant to Section 6.4(b) .	

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 	(g)	The adjustments provided for in this Section 6.5 are cumulative and shall apply to successive subdivisions, redivisions, reductions, combinations, consolidations, distributions, issues or other events resulting in any adjustment under the provisions of this Section, provided that, notwithstanding any other provision of this Section, no adjustment of the Conversion Rate shall be required unless such adjustment would have the effect of increasing or decreasing by at least 1% the Conversion Price then in effect; provided however, that any adjustments which by reason of this Section 6.5(g) are not required to be made shall be carried forward and taken into account in any subsequent adjustment.	
 	 	 	
 	(h)	For the purpose of calculating the number of Shares outstanding, Shares owned by or for the benefit of the Corporation shall not be counted.	
 	 	 	
 	(i)	In the event of any question arising with respect to the adjustments provided in this Section 6.5, such question shall be conclusively determined by a firm of nationally recognized chartered accountants appointed by the Corporation and acceptable to the Debenture Trustee (who may be the auditors of the Corporation); such accountants shall have access to all necessary records of the Corporation and such determination shall be binding upon the Corporation, the Debenture Trustee, and the Debentureholders.	
 	 	 	
 	(j)	In case the Corporation shall take any action affecting the Shares other than action described in this Section 6.5, which in the opinion of the Directors, would materially affect the rights of Debentureholders, the Conversion Rate shall be increased in such manner and at such time, by action of the Directors, subject to the prior written consent of the TSX (or, if the Debentures are not listed thereon, on such other exchange on which the Debentures are then listed), as the Directors in their sole discretion may determine to be equitable in the circumstances. Failure of the Directors to make such an adjustment shall be conclusive evidence that they have determined that it is equitable to make no adjustment in the circumstances.	
 	 	 	
 	(k)	Subject to the prior written consent of the TSX or such other exchange on which the Debentures are then listed, no adjustment in the Conversion Rate shall be made in respect of any event described in Section 6.5 other than the events described in Sections 6.5(a)(i) or 6.5(a)(ii) if the holders of the Debentures are entitled to participate in such event on the same terms mutatis mutandis as if they had converted their Debentures prior to the effective date or record date, as the case may be, of such event.	
 	 	 	
 	(l)	Except as stated above in this Section 6.5, no adjustment will be made in the Conversion Rate for any Debentures as a result of the issuance of Shares at less than the Current Market Price for such Shares on the date of issuance or the then applicable Conversion Price.	

6.6	No Requirement to Issue Fractional Shares	
The Corporation shall not be required to issue fractional Shares upon the conversion of Debentures pursuant to this Article. If more than one Debenture shall be surrendered for conversion at one time by the same holder, the number of whole Shares issuable upon conversion thereof shall be computed on the basis of the aggregate principal amount of such Debentures to be converted. If any fractional interest in a Share would, except for the provisions of this Section, be deliverable upon the conversion of any principal amount of Debentures, the Corporation shall, in lieu of delivering any certificate representing such fractional interest, make a cash payment to the holder of such Debenture of an amount equal to the fractional interest which would have been issuable multiplied by the Current Market Price on the Date of Conversion of such fractional interest (less applicable withholding taxes, if any).

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6.7	Corporation to Reserve Shares	
The Corporation covenants with the Debenture Trustee that it will at all times reserve and keep available out of its authorized Shares, solely for the purpose of issue upon conversion of Debentures as provided in this Article 6, and conditionally allot to Debentureholders who may exercise their conversion rights hereunder, such number of Shares as shall then be issuable upon the conversion of all outstanding Debentures. The Corporation covenants with the Debenture Trustee that all Shares which shall be so issuable shall be duly and validly issued as fully-paid, non-assessable Freely-Tradeable Shares.

6.8	Cancellation of Converted Debentures	
Subject to the provisions of Section 6.4 as to Debentures converted in part, all Debentures converted in whole or in part under the provisions of this Article shall be forthwith delivered to and cancelled by the Debenture Trustee and no Debenture shall be issued in substitution therefor.

6.9	Certificate as to Adjustment	
The Corporation shall from time to time immediately after the occurrence of any event which requires an adjustment or readjustment as provided in Section 6.5, deliver an Officer’s Certificate to the Debenture Trustee specifying the nature of the event requiring the same and the amount of the adjustment necessitated thereby and setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based, which certificate and the amount of the adjustment specified therein shall, in the event of any question regarding such calculation, be verified by an opinion of a firm of nationally recognized chartered accountants appointed by the Corporation and acceptable to the Debenture Trustee (who may be the auditors of the Corporation), and shall be conclusive and binding on all parties in interest. When so approved, the Corporation shall, except in respect of any subdivision, redivision, reduction, combination or consolidation of the Shares, forthwith give notice to the Debenture Trustee for forwarding to the Debentureholders in the manner provided in Section 14.2 specifying the event requiring such adjustment or readjustment and the results thereof, including the resulting Conversion Rate.

6.10	Notice of Special Matters	
The Corporation covenants with the Debenture Trustee that so long as any Debenture remains outstanding, it will give notice to the Debenture Trustee, and to the Debentureholders in the manner provided in Section 14.2, of its intention to fix a record date for any event referred to in Section 6.5(a), 6.5(b) or 6.5(c) (other than the subdivision, redivision, reduction, combination or consolidation of its Shares) which may give rise to an adjustment in the Conversion Rate, and, in each case, such notice shall specify the particulars of such event and the record date and the effective date for such event; provided that the Corporation shall only be required to specify in such notice such particulars of such event as shall have been fixed and determined on the date on which such notice is given. Such notice shall be given not less than 14 days in each case prior to such applicable record date.
In addition, the Corporation covenants with the Debenture Trustee that so long as any Debenture remains outstanding, it will give notice to the Debenture Trustee, and to the Debentureholders in the manner provided in Section 14.2, at least 30 days prior to the (i) effective date of any transaction referred to in Section 6.5(d) stating the consideration into which the Debentures will be convertible after the effective date of such transaction, and (ii) Expiration Date of any transaction referred to in Section 6.5(e) stating the consideration paid per Share in such transaction.

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6.11	Protection of Debenture Trustee	
Subject to Section 15.4, the Debenture Trustee:

 	(a)	shall not at any time be under any duty or responsibility to any Debentureholder to determine whether any facts exist which may require any adjustment in the Conversion Price, or with respect to the nature or extent of any such adjustment when made, or with respect to the method employed in making the same;	
 	 	 	
 	(b)	shall not be accountable with respect to the validity or value (or the kind or amount) of any Shares or other securities or property which may at any time be issued or delivered upon the conversion of any Debenture;	
 	 	 	
 	(c)	shall not be responsible for any failure of the Corporation to make any cash payment or to issue, transfer or deliver Shares or Share certificates upon the surrender of any Debenture for the purpose of conversion, or to comply with any of the covenants contained in this Article; and	
 	 	 	
 	(d)	shall be entitled to act and rely on any adjustment calculation of the Corporation.	

6.12	Payment on Conversion	
Upon conversion of any Debentures, the Corporation has the right to pay or deliver, as the case may be, Shares (“ Physical Settlement ”), cash (“ Cash Settlement ”), or a combination of Shares and cash (“ Combination Settlement ”), as described below. Each of these is referred to as a “ Settlement Method ” below.

 	(a)	All conversions of the Debentures occurring on the same day shall be settled using the same Settlement Method.	
 	 	 	
 	(b)	If the Corporation elects a Settlement Method, it will specify in a notice delivered to the Debenture Trustee and the Debentureholders so converting in accordance with Section 14.2 of the Settlement Method it has selected no later than the close of business on the related Date of Conversion.	
 	 	 	
 	(c)	If the Corporation does not timely elect a Settlement Method for any conversions of Debentures by advising the Debenture Trustee and the Debentureholders so converting in accordance with Section 6.12(b), the Corporation will be deemed to have elected Physical Settlement.	
 	 	 	
 	(d)	Settlement amounts will be computed as follows:	

 	(i)	if the Corporation elects (or is deemed to have elected) Physical Settlement, it will deliver to the Debenture Trustee, for delivery to the converting Debentureholder, in respect of each $1,000 principal amount of Debentures being converted, a number of Shares equal to the Conversion Rate (as adjusted in accordance with Article 6);	
 	 	 	
 	(ii)	if the Corporation elects Cash Settlement, it will pay to the Debenture Trustee, for delivery to the converting Debentureholder, in respect of each $1,000 principal amount of Debentures being converted, cash in an amount equal to (A) the Trailing Market Price calculated as of the Trading Day immediately following the Date of Conversion multiplied by (B) the number of Shares that the holder would have otherwise been entitled to receive on the Date of Conversion had the Corporation elected Physical Settlement; and	

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 	(iii)	if the Corporation elects Combination Settlement, it will pay or deliver, as the case may be, to Debenture Trustee, for delivery to the converting Debentureholder in respect of each $1,000 principal amount of Debentures being converted, (X) such number of Shares, as determined by the Corporation, that are less than the number of Shares that the holder would have otherwise been entitled to receive on the Date of Conversion had the Corporation elected Physical Settlement (“ Share Settlement Portion ”); and (Y) cash in an amount equal to the Trailing Market Price calculated as of the Trading Day immediately following the Date of Conversion multiplied by the difference of: (A) the number of Shares that the holder would have otherwise been entitled to receive on the Date of Conversion had the Corporation elected Physical Settlement minus (B) the Share Settlement Portion.	

 	(e)	Except in the case of an adjustment of the Conversion Rate as set forth in Article 6 hereof, the Corporation will deliver the consideration due in respect of conversion on the third Business Day immediately following the relevant Date of Conversion, if it elects Physical Settlement, or on the third Business Day immediately following the last Trading Day used to calculate the Trailing Market Price, in the case of any other Settlement Method.	
 	 	 	
 	(f)	Holders converting their Debentures, unless Cash Settlement is selected by the Corporation, will become holders of record of Shares on the Business Day immediately following the Date of Conversion.	
ARTICLE 7
 COVENANTS OF THE CORPORATION
The Corporation hereby covenants and agrees with the Debenture Trustee for the benefit of the Debenture Trustee and the Debentureholders, that so long as any Debentures remain outstanding:

7.1	To Pay Principal, Premium (if any) and Interest	
The Corporation will duly and punctually pay or cause to be paid to every Debentureholder the principal of, premium (if any) and interest accrued on the Debentures of which it is the holder on the dates, at the places and in the manner mentioned herein and in the Debentures.

7.2	To Pay Debenture Trustee’s Remuneration	
The Corporation will pay the Debenture Trustee reasonable remuneration for its services as Debenture Trustee hereunder and will repay to the Debenture Trustee on demand all reasonable amounts which shall have been paid by the Debenture Trustee in connection with the execution of the trusts hereby created and such monies including the Debenture Trustee’s remuneration, shall be payable out of any funds coming into the possession of the Debenture Trustee in priority to payment of any principal of the Debentures or interest thereon. Any amount due under this Section and unpaid thirty days after written request for such payment shall bear interest from the expiration of such thirty days at a rate per annum equal to the then rate charged by the Debenture Trustee under similar indentures from time to time, payable on demand. Such remuneration shall continue to be payable until the trusts hereof be finally wound up and whether or not the trusts of this Indenture shall be in the course of administration by or under the direction of a court of competent jurisdiction.

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7.3	To Give Notice of Default	
The Corporation shall promptly notify the Debenture Trustee in writing upon obtaining knowledge of any Event of Default hereunder.

7.4	Preservation of Existence, etc.	
Subject to the express provisions hereof, the Corporation will carry on and conduct its activities, and cause its Subsidiaries to carry on and conduct their businesses, in a proper, efficient and business-like manner and in accordance with good business practices; and, subject to the express provisions hereof and it will do or cause to be done all things necessary to preserve and keep in full force and effect the existence and right of the Corporation.

7.5	Keeping of Books	
The Corporation will keep or cause to be kept proper books of record and account, in which full and correct entries shall be made of all financial transactions and the assets and business of the Corporation in accordance with generally accepted accounting principles.

7.6	Annual Certificate of Compliance	
The Corporation shall deliver to the Debenture Trustee, within 120 days after the end of each calendar year (and at any time upon reasonable demand by the Debenture Trustee), an Officer’s Certificate as to the knowledge of such Director or an Authorized Officer who executes the Officer’s Certificate, of the Corporation’s compliance with all conditions and covenants of this Indenture certifying that after reasonable investigation and inquiry, the Corporation has complied with all covenants, conditions or other requirements contained in this Indenture, the non-compliance with which could, with the giving of notice, lapse of time or otherwise, constitute an Event of Default hereunder, or if such is not the case, setting forth with reasonable particulars the circumstances of any failure to comply and any steps taken or proposed to be taken to remedy such Event of Default.

7.7	No Dividend or Distributions on Shares if Event of Default	
The Corporation shall not declare or make any dividend or distribution to the holders of its issued and outstanding Shares after the occurrence of an Event of Default unless and until such default shall have been cured or waived or shall have ceased to exist.

7.8	Performance of Covenants by Debenture Trustee	
If the Corporation shall fail to perform any of its covenants contained in this Indenture, the Debenture Trustee may notify the Debentureholders of such failure on the part of the Corporation or may itself perform any of the covenants capable of being performed by it, but (subject to Sections 8.2 and 15.4) shall be under no obligation to do so or to notify the Debentureholders. All reasonable sums so expended or advanced by the Debenture Trustee shall be repayable as provided in Section 7.2. No such performance, expenditure or advance by the Debenture Trustee shall be deemed to relieve the Corporation of any default hereunder.

7.9	Maintain Listing	
The Corporation shall use commercially-reasonable efforts to ensure that the Shares are listed and posted for trading on the NYSE and the TSX and that the Initial Debentures are listed and posted for trading on the TSX, to maintain such listing and posting for trading of the Shares on the NYSE and the TSX and the Initial Debentures on the TSX, and to maintain the Corporation’s status as a “reporting issuer” not in default under Applicable Securities Legislation, in all cases for as long as any Initial Debentures remain outstanding.

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ARTICLE 8
DEFAULT

8.1	Events of Default	
Each of the following events constitutes, and is herein sometimes referred to as, an “ Event of Default ”:

 	(a)	failure for 30 days to pay interest on the Debentures when due;	
 	 	 	
 	(b)	failure to pay principal or premium, if any, (whether by way of payment of cash or delivery of Shares) on the Debentures when due whether at maturity upon redemption, or a Change of Control, by declaration or otherwise;	
 	 	 	
 	(c)	default in the delivery, when due, of all cash and any Shares or other consideration, including any Make-Whole Premium Shares, payable on conversion with respect to the Debentures which default continues for 15 days;	
 	 	 	
 	(d)	default in the observance or performance of any covenant or condition of this Indenture by the Corporation and the failure to cure (or obtain a waiver for) such default for a period of 30 days after notice in writing has been given to the Corporation by the Debenture Trustee or by the holders of not less than 25% in principal amount of the Debentures then outstanding specifying such default and requiring the Corporation to remedy such default or obtain a waiver for same;	
 	 	 	
 	(e)	if a decree or order of a court having jurisdiction is entered adjudging the Corporation a bankrupt or insolvent under the Bankruptcy and Insolvency Act (Canada) or any other bankruptcy, insolvency or similar laws, or if a sequestration or process of execution is issued against, or against any material part of, the property of the Corporation or any Material Subsidiary, or appointing a receiver of, or any substantial part of, the property of the Corporation or any Material Subsidiary or ordering the winding-up or liquidation of its affairs, and any such decree or order continues unstayed and in effect for a period of 60 days;	
 	 	 	
 	(f)	if the Corporation or any Material Subsidiary institutes proceedings to be adjudicated bankrupt or insolvent, or consents to the institution of bankruptcy or insolvency proceedings against it under the Bankruptcy and Insolvency Act (Canada) or any other bankruptcy, insolvency or similar laws, or consents to the filing of any such petition or to the appointment of a receiver of, or any substantial part of, the property of the Corporation or makes a general assignment for the benefit of creditors, or admits in writing its inability to pay its debts generally as they become due;	
 	 	 	
 	(g)	if an event of default occurs or exists under any indenture, agreement or other instrument evidencing or governing indebtedness for money borrowed by the Corporation having an outstanding principal amount in excess of $25 million (or the equivalent amount in any other currency) individually or in the aggregate and (A) as a result of such event of default, such indebtedness has become due and payable before the date it would otherwise have been due and payable, and (B) the holders of such indebtedness are entitled to commence, and have commenced, the enforcement of security they hold for such indebtedness (if any) or the exercise of any other creditors’ remedies to collect such indebtedness; or	

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 	(h)	if a resolution is passed for the winding-up or liquidation of the Corporation except in the course of carrying out or pursuant to a transaction in respect of which the conditions of Section 11.1 are duly observed and performed.	
In each and every such Event of Default the Debenture Trustee may, in its discretion, but subject to the provisions of this Section, and shall, upon receipt of a request in writing signed by the holders of not less than 25% in principal amount of the Debentures then outstanding, (or if the Event of Default shall exist only in respect of one or more series of Debentures then outstanding, then upon prior funding and indemnity and receipt of a request in writing signed by the holders of not less than 25% in principal amount of the Debentures of such series then outstanding) subject to the provisions of Section 8.3, by notice in writing to the Corporation declare the principal of, premium, if any, and interest on all Debentures then outstanding (or, as the case may be, on all Debentures of such series outstanding) and all other monies outstanding hereunder to be due and payable and the same shall forthwith become immediately due and payable to the Debenture Trustee, and the Corporation shall forthwith pay to the Debenture Trustee for the benefit of the Debentureholders such principal (and premium, if any), accrued and unpaid interest and interest on amounts in default on such Debentures (and, where such a declaration is based upon a voluntary winding-up or liquidation of the Corporation, the premium, if any, on the Debentures then outstanding which would have been payable upon the redemption thereof by the Corporation on the date of such declaration) and all other monies outstanding hereunder, together with subsequent interest at the rate borne by the Debentures on such principal (and premium, if any), interest and such other monies from the date of such declaration until payment is received by the Debenture Trustee, such subsequent interest to be payable at the times and places and in the monies mentioned in and according to the tenor of the Debentures. Such payment when made shall be deemed to have been made in discharge of the Corporation’s obligations hereunder and any monies so received by the Debenture Trustee shall be applied in the manner provided in Section 8.6.
For greater certainty, for the purposes of this Section 8.1, a series of Debentures shall be in default in respect of an Event of Default if such Event of Default relates to a default in the payment of principal, premium, if any, or interest on the Debentures of such series in which case references to Debentures in this Section 8.1 shall refer to Debentures of that particular series.
For the purposes of this Article 8, where the Event of Default refers to an Event of Default with respect to a particular series of Debentures as described in this Section 8.1, then this Article 8 shall apply mutatis mutandis to the Debentures of such series and references in this Article 8 to the Debentures shall mean Debentures of the particular series and references to the Debentureholders shall refer to the Debentureholders of the particular series, as applicable.

8.2	Notice of Events of Default	
If an Event of Default shall occur and be continuing the Debenture Trustee shall, within 30 days after it receives written notice or otherwise becomes aware of the occurrence of such Event of Default, give notice of such Event of Default to the Debentureholders in the manner provided in Section 14.2, provided that notwithstanding the foregoing, unless the Debenture Trustee shall have been requested to do so by the holders of at least 25% of the principal amount of the Debentures then outstanding, the Debenture Trustee shall not be required to give such notice if the Debenture Trustee in good faith shall have determined that the withholding of such notice is in the best interests of the Debentureholders and shall have so advised the Corporation in writing.

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When notice of the occurrence of an Event of Default has been given and the Event of Default is thereafter cured, notice that the Event of Default is no longer continuing shall be given by the Debenture Trustee to the Debentureholders within 15 days after the Debenture Trustee becomes aware the Event of Default has been cured.

8.3	Waiver of Default	
Upon the happening of any Event of Default hereunder:

 	(a)	the holders of the Debentures shall have the power (in addition to the powers exercisable by Extraordinary Resolution as hereinafter provided) by requisition in writing by the holders of a majority of the principal amount of Debentures then outstanding, to instruct the Debenture Trustee to waive any Event of Default and to cancel any declaration made by the Debenture Trustee pursuant to Section 8.1 and the Debenture Trustee shall thereupon waive the Event of Default and cancel such declaration, or either, upon such terms and conditions as shall be prescribed in such requisition; provided that notwithstanding the foregoing if the Event of Default has occurred by reason of the non- observance or non-performance by the Corporation of any covenant applicable only to one or more series of Debentures, then the holders of more than 50% of the principal amount of the outstanding Debentures of that series shall be entitled to exercise the foregoing power and the Debenture Trustee shall so act and it shall not be necessary to obtain a waiver from the holders of any other series of Debentures; and	
 	 	 	
 	(b)	the Debenture Trustee, so long as it has not become bound to declare the principal and interest on the Debentures then outstanding to be due and payable, or to obtain or enforce payment of the same, shall have power to waive any Event of Default if, in the Debenture Trustee’s opinion, the same shall have been cured or adequate satisfaction made therefor, and in such event to cancel any such declaration theretofore made by the Debenture Trustee in the exercise of its discretion, upon such terms and conditions as the Debenture Trustee may deem advisable.	
No such act or omission either of the Debenture Trustee or of the Debentureholders shall extend to or be taken in any manner whatsoever to affect any subsequent Event of Default or the rights resulting therefrom.

8.4	Enforcement by the Debenture Trustee	
Subject to the provisions of Section 8.3 and to the provisions of any Extraordinary Resolution that may be passed by the Debentureholders and to the provisions of this Section, if the Corporation shall fail to pay to the Debenture Trustee, forthwith after the same shall have been declared to be due and payable under Section 8.1, the principal of and premium (if any) and interest on all Debentures then outstanding, together with any other amounts due hereunder, the Debenture Trustee may in its discretion and shall upon receipt of a request in writing signed by the holders of not less than 25% in principal amount of the Debentures then outstanding and upon being funded and indemnified to its reasonable satisfaction against all costs, expenses and liabilities to be incurred, proceed in its name as trustee hereunder to obtain or enforce payment of such principal of and premium (if any) and interest on all the Debentures then outstanding together with any other amounts due hereunder by such proceedings authorized by this Indenture or by law as the Debenture Trustee in such request shall have been directed to take, or if such request contains no such direction, or if the Debenture Trustee shall act without such request, then by such proceedings authorized by this Indenture or by law as the Debenture Trustee shall deem expedient.

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The Debenture Trustee shall be entitled and empowered, either in its own name or as trustee, or as attorney for the holders of the Debentures, or in any one or more of such capacities, to file such proof of debt, amendment of proof of debt, claim, petition or other document as may be necessary or advisable in order to have the claims of the Debenture Trustee and of the holders of the Debentures allowed in any insolvency, bankruptcy, liquidation or other judicial proceedings relative to the Corporation or its creditors or relative to or affecting its property. The Debenture Trustee is hereby irrevocably appointed (and the successive respective holders of the Debentures by taking and holding the same shall be conclusively deemed to have so appointed the Debenture Trustee) the true and lawful attorney of the respective holders of the Debentures with authority to make and file in the respective names of the holders of the Debentures or on behalf of the holders of the Debentures as a class, subject to deduction from any such claims of the amounts of any claims filed by any of the holders of the Debentures themselves, any proof of debt, amendment of proof of debt, claim, petition or other document in any such proceedings and to receive payment of any sums becoming distributable on account thereof, and to execute any such other papers and documents and to do and perform any and all such acts and things for and on behalf of such holders of the Debentures, as may be necessary or advisable in the opinion of the Debenture Trustee, in order to have the respective claims of the Debenture Trustee and of the holders of the Debentures against the Corporation or its property allowed in any such proceeding, and to receive payment of or on account of such claims; provided, however, that subject to Section 8.3, nothing contained in this Indenture shall be deemed to give to the Debenture Trustee, unless so authorized by Extraordinary Resolution, any right to accept or consent to any plan of reorganization or otherwise by action of any character in such proceeding to waive or change in any way any right of any Debentureholder.
The Debenture Trustee shall also have the power at any time and from time to time to institute and to maintain such suits and proceedings as it may be advised shall be necessary or advisable to preserve and protect its interests and the interests of the Debentureholders.
All rights of action hereunder may be enforced by the Debenture Trustee without the possession of any of the Debentures or the production thereof at trial or other proceedings relating thereto. Any such suit or proceeding instituted by the Debenture Trustee shall be brought in the name of the Debenture Trustee as trustee of an express trust, and any recovery of judgment shall be for the rateable benefit of the holders of the Debentures subject to the provisions of this Indenture. In any proceeding brought by the Debenture Trustee (and also any proceeding in which a declaratory judgment of a court may be sought as to the interpretation or construction of any provision of this Indenture, to which the Debenture Trustee shall be a party) the Debenture Trustee shall be held to represent all the holders of the Debentures, and it shall not be necessary to make any holders of the Debentures parties to any such proceeding.

8.5	No Suits by Debentureholders	
No holder of any Debenture shall have any right to institute any action, suit or proceeding for the purpose of enforcing payment of the principal of, or premium (if any), or interest on the Debentures or for the execution of any trust or power hereunder or for the appointment of a liquidator or receiver or for a receiving order under the Bankruptcy and Insolvency Act (Canada) or to have the Corporation wound up or to file or prove a claim in any liquidation or bankruptcy proceeding or for any other remedy hereunder, unless: (a) such holder shall previously have given to the Debenture Trustee written notice of the happening of an Event of Default hereunder; (b) the Debentureholders by Extraordinary Resolution or by written instrument signed by the holders of at least 25% in principal amount of the Debentures then outstanding shall have made a request to the Debenture Trustee and the Debenture Trustee shall have been afforded reasonable opportunity either itself to proceed to exercise the powers hereinbefore granted or to institute an action, suit or proceeding in its name for such purpose; (c) the Debentureholders or any of them shall have furnished to the Debenture Trustee, when so requested by the Debenture Trustee, sufficient funds and security and indemnity satisfactory to it against the costs, expenses and liabilities to be incurred therein or thereby; and (d) the Debenture Trustee shall have failed to act within a reasonable time after such notification, request and offer of indemnity and such notification, request and offer of indemnity are hereby declared in every such case, at the option of the Debenture Trustee, to be conditions precedent to any such proceeding or for any other remedy hereunder by or on behalf of the holder of any Debentures.

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8.6	Application of Monies by Debenture Trustee	

 	(a)	Except as herein otherwise expressly provided, any monies received by the Debenture Trustee from the Corporation pursuant to the foregoing provisions of this Article 8, or as a result of legal or other proceedings or from any trustee in bankruptcy or liquidator of the Corporation, shall be applied, together with any other monies in the hands of the Debenture Trustee available for such purpose, as follows:	

 	(i)	first, in payment or in reimbursement to the Debenture Trustee of its compensation, and reasonable costs, charges, expenses, borrowings, advances or other monies furnished or provided by or at the instance of the Debenture Trustee in or about the execution of its trusts under, or otherwise in relation to, this Indenture, with interest thereon as herein provided;	
 	 	 	
 	(ii)	second, but subject as hereinafter in this Section 8.6 provided, in payment, rateably and proportionately to (and in the case of applicable withholding taxes, if any, on behalf of) the holders of Debentures, of the principal of and premium (if any) and accrued and unpaid interest and interest on amounts in default on the Debentures which shall then be outstanding in the priority of principal first and then premium (if any) and then accrued and unpaid interest and interest on amounts in default unless otherwise directed by Extraordinary Resolution and in that case in such order or priority as between principal, premium (if any) and interest as may be directed by such resolution; and	
 	 	 	
 	(iii)	third, in payment of the surplus, if any, of such monies to the Corporation or its assigns;	
 	 	 	
 	(iv)	provided, however, that no payment shall be made pursuant to clause (ii) above in respect of the principal, premium (if any) or interest on any Debenture held, directly or indirectly, by or for the benefit of the Corporation or any Subsidiary (other than any Debenture pledged for value and in good faith to a person other than the Corporation or any Subsidiary but only to the extent of such person’s interest therein) except subject to the prior payment in full of the principal, premium (if any) and interest (if any) on all Debentures which are not so held.	

 	(b)	The Debenture Trustee shall not be bound to apply or make any partial or interim payment of any monies coming into its hands if the amount so received by it, after reserving therefrom such amount as the Debenture Trustee may think necessary to provide for the payments mentioned in Section 8.6(a), is insufficient to make a distribution of at least 2% of the aggregate principal amount of the outstanding Debentures, but it may retain the money so received by it and invest or deposit the same as provided in Section 15.10 until the money or the investments representing the same, with the income derived therefrom, together with any other monies for the time being under its control shall be sufficient for the said purpose or until it shall consider it advisable to apply the same in the manner hereinbefore set out. The foregoing shall, however, not apply to a final payment or distribution hereunder.	

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8.7	Notice of Payment by Debenture Trustee	
Not less than 15 days’ notice shall be given in the manner provided in Section 14.2 by the Debenture Trustee to the Debentureholders of any payment to be made under this Article 8. Such notice shall state the time when and place where such payment is to be made and also the liability under this Indenture to which it is to be applied. After the day so fixed, unless payment shall have been duly demanded and have been refused, the Debentureholders will be entitled to interest only on the balance (if any) of the principal monies, premium (if any) and interest due (if any) to them, respectively, on the Debentures, after deduction of the respective amounts payable in respect thereof on the day so fixed.

8.8	Debenture Trustee May Demand Production of Debentures	
The Debenture Trustee shall have the right to demand production of the Debentures in respect of which any payment of principal, interest or premium (if any) required by this Article 8 is made and may cause to be endorsed on the same a memorandum of the amount so paid and the date of payment, but the Debenture Trustee may, in its discretion, dispense with such production and endorsement, upon such indemnity being given to it and to the Corporation as the Debenture Trustee shall deem sufficient.

8.9	Remedies Cumulative	
No remedy herein conferred upon or reserved to the Debenture Trustee, or upon or to the holders of Debentures is intended to be exclusive of any other remedy, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now existing or hereafter to exist by law or by statute.

8.10	Judgment Against the Corporation	
The Corporation covenants and agrees with the Debenture Trustee that, in case of any judicial or other proceedings to enforce the rights of the Debentureholders, judgment may be rendered against it in favour of the Debentureholders or in favour of the Debenture Trustee, as trustee for the Debentureholders, for any amount which may remain due in respect of the Debentures and premium (if any) and the interest thereon and any other monies owing hereunder.

8.11	Immunity of Directors, Officers and Others	
The Debentureholders and the Debenture Trustee hereby waive and release any right, cause of action or remedy now or hereafter existing in any jurisdiction against any past, present or future officer or director of any entity of the Primero Group, any Director or any holder of Shares or of any successor thereto, for the payment of the principal of or premium or interest on any of the Debentures or on any covenant, agreement, representation or warranty by the Corporation contained herein or in the Debentures.
ARTICLE 9
SATISFACTION AND DISCHARGE

9.1	Cancellation and Destruction	
All Debentures shall forthwith after payment thereof be delivered to the Debenture Trustee and cancelled by it. All Debentures cancelled or required to be cancelled under this or any other provision of this Indenture shall, if not already cancelled, be cancelled and perforated by the Debenture Trustee and, if required by the Corporation, the Debenture Trustee shall furnish to it a destruction certificate setting out the designating numbers of the Debentures so destroyed.

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9.2	Non-Presentation of Debentures	
In case the holder of any Debenture shall fail to present the same for payment on the date on which the principal, premium (if any) or the interest thereon or represented thereby becomes payable either at maturity or otherwise or shall not accept payment on account thereof and give such receipt therefor, if any, as the Debenture Trustee may require:

 	(a)	the Corporation shall be entitled to pay or deliver to the Debenture Trustee and direct the Debenture Trustee to set aside;	
 	 	 	
 	(b)	in respect of monies or Shares in the hands of the Debenture Trustee which may or should be applied to the payment of the Debentures, the Corporation shall be entitled to direct the Debenture Trustee to set aside; or	
 	 	 	
 	(c)	if the redemption was pursuant to notice given by the Debenture Trustee, the Debenture Trustee may itself set aside,	
the monies or Shares, as the case may be, in trust to be paid to the holder of such Debenture upon due presentation or surrender thereof in accordance with the provisions of this Indenture; and thereupon the monies or Shares payable on or represented by each Debenture in respect whereof such monies or Shares, if applicable, have been set aside shall be deemed to have been paid and the holder thereof shall thereafter have no right in respect thereof except that of receiving delivery and payment of the monies or Shares, if applicable, (less applicable withholding taxes, if any) so set aside by the Debenture Trustee upon due presentation and surrender thereof, subject always to the provisions of Section 9.3 .

9.3	Repayment of Unclaimed Monies or Shares	
Subject to applicable law, any monies or Shares, if applicable, set aside under Section 9.2 and not claimed by and paid to holders of Debentures as provided in Section 9.2 within six years after the date of such setting aside shall be repaid and delivered to the Corporation by the Debenture Trustee and thereupon the Debenture Trustee shall be released from all further liability with respect to such monies or Shares, if applicable, and thereafter the holders of the Debentures in respect of which such monies or Shares, if applicable, were so repaid to the Corporation shall have no rights in respect thereof except to obtain payment and delivery of the monies or Shares, as applicable and without interest, from the Corporation subject to any prescription provided by the laws of the Province of Ontario. Notwithstanding the foregoing, the Debenture Trustee will pay any remaining funds prior to the expiry of six years after the setting aside described in Section 9.2 to the Corporation upon receipt from the Corporation, or one of its Subsidiaries, of an uncontested letter of credit from a Canadian chartered bank in an amount equal to or in excess of the amount of the remaining funds. If the remaining funds are paid to the Corporation prior to the expiry of six years after such setting aside, the Corporation shall reimburse the Debenture Trustee for any amounts so set aside which are required to be paid by the Debenture Trustee to a holder of a Debenture after the date of such payment of the remaining funds to the Corporation but prior to six years after such setting aside.

9.4	Discharge	
The Debenture Trustee shall at the written request of the Corporation release and discharge this Indenture and execute and deliver such instruments as it shall be advised by Counsel are requisite for that purpose and to release the Corporation from its covenants herein contained (other than the provisions relating to the indemnification of the Debenture Trustee), upon proof being given to the reasonable satisfaction of the Debenture Trustee that the principal and premium (if any) of and interest (including interest on amounts in default, if any), on all the Debentures and all other monies payable hereunder have been paid or satisfied or that all the Debentures having matured or having been duly called for redemption, payment of the principal of and interest (including interest on amounts in default, if any) on such Debentures and of all other monies payable hereunder has been duly and effectually provided for in accordance with the provisions hereof.

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9.5	Satisfaction	

 	(a)	The Corporation shall be deemed to have fully paid, satisfied and discharged all of the outstanding Debentures of any series and the Debenture Trustee, at the expense of the Corporation, shall execute and deliver proper instruments acknowledging the full payment, satisfaction and discharge of such Debentures, when, with respect to all of the outstanding Debentures or all of the outstanding Debentures of any series, as applicable, either:	

 	(i)	the Corporation has deposited or caused to be deposited with the Debenture Trustee as trust funds or property in trust for the purpose of making payment on such Debentures, an amount in money or Shares, if applicable, sufficient to pay, satisfy and discharge the entire amount of principal, premium, if any, and interest, if any, to maturity or any repayment date or Redemption Dates or any Change of Control Purchase Date or upon conversion or otherwise, as the case may be, of such Debentures (including the maximum amount of Shares that may be payable as Make-Whole Premium Shares); or	
 	 	 	
 	(ii)	the Corporation has deposited or caused to be deposited with the Debenture Trustee as property in trust for the purpose of making payment on such Debentures:	

 	(A)	if the Debentures are issued in US dollars, such amount in US dollars of direct obligations of, or obligations the principal and interest of which are guaranteed by, the United States Government, the Government of Canada or Shares, if applicable; or	
 	 	 	
 	(B)	if the Debentures are issued in a currency other than US dollars, cash in the currency in which the Debentures are payable and/or such amount in such currency of direct obligations of, or obligations the principal and interest of which are guaranteed by, the Government of Canada or the government that issued the currency in which the Debentures are payable or Shares, if applicable;	
as will be sufficient to pay and discharge the entire amount of principal, premium, if any, and accrued and unpaid interest to maturity or any repayment date, as the case may be, of all such Debentures; and in either event:

 	(iii)	the Corporation has paid, caused to be paid or made provisions to the satisfaction of the Debenture Trustee for the payment of all other sums payable or which may be payable (including the maximum number of Shares that may be issuable as Make-Whole Premium Shares) with respect to all of such Debentures (together with all reasonable expenses of the Debenture Trustee in connection with the payment of such Debentures); and	

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 	(iv)	the Corporation has delivered to the Debenture Trustee an Officer’s Certificate stating that all conditions precedent herein provided relating to the payment, satisfaction and discharge of all such Debentures have been complied with.	
Any deposits with the Debenture Trustee referred to in this Section 9.5 shall be irrevocable, subject to Section 9.6, and shall be made under the terms of an escrow and/or trust agreement in form and substance satisfactory to the Debenture Trustee and the Corporation and which provides for the due and punctual payment of the principal of, and interest and premium, if any, on the Debentures being satisfied.

 	(b)	Upon the satisfaction of the conditions set out in this Section 9.5 with respect to all the outstanding Debentures, or all the outstanding Debentures of any series, as applicable, the terms and conditions of the Debentures, including the terms and conditions with respect thereto set out in this Indenture (other than those contained in Article 2, 4 and 6 and Section 8.4 and the provisions of Article 1 pertaining to the foregoing provisions) shall no longer be binding upon or applicable to the Corporation.	
 	 	 	
 	(c)	Any funds or obligations deposited with the Debenture Trustee pursuant to this Section 9.5 shall be denominated in the currency or denomination of the Debentures in respect of which such deposit is made.	
 	 	 	
 	(d)	If the Debenture Trustee is unable to apply any money or securities in accordance with this Section 9.5 by reason of any legal proceeding or any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Corporation’s obligations under this Indenture and the affected Debentures shall be revived and reinstated as though no money or securities had been deposited pursuant to this Section 9.5 until such time as the Debenture Trustee is permitted to apply all such money or securities in accordance with this Section 9.5, provided that if the Corporation has made any payment in respect of principal, premium or interest on Debentures or, as applicable, other amounts because of the reinstatement of its obligations, the Corporation shall be subrogated to the rights of the holders of such Debentures to receive such payment from the money or securities held by the Debenture Trustee.	

9.6	Continuance of Rights, Duties and Obligations	

 	(a)	Where trust funds or trust property have been deposited pursuant to Section 9.5, the holders of Debentures and the Corporation shall continue to have and be subject to their respective rights, duties and obligations under Article 2, Article 4 and Article 6 and the provisions of Article 1 pertaining to the foregoing provisions, as may be applicable.	
 	 	 	
 	(b)	In the event that, after the deposit of trust funds or trust property pursuant to Section 9.5 in respect of a series of Debentures (the “ Defeased Debentures ”), any holder of any of the Defeased Debentures from time to time converts its Debentures to Shares or other securities of the Corporation in accordance with Subsection 2.4(e), Article 6 or any other provision of this Indenture, the Debenture Trustee shall upon receipt of a Written Direction of the Corporation return to the Corporation from time to time the proportionate amount of the trust funds or other trust property deposited with the Debenture Trustee pursuant to Section 9. 5 in respect of the Defeased Debentures which is applicable to the Defeased Debentures so converted (which amount shall be based on the applicable principal amount of the Defeased Debentures being converted in relation to the aggregate outstanding principal amount of all the Defeased Debentures).	

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 	(c)	In the event that, after the deposit of trust funds or trust property pursuant to Section 9.5, the Corporation is required to purchase any outstanding Debentures pursuant to Subsection 2.4(i) in relation to Initial Debentures or to purchase or make an offer to purchase Debentures pursuant to any other similar provisions relating to any other series of Debentures, the Corporation shall be entitled to use any trust money or trust property deposited with the Debenture Trustee pursuant to Section 9.5 for the purpose of paying to any holders of Defeased Debentures who have accepted any such offer of the Corporation the Offer Price payable to such holders in respect of such offer to purchase the Initial Debentures (or the total offer price payable in respect of an offer relating to any other series of Debentures). Upon receipt of a Written Direction from the Corporation, the Debenture Trustee shall be entitled to pay to such holder from such trust money or trust property deposited with the Debenture Trustee pursuant to Section 9.5 in respect of the Defeased Debentures which is applicable to the Defeased Debentures held by such holders who have accepted any such offer from the Corporation (which amount shall be based on the applicable principal amount of the Defeased Debentures held holders that accept any such offer in relation to the aggregate outstanding principal amount of all the Defeased Debentures).	
ARTICLE 10
 SHARE INTEREST PAYMENT ELECTION

10.1	Share Interest Payment Election	

 	(a)	Provided that no Event of Default has occurred and is continuing under this Indenture and that all applicable regulatory approvals have been obtained (including any required approval of any stock exchange on which the Debentures or Shares are then listed and subject to Applicable Securities Legislation), the Corporation shall have the right, from time to time to pay the Interest Obligation on an Interest Payment Date (i) in cash; (ii) by delivering sufficient Shares to the Debenture Trustee, for sale on behalf of the Corporation, in which event holders of the Debentures will be entitled to receive a cash payment equal to the interest payable from the proceeds of the sale of such Shares; or (iii) any combination of (i) and (ii) above, by making a Share Interest Payment Election in respect of any Interest Obligation, in whole or in part, and by delivering a Share Interest Payment Election Notice to the Debenture Trustee no later than the earlier of: (i) the date required by applicable law or the rules of any stock exchange on which the Debentures or Shares are then listed, and (ii) the day which is 15 Business Days prior to the Interest Payment Date to which the Share Interest Payment Election relates.	
 	 	 	
 	(b)	Upon receipt of a Share Interest Payment Election Notice, the Debenture Trustee shall, in accordance with this Article 10 and such Share Interest Payment Election Notice, deliver Share Bid Requests to the investment banks, brokers or dealers identified by the Corporation, in its absolute discretion, in the Share Interest Payment Election Notice. In connection with the Share Interest Payment Election, the Debenture Trustee shall: (i) accept delivery of the Shares from the Corporation and process the Shares in accordance with the Share Interest Payment Election Notice and this Article 10; (ii) accept bids with respect to, and consummate sales of, such Shares, each as the Corporation, in the form of a Written Direction of the Corporation, shall direct in its absolute discretion through the investment banks, brokers or dealers identified by the Corporation in the Share Interest Payment Election Notice; (iii) invest the proceeds of such sales on the direction of the Corporation in Government Obligations which mature prior to the applicable Interest Payment Date and use such proceeds to pay the Interest Obligation in respect of which the Share Interest Payment Election was made; (iv) deliver proceeds to holders of Debentures to satisfy all or a portion of the Corporation’s Interest Obligations, as directed by the Corporation in the Share Interest Payment Election Notice; and (v) perform any other action necessarily incidental thereto. The Share Interest Payment Election Notice shall direct the Debenture Trustee to solicit and accept only, and each Share Bid Request shall provide that the acceptance of any bid is conditional on the acceptance of, sufficient bids to result in aggregate proceeds from such issue and sale of Shares which, together with the cash payments to be made by the Corporation in lieu of fractional Shares, if any, equal the Interest Obligation on the Share Delivery Date.	

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 	(c)	The Share Interest Payment Election Notice shall provide for, and all bids shall be subject to, the right of the Corporation, by delivering written notice to the Debenture Trustee at any time prior to the consummation of such delivery and sale of the Shares on the Share Delivery Date, to withdraw the Share Interest Payment Election (which shall have the effect of withdrawing each related Share Bid Request), whereupon the Corporation shall be obliged to pay in cash the Interest Obligation in respect of which the Share Interest Payment Election Notice has been delivered.	
 	 	 	
 	(d)	Any sale of Shares pursuant to this Article 10 may be made to one or more persons whose bids are solicited, but all such sales with respect to a particular Share Interest Payment Election shall take place concurrently on the Share Delivery Date.	
 	 	 	
 	(e)	The amount received in cash by a holder of a Debenture in respect of the Interest Obligation or the entitlement thereto will not be affected by whether or not the Corporation elects to satisfy the Interest Obligation pursuant to a Share Interest Payment Election.	
 	 	 	
 	(f)	The Debenture Trustee shall inform the Corporation promptly following receipt of any bid or bids for Shares solicited pursuant to the Share Bid Requests. The Debenture Trustee shall accept such bid or bids as the Corporation, in its absolute discretion, shall direct by Written Direction of the Corporation, provided that the aggregate proceeds of all sales of Shares resulting from the acceptance of such bids, together with the amount of any cash payment by the Corporation in lieu of any fractional Shares, on the Share Delivery Date, must be equal to the related Share Interest Payment Election Amount in connection with any bids so accepted, the Corporation, the Debenture Trustee (if required by the Corporation in its absolute discretion) and the applicable bidders shall, not later than the Share Delivery Date, enter into Share Purchase Agreements and shall comply with all Applicable Securities Legislation, including the securities rules and regulations of any stock exchange on which the Debentures or Shares are then listed. The Corporation shall pay all fees and expenses in connection with the Share Purchase Agreements including the fees and commissions charged by the investment banks, brokers and dealers and the reasonable fees of the Debenture Trustee.	
 	 	 	
 	(g)	Provided that: (i) all conditions specified in each Share Purchase Agreement to the closing of all sales thereunder have been satisfied, other than the delivery of the Shares to be sold thereunder against payment of the purchase price thereof; and (ii) the purchasers under each Share Purchase Agreement shall be ready, willing and able to perform thereunder, in each case on the Share Delivery Date, the Corporation shall, on the Share Delivery Date, deliver to the Debenture Trustee the Shares to be sold on such date, an amount in cash equal to the value of any fractional Shares and an Officer’s Certificate to the effect that all conditions precedent to such sales, including those set out in this Indenture and in each Share Purchase Agreement, have been satisfied. Upon such deliveries, the Debenture Trustee shall consummate such sales on such Share Delivery Date on behalf of the Corporation by the delivery of the Shares to such purchasers against payment to the Debenture Trustee in immediately available funds of the purchase price therefore in an aggregate amount equal to the Share Interest Payment Election Amount (less any amount attributable to any fractional Shares), whereupon the sole right of a holder of Debentures to receive such holder’s portion of the Share Interest Payment Election Amount will be to receive same from the Debenture Trustee out of the proceeds of such sales of Shares plus any amount received by the Debenture Trustee from the Corporation attributable to any fractional Shares in full satisfaction of the Interest Obligation and the holder will have no further recourse to the Corporation in respect of the Interest Obligation.	

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 	(h)	The Debenture Trustee shall, on the Share Delivery Date, use the sale proceeds of the Shares (together with any cash received from the Corporation in lieu of any fractional Shares) to purchase, on the direction of the Corporation in writing, Government Obligations which mature prior to the applicable Interest Payment Date and which the Debenture Trustee is required to hold until maturity (the “ Share Proceeds Investment ”) and shall, on such date, deposit the balance, if any, of such sale proceeds in an account established by the Corporation (and which shall be maintained by and subject to the control of the Debenture Trustee) (the “ Interest Account ”) for such Debentures. The Debenture Trustee shall hold such Share Proceeds Investment (but not income earned thereon or therefrom) under its exclusive control as security for the benefit of the holders of the Debentures. At least one Business Day prior to the Interest Payment Date, the Debenture Trustee shall deposit amounts from the proceeds of the Share Proceeds Investment in the Interest Account to bring the balance of the Interest Account to the Share Interest Payment Election Amount. On the Interest Payment Date, the Debenture Trustee shall pay the funds held in the Interest Account to the holders of record of the Debentures on the Interest Payment Date (less any tax required to be deducted, if any) and, provided that there is no Event of Default, shall remit amounts, if any, in respect of income earned on the Share Proceeds Investment or otherwise in excess of the Share Interest Payment Election Amount to the Corporation.	
 	 	 	
 	(i)	Neither the making of a Share Payment Election nor the consummation of sales of Shares on a Share Delivery Date shall (i) result in the holders of the Debentures not being entitled to receive on the applicable Interest Payment Date cash in an aggregate amount equal to the Interest Obligation payable on such date or (ii) entitle or require such holders to receive any Shares in satisfaction of such Interest Obligation.	
 	 	 	
 	(j)	No fractional Shares will be issued in satisfaction of interest but in lieu thereof the Corporation will satisfy such fractional interest by a cash payment equal to the Current Market Price of such fractional interest (less any tax required to be deducted, if any). The Debenture Trustee shall be entitled to rely on the calculations of the Corporation.	
ARTICLE 11
SUCCESSORS

11.1	Restrictions on Amalgamation, Merger and Sale of Certain Assets, etc.	
Subject to the provisions of Article 12, the Corporation shall not, without the consent of holders of all the then outstanding Debentures, consolidate or amalgamate with or merge into any person or sell, convey, transfer or lease all or substantially all of the properties and assets of the Corporation to another person (other than one of the Corporation’s direct or indirect wholly-owned Subsidiaries), unless:

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 	(a)	prior to or contemporaneously with the consummation of such transaction the Corporation and the resulting, surviving, continuing or transferee person (the “ Successor ”) shall have executed such instruments and done such things as are necessary to ensure that upon the consummation of such transaction:	

 	(i)	the Successor has assumed all the obligations of the Corporation under this Indenture and the Debentures;	
 	 	 	
 	(ii)	the Successor is organized and existing under the laws of Canada or the United States or any province, territory or state, as the case may be, thereof;	
 	 	 	
 	(iii)	the Debentures will be valid and binding obligations of the Successor entitling the holders thereof, as against the Successor, to all the rights of Debentureholders under this Indenture;	
 	 	 	
 	(iv)	after giving effect to and immediately after the transaction, no Event of Default, and no event that, after notice or lapse of time, or both, would become an Event of Default, will occur; and	
 	 	 	
 	(v)	other conditions described in the Indenture that relate to such transaction are met, including the execution and delivery of any Officer’s Certificate under Section 15.7;	

 	(b)	such transaction, in the opinion of Counsel, shall be on such terms as to substantially preserve and not impair any of the rights and powers of the Debenture Trustee or of the Debentureholders hereunder; and	
 	 	 	
 	(c)	no condition or event shall exist as to the Corporation (at the time of such transaction) or the Successor (immediately after such transaction) and after giving full effect thereto or immediately after the Successor shall become liable to pay the principal monies, premium, if any, interest and other monies due or which may become due hereunder, which constitutes or would constitute an Event of Default hereunder.	
For purposes of the foregoing, the sale, conveyance, transfer or lease (in a single transaction or series of transactions) of the properties or assets one or more of the Subsidiaries of the Corporation (other than to the Corporation or another direct or indirect wholly-owned Subsidiary) which, if such properties or assets were directly owned by the Corporation, would constitute all or substantially all of the properties and assets of the Corporation on a consolidated basis, shall be deemed to be a sale, conveyance, transfer or lease of all or substantially all of the properties and assets of the Corporation.

11.2	Vesting of Powers in Successor	
Whenever the conditions of Section 11.1 shall have been duly observed and performed, any Successor formed by or resulting from such transaction shall succeed to, and be substituted for, and may exercise every right and power of the Corporation under this Indenture with the same effect as though the Successor had been named as the Corporation herein and thereafter, except in the case of a lease or other similar disposition of property to the Successor, the Corporation shall be relieved of all obligations and covenants under this Indenture and the Debentures forthwith upon the Corporation delivering to the Debenture Trustee an opinion of Counsel to the effect that the transaction shall not result in any material adverse tax consequences to the Corporation or the Successor. The Debenture Trustee will, at the expense of the Successor, execute any documents which it may be advised by Counsel are necessary or advisable for effecting or evidencing such release and discharge.

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ARTICLE 12
COMPULSORY ACQUISITION

12.1	Definitions	
In this Article:

 	(a)	“ Dissenting Debentureholders ” means a Debentureholder who does not accept an Offer referred to in Section 12.2 and includes any assignee of the Debenture of a Debentureholder to whom such an Offer is made, whether or not such assignee is recognized under this Indenture;	
 	 	 	
 	(b)	“ Offer ” means an offer to acquire outstanding Debentures which is a take-over bid for Debentures within the meaning of the Securities Act (Ontario) where, as of the date of the offer to acquire, the Debentures that are subject to the offer to acquire, together with the Offeror’s Debentures, constitute in the aggregate 20% or more of the outstanding principal amount of the Debentures;	
 	 	 	
 	(c)	“ offer to acquire ” includes an acceptance of an offer to sell;	
 	 	 	
 	(d)	“ Offeror ” means a person, or two or more persons acting jointly or in concert, who make an Offer to acquire Debentures;	
 	 	 	
 	(e)	“ Offeror’s Debentures ” means Debentures beneficially owned, or over which control or direction is exercised, on the date of an Offer by the Offeror, any Affiliate or Associate of the Offeror or any person or company acting jointly or in concert with the Offeror; and	
 	 	 	
 	(f)	“ Offeror’s Notice ” means the notice described in Section 12.3.	

12.2	Offer for Debentures	
If an Offer for all of the outstanding Debentures (other than Debentures held by or on behalf of the Offeror or an Affiliate or Associate of the Offeror) is made and:

 	(a)	within the time provided in the Offer for its acceptance or within 120 days after the date the Offer is made, whichever period is the shorter, the Offer is accepted by Debentureholders representing at least 90% of the outstanding principal amount of the Debentures, other than the Offeror’s Debentures;	
 	 	 	
 	(b)	the Offeror is bound to take up and pay for, or has taken up and paid for the Debentures of the Debentureholders who accepted the Offer; and	
 	 	 	
 	(c)	the Offeror complies with Sections 12.3 and 12.5,	
the Offeror is entitled to acquire, and the Dissenting Debentureholders are required to sell to the Offeror, the Debentures held by the Dissenting Debentureholders for the same consideration per Debenture payable or paid, as the case may be, under the Offer.

12.3	Offeror’s Notice to Dissenting Shareholders	
Where an Offeror is entitled to acquire Debentures held by Dissenting Debentureholders pursuant to Section 12.2 and the Offeror wishes to exercise such right, the Offeror shall send by registered mail within 30 days after the date of termination of the Offer a notice (the “ Offeror’s Notice ”) to each Dissenting Debentureholder stating that:

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 	(a)	Debentureholders holding at least 90% of the principal amount of all outstanding Debentures, other than Offeror’s Debentures, have accepted the Offer;	
 	 	 	
 	(b)	the Offeror is bound to take up and pay for, or has taken up and paid for, the Debentures of the Debentureholders who accepted the Offer;	
 	 	 	
 	(c)	Dissenting Debentureholders must transfer their respective Debentures to the Offeror on the terms on which the Offeror acquired the Debentures of the Debentureholders who accepted the Offer within 21 days after the date of the sending of the Offeror’s Notice; and	
 	 	 	
 	(d)	Dissenting Debentureholders must send their respective Debenture certificate(s) to the Debenture Trustee within 21 days after the date of the sending of the Offeror’s Notice.	

12.4	Delivery of Debenture Certificates	
A Dissenting Debentureholder to whom an Offeror’s Notice is sent pursuant to Section 12.3 shall, within 21 days after the sending of the Offeror’s Notice, send his or her Debenture certificate(s) to the Debenture Trustee duly endorsed for transfer.

12.5	Payment of Consideration to Debenture Trustee	
Within 21 days after the Offeror sends an Offeror’s Notice pursuant to Section 12.3, the Offeror shall pay or transfer to the Debenture Trustee, or to such other person as the Debenture Trustee may direct, the cash or other consideration that is payable to Dissenting Debentureholders pursuant to Section 12.2. The acquisition by the Offeror of all Debentures held by all Dissenting Debentureholders shall be effective as of the time of such payment or transfer.

12.6	Consideration to be held in Trust	
The Debenture Trustee, or the person directed by the Debenture Trustee, shall hold in trust for the Dissenting Debentureholders the cash or other consideration they or it receives under Section 12.5. The Debenture Trustee, or such persons, shall deposit cash in a separate account in a Canadian chartered bank, or other body corporate, any of whose deposits are insured by the Canada Deposit Insurance Corporation, and shall place other consideration in the custody of a Canadian chartered bank or such other body corporate.

12.7	Completion of Transfer of Debentures to Offeror	
Within 30 days after the date of the sending of an Offeror’s Notice pursuant to Section 12.3, the Debenture Trustee, if the Offeror has complied with Section 12.5, shall:

 	(a)	do all acts and things and execute and cause to be executed all instruments as may be necessary or desirable to cause the transfer of the Debentures of the Dissenting Debentureholders to the Offeror;	
 	 	 	
 	(b)	send to each Dissenting Debentureholder who has complied with Section 12.4 the consideration to which such Dissenting Debentureholder is entitled under this Article 12 net of applicable withholding taxes, if any; and	

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 	(c)	send to each Dissenting Debentureholder who has not complied with Section 12.4 a notice stating that:	

 	(i)	his or her Debentures have been transferred to the Offeror;	
 	 	 	
 	(ii)	the Debenture Trustee or some other person designated in such notice are holding in trust the consideration for such Debentures; and	
 	 	 	
 	(iii)	the Debenture Trustee, or such other person, will send the consideration to such Dissenting Debentureholder as soon as possible after receiving such Dissenting Debentureholder’s Debenture certificate(s) or such other documents as the Debenture Trustee or such other person may require in lieu thereof,	
and the Debenture Trustee is hereby appointed the agent and lawful attorney, and is granted attorney with respect to the Debentures, of the Dissenting Debentureholders for the purposes of giving effect to the foregoing provisions including, without limitation, the power and authority to execute such transfers as may be necessary or desirable in respect of the book-entry only registration system of the Depository.

12.8	Communication of Offer to the Corporation	
An Offeror may not make an Offer for Debentures unless, concurrent with the communication of the Offer to any Debentureholder, a copy of the Offer is provided to the Corporation, which will then provide a copy to the Debenture Trustee.
ARTICLE 13
 MEETINGS OF DEBENTUREHOLDERS

13.1	Right to Convene Meeting	
The Debenture Trustee or the Corporation may at any time and from time to time, and the Debenture Trustee shall, on receipt of a written request of the Corporation or a written request signed by the holders of not less than 25% of the principal amount of the Debentures then outstanding and upon receiving funding and being indemnified to its reasonable satisfaction by the Corporation or by the Debentureholders signing such request against the costs which may be incurred in connection with the calling and holding of such meeting, convene a meeting of the Debentureholders. In the event of the Debenture Trustee failing, within 30 days after receipt of any such request and such funding of indemnity, to give notice convening a meeting, the Corporation or such Debentureholders, as the case may be, may convene such meeting. Every such meeting shall be held in the city of Toronto or at such other place as may be approved or determined by the Corporation.

13.2	Notice of Meetings	

 	(a)	At least 21 days’ notice of any meeting shall be given to the Debentureholders in the manner provided in Section 14.2 and a copy of such notice shall be sent by post to the Debenture Trustee, unless the meeting has been called by it. Such notice shall state the time when and the place where the meeting is to be held and shall state briefly the general nature of the business to be transacted thereat and it shall not be necessary for any such notice to set out the terms of any resolution to be proposed or any of the provisions of this Article. The accidental omission to give notice of a meeting to any holder of Debentures shall not invalidate any resolution passed at any such meeting. A holder may waive notice of a meeting either before or after the meeting.	

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 	(b)	If the business to be transacted at any meeting by Extraordinary Resolution or otherwise, or any action to be taken or power exercised by instrument in writing under Section 13.15, especially affects the rights of holders of Debentures of one or more series in a manner or to an extent differing in any material way from that in or to which the rights of holders of Debentures of any other series are affected (determined as provided in Sections 13.2(c) and 13.2(d)), then:	

 	(i)	a reference to such fact, indicating each series of Debentures so especially affected (hereinafter referred to as the “ especially affected series ”) shall be made in the notice of such meeting, and in any such case the meeting shall be and be deemed to be and is herein referred to as a “ Serial Meeting ”; and	
 	 	 	
 	(ii)	the holders of Debentures of an especially affected series shall not be bound by any action taken at a Serial Meeting or by instrument in writing under Section 13.15 unless in addition to compliance with the other provisions of this Article 13:	

 	(A)	at such Serial Meeting: (I) there are Debentureholders present in person or by proxy and representing at least 25% in principal amount of the Debentures then outstanding of such series, subject to the provisions of this Article 13 as to quorum at adjourned meetings; and (II) the resolution is passed by the affirmative vote of the holders of more than 50% (or in the case of an Extraordinary Resolution not less than 66 2/3%) of the principal amount of the Debentures of such series then outstanding voted on the resolution; or	
 	 	 	
 	(B)	in the case of action taken or power exercised by instrument in writing under Section 13.15, such instrument is signed in one or more counterparts by the holders of not less than 66 2/3% in principal amount of the Debentures of such series then outstanding.	

 	(c)	Subject to Section 13.2(d), the determination as to whether any business to be transacted at a meeting of Debentureholders, or any action to be taken or power to be exercised by instrument in writing under Section 13.15, especially affects the rights of the Debentureholders of one or more series in a manner or to an extent differing in any material way from that in or to which it affects the rights of Debentureholders of any other series (and is therefore an especially affected series) shall be determined by an opinion of Counsel, which shall be binding on all Debentureholders, the Debenture Trustee and the Corporation for all purposes hereof.	

 	(d)	A proposal:	

 	(i)	to extend the maturity of Debentures of any particular series or to reduce the principal amount thereof; the rate of interest or any redemption premium thereon or to impair any conversion right thereof;	
 	 	 	
 	(ii)	to modify or terminate any covenant or agreement which by its terms is effective only so long as Debentures of a particular series are outstanding; or	
 	 	 	
 	(iii)	to reduce with respect to Debentureholders of any particular series any percentage stated in this Section 13.2 and Sections 13.4, 13.12 and 13.15; shall be deemed to especially affect the rights of the Debentureholders of such series in a manner differing in a material way from that in which it affects the rights of holders of Debentures of any other series, whether or not a similar extension, reduction, modification or termination is proposed with respect to Debentures of any or all other series.	

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13.3	Chairman	
Some person, who need not be a Debentureholder, nominated in writing by the Corporation (in case it convenes the meeting) or by the Debenture Trustee (in any other case) shall be chairman of the meeting and if no person is so nominated, or if the person so nominated is not present within 15 minutes from the time fixed for the holding of the meeting, a majority of the Debentureholders present in person or by proxy shall choose some person present to be chairman.

13.4	Quorum	
Subject to the provisions of Section 13.12, at any meeting of the Debentureholders a quorum shall consist of Debentureholders present in person or by proxy and representing at least 25% in principal amount of the outstanding Debentures and, if the meeting is a Serial Meeting, at least 25% of the Debentures then outstanding of each especially affected series. If a quorum of the Debentureholders shall not be present within 30 minutes from the time fixed for holding any meeting, the meeting, if summoned by the Debentureholders or pursuant to a request of the Debentureholders, shall be dissolved, but in any other case the meeting shall be adjourned to the same day in the next week (unless such day is not a Business Day in which case it shall be adjourned to the next following Business Day thereafter) at the same time and place and no notice shall be required to be given to any party in respect of such adjourned meeting. At the adjourned meeting, the Debentureholders present in person or by proxy shall, subject to the provisions of Section 13.12, constitute a quorum and may transact the business for which the meeting was originally convened notwithstanding that they may not represent 25% of the principal amount of the outstanding Debentures or of the Debentures then outstanding of each especially affected series. Any business may be brought before or dealt with at an adjourned meeting which might have been brought before or dealt with at the original meeting in accordance with the notice calling the same. No business shall be transacted at any meeting unless the required quorum be present at the commencement of business.

13.5	Power to Adjourn	
The chairman of any meeting at which a quorum of the Debentureholders is present may, with the consent of the holders of a majority in principal amount of the Debentures represented thereat, adjourn any such meeting and no notice of such adjournment need be given except such notice, if any, as the meeting may prescribe.

13.6	Show of Hands	
Every question submitted to a meeting shall, subject to Section 13.7, be decided in the first place by a majority of the votes given on a show of hands except that votes on Extraordinary Resolutions shall be given in the manner hereinafter provided. At any such meeting, unless a poll is duly demanded as herein provided, a declaration by the chairman that a resolution has been carried or carried unanimously or by a particular majority or lost or not carried by a particular majority shall be conclusive evidence of the fact. The chairman of any meeting shall be entitled, both on a show of hands and on a poll, to vote in respect of the Debentures, if any, held by him.

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13.7	Poll	
On every Extraordinary Resolution, and on any other question or resolution submitted to a meeting when demanded by the chairman or by one or more Debentureholders or proxies for Debentureholders, a poll shall be taken in such manner and either at once or after an adjournment as the chairman shall direct. Questions or resolutions other than Extraordinary Resolutions shall, if a poll be taken, be decided or approved (as the case may be) by the votes of the holders of a majority in principal amount of the Debentures and of each especially affected series, if applicable, represented at the meeting and voted on the poll.

13.8	Voting	
On a show of hands every person who is present and entitled to vote, whether as a Debentureholder or as proxy for one or more Debentureholders or both, shall have one vote. On a poll each Debentureholder present in person or represented by a proxy duly appointed by an instrument in writing shall be entitled to one vote in respect of each $1,000 principal amount of Debentures of which he shall then be the holder. A proxy need not be a Debentureholder. In the case of joint holders of a Debenture, any one of them present in person or by proxy at the meeting may vote in the absence of the other or others but in case more than one of them be present in person or by proxy, they shall vote together in respect of the Debentures of which they are joint holders.
In the case of a Global Debenture, the Depository may appoint or cause to be appointed a Person or Persons as proxies and shall designate the number of votes entitled to each such Person, and each such Person shall be entitled to be present at any meeting of Debentureholders and shall be the Persons entitled to vote at such meeting in accordance with the number of votes set out in the Depository’s designation.

13.9	Proxies	
A Debentureholder may be present and vote at any meeting of Debentureholders by an authorized representative. The Corporation (in case it convenes the meeting) or the Debenture Trustee (in any other case) for the purpose of enabling the Debentureholders to be present and vote at any meeting without producing their Debentures, and of enabling them to be present and vote at any such meeting by proxy and of lodging instruments appointing such proxies at some place other than the place where the meeting is to be held, may from time to time make and vary such regulations as it shall think fit providing for and governing any or all of the following matters:

 	(a)	voting by proxy by Debentureholders, the form of the instrument appointing a proxy, which shall be in writing, and the manner in which the same shall be executed and the production of the authority of any person signing on behalf of a Debentureholder;	
 	 	 	
 	(b)	the deposit of instruments appointing proxies at such place as the Debenture Trustee, the Corporation or the Debentureholder convening the meeting, as the case may be, may, in the notice convening the meeting, direct and the time, if any, before the holding of the meeting or any adjournment thereof by which the same must be deposited; and	
 	 	 	
 	(c)	the deposit of instruments appointing proxies at some approved place or places other than the place at which the meeting is to be held and enabling particulars of such instruments appointing proxies to be mailed, faxed, or sent by other electronic means before the meeting to the Corporation or to the Debenture Trustee at the place where the same is to be held and for the voting of proxies so deposited as though the instruments themselves were produced at the meeting.	

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Any regulations so made shall be binding and effective and the votes given in accordance therewith shall be valid and shall be counted. Save as such regulations may provide, the only persons who shall be recognized at any meeting as the holders of any Debentures, or as entitled to vote or be present at the meeting in respect thereof, shall be Debentureholders and persons whom Debentureholders have by instrument in writing duly appointed as their proxies.

13.10	Persons Entitled to Attend Meetings	
The Corporation, each other entity of the Primero Group and the Debenture Trustee, by their respective officers, directors, the Auditors of the Corporation and the legal advisers of the Corporation and the Debenture Trustee may attend any meeting of the Debentureholders, but shall have no vote as such.

13.11	Powers Exercisable by Extraordinary Resolution	
In addition to the powers conferred upon them by any other provisions of this Indenture or by law, a meeting of the Debentureholders shall have the following powers exercisable from time to time by Extraordinary Resolution, subject in the case of the matters in paragraphs (a), (b), (c), (d) and (l) to receipt of the prior approval of the TSX (if applicable) or such other exchange on which the Debentures are then listed:

 	(a)	power to authorize the Debenture Trustee to grant extensions of time for payment of any principal, premium or interest on the Debentures, whether or not the principal, premium, or interest, the payment of which is extended, is at the time due or overdue;	
 	 	 	
 	(b)	power to sanction any modification, abrogation, alteration, compromise or arrangement of the rights of the Debentureholders or the Debenture Trustee against the Corporation, or against its property, whether such rights arise under this Indenture or the Debentures or otherwise provided that such sanctioned actions are not prejudicial to the Debenture Trustee;	
 	 	 	
 	(c)	power to assent to any modification of or change in or addition to or omission from the provisions contained in this Indenture or any Debenture which shall be agreed to by the Corporation and to authorize the Debenture Trustee to concur in and execute any indenture supplemental hereto embodying any modification, change, addition or omission;	
 	 	 	
 	(d)	power to sanction any scheme for the reconstruction, reorganization or recapitalization of the Corporation or for the consolidation, amalgamation, arrangement, combination or merger of the Corporation with any other person or for the sale, leasing, transfer or other disposition of all or substantially all of the undertaking, property and assets of the Corporation or any part thereof, provided that no such sanction shall be necessary in respect of any such transaction if the provisions of Section 11.1 shall have been complied with;	
 	 	 	
 	(e)	power to direct or authorize the Debenture Trustee to exercise any power, right, remedy or authority given to it by this Indenture in any manner specified in any such Extraordinary Resolution or to refrain from exercising any such power, right, remedy or authority;	
 	 	 	
 	(f)	power to waive, and direct the Debenture Trustee to waive, any default hereunder and/or cancel any declaration made by the Debenture Trustee pursuant to Section 8.1 either unconditionally or upon any condition specified in such Extraordinary Resolution;	

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 	(g)	power to restrain any Debentureholder from taking or instituting any suit, action or proceeding for the purpose of enforcing payment of the principal, premium or interest on the Debentures, or for the execution of any trust or power hereunder;	
 	 	 	
 	(h)	power to direct any Debentureholder who, as such, has brought any action, suit or proceeding to stay or discontinue or otherwise deal with the same upon payment, if the taking of such suit, action or proceeding shall have been permitted by Section 8.5, of the costs, charges and expenses reasonably and properly incurred by such Debentureholder in connection therewith;	
 	 	 	
 	(i)	power to assent to any compromise or arrangement with any creditor or creditors or any class or classes of creditors, whether secured or otherwise, and with holders of any Shares or other securities of the Corporation;	
 	 	 	
 	(j)	power to appoint a committee with power and authority (subject to such limitations, if any, as may be prescribed in the resolution) to exercise, and to direct the Debenture Trustee to exercise, on behalf of the Debentureholders, such of the powers of the Debentureholders as are exercisable by Extraordinary Resolution or other resolution as shall be included in the resolution appointing the committee. The resolution making such appointment may provide for payment of the expenses and disbursements of and compensation to such committee. Such committee shall consist of such number of persons as shall be prescribed in the resolution appointing it and the members need not be themselves Debentureholders. Every such committee may elect its chairman and may make regulations respecting its quorum, the calling of its meetings, the filling of vacancies occurring in its number and its procedure generally. Such regulations may provide that the committee may act at a meeting at which a quorum is present or may act by minutes signed by the number of members thereof necessary to constitute a quorum. All acts of any such committee within the authority delegated to it shall be binding upon all Debentureholders. Neither the committee nor any member thereof shall be liable for any loss arising from or in connection with any action taken or omitted to be taken by them in good faith;	
 	 	 	
 	(k)	power to remove the Debenture Trustee from office and to appoint a new Debenture Trustee or Debenture Trustees provided that no such removal shall be effective unless and until a new Debenture Trustee or Debenture Trustees shall have become bound by this Indenture;	
 	 	 	
 	(l)	power to sanction the exchange of the Debentures for or the conversion thereof into Shares, bonds, debentures or other securities or obligations of the Corporation or of any other person formed or to be formed;	
 	 	 	
 	(m)	power to authorize the distribution in specie of securities received pursuant to a transaction authorized under the provisions of Section 13.11(l); and	
 	 	 	
 	(n)	power to amend, alter or repeal any Extraordinary Resolution previously passed or sanctioned by the Debentureholders or by any committee appointed pursuant to Section 13.11(j).	
Notwithstanding the foregoing provisions of this Section 13.11, none of such provisions shall in any manner allow or permit any amendment, modification, abrogation or addition to the provisions of Article 5 which could reasonably be expected to detrimentally affect the rights, remedies or recourse of the priority of the Senior Creditors.

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13.12	Meaning of “ Extraordinary Resolution ”	

 	(a)	The expression “ Extraordinary Resolution ” when used in this Indenture means, subject as hereinafter in this Article provided, a resolution proposed to be passed as an Extraordinary Resolution at a meeting of Debentureholders (including an adjourned meeting) duly convened for the purpose and held in accordance with the provisions of this Article at which the holders of not less than 25% of the principal amount of the Debentures then outstanding, and if the meeting is a Serial Meeting, at which holders of not less than 25% of the principal amount of the Debentures then outstanding of each especially affected series, are present in person or by proxy and passed by the favourable votes of the holders of not less than 66 2/3% of the principal amount of the Debentures, and if the meeting is a Serial Meeting by the affirmative vote of the holders of not less than 66 2/3% of each especially affected series, in each case present or represented by proxy at the meeting and voted upon on a poll on such resolution.	
 	 	 	
 	(b)	If, at any such meeting, the holders of not less than 25% of the principal amount of the Debentures then outstanding and, if the meeting is a Serial Meeting, 25% of the principal amount of the Debentures then outstanding of each especially affected series, in each case are not present in person or by proxy within 30 minutes after the time appointed for the meeting, then the meeting, if convened by or on the requisition of Debentureholders, shall be dissolved but in any other case it shall stand adjourned to such date, being not less than 14 days nor more than 60 days later, and to such place and time as may be appointed by the chairman. Not less than ten days’ notice shall be given of the time and place of such adjourned meeting in the manner provided in Section 14.2. Such notice shall state that at the adjourned meeting the Debentureholders present in person or by proxy shall form a quorum. At the adjourned meeting the Debentureholders present in person or by proxy shall form a quorum and may transact the business for which the meeting was originally convened and a resolution proposed at such adjourned meeting and passed thereat by the affirmative vote of holders of not less than 66 2/3% of the principal amount of the Debentures and, if the meeting is a Serial Meeting, by the affirmative vote of the holders of not less than 66 2/3% of the principal amount of the Debentures of each especially affected series, in each case present or represented by proxy at the meeting and voted upon on a poll shall be an Extraordinary Resolution within the meaning of this Indenture, notwithstanding that the holders of not less than 25% in principal amount of the Debentures then outstanding, and if the meeting is a Serial Meeting, holders of not less than 25% of the principal amount of the Debentures then outstanding of each especially affected series, are not present in person or by proxy at such adjourned meeting.	
 	 	 	
 	(c)	Votes on an Extraordinary Resolution shall always be given on a poll and no demand for a poll on an Extraordinary Resolution shall be necessary.	

13.13	Powers Cumulative	
Any one or more of the powers in this Indenture stated to be exercisable by the Debentureholders by Extraordinary Resolution or otherwise may be exercised from time to time and the exercise of any one or more of such powers from time to time shall not be deemed to exhaust the rights of the Debentureholders to exercise the same or any other such power or powers thereafter from time to time.

13.14	Minutes	
Minutes of all resolutions and proceedings at every meeting as aforesaid shall be made and duly entered in books to be from time to time provided for that purpose by the Debenture Trustee at the expense of the Corporation, and any such minutes as aforesaid, if signed by the chairman of the meeting at which such resolutions were passed or proceedings had, or by the chairman of the next succeeding meeting of the Debentureholders, shall be prima facie evidence of the matters therein stated and, until the contrary is proved, every such meeting, in respect of the proceedings of which minutes shall have been made, shall be deemed to have been duly held and convened, and all resolutions passed thereat or proceedings taken thereat to have been duly passed and taken.

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13.15	Instruments in Writing	
All actions which may be taken and all powers that may be exercised by the Debentureholders at a meeting held as hereinbefore in this Article provided may also be taken and exercised by the holders of 66 2/3% of the principal amount of all the outstanding Debentures and, if the meeting at which such actions might be taken would be a Serial Meeting, by the holders of 66 2/3% of the principal amount of the Debentures then outstanding of each especially affected series, by an instrument in writing signed in one or more counterparts and the expression “ Extraordinary Resolution ” when used in this Indenture and references to other resolutions of the Debentureholders in this Indenture shall include an instrument so signed.

13.16	Binding Effect of Resolutions	
Every resolution and every Extraordinary Resolution passed in accordance with the provisions of this Article at a meeting of Debentureholders shall be binding upon all the Debentureholders, whether present at or absent from such meeting, and every instrument in writing signed by Debentureholders in accordance with Section 13.15 shall be binding upon all the Debentureholders, whether signatories thereto or not, and each and every Debentureholder and the Debenture Trustee (subject to the provisions for its indemnity herein contained) shall be bound to give effect accordingly to every such resolution, Extraordinary Resolution and instrument in writing.

13.17	Evidence of Rights of Debentureholders	

 	(a)	Any request, direction, notice, consent or other instrument which this Indenture may require or permit to be signed or executed by the Debentureholders may be in any number of concurrent instruments of similar tenor signed or executed by such Debentureholders.	
 	 	 	
 	(b)	The Debenture Trustee may, in its discretion, require proof of execution in cases where it deems proof desirable and may accept such proof as it shall consider proper.	

13.18	Concerning Serial Meetings	
If in the opinion of Counsel any business to be transacted at any meeting, or any action to be taken or power to be exercised by instrument in writing under Section 13.15, does not adversely affect the rights of the holders of Debentures of one or more series, the provisions of this Article 13 shall apply as if the Debentures of such series were not outstanding and no notice of any such meeting need be given to the holders of Debentures of such series. Without limiting the generality of the foregoing, a proposal to modify or terminate any covenant or agreement which is effective only so long as Debentures of a particular series are outstanding shall be deemed not to adversely affect the rights of the holders of Debentures of any other series.

13.19	Record Dates	
If the Corporation shall solicit from the holders of Debentures any request, demand, authorization, direction, notice, consent, waiver or other action, the Corporation may, at its option, by or pursuant to a Written Direction of the Corporation, fix in advance a record date for the determination of such holders entitled to provide such request, demand, authorization, direction, notice, consent, waiver or other action, but the Corporation shall not have the obligation to do so. Any such record date shall be the record date specified in or pursuant to such Written Direction of the Corporation.

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If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other action may be given before or after such record date, but only the holders of record at the close of business on such record date shall be deemed to be holders for the purposes of determining whether holders of the requisite proportion of Debentures then outstanding have authorized or agreed or consented to such request, demand, authorization, notice, consent, waiver or other act, and for this purpose the Debentures then outstanding shall be computed as of such record date.
ARTICLE 14
NOTICES

14.1	Notice to the Corporation	
Any notice to the Corporation under the provisions of this Indenture shall be valid and effective if delivered in writing to the Corporation at 79 Wellington Street West, TD South Tower, Suite 2100, P.O. Box 139, Toronto-Dominion Centre, Toronto, Ontario, Canada, M5K 1H1 Attention: Chief Executive Officer, Facsimile No.: Fax: (416) 814-3170, Email: legal@primeromining.com and copies delivered to Fasken Martineau DuMoulin LLP, 333 Bay Street, Suite 2400, Toronto, Ontario, M5H 2T6, Attention: John Sabetti, Facsimile No.: (416) 364-7813, Email: jsabetti@fasken.com or if given by registered letter, postage prepaid, to such offices and so addressed and if mailed, shall be deemed to have been effectively given three days following the mailing thereof. The Corporation may from time to time notify the Debenture Trustee in writing of a change of address which thereafter, until changed by like notice, shall be the address of the Corporation for all purposes of this Indenture.
If by reason of any interruption of mail service, actual or threatened, any notice to be given to the Corporation would reasonably be unlikely to reach its destination by the time notice by mail is deemed to have been given pursuant to this Section 14.1, such notice shall be valid and effective only if delivered at the appropriate address in accordance with this Section 14.1 .

14.2	Notice to Debentureholders	
All notices to be given hereunder with respect to the Debentures shall be deemed to be validly given to the holders thereof if sent by first class mail, postage prepaid, by letter or circular addressed to such holders at their post office addresses appearing in any of the registers hereinbefore mentioned and shall be deemed to have been effectively given three days following the day of mailing. Accidental error or omission in giving notice or accidental failure to mail notice to any Debentureholder or the inability of the Corporation to give or mail any notice due to any event beyond the reasonable control of the Corporation shall not invalidate any action or proceeding founded thereon.
If any notice given in accordance with the foregoing paragraph would be unlikely to reach the Debentureholders to whom it is addressed in the ordinary course of post by reason of an interruption in mail service, whether at the place of dispatch or receipt or both, the Corporation shall give such notice by publication at least once in the city of Toronto, Ontario (or in such of those cities as, in the opinion of the Debenture Trustee, is sufficient in the particular circumstances), each such publication to be made in a daily newspaper of general circulation in the designated city.
Any notice given to Debentureholders by publication shall be deemed to have been given on the day on which publication shall have been effected at least once in each of the newspapers in which publication was required.

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All notices with respect to any Debenture may be given to whichever one of the holders thereof (if more than one) is named first in the registers hereinbefore mentioned, and any notice so given shall be sufficient notice to all holders of any persons having an interest in such Debenture.

14.3	Notice to Debenture Trustee	
Any notice to the Debenture Trustee under the provisions of this Indenture shall be valid and effective if delivered to the Debenture Trustee at its offices in the city of Toronto at 100 University Avenue, 11th Floor, Toronto, Ontario M5J 2Y1, Attention: Manager, Corporate Trust or if sent by facsimile to facsimile number: (416) 981-9777, Attention: Manager, Corporate Trust, or if given by registered letter, postage prepaid, to such offices and so addressed and, if mailed, shall be deemed to have been effectively given three days following the mailing thereof.

14.4	Mail Service Interruption	
If by reason of any interruption of mail service, actual or threatened, any notice to be given to the Debenture Trustee would reasonably be unlikely to reach its destination by the time notice by mail is deemed to have been given pursuant to Section 14.3 such notice shall be valid and effective only if delivered at the appropriate address in accordance with Section 14.3.
ARTICLE 15
 CONCERNING THE DEBENTURE TRUSTEE

15.1	Trust Indenture Legislation	

 	(a)	In this Indenture, the term “ Indenture Legislation ” means the provisions, if any, of the Business Corporations Act (British Columbia) and any other statute of Canada or a province thereof, and of the regulations under any such statute, relating to trust indentures and to the rights, duties and obligations of trustees under trust indentures and of corporations issuing debt obligations under trust indentures, to the extent that such provisions are at the time in force and applicable to this Indenture or the Corporation or the Debenture Trustee.	
 	 	 	
 	(b)	If and to the extent that any provision of this Indenture limits, qualifies or conflicts with a mandatory requirement of Indenture Legislation, such mandatory requirement shall prevail.	
 	 	 	
 	(c)	At all times in relation to this Indenture and any action to be taken hereunder, the Corporation and the Debenture Trustee each shall observe and comply with Indenture Legislation and the Corporation, the Debenture Trustee and each Debentureholder shall be entitled to the benefits of Indenture Legislation.	

15.2	No Conflict of Interest	
The Debenture Trustee represents to the Corporation that at the date of execution and delivery by it of this Indenture there exists no material conflict of interest in the role of the Debenture Trustee as a fiduciary hereunder but if, notwithstanding the provisions of this Section 15.2, such a material conflict of interest exists, or hereafter arises, the validity and enforceability of this Indenture, and the Debentures issued hereunder, shall not be affected in any manner whatsoever by reason only that such material conflict of interest exists or arises but the Debenture Trustee shall, within 30 days after ascertaining that it has a material conflict of interest, either eliminate such material conflict of interest or resign in the manner and with the effect specified in Section 15.3 .

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15.3	Replacement of Debenture Trustee	
The Debenture Trustee may resign its trust and be discharged from all further duties and liabilities hereunder by giving to the Corporation 60 days’ notice in writing or such shorter notice as the Corporation may accept as sufficient. If at any time a material conflict of interest exists in the Debenture Trustee’s role as a fiduciary hereunder, the Debenture Trustee shall, within 30 days after ascertaining that such a material conflict of interest exists, either eliminate such material conflict of interest or resign in the manner and with the effect specified in this Section 15.3. The validity and enforceability of this Indenture and of the Debentures issued hereunder shall not be affected in any manner whatsoever by reason only that such a material conflict of interest exists or existed. In the event of the Debenture Trustee resigning or being removed or being dissolved, becoming bankrupt, going into liquidation or otherwise becoming incapable of acting hereunder, the Corporation shall forthwith appoint a new Debenture Trustee unless a new Debenture Trustee has already been appointed by the Debentureholders. Failing such appointment by the Corporation, the retiring Debenture Trustee or any Debentureholder may apply to a Judge of the Ontario Superior Court of Justice, on such notice as such Judge may direct at the Corporation’s expense, for the appointment of a new Debenture Trustee but any new Debenture Trustee so appointed by the Corporation or by the Court shall be subject to removal as aforesaid by the Debentureholders and the appointment of such new Debenture Trustee shall be effective only upon such new Debenture Trustee becoming bound by this Indenture. Any new Debenture Trustee appointed under any provision of this Section 15.3 shall be a corporation authorized to carry on the business of a trust company in all of the provinces and territories of Canada, which for certainty includes in accordance with the Indenture Legislation. On any new appointment the new Debenture Trustee shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named herein as Debenture Trustee.
Any company into which the Debenture Trustee may be merged or, with or to which it may be consolidated, amalgamated or sold, or any company resulting from any merger, consolidation, sale or amalgamation to which the Debenture Trustee shall be a party, or any company succeeding to the corporate trust business of the Debenture Trustee shall be the successor Debenture Trustee under this Indenture without the execution of any instrument or any further act. Nevertheless, upon the written request of the successor Debenture Trustee or of the Corporation, the Debenture Trustee ceasing to act shall execute and deliver an instrument assigning and transferring to such successor Debenture Trustee, upon the terms herein expressed, all the rights, powers and trusts of the Debenture Trustee so ceasing to act, and shall duly assign, transfer and deliver all property and money held by such Debenture Trustee to the successor Debenture Trustee so appointed in its place. Should any deed, conveyance or instrument in writing from the Corporation be required by any new Debenture Trustee for more fully and certainly vesting in and confirming to it such estates, properties, rights, powers and trusts, then any and all such deeds, conveyances and instruments in writing shall on request of said new Debenture Trustee, be made, executed, acknowledged and delivered by the Corporation and/or the Debenture Trustee that is ceasing to act.

15.4	Duties of Debenture Trustee	
In the exercise of the rights, duties and obligations prescribed or conferred by the terms of this Indenture, the Debenture Trustee shall act honestly and in good faith and in a commercially reasonable manner and exercise that power with the degree of care, diligence and skill of a reasonably prudent trustee and with a view to the best interests of the Debentureholders.

15.5	Reliance Upon Declarations, Opinions, etc.	
In the exercise of its rights, duties and obligations hereunder the Debenture Trustee may, if acting in good faith, act and rely, as to the truth of the statements and accuracy of the opinions expressed therein, upon statutory declarations, opinions, reports or certificates furnished pursuant to any covenant, condition or requirement of this Indenture or required by the Debenture Trustee to be furnished to it in the exercise of its rights and duties hereunder, if the Debenture Trustee examines such statutory declarations, opinions, reports or certificates and determines that they comply with Section 15.6, if applicable, and with any other applicable requirements of this Indenture and the Indenture Legislation. The Debenture Trustee may nevertheless, in its discretion, require further proof in cases where it deems further proof desirable. Without restricting the foregoing, the Debenture Trustee may act and rely on an opinion of Counsel satisfactory to the Debenture Trustee notwithstanding that it is delivered by a solicitor or firm which acts as solicitors for the Corporation.

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15.6	Evidence and Authority to Debenture Trustee, Opinions, etc .	
The Corporation shall furnish to the Debenture Trustee evidence of compliance with the conditions precedent provided for in this Indenture relating to any action or step required or permitted to be taken by the Corporation or the Debenture Trustee under this Indenture or as a result of any obligation imposed under this Indenture or the Indenture Legislation, including without limitation, the certification and delivery of Debentures hereunder, the satisfaction and discharge of this Indenture and the taking of any other action to be taken by the Debenture Trustee at the request of or on the application of the Corporation, forthwith if and when (a) such evidence is required by any other Section of this Indenture to be furnished to the Debenture Trustee in accordance with the terms of this Section 15.6, or (b) the Debenture Trustee, in the exercise of its rights and duties under this Indenture, gives the Corporation written notice requiring it to furnish such evidence in relation to any particular action or obligation specified in such notice.
Such evidence shall consist of:

 	(a)	a certificate made by any one officer or director of the Corporation, stating that any such condition precedent has been complied with in accordance with the terms of this Indenture;	
 	 	 	
 	(b)	in the case of any such condition precedent compliance with which is subject to review or examination by legal counsel, an opinion of Counsel that such condition precedent has been complied with in accordance with the terms of this Indenture; and	
 	 	 	
 	(c)	in the case of any such condition precedent compliance with which is subject to review or examination by auditors or accountants, an opinion or report of the auditors of the Corporation whom the Debenture Trustee for such purposes hereby approves, that such condition precedent has been complied with in accordance with the terms of this Indenture.	
Whenever such evidence relates to a matter other than the certificates and delivery of Debentures and the satisfaction and discharge of this Indenture, and except as otherwise specifically provided herein, such evidence may consist of a report or opinion of any solicitor, auditor, accountant, engineer or appraiser or any other person whose qualifications give authority to a statement made by him, provided that if such report or opinion is furnished by a director or officer or employee of the Corporation, it shall be in the form of a statutory declaration. Such evidence shall be, so far as appropriate, in accordance with the immediately preceding paragraph of this Section 15.6.
Each statutory declaration, certificate, opinion or report with respect to compliance with a condition precedent provided for in the Indenture shall include (a) a statement by the person giving the evidence that he has read and is familiar with those provisions of this Indenture relating to the condition precedent in question, (b) a brief statement of the nature and scope of the examination or investigation upon which the statements or opinions contained in such evidence are based, (c) a statement that, in the belief of the person giving such evidence, he has made such examination or investigation as is necessary to enable him to make the statements or give the opinions contained or expressed therein, and (d) a statement whether in the opinion of such person the conditions precedent in question have been complied with or satisfied; and shall otherwise satisfy any applicable requirement under Indenture Legislation.

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The Corporation shall furnish to the Debenture Trustee at any time if the Debenture Trustee reasonably so requires, an Officer’s Certificate that the Corporation has complied with all covenants, conditions or other requirements contained in this Indenture, the non-compliance with which would, with the giving of notice or the lapse of time, or both, or otherwise, constitute an Event of Default, or if such is not the case, specifying the covenant, condition or other requirement which has not been complied with and giving particulars of such non-compliance. The Corporation shall, whenever the Debenture Trustee so requires, furnish the Debenture Trustee with evidence by way of statutory declaration, opinion, report or certificate as specified by the Debenture Trustee as to any action or step required or permitted to be taken by the Corporation or as a result of any obligation imposed by this Indenture or the Indenture Legislation, such evidence satisfying the requirements of Indenture Legislation, as applicable.

15.7	Officer’s Certificates Evidence	
Except as otherwise specifically provided or prescribed by this Indenture, whenever in the administration of the provisions of this Indenture the Debenture Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or omitting any action hereunder, the Debenture Trustee, if acting in good faith, may act and rely upon an Officer’s Certificate.

15.8	Experts, Advisers and Agents	
The Debenture Trustee may:

 	(a)	employ or retain and act and rely on the opinion or advice of or information obtained from any solicitor, auditor, valuator, engineer, surveyor, appraiser or other expert or advisor, whether obtained by the Debenture Trustee or by the Corporation, or otherwise, and shall not be liable for acting, or refusing to act, in good faith on any such opinion or advice and may pay proper and reasonable compensation for all such legal and other advice or assistance as aforesaid; and	
 	 	 	
 	(b)	employ such agents and other assistants as it may reasonably require for the proper discharge of its duties hereunder, and may pay reasonable remuneration for all services performed for it (and shall be entitled to receive reasonable remuneration for all services performed by it) in the discharge of the trusts hereof and compensation for all reasonable disbursements, costs and expenses made or incurred by it in the discharge of its duties hereunder and in the management of the trusts hereof and any solicitors employed or consulted by the Debenture Trustee may, but need not be, solicitors for the Corporation.	

15.9	Debenture Trustee May Deal in Debentures	
Subject to Sections 15.2 and 15.4, the Debenture Trustee may, in its personal or other capacity, buy, sell, lend upon and deal in the Debentures and generally contract and enter into financial transactions with the Corporation or otherwise, without being liable to account for any profits made thereby.

15.10	Investment of Monies Held by Debenture Trustee	
Unless otherwise provided in this Indenture, any monies held by the Debenture Trustee, which, under the trusts of this Indenture, may or ought to be invested or which may be on deposit with the Debenture Trustee or which may be in the hands of the Debenture Trustee, may be invested and reinvested in the name or under the control of the Debenture Trustee in securities in which, under the laws of the Province of Ontario, trustees are authorized to invest trust monies, provided that such securities are expressed to mature within two years or such shorter period selected to facilitate any payments expected to be made under this Indenture, after their purchase by the Debenture Trustee, and unless and until the Debenture Trustee shall have declared the principal of and interest on the Debentures to be due and payable, the Debenture Trustee shall so invest such monies upon Written Direction of the Corporation given in a reasonably timely manner. Any Written Direction must be received prior to 11:00 am (Toronto time) on a Business Day. If received after 11:00 a.m. (Toronto time), the Written Direction will be deemed received on the next following Business Day. Pending the investment of any monies as hereinbefore provided, such monies may be deposited in a segregated interest-bearing account the name of the Debenture Trustee in any chartered bank of Canada or, with the consent of the Corporation, in the deposit department of the Debenture Trustee or any other loan or trust company authorized to accept deposits under the laws of Canada or any province or territory thereof at the rate of interest, if any, then current on similar deposits. The Corporation shall receive such chartered bank’s or the Debenture Trustee’s (as the case may be) prevailing rate for all monies held by it, as may change from time to time.

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Unless and until the Debenture Trustee shall have declared the principal of and interest on the Debentures to be due and payable, the Debenture Trustee shall pay over to the Corporation all interest received by the Debenture Trustee in respect of any investments or deposits made pursuant to the provisions of this Section.

15.11	Debenture Trustee Not Ordinarily Bound	
Except as provided in Section 8.2 and as otherwise specifically provided herein, the Debenture Trustee shall not, subject to Section 15.4, be bound to give notice to any person of the execution hereof, nor to do, observe or perform or see to the observance or performance by the Corporation of any of the obligations herein imposed upon the Corporation or of the covenants on the part of the Corporation herein contained, nor in any way to supervise or interfere with the conduct of the Corporation’s business, unless the Debenture Trustee shall have been required to do so in writing by the holders of not less than 25% of the aggregate principal amount of the Debentures then outstanding or by any Extraordinary Resolution of the Debentureholders passed in accordance with the provisions contained in Article 13, and then only after it shall have been funded and indemnified to its satisfaction against all actions, proceedings, claims and demands to which it may render itself liable and all costs, charges, damages and expenses which it may incur by so doing.

15.12	Debenture Trustee Not Required to Give Security	
The Debenture Trustee shall not be required to give any bond or security in respect of the execution of the trusts and powers of this Indenture or otherwise in respect of the premises.

15.13	Debenture Trustee Not Bound to Act on the Corporation’s Request	
Except as in this Indenture otherwise specifically provided, the Debenture Trustee shall not be bound to act in accordance with any direction or request of the Corporation until a duly authenticated copy of the instrument or resolution containing such direction or request shall have been delivered to the Debenture Trustee, and the Debenture Trustee shall be empowered to act upon any such copy purporting to be authenticated and believed by the Debenture Trustee to be genuine.

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15.14	Debenture Trustee Protected in Acting	
The Debenture Trustee may act and rely, and shall be protected in acting and relying absolutely, upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, letter, facsimile transmission, directions or other paper document believed in good faith by it to be genuine and to have been signed, sent or presented by or on behalf of the proper party or parties. The Debenture Trustee shall be protected in acting and relying upon any written notice, request, waiver, consent, certificate, receipt, statutory declaration, affidavit or other paper or document furnished to it, not only as to its due execution and the validity and the effectiveness of its provisions but also as to the truth and acceptability of any information therein contained which it in good faith believes to be genuine and what it purports to be.

15.15	Conditions Precedent to Debenture Trustee’s Obligations to Act Hereunder	
The obligation of the Debenture Trustee to commence or continue any act, action or proceeding for the purpose of enforcing the rights of the Debenture Trustee and of the Debentureholders hereunder shall be conditional upon the Debentureholders furnishing when required by notice in writing by the Debenture Trustee, sufficient funds to commence or continue such act, action or proceeding and indemnity reasonably satisfactory to the Debenture Trustee to protect and hold harmless the Debenture Trustee against the costs, charges and expenses and liabilities to be incurred thereby and any loss and damage it may suffer by reason thereof.
None of the provisions contained in this Indenture shall require the Debenture Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties or in the exercise of any of its rights or powers unless indemnified as aforesaid.
The Debenture Trustee may, before commencing or at any time during the continuance of any such act, action or proceeding require the Debentureholders at whose instance it is acting to deposit with the Debenture Trustee the Debentures held by them for which Debentures the Debenture Trustee shall issue receipts.

15.16	Authority to Carry on Business	
The Debenture Trustee represents to the Corporation that at the date of execution and delivery by it of this Indenture it is authorized to carry on the business of a trust company in all the provinces and territories of Canada, which, for certainty, includes in accordance with the Indenture Legislation, but if, notwithstanding the provisions of this Section 15.16, it ceases to be so authorized to carry on business, the validity and enforceability of this Indenture and the securities issued hereunder shall not be affected in any manner whatsoever by reason only of such event but the Debenture Trustee shall, within 90 days after ceasing to be authorized to carry on the business of trust company in any of the provinces and territories of Canada, which, for certainty, includes in accordance with the Indenture Legislation, either become so authorized or resign in the manner and with the effect specified in Section 15.3.

15.17	Compensation and Indemnity	

 	(a)	The Corporation shall pay to the Debenture Trustee from time to time reasonable compensation for its services hereunder as agreed separately by the Corporation and the Debenture Trustee, and shall pay or reimburse the Debenture Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Debenture Trustee in the administration or execution of its duties under this Indenture (including the reasonable and documented compensation and disbursements of its counsel and all other advisers and assistants not regularly in its employ), both before any default hereunder and thereafter until all duties of the Debenture Trustee under this Indenture shall be finally and fully performed.	

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 	(b)	Subject to compliance with Indenture Legislation, the Corporation hereby indemnifies and saves harmless the Debenture Trustee and its directors, officers, employees and agents from and against any and all loss, damages, charges, expenses, claims, demands, actions or liability whatsoever which may be brought against the Debenture Trustee or which it may suffer or incur as a result of or arising out of the performance of its duties and obligations hereunder save only in the event of the gross negligence or the wilful misconduct or bad faith of the Debenture Trustee. This indemnity will survive the termination or discharge of this Indenture and the resignation or removal of the Debenture Trustee. The Debenture Trustee shall notify the Corporation promptly of any claim for which it may seek indemnity. The Corporation shall defend the claim and the Debenture Trustee shall cooperate in the defence. The Debenture Trustee may, in the event of a conflict of interest, have separate counsel and the Corporation shall pay the reasonable fees and expenses of such counsel. The Corporation and the Debenture Trustee, as applicable, need not pay for any settlement made without its consent, which consent must not be unreasonably withheld. This indemnity shall survive the resignation or removal of the Debenture Trustee or the discharge of this Indenture.	
 	 	 	
 	(c)	Provisions contained in this Section 15.17 shall survive the resignation or removal of the Debenture Trustee and the discharge of this Debenture.	

15.18	Anti-Money Laundering	
The Debenture Trustee shall retain the right not to act and shall not be liable for refusing to act if, due to a lack of information or for any other reason whatsoever, the Debenture Trustee, in its sole judgment and acting reasonably, determines that such act might cause it to be in non-compliance with any applicable anti-money laundering or anti-terrorist legislation, regulation or guideline. Further, should the Debenture Trustee, in its sole judgment and acting reasonably, determine at any time that its acting under this Indenture has resulted in its being in non-compliance with any applicable anti-money laundering or anti-terrorist legislation, regulation or guideline, then it shall have the right to resign on ten days’ written notice to the Corporation or any shorter period of time as agreed to by the Corporation, provided that:

 	(a)	the Debenture Trustee’s written notice shall describe the circumstances of such non- compliance; and	
 	 	 	
 	(b)	if such circumstances are rectified to the Debenture Trustee’s satisfaction within such 10 day period, then such resignation shall not be effective.	

15.19	Acceptance of Trust	
The Debenture Trustee hereby accepts the trusts in this Indenture declared and provided for and agrees to perform the same upon the terms and conditions herein set out and to hold all rights, privileges and benefits conferred hereby and by law in trust for the various persons who shall from time to time be Debentureholders, subject to all the terms and conditions herein set out.

15.20	Privacy Laws	
The parties acknowledge that federal and/or provincial legislation that addresses the protection of individuals’ personal information (collectively, “ Privacy Laws ”) applies to certain obligations and activities under this Indenture. Notwithstanding any other provision of this Indenture, neither party shall take or direct any action that would contravene, or cause the other to contravene, applicable Privacy Laws. The Corporation shall, prior to transferring or causing to be transferred personal information to the Debenture Trustee, obtain and retain required consents of the relevant individuals to the collection, use and disclosure of their personal information, or shall have determined that such consents either have previously been given upon which the parties can rely or are not required under the Privacy Laws. The Debenture Trustee shall use commercially-reasonable efforts to ensure that its services hereunder comply with Privacy Laws. Specifically, the Debenture Trustee agrees: (a) to have a designated chief privacy officer; (b) to maintain policies and procedures to protect personal information and to receive and respond to any privacy complaint or inquiry; (c) to use personal information solely for the purposes of providing its services under or ancillary to this Indenture and to comply with applicable laws and not to use it for any other purpose except with the consent of or direction from the Corporation or the individual involved or as permitted by Privacy Laws; (d) not to sell or otherwise improperly disclose personal information to any third party; and (e) to employ administrative, physical and technological safeguards to reasonably secure and protect personal information against loss, theft, or unauthorized access, use or modification.

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15.21	Force Majeure	
Except for the payment of conversion obligations of the Corporation contained herein, neither party shall be liable to the other, or held in breach of this Indenture, if prevented, hindered, or delayed in the performance or observance of any provision contained herein by reason of force majeure , such as act of God, riots, terrorism, acts of war, epidemics, governmental action or judicial order, earthquakes, or any other similar causes (including, but not limited to, general mechanical, electronic or communication interruptions, disruptions or failures). Performance times under this Indenture shall be extended for a period of time equivalent to the time lost because of any delay that is excusable under this Section 15.21.
ARTICLE 16
SUPPLEMENTAL INDENTURES

16.1	Supplemental Indentures	
Subject to any approval that may be required pursuant to the requirements of the TSX or such other exchange on which the Debentures are listed, if any, from time to time the Debenture Trustee and, when authorized by a resolution of the Directors, the Corporation, may, and shall when required by this Indenture, execute, acknowledge and deliver by their proper officers deeds or indentures supplemental hereto which thereafter shall form part hereof, for any one or more of the following purposes:

 	(a)	providing for the issuance of Additional Debentures under this Indenture;	
 	 	 	
 	(b)	adding to the covenants of the Corporation herein contained for the protection or benefit of the Debentureholders, or of the Debentures of any series, or providing for events of default, in addition to those herein specified;	
 	 	 	
 	(c)	making such provisions not inconsistent with this Indenture as may be necessary or desirable with respect to matters or questions arising hereunder, including the making of any modifications in the form of the Debentures which do not affect the substance thereof and which in the opinion of the Debenture Trustee relying on an opinion of Counsel will not be prejudicial to the interests of the Debentureholders;	
 	 	 	
 	(d)	evidencing the succession, or successive successions, of others to the Corporation and the covenants of and obligations assumed by any such successor in accordance with the provisions of this Indenture;	

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 	(e)	giving effect to any Extraordinary Resolution passed as provided in Article 13;	
 	 	 	
 	(f)	making any additions to, deletions from or alterations of the provisions of this Indenture (including any of the terms and conditions of the Debentures) which, in the opinion of the Debenture Trustee (relying on an opinion of counsel), are not prejudicial to the interests of the Debentureholders and which are necessary or advisable in order to incorporate, reflect or comply with the Indenture Legislation; and	
 	 	 	
 	(g)	for any other purpose not inconsistent with the terms of this Indenture, provided that, in the opinion of the Debenture Trustee (relying on an opinion of counsel), the rights of the Debentureholders are in no way prejudiced thereby.	
Unless the supplemental indenture requires the consent or concurrence of Debentureholders or the holders of a particular series of Debentures, as the case may be, by Extraordinary Resolution, the consent or concurrence of Debentureholders or the holders of a particular series of Debentures, as the case may be, shall not be required in connection with the execution, acknowledgement or delivery of a supplemental indenture. The Corporation and the Debenture Trustee may amend any of the provisions of this Indenture related to matters of United States law or the issuance of Debentures into the United States in order to ensure that such issuances can be made in accordance with applicable law in the United States without the consent or approval of the Debentureholders. The Debenture Trustee will have the right to request a legal opinion regarding matters of United States law on the issuance of Debentures into the United States prior to or concurrently with making such amendments. Further, the Corporation and the Debenture Trustee may without the consent or concurrence of the Debentureholders or the holders of a particular series of Debentures, as the case may be, by supplemental indenture or otherwise, make any changes or corrections in this Indenture which it shall have been advised by Counsel are required for the purpose of curing or correcting any ambiguity or defective or inconsistent provisions or clerical omissions or mistakes or manifest errors contained herein or in any indenture supplemental hereto, or to remove any conflicts or other inconsistencies which may exist between any terms of this Indenture and any provisions in the Prospectus or any provisions of any law or regulation applicable to or affecting the Corporation, or any Written Direction of the Corporation provided for the issue of Debentures, provided that in the opinion of the Debenture Trustee (relying upon an opinion of Counsel) the rights of the Debentureholders and the Senior Creditors in general are in no way prejudiced thereby.
ARTICLE 17
RIGHTS OF RESCISSION

17.1	Rights of Rescission	
If the Prospectus contains a misrepresentation (as such term is defined in the Securities Act (Ontario)) and it was a misrepresentation on the date hereof, an original purchaser of Initial Debentures to whom the Prospectus was sent or delivered (each, an “ Original Purchaser ”) shall a have a right of action against the Corporation for rescission to receive the subscription price for each Initial Debenture for which such Original Purchaser subscribed exercisable on notice given to the Corporation not more than 180 days subsequent to the date hereof (the “ Rescission Period ”). The right of action for rescission is available only to an Original Purchaser during the Rescission Period either while the Original Purchaser is a holder of the Initial Debentures purchased or while the Original Purchaser is a holder of the Shares issued upon conversion of such Initial Debentures. In no event shall the Corporation be liable under this Section 17.1 if the Original Purchaser purchased the Initial Debentures with knowledge of the misrepresentation. This contractual right of rescission shall be consistent with the statutory right of rescission described under section 130 of the Securities Act (Ontario), and is in addition to any other right or remedy available to Original Purchasers under section 130 of the Securities Act (Ontario) or otherwise at law.

- 91 -
ARTICLE 18
EXECUTION AND FORMAL DATE

18.1	Execution	
This Indenture may be executed and delivered by facsimile transmission or electronic mail delivery and in counterparts, each of which when so executed and delivered shall be deemed to be an original and such counterparts together shall constitute one and the same instrument and notwithstanding their date of execution they shall be deemed to be dated as of the date hereof.

18.2	Contracts of the Corporation	

 	(a)	The Directors, in incurring any debts, liabilities or obligations, or in taking or omitting any other actions for or in connection with the affairs of the Corporation are, and will be conclusively deemed to be, acting for and on behalf of the Corporation, and not in their own personal capacities. None of the Directors will be subject to any personal liability for any debts, liabilities, obligations, claims, demands, judgments, costs, charges or expenses (including legal expenses) against or with respect to the Corporation or in respect of the affairs of the Corporation. No property or assets of the Directors, owned in their personal capacity or otherwise, will be subject to any levy, execution or other enforcement procedure with regard to any obligations under this Indenture or the Debentures. No recourse may be had or taken, directly or indirectly, against the Directors in their personal capacity. The Corporation will be solely liable therefor and resort will be had solely to the property and assets of the Corporation for payment or performance thereof.	
 	 	 	
 	(b)	No holder of Shares as such will be subject to any personal liability whatsoever, whether extra-contractually, contractually or otherwise, to any party to this Indenture or pursuant to the Debentures in connection with the obligations or the affairs of the Corporation or the acts or omissions of the Directors, whether under this Indenture, the Debentures or otherwise, and the other parties to this Indenture and the holders of the Debentures will look solely to the property and assets of the Corporation for satisfaction of claims of any nature arising out of or in connection therewith and the property and assets of the Corporation only will be subject to levy or execution.	

18.3	Formal Date	
For the purpose of convenience this Indenture may be referred to as bearing the formal date of February 9, 2015 irrespective of the actual date of execution hereof.
[remainder of this page intentionally left blank]

IN WITNESS WHEREOF the parties hereto have executed this agreement as of the date first written above.

 	PRIMERO MINING CORP.	
 	 	
 	By:	(signed) Joseph Conway	
 	 	Name: Joseph Conway	
 	 	Title: Chief Executive Officer	
 	 	 	
 	COMPUTERSHARE TRUST COMPANY OF CANADA	
 	 	
 	By:	(signed) Lisa M. Kudo	
 	 	Name: Lisa M. Kudo	
 	 	Title: Corporate Trust Officer	
 	 	 	
 	By:	(signed) Raji Sivalingam	
 	 	Name: Raji Sivalingam	
 	 	Title: Associate Trust Officer	

A-1
SCHEDULE “ A ” 
 FORM OF GLOBAL DEBENTURE
TO THE TRUST INDENTURE BETWEEN
 PRIMERO MINING CORP.
AND
 COMPUTERSHARE TRUST COMPANY OF CANADA

A-2
SCHEDULE “ A ”
GLOBAL DEBENTURE CERTIFICATE
This Initial Debenture is a Global Debenture within the meaning of the Indenture herein referred to and is registered in the name of a Depository or a nominee thereof. This Initial Debenture may not be transferred to or exchanged for Initial Debentures registered in the name of any person other than the Depository or a nominee thereof and no such transfer may be registered except in the limited circumstances described in the Indenture (as defined below). Every Initial Debenture authenticated and delivered upon registration of, transfer of, or in exchange for, or in lieu of, this Initial Debenture shall be a Global Debenture subject to the foregoing, except in such limited circumstances described in the Indenture.
Unless this Initial Debenture is presented by an authorized representative of CDS Clearing and Depository Services Inc. (“ CDS ”) to Primero Mining Corp. or its agent for registration of transfer, exchange or payment, and any certificate issued in respect thereof is registered in the name of CDS & CO., or in such other name as is requested by an authorized representative of CDS (and any payment is made to CDS & CO. or to such other entity as is requested by an authorized representative of CDS), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered holder hereof, CDS & CO., has a property interest in the securities represented by this certificate herein and it is a violation of its rights for another person to hold, transfer or deal with this certificate.

Certificate No. 2015-1	[$_________]	
CUSIP 74164WAB2	 	
ISIN CA 74164WAB24	 	
PRIMERO MINING CORP.
(A CORPORATION GOVERNED BY THE BUSINESS CORPORATIONS ACT (BRITISH
COLUMBIA))
5.75% CONVERTIBLE UNSECURED SUBORDINATED DEBENTURE
PRIMERO MINING CORP. (the “ Corporation ”) for value received hereby acknowledges itself indebted and, subject to the provisions of the trust indenture (the “ Indenture ”) dated as of February 9, 2015 between the Corporation and Computershare Trust Company of Canada (the “ Debenture Trustee ”), promises to pay to the registered holder hereof on the Maturity Date or on such earlier date as the principal amount hereof may become due in accordance with the provisions of the Indenture, the principal sum of ___________dollars in lawful money of the United States [$________], as such amount may be adjusted from time to time in accordance with the Indenture and reflected in the adjustment table set forth in Exhibit “1” hereto, on presentation and surrender of this Initial Debenture at the principal offices of the Debenture Trustee in Toronto, Ontario in accordance with the terms of the Indenture.
The Initial Debentures shall bear interest from and including the date of issue at the rate of 5.75% per annum, payable in US dollars semi-annually, in arrears, on February 28 and August 28 in each year computed on the basis of a 360-day year composed of twelve 30-day months. The first such payment will fall due on August 28, 2015 and the last such payment (representing interest payable from and including the last Interest Payment Date to, but excluding, February 28, 2020 or, the earlier date of redemption, repayment or conversion) will fall due on the Maturity Date or the earlier date of redemption, repayment or conversion, payable after as well as before maturity and after as well as before default, with interest on amounts after maturity or in default at the same rate, compounded semi-annually, computed on the basis of a 360-day year composed of twelve 30-day months. The first interest payment will include interest accrued and unpaid from and including February 9, 2015 to, but excluding, August 28, 2015.

A-3
Interest hereon shall be payable by cheque mailed by prepaid ordinary mail or by electronic transfer of funds to the registered holder hereof and, subject to the provisions of the Indenture, the sending of such electronic transfer of funds shall, to the extent of the sum represented thereby (plus the amount of any tax withheld), satisfy and discharge all liability for interest on this Initial Debenture.
This Initial Debenture is one of the 5.75% Convertible Unsecured Subordinated Debentures due February 28, 2020 (referred to herein as the “ Initial Debentures ”) of the Corporation issued or issuable in one or more series under the provisions of the Indenture. The Initial Debentures authorized for issue immediately are limited to an aggregate principal amount of eighty six million two hundred and fifty thousand dollars in lawful money of the United States ($86,250,000). Reference is hereby expressly made to the Indenture for a description of the terms and conditions upon which the Initial Debentures are issued and held and the rights and remedies of the holders of the Initial Debentures and of the Corporation and of the Debenture Trustee, all to the same effect as if the provisions of the Indenture were herein set out to all of which provisions the holder of this Initial Debenture by acceptance hereof assents.
The Initial Debentures are issuable only in denominations of $1,000 and integral multiples thereof. Upon compliance with the provisions of the Indenture, Initial Debentures of any denomination may be exchanged for an equal aggregate principal amount of Initial Debentures in any other authorized denomination or denominations.
The whole, or if this Initial Debenture is a denomination in excess of $1,000, any part which is $1,000 or an integral multiple thereof, of the principal of this Initial Debenture is convertible, at the option of the holder hereof, upon surrender of this Initial Debenture at the principal offices of the Debenture Trustee in Toronto, Ontario, at any time prior to the close of business on the earlier of (i) the Business Day immediately preceding the Maturity Date, (ii) the Business Day immediately preceding the date specified for redemption of this Initial Debenture, and (iii) the Business Day immediately preceding the payment date in the event the Corporation is required to offer to repurchase the Debentures in the event of a Change of Control, into Shares at a conversion price of approximately $6.55 per Share, being a conversion rate of 152.6718 Shares for each $1,000 principal amount of Initial Debentures so converted, all subject to the terms and conditions and in the manner set out in the Indenture. The Indenture makes provision for the adjustment of the Conversion Rate in the events therein specified. No fractional Shares will be issued on any conversion but in lieu thereof, the Corporation will satisfy such fractional interest by a cash payment equal to the fractional interest multiplied by the Current Market Price, as defined in the Indenture. Holders converting their Initial Debentures will receive, as the case may be, interest which has accrued and is unpaid in respect thereof from the most recent Interest Payment Date to but excluding the date of conversion.
This Initial Debenture may be redeemed at the option of the Corporation on the terms and conditions set out in the Indenture at the Redemption Price therein and herein set out provided that this Initial Debenture is not redeemable before February 28, 2018 except in the event of the satisfaction of certain conditions after a Change of Control has occurred. On and after February 28, 2018 and prior to February 28, 2020, the Initial Debentures may be redeemed at the option of the Corporation at the redemption price equal to the principal amount of the Initial Debentures plus accrued and unpaid interest thereon up to but excluding the date set for redemption provided, among other things, the Current Market Price is at least 125% of the Conversion Price and, in addition thereto, at the time of redemption, the Corporation shall pay to the holder accrued and unpaid interest and otherwise on the terms and conditions described in the Indenture. In connection with the redemption of the Initial Debentures, the Corporation may, on notice as provided in the Indenture, at its option and subject to any applicable regulatory approval and applicable securities law, elect to satisfy its obligation to pay all or a portion of the applicable Redemption Price by the issue of that number of Freely-Tradeable Shares obtained by dividing the applicable Redemption Price by 95% of the Current Market Price of the Shares on the Redemption Date.

A-4
Within 30 days following a Change of Control of the Corporation, the Corporation is required to deliver to the Debenture Trustee a notice in writing stating that there has been a Change of Control and specifying the date on which such Change of Control occurred and the circumstances or events giving rise to such Change of Control together with an offer in writing to purchase for cash all of the Initial Debentures then outstanding from the holders thereof at a price per Initial Debenture equal to 100% of the principal amount thereof together with accrued and unpaid interest thereon up to but excluding the Change of Control Purchase Date, as such term is defined in the Debenture. If 90% or more of the principal amount of the Initial Debentures outstanding on the date the Corporation provides the Debenture Offer to the Debenture Trustee have been tendered for purchase pursuant to the Debenture Offer, the Corporation has the right to redeem all the remaining outstanding Initial Debentures at the same price.
If an Offer for all of the outstanding Debentures of a series is made which is a take-over bid for Debentures within the meaning of the Securities Act (Ontario) and Debentures representing 90% or more of the principal amount of all the then-outstanding Debentures (other than Debentures held at the date of the take-over bid by or on behalf of the Offeror, Associates or Affiliates of the Offeror or anyone acting jointly or in concert with the Offeror) are taken up and paid for by the Offeror, the Offeror will be entitled to acquire the Debentures of those holders who did not accept the Offer on the same terms as the Offeror acquired the first 90% or more of the principal amount of the Debentures.
The Corporation may, on notice as provided in the Indenture, at its option and subject to any applicable regulatory approval, elect to satisfy the obligation to repay all or any portion of the principal amount of this Initial Debenture due on the Maturity Date by the issue of that number of Freely-Tradeable Shares obtained by dividing the principal amount of this Initial Debenture to be paid for in Shares pursuant to the exercise by the Corporation of the Share Repayment Right by 95% of the Current Market Price on the Maturity Date.
The indebtedness evidenced by this Initial Debenture, and by all other Initial Debentures now or hereafter certified and delivered under the Indenture, is a direct unsecured obligation of the Corporation, and is subordinated in right of payment, to the extent and in the manner provided in the Indenture, to the prior payment of all Senior Indebtedness, whether outstanding at the date of the Indenture or thereafter created, incurred, assumed or guaranteed.
The principal hereof may become or be declared due and payable before the stated maturity in the events, in the manner, with the effect and at the times provided in the Indenture.
The Indenture contains provisions making binding upon all holders of Debentures outstanding thereunder (or in certain circumstances specific series of Debentures) resolutions passed at meetings of such holders held in accordance with such provisions and instruments signed by the holders of a specified majority of Debentures outstanding (or specific series), which resolutions or instruments may have the effect of amending the terms of this Initial Debenture or the Indenture.
This Initial Debenture may be transferred, only upon compliance with the conditions prescribed in the Indenture, in one of the registers to be kept at the principal offices of the Debenture Trustee in Toronto, Ontario and in such other place or places and/or by such other registrars (if any) as the Corporation with the approval of the Debenture Trustee may designate. No transfer of this Initial Debenture shall be valid unless made on the register by the registered holder hereof or his executors or administrators or other legal representatives, or his or their attorney duly appointed by an instrument in form and substance satisfactory to the Debenture Trustee or other registrar, and upon compliance with such reasonable requirements as the Debenture Trustee and/or other registrar may prescribe and upon surrender of this Initial Debenture for cancellation. Thereupon a new Initial Debenture or Initial Debentures in the same aggregate principal amount shall be issued to the transferee in exchange hereof.

A-5
This Initial Debenture shall not become obligatory for any purpose until it shall have been certified by the Debenture Trustee under the Indenture.
If any of the provisions of this Initial Debenture are inconsistent with the provisions of the Indenture, the provisions of the Indenture shall take precedence and shall govern. Capitalized words or expressions used in this Initial Debenture shall, unless otherwise defined herein, have the meaning ascribed thereto in the Indenture. Unless otherwise indicated, all dollar amounts expressed in this Initial Debentures are in lawful money of the United States and all payments required to be made hereunder and thereunder shall be made in United States dollars.
The Indenture and this Debenture shall be governed by, and construed in accordance with, the laws of the Province of Ontario and the federal laws of Canada applicable therein.
[remainder of this page intentionally left blank]

A-6
IN WITNESS WHEREOF PRIMERO MINING CORP. has caused this Initial Debenture to be signed by its authorized representatives as of the 9 th day of February, 2015.

 	PRIMERO MINING CORP.	
 	By:           ________________________________________________	
 	                 Name:	
 	                 Title:	

A-7
DEBENTURE TRUSTEE’S CERTIFICATE
This Initial Debenture is one of the 5.75% Convertible Unsecured Subordinated Debentures due February 28, 2020 referred to in the Indenture within mentioned.
COMPUTERSHARE TRUST COMPANY OF CANADA
By:    ______________________________
         (Authorized Officer)
REGISTRATION PANEL
(No writing hereon except by Debenture Trustee or other registrar)

Date of Registration	In Whose Name Registered	Signature of Debenture Trustee or Registrar	

 	 	 	

A-8
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto • , whose address and social insurance number, if applicable, are set out below, this Initial Debenture (or $ ______ principal amount hereof *) of Primero Mining Corp. standing in the name(s) of the undersigned in the register maintained by the Debenture Trustee with respect to such Initial Debenture and does hereby irrevocably authorize and direct the Debenture Trustee to transfer such Initial Debenture in such register, with full power of substitution in the premises.

Dated:  _________________________	
 	
Address of Transferee:  __________________________________________________________________________________________________________	
                                                                               (Street Address, City, Province and Postal Code)	
 	
Social Insurance Number of Transferee, if applicable:  _____________________________________________________________	
* If less than the full principal amount of the within Initial Debenture is to be transferred, indicate in the space provided the principal amount (which must be $1,000 or an integral multiple thereof, unless you hold an Initial Debenture in a non-integral multiple of $1,000, in which case such Initial Debenture is transferable only in its entirety) to be transferred.

1.	The signature(s) to this assignment must correspond with the name(s) as written upon the face of this Initial Debenture in every particular without alteration or any change whatsoever. The signature(s) on this form must be guaranteed by one of the following methods:	
 	 	
	Canada and the USA : A Medallion Signature Guarantee obtained from a member of an acceptable Medallion Signature Guarantee Program (STAMP, SEMP, MSP). Many commercial banks, savings banks, credit unions, and all broker dealers participate in a Medallion Signature Guarantee Program. The Guarantor must affix a stamp bearing the actual words “ Medallion Guaranteed ”.	
 	 	
	Canada : A Signature Guarantee obtained from a major Canadian Schedule I chartered bank. The Guarantor must affix a stamp bearing the actual words “ Signature Guaranteed ”. Signature Guarantees are not accepted from Treasury Branches, Credit Unions or Caisses Populaires unless they are members of a Medallion Signature Guarantee Program.	
 	 	
	Outside North America : For holders located outside North America, present the certificate(s) and/or document(s) that require a guarantee to a local financial institution that has a corresponding Canadian or American affiliate which is a member of an acceptable Medallion Signature Guarantee Program. The corresponding affiliate will arrange for the signature to be over- guaranteed.	
 	 	
2.	The registered holder of this Initial Debenture is responsible for the payment of any documentary, stamp or other transfer taxes that may be payable in respect of the transfer of this Initial Debenture.	

Signature of Guarantor:	 	 	
 	 	 	
Authorized Officer	 	Signature of transferring registered holder	
 	 	 	
Name of Institution	 	 	

A-9
EXHIBIT “ 1 ” 
 TO CDS GLOBAL DEBENTURE
PRIMERO MINING CORP.
5.75% CONVERTIBLE UNSECURED SUBORDINATED DEBENTURES

Initial Aggregate Principal Amount:	[$_________]	
 	 	
CUSIP 74164WAB2	 	
 	 	
ISIN CA 74164WAB24	 	
 	 	
Signature of the Debenture Trustee:  ______________________	 	
ADJUSTMENTS

Date	Amount of
Increase	Amount of
Decrease	New Principal
Amount	
Authorization		

 	 	 	 	 		

 	 	 	 	 		

B-1
SCHEDULE “ B ” 
 FORM OF REDEMPTION NOTICE
TO THE TRUST INDENTURE BETWEEN
PRIMERO MINING CORP.
 AND
 COMPUTERSHARE TRUST COMPANY OF CANADA

B-2
SCHEDULE “B”
 FORM OF REDEMPTION NOTICE
PRIMERO MINING CORP.
 5.75% CONVERTIBLE UNSECURED SUBORDINATED DEBENTURES
REDEMPTION NOTICE

To:	Holders of 5.75% Convertible Unsecured Subordinated Debentures (the “ Debentures ”) of Primero Mining Corp. (the “ Corporation ”)	
 		
Note:	All capitalized terms used herein have the meaning ascribed thereto in the Indenture mentioned below, unless otherwise indicated.	
Notice is hereby given pursuant to Section 4.3 of the trust indenture (the “ Indenture ”) dated as of February 9, 2015 between the Corporation and Computershare Trust Company of Canada (the “ Debenture Trustee ”), that the aggregate principal amount of $ • of the $ • of Debentures outstanding will be redeemed as of • (the “ Redemption Date ”), upon payment of a redemption amount of $1,000 for each $1,000 principal amount of Debentures, being equal to the aggregate of (i) $• (the “ Redemption Price ”), and (ii) all accrued and unpaid interest hereon to but excluding the Redemption Date (collectively, the “ Total Redemption Price ”).
The Total Redemption Price will be payable upon presentation and surrender of the Debentures called for redemption at the following corporate trust office:
Computershare Trust Company of Canada |
100 University Avenue, 8th Floor
Toronto, Ontario M5J 2Y1
Attention: Manager, Corporate Trust
The interest upon the principal amount of Debentures called for redemption shall cease to be payable from and after the Redemption Date, unless payment of the Total Redemption Price shall not be made on presentation for surrender of such Debentures at the above-mentioned corporate trust office on or after the Redemption Date or prior to the setting aside of the Total Redemption Price pursuant to the Indenture.
[Pursuant to Section 4.6 of the Indenture, the Corporation hereby irrevocably elects to satisfy its obligation to pay to the holders of Debentures $ • of the Redemption Price payable to holders of Debentures in accordance with this notice by issuing and delivering to the holders that number of Freely-Tradeable Shares obtained by dividing the Redemption Price by 95% of the then-Current Market Price of the Shares.
No fractional Shares shall be delivered upon the exercise by the Corporation of the above-mentioned redemption right but, in lieu thereof, the Corporation shall pay the cash equivalent thereof determined on the basis of the Current Market Price of Shares on the Redemption Date (less any tax required to be deducted, if any).

B-3
Upon presentation and surrender of the Debentures for payment on the Redemption Date, the Corporation shall, on the Redemption Date, make the delivery to the Debenture Trustee, at the above-mentioned corporate trust office, for delivery to and on account of the holders, of certificates representing the Freely-Tradeable Shares to which holders are entitled together with the cash equivalent in lieu of fractional Shares, cash for all accrued and unpaid interest up to, but excluding, the Redemption Date, and, if only a portion of the Debentures are to be redeemed by issuing Freely-Tradeable Shares, cash representing the balance of the Redemption Price.]
DATED:  _________________________________
PRIMERO MINING CORP.
By:  _____________________________________
       Name:
       Title:

C-1
SCHEDULE “ C ” 
FORM OF MATURITY NOTICE
TO THE TRUST INDENTURE BETWEEN
PRIMERO MINING CORP.
 AND
 COMPUTERSHARE TRUST COMPANY OF CANADA

C-2
SCHEDULE “ C ” 
FORM OF MATURITY NOTICE
PRIMERO MINING CORP.
 5.75% CONVERTIBLE UNSECURED SUBORDINATED DEBENTURES
MATURITY NOTICE

To:	Holders of 5.75% Convertible Unsecured Subordinated Debentures (the “ Debentures ”) of Primero Mining Corp. (the “ Corporation ”)	
 		
Note:	All capitalized terms used herein have the meaning ascribed thereto in the Indenture mentioned below, unless otherwise indicated.	
Notice is hereby given pursuant to Section 4.11(b) of the trust indenture (the “ Indenture ”) dated as of February 9, 2015 between the Corporation and Computershare Trust Company of Canada, as trustee (the “ Debenture Trustee ”), that the Debentures are due and payable as of February 28, 2020 (the “ Maturity Date ”) and the Corporation elects to satisfy its obligation to pay to holders of Debentures $• of the principal amount of the Debentures outstanding on the Maturity Date by issuing and delivering to the holders that number of Freely-Tradeable Shares equal to the number obtained by dividing such principal amount of the Debentures by 95% of the Current Market Price of Shares on the Maturity Date.
No fractional Shares shall be delivered on exercise by the Corporation of the above-mentioned repayment right but, in lieu thereof, the Corporation shall pay the cash equivalent thereof determined on the basis of the Current Market Price of Shares on the Maturity Date (less any tax required to be deducted, if any). In this connection, upon presentation and surrender of the Debentures for payment on the Maturity Date, the Corporation shall, on the Maturity Date, make delivery to the Debenture Trustee, at its principal corporate trust office in Toronto, Ontario, for delivery to and on account of the holders, of certificates representing the Freely-Tradeable Shares to which holders are entitled together with the cash equivalent in lieu of fractional Shares, cash for all accrued and unpaid interest up to, but excluding, the Maturity Date and if only a portion of the Debentures are to be repaid by issuing Freely-Tradeable Shares, cash representing the balance of the principal amount, premium (if any) and interest (if any) due on the Maturity Date.

 	DATED:	
 	          ____________________________________________	
 	 	
 	PRIMERO MINING CORP.	
 	By:	
 	        _____________________________________________	
 	         Name:	
 	         Title:	
 	By:	
 	          _____________________________________________	
 	          Name:	
 	          Title:	

D-1
SCHEDULE “ D ” 
 FORM OF NOTICE OF CONVERSION
TO THE TRUST INDENTURE BETWEEN
 PRIMERO MINING CORP.
AND
 COMPUTERSHARE TRUST COMPANY OF CANADA

D-2
SCHEDULE “ D ”
FORM OF NOTICE OF CONVERSION
PRIMERO MINING CORP.
 5.75% CONVERTIBLE UNSECURED SUBORDINATED DEBENTURES
NOTICE OF CONVERSION

To:	PRIMERO MINING CORP.	
 	 	
Note:	All capitalized terms used herein have the meaning ascribed thereto in the Indenture mentioned below, unless otherwise indicated.	
The undersigned registered holder of 5.75% Convertible Unsecured Subordinated Debentures in the principal amount of $ • bearing Certificate No. 2015-1 irrevocably elects to convert such Debentures (or $ _______ principal amount thereof *) in accordance with the terms of the Indenture referred to in such Debentures and tenders herewith the Debentures, and, if applicable, directs that the Shares of Primero Mining Corp. issuable upon a conversion be issued and delivered to the person indicated below. (If Shares are to be issued in the name of a person other than the holder, all requisite transfer taxes must be tendered by the undersigned).

Dated: _________________________________________________________________________	 		
 	 	     (Signature of Registered Holder)	
* If less than the full principal amount of the Debentures, indicate in the space provided the principal amount (which must be $1,000 or integral multiples thereof).

NOTE:	If Shares are to be issued in the name of a person other than the holder, the signature must be guaranteed by one of the following methods:	
Canada and the USA : A Medallion Signature Guarantee obtained from a member of an acceptable Medallion Signature Guarantee Program (STAMP, SEMP, MSP). Many commercial banks, savings banks, credit unions, and all broker dealers participate in a Medallion Signature Guarantee Program. The Guarantor must affix a stamp bearing the actual words “ Medallion Guaranteed ”.
Canada : A Signature Guarantee obtained from a major Canadian Schedule I chartered bank. The Guarantor must affix a stamp bearing the actual words “ Signature Guaranteed ”. Signature Guarantees are not accepted from Treasury Branches, Credit Unions or Caisses Populaires unless they are members of a Medallion Signature Guarantee Program.
Outside North America : For holders located outside North America, present the certificate(s) and/or document(s) that require a guarantee to a local financial institution that has a corresponding Canadian or American affiliate which is a member of an acceptable Medallion Signature Guarantee Program. The corresponding affiliate will arrange for the signature to be over-guaranteed.

D-3

(Print name in which Shares are to be issued, delivered and registered)	
 	
Name:  _______________________________________________	
 	
Address  _____________________________________________	
 	
_____________________________________________________	
 	
City, Province and Postal Code  _____________________________	
 	
Name of guarantor:  ______________________________________	
 	
Authorized signature:  ____________________________________	

Execution Copy
PRIMERO MINING CORP.
as Borrower
and
BMO CAPITAL MARKETS
as Lead Arranger and Sole Bookrunner
and
BANK OF MONTREAL
as Administrative Agent
and
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO
__________________________________________
CREDIT AGREEMENT
__________________________________________
Dated as of May 23, 2014

Fasken Martineau DuMoulin LLP
Toronto, Ontario
Credit Agreement - Primero Mining

Table of Contents

 	 	PAGE	

 	 	 	
ARTICLE 1 INTERPRETATION	1	
1.1	Defined Terms	1	
1.2	Other Usages	34	
1.3	Plural and Singular	34	
1.4	Headings	34	
1.5	Currency	34	
1.6	Applicable Law	35	
1.7	Time of the Essence	35	
1.8	Non-Banking Days	35	
1.9	Consents and Approvals	35	
1.10	Amount of Credit	35	
1.11	Schedules	36	
1.12	Extension of Credit	36	
1.13	Accounting Terms – GAAP	36	
1.14	Change in Accounting Polices	36	
1.15	Paramountcy	36	
 	 	 	
ARTICLE 2 CREDIT FACILITY	37	
2.1	Establishment of Credit Facility	37	
2.2	Lenders’ Commitments	37	
2.3	Reduction of Credit Limit	37	
2.4	Termination of Credit Facility	38	
 	 	 	
ARTICLE 3 GENERAL PROVISIONS RELATING TO CREDITS	38	
3.1	Types of Credit Availments	38	
3.2	Funding of Loans	38	
3.3	Failure of Lender to Fund Loan	39	
3.4	Funding of Bankers’ Acceptances .	40	
3.5	BA Equivalent Loans .	42	
3.6	Timing of Credit Availments	42	
3.7	Inability to Fund U.S. Dollar Advances in Canada	42	
3.8	Time and Place of Payments	43	
3.9	Remittance of Payments	44	
3.10	Evidence of Indebtedness	44	
3.11	General Provisions Relating to All Letters	44	
3.12	Notice Periods	47	
3.13	Administrative Agent’s Discretion to Allocate	48	
 	 	 	
ARTICLE 4 DRAWDOWNS	48	
4.1	Drawdown Notice	48	
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ARTICLE 5 ROLLOVERS	49	
5.1	LIBOR Loans	49	
5.2	Bankers’ Acceptances	49	
5.3	Rollover Notice	49	
5.4	Rollover by Lenders	49	
 	 	 	
ARTICLE 6 CONVERSIONS	50	
6.1	Converting Loan to Other Type of Loan	50	
6.2	Converting Loan to Bankers’ Acceptances	50	
6.3	Converting Bankers’ Acceptances to Loan	50	
6.4	Conversion Notice	51	
6.5	Absence of Notice	51	
6.6	Conversion by Lenders	51	
 	 	 	
ARTICLE 7 INTEREST AND FEES	52	
7.1	Interest Rates	52	
7.2	Calculation and Payment of Interest	52	
7.3	General Interest Rules	52	
7.4	Selection of Interest Periods	53	
7.5	BA Acceptance Fees	54	
7.6	Standby Fees	54	
7.7	Letter Fees	54	
 	 	 	
ARTICLE 8 RESERVE, CAPITAL, INDEMNITY AND TAX PROVISIONS	54	
8.1	Conditions of Credit	54	
8.2	Change of Circumstances	55	
8.3	Failure to Fund as a Result of Change of Circumstances	56	
8.4	Indemnity Relating to Credits	57	
8.5	Indemnity for Transactional and Environmental Liability	58	
8.6	Payments Free and Clear of Taxes	59	
 	 	 	
ARTICLE 9 REPAYMENTS AND PREPAYMENTS	62	
9.1	Repayment of Credit Facility	62	
9.2	Extension of Maturity Date	62	
9.3	Voluntary Prepayments	64	
9.4	Mandatory Prepayments	64	
9.5	Prepayment Notice	64	
9.6	Currency of Repayment	64	
9.7	Repayments of Credit Excess	64	
9.8	Reimbursement or Conversion on Presentation of Letters	65	
9.9	Letters Subject to an Order	65	
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9.10	Reimbursement Obligation for Maturing Bankers’ Acceptances	65	
 	 	 	
ARTICLE 10 REPRESENTATIONS AND WARRANTIES	66	
10.1	Representations and Warranties	66	
10.2	Survival of Representations and Warranties	72	
 	 	 	
ARTICLE 11 COVENANTS	73	
11.1	Financial Covenants	73	
11.2	Affirmative Covenants	73	
11.3	Restrictive Covenants	80	
11.4	Performance of Covenants by Administrative Agent	81	
 	 	 	
ARTICLE 12 CONDITIONS PRECEDENT TO OBTAINING CREDIT	82	
12.1	Conditions Precedent to All Credit	82	
12.2	Conditions Precedent to Initial Extension of Credit	82	
12.3	Waiver	85	
 	 	 	
ARTICLE 13 DEFAULT AND REMEDIES	85	
13.1	Events of Default	85	
13.2	Bankers’ Acceptances	88	
13.3	Letters	88	
13.4	Refund of Overpayments	89	
13.5	Remedies Cumulative	89	
13.6	Set-Off	90	
 	 	 	
ARTICLE 14 THE ADMINISTRATIVE AGENT	90	
14.1	Appointment and Authorization of Administrative Agent	90	
14.2	Interest Holders	91	
14.3	Consultation with Counsel	91	
14.4	Documents	91	
14.5	Administrative Agent as Finance Party	91	
14.6	Responsibility of Administrative Agent	91	
14.7	Action by Administrative Agent	91	
14.8	Notice of Events of Default	92	
14.9	Responsibility Disclaimed	92	
14.10	Indemnification	93	
14.11	Credit Decision	93	
14.12	Successor Administrative Agent	93	
14.13	Delegation by Administrative Agent	94	
14.14	Waivers and Amendments	94	
14.15	Determination by Administrative Agent Conclusive and Binding	96	
14.16	Adjustments among Lenders after Acceleration	96	
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14.17	Redistribution of Payment	97	
14.18	Distribution of Notices	97	
14.19	Other Security Not Permitted	97	
14.20	Discharge of Security	97	
14.21	Determination of Exposures	97	
14.22	Decision to Enforce Security	99	
14.23	Enforcement	99	
14.24	Application of Cash Proceeds of Realization	99	
14.25	Entering Into Contracts	100	
14.26	Survival	100	
 	 	 	
ARTICLE 15 MISCELLANEOUS	100	
15.1	Notices	100	
15.2	Severability	101	
15.3	Counterparts	101	
15.4	Successors and Assigns	102	
15.5	Assignment	102	
15.6	Entire Agreement	103	
15.7	Further Assurances	103	
15.8	Judgment Currency	104	
15.9	Confidentiality	105	

SCHEDULE A PRICING GRID	1	
 	 	
SCHEDULE B LENDERS AND INDIVIDUAL COMMITMENTS	1	
 	 	
SCHEDULE C COMPLIANCE CERTIFICATE	1	
 	 	
SCHEDULE D FORM OF ASSIGNMENT	1	
 	 	
SCHEDULE E FORM OF DRAWDOWN NOTICE	1	
 	 	
SCHEDULE F FORM OF ROLLOVER NOTICE	1	
 	 	
SCHEDULE G FORM OF CONVERSION NOTICE	1	
 	 	
SCHEDULE H CORPORATE STRUCTURE	1	
 	 	
SCHEDULE I SECURITY DOCUMENTS	1	
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SCHEDULE J QUALIFIED AFFILIATE INSTRUMENT OF ADHESION	1	
 	 	
SCHEDULE K EJIDOS LITIGATION	1	
Credit Agreement - Primero Mining

CREDIT AGREEMENT dated as of May 23, 2014 between Primero Mining Corp., a corporation existing under the laws of the Province of British Columbia (the “ Borrower ”), the lending institutions from time to time parties hereto as Lenders (each a “ Lender ” and, collectively, the “ Lenders ”), and Bank of Montreal, as Administrative Agent.
WHEREAS the Borrower has requested the Lenders to provide to it a certain senior secured revolving credit facility for the purposes set forth in Section 11.2(c);
AND WHEREAS the Lenders are each willing to provide such credit facility to the Borrower for the aforementioned purposes upon the terms and conditions contained herein;
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the mutual covenants and agreements herein contained and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereto covenant and agree as follows:
ARTICLE 1
INTERPRETATION

1.1	Defined Terms	
The following defined terms shall for all purposes of this agreement, or any amendment, substitution, supplement, replacement, restatement or addition hereto, have the following respective meanings unless the context otherwise specifies or requires or unless otherwise defined herein:
“$” denotes U.S. dollars.
“Acquisition” means:

 	(a)	if the acquisition is a share purchase, the Borrower shall Control the entity being acquired immediately following the completion of such acquisition; or	
 	 	 	
 	(b)	if the acquisition is an asset purchase, all or substantially all of the assets of the vendor (or of a division or unit of the vendor) are being acquired.	
“Administrative Agent” means Bank of Montreal, in its capacity as administrative agent of the Lenders, and any successor thereto pursuant to Section 14.12.
“Affected Lender” shall have the meaning ascribed thereto in Section 8.3.
“Affiliate” means an affiliated body corporate and, for the purposes of this agreement, (i) one body corporate is affiliated with another body corporate if one such body corporate is the Subsidiary of the other or both are Subsidiaries of the same body corporate or each of them is Controlled by the same Person and (ii) if two bodies corporate are affiliated with the same body corporate at the same time, they are deemed to be affiliated with each other; for greater certainty for the purposes of this definition, “body corporate” shall include a chartered bank.
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“Alternate Base Rate Canada” means, at any particular time, the variable rate of interest per annum, calculated on the basis of a year of 365 days (or 366 days in the case of a leap year), which is equal to the greater of (a) the Base Rate Canada at such time and (b) the Federal Funds Effective Rate at such time plus ½ of 1%.
“ Applicable Law ” means all public laws, statutes, ordinances, decrees, judgments, codes, standards, acts, orders, by-laws, rules, regulations, Official Body consents, permits, binding policies and guidelines, and requirements of all Official Bodies, which now or hereafter may be lawfully applicable to and enforceable against any Obligor or its property or any part thereof.
“Applicable Margin” means, at any particular time, the aggregate of (a) the applicable interest rate margin or fee rate, as the case may be, expressed as a percentage per annum which are in effect at such time based upon the Total Net Debt Leverage Ratio for the Fiscal Quarter that is the subject of the quarterly Compliance Certificate delivered by the Borrower to the Administrative Agent at the time of the first drawdown hereunder as provided in Section 12.2(e)(iii) or otherwise most recently delivered by the Borrower to the Administrative Agent, as set forth in the table in Schedule A hereto, and (b) where the Borrower fails to pay any amount required to be paid by them hereunder when due in respect of principal, interest, Bankers’ Acceptance reimbursement, BA Acceptance Fees, Letter reimbursement or Letter fees, having received notice that such amount is due, 2% per annum on such overdue amounts in order to compensate the Lenders for the additional risk, provided that (i) changes in the Applicable Margin shall be effective as of the first day of the calendar month next following the relevant Reporting Date and (ii) changes in the Applicable Margin shall apply, as at the effective dates of such changes, to Letters, Loans and Bankers’ Acceptances outstanding on such dates, but only for those portions of the terms of such Letters, Loans and Bankers’ Acceptances after the effective date of such changes, as provided above. Notwithstanding the foregoing, until December 31, 2014, the Applicable Margin shall not be less than that based on Level II in Schedule A hereto.
“ Asset Purchase Agreement ” means the asset purchase agreement dated July 29, 2010 pursuant to which PEM purchased the San Dimas Mine from Desarrollos Mineros San Luis, S.A. de C.V., as the same may be amended, modified, supplemented or replaced from time to time with the consent of the Lenders.
“Assenting Lender” shall have the meaning ascribed thereto in Section 8.3.
“Available Credit” means, at any particular time, the amount, if any, by which the Credit Limit at such time exceeds the amount of credit outstanding under the Credit Facility at such time.
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“ BA Acceptance Fee ” means, for each issuance of a Bankers’ Acceptance or a BA Equivalent Note, a fee in the amount calculated by multiplying the face amount of such Bankers’ Acceptance or principal amount of such BA Equivalent Loan by an amount equal to the Applicable Margin and then multiplying the product so obtained by a fraction (x) the numerator of which is the number of days in the term to maturity of such Bankers' Acceptance or BA Equivalent Note and (y) the denominator of which is 365 days (or 366 days in the case of a Bankers' Acceptance which matures in a leap year).
“ BA Cash Collateral Account ” means a special purpose account to be established by the Borrower with the Administrative Agent for the purposes set out in Section 13.2.
“ BA Discount Rate ” means:

 	(a)	for Schedule I Lenders, the CDOR Rate with a term identical to the term to maturity of the applicable Bankers’ Acceptance; and	
 	 	 	
 	(b)	for Schedule II Lenders, Schedule III Lenders and Non-BA Lenders, the sum of:	

 	(i)	the BA Discount Rate for Schedule I Lenders determined in accordance with subsection (a) above; and	
 	 	 	
 	(ii)	10 basis points per annum.	
Any Schedule I Lender who declares itself as a Non-BA Lender shall be entitled to receive the BA Discount Rate defined in subsection (b) above.
“ BA Discounted Proceeds ” means, in respect of any Bankers’ Acceptances to be accepted by a Lender on any day, an amount (rounded to the nearest whole cent and with one-half of one cent being rounded up) calculated on such day by multiplying:

 	(a)	the aggregate face amount of such Bankers’ Acceptances; by	
 	 	 	
 	(b)	the price, where the price is determined by dividing one by the sum of one plus the product of:	

 	(i)	the BA Discount Rate which is applicable to such Bankers’ Acceptance (expressed as a decimal); and	
 	 	 	
 	(ii)	a fraction, the numerator of which is the number of days remaining in the term of such Bankers’ Acceptances and the denominator of which is 365;	
with the price as so determined being rounded up or down to the fifth decimal place and .000005 being rounded up.
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“ BA Draft ” shall have the meaning ascribed thereto in Section 3.4(i) .
“ BA Equivalent Loans ” shall have the meaning ascribed thereto in Section 3.5.
“ BA Equivalent Note ” shall have the meaning ascribed thereto in Section 3.4(i) .
“ BA Proceeds ” means, with respect to a particular Bankers’ Acceptance, the BA Discounted Proceeds with respect thereto less the amount of the BA Acceptance Fee in respect of such Bankers’ Acceptance.
“ Bankers’ Acceptance ” means a depository bill or bill of exchange (a) drawn by the Borrower and accepted by a Lender, (b) denominated in Canadian dollars, (c) having a term of 30 to 180 days (subject to availability and subject to the right of the Administrative Agent, in its sole discretion, to restrict the term or maturity dates applicable thereto), (d) issued and payable only in Canada and (e) having a face amount of at least Cdn.$1,000,000.
“ Banking Day ” means any day of the year, other than a Saturday, Sunday or other day on which banks are required or authorized to close in Toronto, Ontario and, where used in the context of (i) an advance in U.S. dollars, is also a day on which banks are not required or authorized to close in New York, New York; and (ii) a LIBOR Loan, is also a day on which banks are not required or authorized to close in New York, New York and on which dealings are carried on in the London interbank market in respect of transactions in U.S. dollars.
“ Base Rate Loan ” means monies lent by the Lenders to the Borrower hereunder and upon which interest accrues at a rate referable to the Alternate Base Rate Canada.
“Base Rate Canada” means the variable rate of interest per annum determined by the Administrative Agent from time to time as its base rate for United States dollar loans made by the Administrative Agent in Canada from time to time, being a variable per annum reference rate of interest adjusted automatically upon change by the Administrative Agent, calculated on the basis of a year of 365 days (or 366 days in the case of a leap year).
“ Black Fox Mine ” means the mining operations located in the Township of Black River - Matheson, Ontario and owned and operated by Primero Gold.
“ BMO Fee Letter ” means the fee letter dated May 23, 2014 entered into between Bank of Montreal and the Borrower.
“ BNS Fee Letter ” means the fee letter dated May 23, 2014 entered into between The Bank of Nova Scotia and the Borrower.
“ Borrower Silver Purchase Guarantee ” means the guarantee of the Borrower in favour of SWC dated August 6, 2010 and pursuant to which the Borrower guaranteed the obligations of STB under the SLW Silver Purchase Agreement, as the same may be amended, modified, supplemented or replaced from time to time with the consent of the Lenders.
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“ Branch of Account ” means the branch of the Administrative Agent located at 595 Burrard Street, Vancouver, British Columbia, or such other branch of the Administrative Agent located in Canada as the Administrative Agent may advise the Borrower from time to time.
“ Canadian Dollar Equivalent ” means the Exchange Equivalent in Canadian dollars of any amount of United States dollars.
“ Capital Expenditures ” means, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities and including in all events all amounts expended or capitalized under Capital Leases, but excluding any amount representing capitalized interest) by the Borrower on a consolidated basis, during such period that, in conformity with GAAP, are or are required to be included as additions during such period to tangible fixed assets, provided that the term “ Capital Expenditures ” shall not include (a) expenditures made in connection with the replacement, substitution or restoration of assets (i) to the extent financed from insurance proceeds paid on account of the loss of or damage to the assets being replaced or restored or (ii) to the extent funded with awards of compensation arising from the expropriation, taking by eminent domain or condemnation of the assets being replaced, (b) the purchase price of equipment that is purchased simultaneously with the trade in of existing equipment to the extent of the credit granted by the seller of such equipment for the equipment being traded in at such time, (c) the purchase price of tangible fixed assets and other capital expenditures made within 60 days of the sale of any asset to the extent purchased with the proceeds of such sale, or (d) expenditures that constitute any part of rental expenses under operating leases for real or personal property.
“ Capital Lease ”, as applied to any Person, shall mean any lease of any property (whether real, personal or mixed and including, without limitation, equipment) by that Person as lessee that, in conformity with GAAP, is, or is required to be, accounted for as a finance lease obligation on the balance sheet of that Person.
“ Capital Reorganization ” means any change in the issued and outstanding Shares of an Obligor.
“ Cash ” means cash and Cash Equivalents of the Borrower determined on a consolidated basis.
“ Cash Equivalents ” means (i) securities issued or directly and fully guaranteed or insured by the United States or Canadian government or any agency or instrumentality thereof with maturities of 12 months or less from the date of acquisition, (ii) certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank incorporated in the United States or any Canadian chartered bank having capital and surplus in excess of $500,000,000, (iii) repurchase obligations for underlying securities of the types described in clauses (i) and (ii) entered into with any financial institution meeting the qualifications specified in clause (ii) above, (iv) commercial paper rated A 1 or the equivalent thereof by Moody’s or S&P and in each case maturing within one year after the date of acquisition, (v) investment funds investing at least 95% of their assets in securities of the types described in clauses (i) to (iv) above and (vi) readily marketable direct obligations issued by any state of the United States or province of Canada or any political subdivision thereof having one of the two highest rating categories obtainable from either Moody’s or S&P with maturities of 12 months or less from the date of acquisition.
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“ Cash Management Agreement ” means any present or future agreement pursuant to which any Obligor contracts for the provision of a cash management facility.
“ Cash Proceeds of Realization ” means the aggregate of (i) all Proceeds of Realization in the form of cash and (ii) all cash proceeds of the sale or disposition of non-cash Proceeds of Realization, in each case expressed in United States dollars.
“ CDOR Rate ” means, with respect to an issue of Bankers’ Acceptances with the same maturity date to be accepted by a Lender hereunder, the discount rate per annum, calculated on the basis of a year of 365 days, (i) equal to, as determined by the Administrative Agent, the discount rate of such Lender that appears on the Reuters Screen CDOR Page for such Lender at or about 10:00 a.m. (Toronto time) on the date of issue and acceptance of such Bankers’ Acceptances, for bankers’ acceptances having a comparable face value and an identical maturity date to the face value and maturity date of such issue of Bankers’ Acceptances or (ii) if such rate does not appear on such Page for such Lender, equal to the rate per annum for Canadian dollar bankers’ acceptances having such term which is quoted by such Lender at such time.
“Cerro de Gallo Project” means the mining operations located in the state of Guanajuato, Mexico and owned and operated by San Anton de las Minas, SA. de C.V.
“ Change of Control ” means any transaction the consummation of which results in (i) another entity owning at least 50% of the voting power of the Shares of the Borrower, (ii) any entity acquiring Control of the Borrower; (iii) the Borrower ceasing to own or control, directly or indirectly, 100% of the issued and outstanding shares of each of the Guarantors or (iv) the Borrower ceasing to own or control, directly or indirectly, any Material Project.
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“ Closing Certificate ” of a particular Obligor means a certificate of a senior officer of such Obligor addressed to the Administrative Agent, in form and substance satisfactory to the Administrative Agent, acting reasonably, and certifying (a) the truth and correctness of attached copies of the articles of incorporation and by-laws of such Obligor (or the equivalent in the jurisdiction of formation of the Obligor) and the resolution of the board of directors of such Obligor (or the equivalent in the jurisdiction of formation of the Obligor) authorizing it to execute, deliver and perform its obligations under the Credit Documents to which it is a party, (b) specimen signatures of the individuals authorized to sign Credit Documents on behalf of such Obligor and (c) in the case of the Closing Certificate of the Borrower, (i) that no Default has occurred and is continuing or would arise immediately after or as a result of this agreement becoming effective, (ii) no Material Adverse Change has occurred since December 31, 2013 and (iii) there exists no pending or threatened (in writing) litigation, proceedings or investigations which (x) contest the entering into of this agreement or (y) could reasonably be expected to have a Material Adverse Effect.
“ Collateral Agency Agreement ” means the collateral agency agreement dated the date hereof between the Mexican Collateral Agent, the Non-Mexican Proceeds Agent, the Administrative Agent, SWC, Goldcorp and each Obligor (other than Primero Gold), in form and substance satisfactory to the Administrative Agent, and pursuant to which, inter alia , the Mexican Collateral Agent and the Non-Mexican Proceeds Agent were appointed to hold certain collateral owned by the Obligors for and on behalf of the Administrative Agent, SWC and Goldcorp.
“ Common Cash Management Agreements ” means any Cash Management Agreement between an Obligor on the one hand and a Qualified Cash Management Lender on the other hand.
“ Common Risk Management Agreements ” means any Risk Management Agreement between an Obligor on the one hand and a Qualified Risk Management Lender on the other hand.
“ Companies ” means the Borrower and its Subsidiaries and “ Company ” means any of the Companies.
“ Compliance Certificate ” means a compliance certificate, in the form attached as Schedule C and signed by a senior financial officer of the Borrower, evidencing compliance with the terms of this agreement.
“ Contaminant ” means any contaminant, as defined by the EPA.
“ Contributing Lender ” shall have the meaning ascribed thereto in Section 3.3.
“ Control ” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through ownership of voting equity, by contract or otherwise and “ Controlled ” shall have a similar meaning.
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“ Conversion Notice ” shall have the meaning ascribed thereto in Section 6.4.
“ Corporate Reorganization ” means any change in the legal existence of any Company (other than a Capital Reorganization) including by way of amalgamation, merger, winding up, continuance or plan of arrangement, provided such change does not involve any Person other than the Companies.
“ Credit Documents ” means this agreement, the Guarantees, the Fee Letters, the Security Documents, the Perfection Certificate, the Postponement and Subordination Undertaking, the Intercreditor Documents, the Sandstorm Subordination Agreement and all instruments and agreements executed and delivered by the Obligors in favour of the Finance Parties or the Mexican Collateral Agent from time to time in connection with this agreement or any other Credit Document, but specifically excluding the Common Cash Management Agreements and the Common Risk Management Agreements.
“ Credit Excess ” means, as at a particular date, the amount, if any, by which the aggregate amount of credit outstanding hereunder as at the close of business on such date exceeds the amount of the Credit Facility (as such amount may be reduced from time to time pursuant to the terms hereof) as at the close of business on such date.
“ Credit Facility ” means the revolving term credit facility established by the Lenders in favour of the Borrower pursuant to Section 2.1.
“ Credit Facility Repayment Date ” means the date on which all Secured Obligations under or in connection with the Credit Facility have been permanently repaid in full and the Lenders have no further commitments with respect to the Credit Facility.
“ Credit Limit ” means, at any particular time, $75,000,000 (as such amount may be reduced pursuant to Section 2.3) .
“ Default ” means any event which is or which, with the passage of time, the giving of notice or both, would be an Event of Default.
“ Defaulting Lender ” shall have the meaning ascribed thereto in Section 3.3.
“ Designated Accounts ” means the Borrower’s United States dollar account numbered 004-4719-550 and Canadian dollar account numbered 004-1936-702, each maintained by the Administrative Agent at the Branch of Account for the purposes of transactions under the Credit Facility and “ Designated Account ” means any one of the Designated Accounts.
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“ Disposition ” shall mean any sale, assignment, transfer, conveyance, lease, license or other disposition of any nature or kind whatsoever of any property or of any right, title or interest in or to any property, and the verb “ Dispose ” shall have a correlative meaning.
“ Draft ” means any draft, bill of exchange, receipt, acceptance, demand or other request for payment drawn or issued under or in respect of a Letter.
“ Drawdown Notice ” shall have the meaning ascribed thereto in Section 4.1.
“ EBITDA ” means for any particular Fiscal Quarter, Net Income for such Fiscal Quarter plus, to the extent deducted in determining Net Income, the aggregate of:

 	(a)	Interest Expenses for such Fiscal Quarter;	
 	 	 	
 	(b)	consolidated income tax expenses of the Borrower (but excluding any Subsidiaries which are not Guarantors) for such Fiscal Quarter; and	
 	 	 	
 	(c)	consolidated depreciation and amortization expenses and other non-cash expenses of the Borrower (which shall include, for certainty, the Borrower’s non-cash stock options but excluding any Subsidiaries which are not Guarantors) for such Fiscal Quarter;	
in each case expressed in United States dollars.
The calculation of EBITDA shall be adjusted, without duplication, for unrealized derivative financial instrument gains or losses, non-cash revenues and expenses of the Borrower on a consolidated basis but excluding any Subsidiaries which are not Guarantors including, without limitation, deferred revenue and the difference between accrued and cash reclamation costs. If any of the Obligors shall have acquired the assets of any going concern business, or the shares of another Person which shall have become a Subsidiary of the relevant Obligor during such period, such acquisition shall be deemed to have occurred on the first day of such period and any Indebtedness incurred or assumed by the relevant Obligor in connection with such acquisition shall be deemed to have been incurred or assumed on the first day of such period; provided, however in determining the results of operations of such going concern, business or such Person for purposes of Sections 11.1(b) and 11.1(c) hereof for any portion of such period prior to the date of its acquisition or becoming a Subsidiary of the relevant Obligor, such determination shall be made by using historical results with adjustments to exclude those revenues actually received and operating expenses actually incurred by such other Person during such period that are reasonably expected to be eliminated following the acquisition thereof by the Borrower and are approved by the Majority Lenders (all such exclusions to be identified on a separate schedule delivered by the Borrower to the Administrative Agent and the Lenders). EBITDA for any period prior to the closing date of any Disposition by any of the Obligors out of the ordinary course of business shall be adjusted to take into account on a pro forma basis the EBITDA for such period for the Person or property Disposed of as agreed to by the Borrower and the Majority Lenders prior to the closing date of such Disposition.
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“ Ejidos ” means a communal ownership of land recognized by the federal laws in Mexico which controls surface rights over its communal property through a board of directors.
“ Ejidos Claims ” means those claims commenced by Ejidos as of December 11, 2013, as more particularly described in Schedule K hereto.
“ Enforcement Date ” means:

 	(a)	the date on which the Administrative Agent notifies the Borrower, pursuant to Section 13.1, that all indebtedness of the Borrower to the Lenders hereunder has become immediately due and payable or on which such indebtedness automatically becomes due and payable pursuant to Section 13.1, whichever occurs first; or	
 	 	 	
 	(b)	if all indebtedness of the Borrower to the Lenders hereunder has been repaid in full and all commitments of the Lenders hereunder have terminated, the date on which a Qualified Cash Management Lender or Qualified Risk Management Lender notifies the Borrower that all indebtedness of the Borrower to such Qualified Cash Management Lender or Qualified Risk Management Lender under the relevant Common Cash Management Agreement or Common Risk Management Agreement, as the case may be, has become immediately due and payable or on which such indebtedness automatically becomes due and payable, whichever occurs first.	
“ Environment ” means soil, land surface or subsurface strata, surface waters (including navigable waters, ocean waters, streams, ponds, drainage basins and wetlands), groundwaters, drinking water supply, stream sediments, ambient air (including indoor air), plant and animal life and any other environmental medium or natural resource.
“ Environmental Law ” means any Legal Requirement that addresses, is related to or is otherwise concerned with environmental, health or safety issues, including any Legal Requirement relating to any emissions, releases or discharges of Hazardous Materials into ambient air, surface water, ground water or land, or otherwise relating to the manufacture, processing, distribution, use, existence, treatment, storage, disposal, transport, handling, clean-up or control of Hazardous Materials, including the Equator Principles and the World Bank Environment, Health and Safety Guidelines for Mining and Milling, each as amended from time to time.
“ EPA ” means the Environmental Protection Act (Ontario), as amended from time to time, and any successor statute.
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“ Equator Principles ” means the Equator Principles III, being the principles developed and adopted by various banks and financial institutions, to the extent applicable to the operation of mines and based on (but not limited to) the:

 	(a)	IFC Performance Standards;	
 	 	 	
 	(b)	IFC Environmental, Health and Safety General Guidelines; and	
 	 	 	
 	(c)	IFC Environmental, Health and Safety Guidelines for Mining.	
“ Equity ” means, at any particular time, the amount, expressed in United States dollars, which would, in accordance with GAAP, be classified on the consolidated balance sheet of the Borrower (but excluding any Subsidiaries which are not Guarantors) at such time as shareholder’s equity.
“ Event of Default ” means any one of the events set forth in Section 13.1.
“ Exchange Equivalent ” means, as of any date of determination, with reference to any amount expressed in one currency, the amount of another applicable currency required to purchase such amount in the first currency on such date either (i) in the case of any amount derived directly or indirectly from any financial statements of the Borrower, the exchange rate used to convert from one currency to another, as applicable, in the preparation of such financial statements, (ii) in determining the amount of Available Credit, the spot rate of exchange for converting from one currency to another quoted by the Bank of Canada at approximately 12:00 noon (Toronto time) on the first Banking Day of the calendar month in which the calculation is being made, and (iii) in all other cases, the spot rate of exchange for converting from one currency to another quoted by the Bank of Canada at approximately 12:00 noon (Toronto time) on the effective date of such conversion.
“ Excluded Taxes ” means any (a) Taxes imposed on or measured by, net income (however denominated), franchise Taxes, branch profits Taxes or capital Taxes imposed on a Lender, in each case by any jurisdiction (or political subdivision thereof) as a result of a present or former connection between the Lender and the jurisdiction (or political subdivision thereof) other than Taxes levied by reason of the fact that the Lender has executed, delivered, become party to or performed its obligations under, or has enforced or perfected a security interest under any Credit Documents, or sold or assigned any credit or commitment or interest under any Credit Documents, (b) U.S. withholding tax imposed under FATCA, and (c) Taxes solely attributable to a Lender’s failure to comply with Section 8.6(h) .
“ Exposure ” means, with respect to a particular Finance Party at a particular time, the amount of the Secured Obligations owing to such Finance Party at such time, determined by such Finance Party in good faith in accordance with Section 14.21.
“ FATCA ” means sections 1471 to 1474 of the U.S. Internal Revenue Code of 1986 or any associated regulations or other official guidance as of the date of this agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with).
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“ Federal Funds Effective Rate ” means, for any particular day, the variable rate of interest per annum, calculated on the basis of a year of 365 days (or 366 days in the case of a leap year) and for the actual number of days elapsed, equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by Federal Funds brokers as published for such day (or, if such day is not a Banking Day, for the next preceding Banking Day) by the Federal Reserve Bank of New York or, for any Banking Day on which such rate is not so published by the Federal Reserve Bank of New York, the average of the quotations for such day for such transactions received by the Administrative Agent from three Federal Funds brokers of recognized standing selected by the Administrative Agent.
“Fee Letters” means the BMO Fee Letter and the BNS Fee Letter.
“Finance Documents” means the Credit Documents, the Common Cash Management Agreements and the Common Risk Management Agreements.
“Finance Parties” means the Administrative Agent, the Lenders, the Qualified Cash Management Lenders and the Qualified Risk Management Lenders.
“Fiscal Quarter” means any of the three-month periods ending on the last day of March, June, September and December in each Fiscal Year.
“Fiscal Year” means the twelve-month period ending on the last day of December in each year.
“GAAP” means, at any given date, International Financial Reporting Standards, which include standards and interpretations adopted by the International Accounting Standards Board, applied on a consistent basis.
“ Goldcorp ” means Goldcorp Inc., a corporation incorporated under the laws of the Province of Ontario.
“ Goldcorp Indemnity Agreement ” means the deed of indemnity dated August 6, 2010 and entered into by the Borrower and STB in favour of Goldcorp and pursuant to which the Borrower and STB indemnified Goldcorp for certain payments required to be made by Goldcorp under the Goldcorp Silver Purchase Guarantee.
“ Goldcorp Note ” means the $50,000,000 promissory note dated August 6, 2010 issued by PEM to Desarrollos Mineros San Luis, S.A. de C.V., as assigned to International Mineral Finance S.a.r.l. by assignment agreement dated August 6, 2010.
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“ Goldcorp Obligations ” means the obligations of the Obligors and others under the Goldcorp Indemnity Agreement and the Goldcorp Security.
“ Goldcorp Security ” means, collectively, (i) the security interests granted by the Borrower to Goldcorp in the SW/Borrower Secured Assets as security for the obligations of the Borrower under the Goldcorp Indemnity Agreement, (ii) the security interests granted by STB to Goldcorp in the SW/STB Secured Assets as security for the obligations of STB under the Goldcorp Indemnity Agreement, (iii) the security interests granted by PEM to Goldcorp in the SW/PEM Secured Assets as security for the obligations of PEM under the Goldcorp Indemnity Agreement, (iv) the security interests granted by the minority shareholders of PEM to Goldcorp in the shares of PEM as security for the obligations of such minority shareholders under or with respect to the Goldcorp Indemnity Agreement and (v) the security interests to be granted by the Future Owners (as defined in the Goldcorp Indemnity Agreement) in the present and future personal property of such Future Owners other than the Excluded Collateral (as defined in the Goldcorp Indemnity Agreement) as security for the obligations of such Future Owners under or in respect of the Goldcorp Indemnity Agreement.
“ Goldcorp Silver Purchase Guarantee ” means the guarantee dated August 6, 2010 and entered into by Goldcorp in favour of SWC and pursuant to which Goldcorp guaranteed certain of the obligations of STB under the SLW Silver Purchase Agreement, as the same may be amended, modified, supplemented or replaced from time to time.
“ Grey Fox Project ” means the exploration property owned by Primero Gold and located approximately four kilometers south-east of the Black Fox Mine.
“Guarantees” means, collectively, the guarantees to be entered into by each Obligor in favour of the Administrative Agent for the benefit of the Finance Parties and, if applicable, the Mexican Collateral Agent, in each case form and substance satisfactory to the Administrative Agent, and pursuant to which each Obligor shall guarantee all of the Secured Obligations of each other Obligor, as the same may be amended, modified, supplemented or replaced from time to time.
“ Guarantors ” means, collectively, Primero Gold, San Anton Resource Corporation, Kings-San Anton, S.A. de C.V., San Anton de las Minas, S.A. de C.V., San Anton del Oro, S.A. de C.V., PEM, STB and PML and all other Material Subsidiaries of the Borrower including those that become Guarantors pursuant to Section 11.2(o) .
“ Hazardous Materials ” means any waste or other substance that is hazardous, radioactive, toxic, a pollutant or a contaminant, or that is regulated, listed, defined, designated, or classified, or otherwise determined to be, as such under or pursuant to any Environmental Law, including any mixture or solution thereof, and specifically including petroleum and all derivatives thereof or synthetic substitutes thereof and asbestos or asbestos-containing materials and cyanide or cyanide-containing compounds.
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“ IFC ” means the International Finance Corporation.
“ IFC Environmental, Health and Safety Guidelines for Mining ” means the guidelines and standards relating to the mining sector dated August 20, 2008, relevant and applicable to the Projects from time to time.
“ IFC Environmental, Social, Health and Safety Guidelines ” means all environmental, social, health and safety regulations, orders, standards, customs, policies, procedures, guidelines and practices published by the IFC, relevant and applicable to the Projects from time to time.
“ IFC Performance Standards ” means the environmental and social policies providing guidance on matters relevant to the IFC’s operations, and any other environmental standards, requirements and guidelines published by the IFC, relevant and applicable to the Projects from time to time.
“Indebtedness” of any Person means, without duplication, all debts, liabilities and obligations of such Person which would, in accordance with GAAP, be recorded as liabilities on the consolidated balance sheet of such Person including, without limitation, (i) indebtedness of such Person for borrowed money or for the deferred purchase price of property and services, other than trade payables incurred in the ordinary course of business and payable in accordance with customary practices, (ii) other indebtedness of such Person which is evidenced by a note, bond, debenture or similar instrument, (iii) obligations of such Person under any Capital Lease, (iv) Purchase Money Indebtedness of such Person, (v) reimbursement obligations of such person in respect of bankers’ acceptances; (vi) contingent obligations of such Person in respect of any letter of credit, bank guarantee or surety bond, (vii) to the extent accelerated, obligations of any Person under any commodity hedging transaction, spot or forward foreign exchange transaction, interest rate swap transaction, currency swap transaction, forward rate transaction, rate cap transaction, rate floor transaction, rate collar transaction, any other exchange or rate protection, any combination of such transactions or any option with respect to any such transaction, and (viii) the contingent obligations of such Person under any guarantee or other agreement assuring payment of any obligations of any Person of the type described in the foregoing clauses (i) to (vii); provided, however, that Indebtedness of any Person shall exclude indebtedness of such Person which, at any and all times and at the option of such Person, can be converted into shares of such Person.
“Indemnified Parties” shall have the meaning ascribed thereto in Section 8.5(a) .
“Indemnified Liabilities” shall have the meaning ascribed thereto in Section 8.5(a) .
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“Indebtedness Currency ” shall have the meaning ascribed thereto in Section 15.8(a) .
“Individual Commitment” means, with respect to a particular Lender, the amount set forth in Schedule B attached hereto, as reduced or amended from time to time pursuant to, as applicable, Sections 2.2, 2.3, 8.3 and 15.5 as the individual commitment of such Lender, provided that, upon the termination of the Credit Facility pursuant to Section 2.4, the Individual Commitment of each Lender shall thereafter be equal to the Individual Commitment of such Lender immediately prior to the termination of the Credit Facility.
“Intellectual Property” shall mean all issued patents and patent applications, industrial design registrations, trade-marks, registrations and applications therefor, trade-names and styles, logos, copyright registrations and applications therefor, all of the foregoing owned by or licensed to any Obligor and used in or necessary to the operation of its business.
“ Intercreditor Agreement ” means the intercreditor agreement dated the date hereof between the Mexican Collateral Agent, the Non-Mexican Proceeds Agent, the Administrative Agent, SWC and Goldcorp, as acknowledged by each Obligor (other than Primero Gold), in form and substance satisfactory to the Administrative Agent, and pursuant to which the relative priorities of the Security, the SWC Security and the Goldcorp Security and the priority of payment between the Secured Obligations and the SWC Obligations and the Goldcorp Obligations are agreed upon.
“ Intercreditor Documents ” means the Intercreditor Agreement and the Collateral Agency Agreement.
“ Interest Coverage Ratio ” means, at any particular time, the ratio of Rolling EBITDA at such time to Rolling Interest Expenses at such time.
“ Interest Expenses ” means, for any particular period, the amount, expressed in United States dollars, which would, in accordance with GAAP consistently applied, be classified on the consolidated income statement of the Borrower (but excluding any Subsidiaries which are not Guarantors) for such period as gross interest expenses.
“Interest Period” means, in the case of any LIBOR Loan, the applicable period for which interest on such LIBOR Loan shall be calculated pursuant to Article 7.
“Investment” shall mean any advance, loan, extension of credit or capital contribution to, purchase of Shares, bonds, notes, debentures or other securities of, or any other investment made in, any Person but shall exclude any Acquisition. The amount of any Investment shall be the original principal or capital amount thereof less all returns of principal or equity, or distributions or dividends paid, thereon and shall, if made by the transfer or exchange of property other than cash, be deemed to have been made in an original principal or capital amount equal to the fair value of such property at the time of such Investment, as determined in good faith by the Borrower.
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“Issuing Lender” means Bank of Montreal or any other Lender selected by the Administrative Agent and acceptable to the Borrower who assumes in writing the obligation of issuing Letters under the Credit Facility on behalf of the Lenders.
“Judgment Currency” shall have the meaning ascribed thereto in Section 15.8(a) .
“Judgment Conversion Date” shall have the meaning ascribed thereto in Section 15.8(a)(ii) .
“Lead Arranger” means BMO Capital Markets.
“ Legal Requirement ” means any federal, state, local, provincial, municipal, foreign, international, multinational or other administrative order, constitution, ordinance, regulation, statute or treaty.
“Lenders” means the individual financial institutions set out and described in Schedule B, as amended from time to time, and “ Lender ” means any of the Lenders. After the Credit Facility Repayment Date, “ Lender ” shall mean each Person that was a Lender immediately prior to the Credit Facility Repayment Date but only for so long as such Person is a Qualified Cash Management Lender or Qualified Risk Management Lender.
“ Letter Cash Collateral Account ” means a special purpose account to be established by the Borrower with the Administrative Agent for the purposes set out in Section 13.3.
“Letters” means standby letters of credit issued by the Issuing Lender at the request, and on the credit, of the Borrower, each being denominated in United States dollars or Canadian dollars, having a term of not more than one year, being renewable in the sole discretion of the Issuing Lender, being issued to a named beneficiary acceptable to the Issuing Lender and being otherwise in a form satisfactory to the Issuing Lender.
“ LIBOR ” means, with respect to a particular Interest Period, the rate of interest per annum which appears on page 3750 of the Telerate screen at approximately 11:00 a.m. (London time) two London Business Days before the first day of such Interest Period; or if such Telerate screen is not available, then the rate of interest per annum which appears on LIBOR01 page of the Reuters screen at approximately 11:00 a.m. (London time) two London Business Days before the first day of such Interest Period; or if such LIBOR01 page is not available, then the rate of interest per annum equal to the rate per annum which the Administrative Agent offers U.S. dollar deposits to leading banks in the London interbank market at approximately 11:00 a.m. (London time), two London Business Days before the first day of such Interest Period, for a period comparable to such Interest Period and in an amount approximately equal to the amount of such LIBOR Loan. For the purposes of this definition, “ London Business Day ” means a day on which dealings are carried on in the London inter-bank market in respect of transactions in U.S. dollars.
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“ LIBOR Loan ” means monies lent by the Lenders to the Borrower in United States dollars and upon which interest accrues at a rate referable to LIBOR.
“ Lien ” means any deed of trust, mortgage, charge, hypothec, assignment, pledge, lien, vendor’s privilege, vendor’s right of reclamation, security interest, deemed trust or encumbrance of whatever kind or nature, regardless of form and whether consensual or arising by operation of law (statutory or otherwise), that secures the payment of any indebtedness or liability or the observance or performance of any obligation (including any agreement to give any of the foregoing and any filing of or agreement to give any financing statement under the PPSA or any similar action under any similar law of any other jurisdiction).
“Loans” means Prime Rate Loans, BA Equivalent Loans, Base Rate Loans and LIBOR Loans.
“Majority Lenders” (i) such group of Lenders (and, if there is less than three Lenders, all of the Lenders) whose Individual Commitments aggregate at least two-thirds of the Total Commitment Amount at such time, and (ii) means, at any time following the Credit Facility Repayment Date, such group of Finance Parties which have aggregate Exposure in an amount at least two-thirds of the aggregate Exposure of all of the Finance Parties at such time.
“Material Adverse Change” means any change of circumstances or event (or any Lender becoming aware of any facts not previously disclosed or known) which, in the case of Section 12.2(d) of this Agreement, the Lenders determine, and in each other case, the Majority Lenders determine, is reasonably likely to have a Material Adverse Effect.
“Material Adverse Effect” means a material adverse effect (or a series of adverse effects, none of which is material in and of itself but which, cumulatively, result in a material adverse effect) on:

 	(a)	the business, property, assets, liabilities or condition (financial or otherwise) of the Companies taken as a whole;	
 	 	 	
 	(b)	the ability of any Obligor to perform its obligations under any Credit Document to which it is a party; or	
 	 	 	
 	(c)	the ability of any Finance Party or the Mexican Collateral Agent to enforce its rights under any Credit Document.	
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Notwithstanding the foregoing, normal course adverse price fluctuations in the commodity markets shall not, in and of themselves, be deemed to constitute a Material Adverse Effect.
“Material Agreements” means, at any particular time, those agreements set forth in Section 7 of the Perfection Certificate.
“ Material Properties ” means the San Dimas Mine , the Black Fox Mine , the Grey Fox Project, the Cerro de Gallo Project and the Ventanas Property.
“ Material Subsidiary ” means any direct or indirect Subsidiary of the Borrower:

 	(a)	in respect of which the product obtained by multiplying (i) the percentage of the Shares of such Subsidiary directly or indirectly owned by the Borrower by (ii) the gross revenues of such Subsidiary for the most recently completed four Fiscal Quarters, is greater than $5,000,000; or	
 	 	 	
 	(b)	in respect of which the product obtained by multiplying (i) the percentage of the Shares directly or indirectly owned by the Borrower by (ii) the book value of the assets of such Subsidiary as at the last day of the most recently completed fiscal quarter of such Subsidiary, is greater than $10,000,000; or	
 	 	 	
 	(c)	which owns any direct or indirect interest in a Material Property; or	
 	 	 	
 	(d)	which is a party to a Material Agreement (including but not limited to STB).	
For certainty, a direct or indirect Subsidiary of the Borrower that satisfies the criteria of paragraph (a), (b) or (c) above, solely by being an intermediate holding company, shall nonetheless constitute a “ Material Subsidiary ”.
“Maturity Date” means May 23, 2017, as the same may be extended from time to time pursuant to Section 9.2.
“ Mexican Collateral ” shall have the meaning ascribed thereto in the Intercreditor Documents.
“ Mexican Collateral Agent ” means Banco Nacional de México, S.A., integrante del Grupo Financiero Banamex, División Fiduciaria, in its capacity as Mexican collateral agent appointed by the Administrative Agent, Goldcorp and SLW pursuant to the Collateral Agency Agreement to hold, for and on behalf of the Administrative Agent, Goldcorp and SLW, the Mexican Collateral pursuant to the Mexican Collateral Documents.
“ Mexican Collateral Documents ” shall have the meaning ascribed thereto in the Intercreditor Documents.
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“ Mexico ” means the United Mexican States.
“ Mining Properties ” means all mining rights, claims, leases and concessions in connection with or in respect of the Material Properties.
“Moody’s” means Moody’s Investors Service, Inc. or any successor by merger or consolidation to its business.
“Net Cash Proceeds” means, with respect to any Prepayment Trigger Event, the gross cash proceeds (including payments from time to time in respect of instalment obligations, if any) received by or on behalf of an Obligor in respect of such Prepayment Trigger Event less the sum of:

 	(a)	the amount, if any, of all Taxes paid or estimated to be payable by or on behalf of the Obligor in connection with such Prepayment Trigger Event; and	
 	 	 	
 	(b)	reasonable and customary fees, commissions, expenses, issuance costs, deductibles, discounts and other costs paid by or on behalf of the Obligor in connection with such Prepayment Trigger Event.	
“Net Income” means, for any particular period, the amount, expressed in United States dollars, which would, in accordance with GAAP, be classified on the consolidated income statement of the Borrower (but excluding any Subsidiaries which are not Guarantors) for such period as the net income of the Borrower excluding any extraordinary items.
“Net Disposition Proceeds” means, with respect to any Disposition, the gross proceeds received by or on behalf of an Obligor in respect of such Disposition less the sum of:

 	(a)	the amount, if any, of all Taxes paid or estimated to be payable by or on behalf of the Obligor in connection with such Disposition; and	
 	 	 	
 	(b)	reasonable and customary fees, commissions, expenses, issuance costs, deductibles, discounts and other costs paid by or on behalf of the Obligor in connection with such Disposition.	
“ Non-BA Lender ” shall have the meaning ascribed thereto in Section 3.5.
“Non-Mexican Collateral” shall have the meaning ascribed thereto in the Intercreditor Documents.
“Non-Mexican Proceeds Agent” means Citi Trust Company Canada, in its capacity as agent to receive the proceeds of all Non-Mexican Collateral for the purpose of distributing same to the Administrative Agent, SLW and Goldcorp pursuant to the terms of the Collateral Agency Agreement.
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“Obligors” means the Borrower and the Guarantors and “ Obligor ” means any of the Obligors.
“Official Body” means any national, provincial, territorial, state or municipal government or government of any political subdivision thereof, or any agency, authority, board, central bank, monetary authority, commission, department or instrumentality thereof, or any court, tribunal, grand jury, mediator, arbitrator or referee, whether foreign or domestic.
“ Order ” means an order, judgment, injunction or other determination by an Official Body restricting payment by the Issuing Lender under and in accordance with a Letter or extending the Issuer Lender’s liability under a Letter beyond the expiration date stated therein.
“ Other Capital Lease ” means any Capital Lease in respect of which the subject lessor

 	(a)	has no financial recourse to any Obligor; or	
 	 	 	
 	(b)	has entered into a non-disturbance agreement in favour of the Administrative Agent or, if applicable, the Mexican Collateral Agent, in form and substance satisfactory to the Administrative Agent.	
“ Other Taxes ” means all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or under any other Credit Document or from the execution, delivery or enforcement of, or otherwise with respect to, this agreement or any other Credit Document.
“Participant” shall have the meaning ascribed thereto pursuant to Section 15.5(b) .
“Payment” shall have the meaning ascribed thereto in Section 8.6(a) .
“ PEM ” mean Primero Empresa Minera, S.A. de C.V., a corporation incorporated under the laws of Mexico.
“ PEM Silver Purchase Guarantees ” means the guarantee of PEM in favour of SWC dated August 6, 2010 and pursuant to which PEM guaranteed the obligations of STB under the SLW Silver Purchase Agreement, as the same may be amended, modified, supplemented or replaced from time to time with the consent of the Lenders.
“ Perfection Certificate ” means the certificate of a senior officer of the Borrower, addressed to the Administrative Agent or the Mexican Collateral Agent, as applicable, in form and substance satisfactory to the Administrative Agent and pursuant to which certain factual matters relating to the Companies and the Secured Assets are certified true and correct, together with all schedules and exhibits attached thereto or referred to therein, as the same may be updated from time to time pursuant to Sections 11.2(b), 11.2(o) and 11.2(p) .
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“ Permitted Acquisition ” means any Acquisition that satisfies each of the following conditions:

 	(a)	the entity or assets being acquired are in the mining industry, mineral exploration or mineral extraction;	
 	 	 	
 	(b)	if the subject Acquisition is financed solely with Shares of the Borrower, the entity or assets being acquired are in a Permitted Jurisdiction, Brazil, Peru, Chile, Columbia, Guyana, Suriname or Uruguay and otherwise if the subject Acquisition is paid in whole or in part with cash or by way of an assumption of debt, the entity or assets being acquired are in a Permitted Jurisdiction, Chile, Brazil or Peru;	
 	 	 	
 	(c)	no Default or Event of Default would have occurred and be continuing at the time of such Acquisition or would arise immediately after such Acquisition and as a result thereof;	
 	 	 	
 	(d)	in the case of an Acquisition not financed solely by the issuance of Shares of the Borrower, (i) immediately after the Acquisition, the aggregate of Unrestricted Cash in Permitted Jurisdictions and Available Credit is no less than $25,000,000, (ii) after giving effect to the Acquisition, the Borrower would be in pro forma compliance with each of the financial covenants in Section 11.1 and the Borrower shall have delivered to the Administrative Agent a Compliance Certificate to such effect, (iii) the Acquisition is made pursuant to a negotiated agreement and (iv) the Borrower shall have delivered to the Administrative Agent information with respect to the acquired entity or the acquired assets, as the case may be, which any of the Lenders may reasonably require; and	
 	 	 	
 	(e)	in the case of an Acquisition of an entity which becomes a direct or indirect Subsidiary of the Borrower, the Borrower shall have complied with Section 11.2(o).	
“ Permitted Capital Reorganization ” means any Capital Reorganization (i) that does not result in any change in the combined direct and indirect percentage ownership interest of the Borrower in any Obligor; (ii) notice of which (and reasonable details thereof) has been provided by the Borrower to the Administrative Agent in writing not later than ten Banking Days before its proposed completion date, and (iii) where at the time of the delivery of the aforesaid notice by the Borrower to the Administrative Agent, the Borrower delivers to the Administrative Agent an officer’s certificate (A) certifying that the completion of the Capital Reorganization will not have a Material Adverse Effect and (B) in which the Borrower shall covenant to deliver or cause to be delivered to the Administrative Agent or the Mexican Collateral Agent, as applicable, contemporaneously with the completion of any such Capital Reorganization involving an Obligor, any Credit Documents and/or amendments thereto, certificates, opinions and other things as the Administrative Agent or the Mexican Collateral Agent may request to ensure the completion of such Capital Reorganization shall not adversely affect any rights of any Finance Party or, if applicable, the Mexican Collateral Agent under any Credit Document and (iv) certifying that no Default or Event of Default has occurred and is outstanding at the time of the completion of the Capital Reorganization or would arise immediately upon giving effect thereto.
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“ Permitted Corporate Reorganization ” means any Corporate Reorganization (i) notice of which (and reasonable details thereof) has been provided by the Borrower to the Administrative Agent in writing not later than ten Banking Days before its proposed completion date, and (ii) the aforesaid notice by the Borrower to the Administrative Agent, the Borrower delivers to the Administrative Agent includes an officer’s certificate (A) certifying that the completion of the Corporate Reorganization will not have a Material Adverse Effect and (B) in which the Borrower shall covenant to deliver or cause to be delivered to the Administrative Agent or the Mexican Collateral Agent, as applicable, contemporaneously with the completion of such Corporate Reorganization involving an Obligor, any Credit Documents and/or amendments thereto, certificates, opinions and other things as the Administrative Agent or the Mexican Collateral Agent may request to ensure the completion of such Capital Reorganization shall not adversely affect any rights of any Finance Party or, if applicable, the Mexican Collateral Agent under any Credit Document and (iii) certifying that no Default or Event of Default has occurred and is outstanding at the time of the completion of the Corporate Reorganization or would arise immediately upon giving effect thereto.
“ Permitted Dispositions ” means any one or more of the following:

 	(a)	Dispositions of inventory, product or produced or unprocessed minerals, metals or other mineral or extracted materials Disposed of in the ordinary course of business;	
 	 	 	
 	(b)	Dispositions of worn out, unserviceable or obsolete equipment in the ordinary course of business;	
 	 	 	
 	(c)	Dispositions of publicly traded securities Disposed of for their fair market value; and	
 	 	 	
 	(d)	other Dispositions provided that the aggregate Net Disposition Proceeds of such Dispositions do not exceed $10,000,000 in any Fiscal Year (for the avoidance of doubt, such $10,000,000 threshold excludes the proceeds of any Permitted Dispositions referenced in paragraphs (a), (b) and (c) of this definition);in each case, further provided that a Disposition will be deemed not to be a Permitted Disposition if (i) the asset Disposed of is an asset of a Material Property (other than the Disposition of the Ventanas Property to an Obligor and the Disposition of worn out, unserviceable or obsolete equipment Disposed of in the ordinary course of business) or (ii) a Default or Event of Default has occurred and is continuing at the time of such Disposition or would arise immediately after such Disposition as a result thereof.	
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“Permitted Indebtedness” means any one or more of the following:

 	(a)	the Secured Obligations;	
 	 	 	
 	(b)	Indebtedness of the Obligors arising under Capital Leases and Purchase Money Indebtedness of the Obligors; provided that, at any particular time, the aggregate amount of such Indebtedness does not exceed $10,000,000;	
 	 	 	
 	(c)	Indebtedness of the Obligors under Other Capital Leases provided that, at any particular time, the aggregate amount of such Indebtedness does not exceed $30,000,000 (for the avoidance of doubt, such amount being in excess to the amount referenced in paragraph (b), above);	
 	 	 	
 	(d)	at all times that the Intercreditor Documents remain in full force and effect, Indebtedness of the Obligors existing at the date hereof including Indebtedness under the SLW Silver Purchase Agreement, the Borrower Silver Purchase Guarantee, the PEM Silver Purchase Guarantee and the Goldcorp Indemnity Agreement;	
 	 	 	
 	(e)	vendor-take-back Indebtedness incurred pursuant to a Permitted Acquisition which has no recourse to any entity which has any direct or indirect ownership interest in the San Dimas Mine and where the recourse of such Indebtedness is limited to (i) the acquired assets, (ii) the acquired entity, or (iii) the relevant Obligor’s equity interest in the acquired entity, in each case provided that the Borrower has provided evidence satisfactory to the Lenders that (x) no Default or Event of default has occurred and is continuing at the time of or would arise as a result of the incurring of such Indebtedness and (y) the Borrower would be in compliance with all of the financial covenants in Section 11.1 on a pro forma basis after giving effect to the incurring of such Indebtedness;	
 	 	 	
 	(f)	at all times that the Postponement and Subordination Undertaking remains in full force and effect, Indebtedness of the Obligors to any other Obligor or to any other Company;	
 	 	 	
 	(g)	trade payables and other accrued liabilities of the Obligors incurred in the ordinary course of business and payable in accordance with customary practices;	
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 	(h)	any other unsecured Indebtedness for borrowed money not referred to in clauses (a) to (l) above which does not have a maturity or any scheduled repayment due prior to the third anniversary of the Maturity Date, is otherwise on terms no more onerous than the Secured Obligations and does not aggregate more than $200,000,000; and	
 	 	 	
 	(i)	an unsecured overdraft facility in the maximum amount of $10,000,000 obtain in the ordinary course of business;	
 	 	 	
 	(j)	unsecured Risk Management Agreements with non-Lenders obtained in the ordinary course of business, including any guarantees given in relation to the same; provided that, at any particular time, the aggregate amount of such Indebtedness under such unsecured Risk Management Agreements does not exceed $10,000,000 ;	
 	 	 	
 	(k)	at all times that the Sandstorm Subordination Agreement remains in full force and effect, Indebtedness of Primero Gold under the Sandstorm Gold Purchase Agreement; and	
 	 	 	
 	(l)	any guarantee or indemnity in respect of Permitted Indebtedness;	
in each case, provided that no Default or Event of Default has occurred and is continuing at the time of the incurrence of such Indebtedness or would arise immediately after the incurrence of such Indebtedness.
“ Permitted Investments ” means any one or more of the following:

 	(a)	Investments constituting Capital Expenditures;	
 	 	 	
 	(b)	Investments in Cash;	
 	 	 	
 	(c)	Investments financed by the issuance of shares of the Borrower;	
 	 	 	
 	(d)	Investments by any Obligor in another Obligor; and	
 	 	 	
 	(e)	other Investments in an aggregate amount not exceeding $10,000,000 at any time;	
in each case, provided that no Default or Event of Default has occurred and is continuing at the time of the Investment or would arise immediately after the Investment.
“ Permitted Jurisdictions ” means Canada, the United States and Mexico and “Permitted Jurisdiction” means any of the Permitted Jurisdictions.
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“Permitted Liens” means any one or more of the following with respect to the property and assets of the Obligors:

 	(a)	the Security;	
 	 	 	
 	(b)	for so long as the Intercreditor Documents remain in full force and effect, the SWC Security and the Goldcorp Security;	
 	 	 	
 	(c)	Liens for taxes, assessments or governmental charges or levies not at the time due or delinquent or the validity of which are being contested in good faith by appropriate proceedings and as to which reserves are being maintained in accordance with GAAP;	
 	 	 	
 	(d)	the Lien of any judgment rendered or the Lien of any claim filed which is being contested in good faith by appropriate proceedings and as to which reserves are being maintained in accordance with GAAP;	
 	 	 	
 	(e)	Liens and charges incidental to construction or current operations which have not at such time been filed pursuant to law or which relate to obligations not due or delinquent or the validity of which are being contested in good faith by appropriate proceedings and as to which reserves are being maintained in accordance with GAAP;	
 	 	 	
 	(f)	restrictions, easements, rights-of-way, servitudes or other similar rights in land granted to or reserved by other persons which in the aggregate do not materially impair the usefulness, in the operation of the business of any Obligor, of the property subject to such restrictions, easements, rights-of-way, servitudes or other similar rights in land granted to or reserved by other persons;	
 	 	 	
 	(g)	the right reserved to or vested in any municipality or governmental or other public authority by the terms of any lease, licence, franchise, grant or permit acquired by any Obligor or by any statutory provision, to terminate any such lease, licence, franchise, grant or permit, or to require annual or other payments as a condition to the continuance thereof and any right of such municipality or government or other public authority in the event of failure to make such annual or other payments;	
 	 	 	
 	(h)	the Lien resulting from the deposit of cash or securities (i) in connection with contracts, tenders or expropriation proceedings, or (ii) to secure workers’ compensation, surety or appeal bonds, letters of credit, costs of litigation when required by law and public and statutory obligations, or (iii) in connection with the discharge of Liens or claims incidental to construction and mechanics’, warehouseman’s, carriers’ and other similar liens or construction and mechanics' and other similar Liens arising in the ordinary course of business;	
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 	(i)	security given to a public utility or any municipality or governmental or other public authority when required by such utility or other authority in connection with the operations of any Obligor, all in the ordinary course of business;	
 	 	 	
 	(j)	the restrictions, exceptions, reservations, limitations, provisos and conditions, if any, expressed in any original patents or grants from any Official Body, and any statutory and common law limitations, exceptions, reservations and qualifications;	
 	 	 	
 	(k)	title defects or irregularities which are of a minor nature and in the aggregate will not materially impair the use of the property for the purpose for which it is held;	
 	 	 	
 	(l)	applicable municipal and other governmental restrictions affecting the use of land or the nature of any structures which may be erected thereon, provided such restrictions have been complied with and will not materially impair the use of the property for the purpose for which it is held;	
 	 	 	
 	(m)	Liens on minerals or the proceeds of sale of such minerals arising or granted pursuant to a processing or refining arrangement entered into in the ordinary course and upon usual market terms, securing the payment of any Obligor’s portion of the fees, costs and expenses attributable to the processing of such minerals under any such processing or refining arrangement, but only insofar as such Liens relate to obligations which are at such time not past due;	
 	 	 	
 	(n)	Liens securing Indebtedness arising under clauses (b), (c), (d) and (k) of the definition of Permitted Indebtedness; and	
 	 	 	
 	(o)	the extension, renewal or refinancing of any Permitted Lien, provided that the amount so secured does not exceed the original amount secured immediately prior to such extension, renewal or refinancing and the Lien is not extended to any additional property.	
“ Permitted Reorganizations ” means Permitted Corporate Reorganizations and Permitted Capital Reorganizations.
“Person” means any natural person, corporation, firm, partnership, joint venture, joint stock company, incorporated or unincorporated association, government, governmental agency or any other entity, whether acting in an individual, fiduciary or other capacity.
“PML” means Primero Mining Luxembourg, a société anonyme formed under the laws of Luxembourg.
“Pollutant” means any pollutant, as defined by EPA.
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“ Postponement and Subordination Undertaking ” means the postponement and subordination undertaking to be entered into by certain Companies in favour of the Administrative Agent and, if applicable, the Mexican Collateral Agent pursuant to Section 11.2(q), in form and substance satisfactory to the Administrative Agent, as the same may be amended, modified, supplemented or replaced from time to time.
“PPSA” means the Personal Property Security Act (British Columbia), as amended.
“ Primero Gold ” means Primero Gold Canada Inc. (formerly Brigus Gold Corp.), a corporation amalgamated under the laws of Canada.
“Prepayment Notice” shall have the meaning ascribed thereto in Section 9.5.
“Prepayment Trigger Event” means the receipt by any Company of any insurance proceeds in excess of $5,000,000 or the Exchange Equivalent thereof, where such proceeds or any portion thereof have not been used or committed by such Company to repair or replace the subject assets within six months of such Company’s receipt thereof.
“ Prime Rate ” means the higher of the following: (i) the floating rate of interest announced from time to time by the Administrative Agent as its reference rate then in effect for determining rates of interest on Canadian dollar loans to its customers in Canada and designated as its prime rate; and (ii) the thirty (30) day CDOR Rate plus one percent (1%) per annum. Any change in the Prime Rate shall be effective on the date the change becomes effective generally without the necessity for any notice.
“ Prime Rate Loan ” means monies lent by the Lenders to the Borrower hereunder in Canadian dollars and upon which interest accrues at a rate referrable to the Prime Rate.
“Pro Rata Share” means, at any particular time with respect to a particular Lender, the ratio of the Individual Commitment of such Lender at such time to the aggregate of the Individual Commitments of all of the Lenders at such time.
“Proceeds of Realization” means all cash and non-cash proceeds derived from any sale, disposition or other realization of the Secured Assets or received from the Guarantors pursuant to the Guarantees (i) after any notice being sent by the Administrative Agent to the Borrower pursuant to Section 13.1 declaring all indebtedness of the Borrower hereunder to be immediately due and payable, (ii) upon any dissolution, liquidation, winding-up, reorganization, bankruptcy, insolvency or receivership of any Obligor (or any other arrangement or marshalling of the Secured Assets that is similar thereto) or (iii) upon the enforcement of, or any action taken with respect to, the Guarantees or the Security Documents. For greater certainty, insurance proceeds derived as a result of the loss or destruction of any of the Secured Assets or cash or non-cash proceeds derived from any expropriation or other condemnation of any of the Secured Assets shall not constitute Proceeds of Realization prior to the Enforcement Date.
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“Properties” means, collectively, all mines, all projects for the development of mines and all exploration properties now or hereafter owned by the Obligors.
“Purchase Money Indebtedness” means Indebtedness assumed by any Obligor as part of, or issued or incurred by such Obligor to pay or provide funds to pay, all or a part of the purchase price of any property, goods, chattels or equipment hereafter or previously acquired by such Obligor (including, without limitation, any title retention arrangement).
“Purchasing Lenders” shall have the meaning ascribed thereto in Section 15.5(c) .
“ Qualified Affiliate ” means an Affiliate of a Lender who has executed and delivered to the Administrative Agent an instrument of adhesion in the form set forth in Schedule J.
“Qualified Cash Management Lender” means any Person that enters into a Cash Management Agreement at a time when such Person is a Lender.
“Qualified Risk Management Lender” means (x) any Person that enters into a Risk Management Agreement at a time when such Person is a Lender or (y) any Qualified Affiliate that enters into a Risk Management Agreement at a time when the Lender with which such Qualified Affiliate is affiliated is a Lender.
“Receiver” means a receiver, receiver and manager or other Person having similar powers or authority appointed by the Administrative Agent or, if applicable, the Mexican Collateral Agent or by a court at the instance of the Administrative Agent or, if applicable, the Mexican Collateral Agent in respect of the Secured Assets or any part thereof.
“Release” means any spilling, leaking, emitting, discharging, depositing, escaping, leaching, dumping or other releasing into the Environment, whether intentional or unintentional.
“Relevant Taxes” shall have the meaning ascribed thereto in Section 8.6(g) .
“ Reporting Date ” means the 45 th day following the last day of any of the first three Fiscal Quarters of a Fiscal Year or the 90 th day following the last day of a Fiscal Year.
“Restraint” shall have the meaning ascribed thereto in Section 8.2(a) .
“Restricted Payment” means:
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 	(a)	the declaration, payment or setting aside for payment of any dividend or other distribution on or in respect of any shares in the capital of the Borrower, other than a dividend declared, paid or set aside for payment by the Borrower which is payable in shares of the Borrower;	
 	 	 	
 	(b)	the payment or setting aside for payment of any amount in consideration of the redemption, retraction, purchase, retirement or other acquisition, in whole or in part, of any shares in the capital of the Borrower or any securities, instruments or contractual rights capable of being converted into, exchanged or exercised for shares in the capital of the Borrower, including, without limitation, options, warrants, conversion or exchange privileges and similar rights; or	
 	 	 	
 	(c)	the payment or prepayment of interest or the repayment or prepayment of principal with respect to any Indebtedness of the Borrower which is postponed in right of payment to the Secured Obligations (including, for certainty, under or in connection with the Postponement and Subordination Undertaking).	
“Risk Management Agreement” means any present or future agreement which evidences any gold, silver or other commodity hedging transaction, spot or forward foreign exchange transaction, interest rate swap transaction, currency swap transaction, forward rate transaction, rate cap transaction, rate floor transaction, rate collar transaction, and any other exchange or rate protection transaction, any combination of such transactions or any option with respect to any such transaction entered into by any Obligor.
“ Rolling EBITDA ” means:

 	(a)	for the Fiscal Quarter ending June 30, 2014, EBITDA for such Fiscal Quarter multiplied by four;	
 	 	 	
 	(b)	for the Fiscal Quarter ending September 30, 2014, the aggregate amount of EBITDA for such Fiscal Quarter and for the immediately preceding Fiscal Quarter multiplied by two;	
 	 	 	
 	(c)	for the Fiscal Quarter ending December 31, 2014, the aggregate amount of EBITDA for such Fiscal Quarter and for the two immediately preceding Fiscal Quarters multiplied by 4/3; and	
 	 	 	
 	(d)	for each Fiscal Quarter thereafter, the aggregate amount of EBITDA for such Fiscal Quarter and for the three immediately preceding Fiscal Quarters.	
“ Rolling Interest Expenses ” means:

 	(a)	for the Fiscal Quarter ending June 30, 2014, Interest Expenses for such Fiscal Quarter multiplied by four;	
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 	(b)	for the Fiscal Quarter ending September 30, 2014, the aggregate amount of Interest Expenses for such Fiscal Quarter and for the immediately preceding Fiscal Quarter multiplied by two;	
 	 	 	
 	(c)	for the Fiscal Quarter ending December 31, 2014, the aggregate amount of Interest Expenses for such Fiscal Quarter and for the two immediately preceding Fiscal Quarters multiplied by 4/3; and	
 	 	 	
 	(d)	for each Fiscal Quarter thereafter, the aggregate amount of Interest Expenses for such Fiscal Quarter and for the three immediately preceding Fiscal Quarters.	
“Rollover Notice” shall have the meaning ascribed thereto in Section 5.3.
“Royalties” means:

 	(a)	the 4% net smelter royalty with respect to the San Anton (T-205335) concession payable to the Mexican Geological Service; and	
 	 	 	
 	(b)	the 3% net smelter royalty with respect to the La Libertad (T-198427), Nuevo San Anton (T-208424), El Cipres (T-210168), Ave de Gracia (T- 216707) and Dolores (T-220992) concessions payable to Corporacion Turistica Sanluis, S.A. de C.V.	
“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business, and its successors.
“ San Dimas Mine ” means the mining operations located approximately 125 kilometres northeast of Mazatlan, Sinaloa, Mexico and approximately 150 kilometres west of Durango, Durango, Mexico and owned and operated by PEM.
“Sandstorm” means Sandstorm Gold Ltd. (formerly Sandstorm Resources Ltd.).
“Sandstorm Gold Purchase Agreement” means the gold purchase agreement in respect of the Black Fox Mine dated November 9, 2010 between Primero Gold and Sandstorm Gold Ltd.
“ Sandstorm Subordination Agreement ” means the subordination agreement dated May 23, 2014 entered into between Sandstorm and the Administrative Agent, as acknowledged by Primero Gold pursuant to which Sandstorm subordinates the Project Charge (as defined in the Sandstorm Gold Purchase Agreement) to the Administrative Agent’s Security over Primero Gold’s assets.
“ Schedule I Lenders ” means Lenders which are listed in Schedule I to the Bank Act (Canada).
“ Schedule II Lenders ” means Lenders which are listed in Schedule II to the Bank Act (Canada).
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“ Schedule III Lenders ” means Lenders which are listed in Schedule III to the Bank Act (Canada).
“Secured Assets” means:

 	(a)	all of the present and future assets, property and undertaking of the Obligors; and	
 	 	 	
 	(b)	any and all proceeds of any of the foregoing.	
“Secured Obligations” shall mean all indebtedness, obligations and liabilities, present or future, absolute or contingent, matured or not, at any time owing by the Obligors to the Finance Parties or the Mexican Collateral Agent, or remaining unpaid to the Finance Parties, under or in connection with the Finance Documents and Secured Obligations of a particular Obligor shall mean all indebtedness, obligations and liabilities, present or future, absolute or contingent, matured or not, at any time owing by such Obligor to the Finance Parties or the Mexican Collateral Agent, or remaining unpaid to the Finance Parties or the Mexican Collateral Agent, under or in connection with the Finance Documents to which such Obligor is a party. For certainty, “ Secured Obligations ” shall include interest accruing subsequent to the filing of, or which would have accrued but for the filing of, a petition for bankruptcy, in accordance with and at the rate (including any rate applicable upon any Default or Event of Default to the extent lawful) specified herein, whether or not such interest is an allowable claim in such bankruptcy proceeding.
“Security” means the collateral security constituted by the Security Documents.
“ Security Documents ” means the security documents described in Schedule I hereto as well as any other security documents granted from time to time by any Obligor in favour of the Administrative Agent or the Mexican Collateral Agent, as applicable, to secure all or any part of the Secured Obligations.
“ Senior Net Debt ” means that portion of Total Net Debt which ranks pari passu with or in priority to the Secured Obligations.
“ Senior Net Debt Leverage Ratio ” means, at any particular time, the ratio of Senior Net Debt at such time to Rolling EBITDA at such time.
“ Share Purchase Agreement ” means the share purchase agreement dated July 29, 2010 pursuant to which the Borrower bought the shares of STB from Goldcorp Silver (Barbados) Ltd. (as may be amended from time to time with the consent of the Majority Lenders).
“Shares”, as applied to the shares of any corporation or other entity, means the shares or other ownership interests of every class whether now or hereafter authorized, regardless of whether such shares or other ownership interests shall be limited to a fixed sum or percentage with respect to the rights of the holders thereof to participate in dividends and in the distribution of assets upon the voluntary or involuntary liquidation, dissolution or winding-up of such corporation or other entity.
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“ SLW ” means Silver Wheaton Corp., a corporation incorporated under the laws of the Province of Ontario.
“SLW Silver Purchase Agreement” means the second amended and restated silver purchase agreement effective August 6, 2010 between STB, SWC, the Borrower and SLW, as the same may be amended, modified, supplemented or replaced from time to time with the consent of the Lenders.
“ STB ” means Silver Trading (Barbados) Limited, a corporation incorporated under the laws of Barbados.
“Subsidiary” means, with respect to any Person, any corporation, company or other similar business entity (including, for greater certainty, a chartered bank) of which more than fifty per cent (50%) of the outstanding Shares or other equity interests (in the case of Persons other than corporations) having ordinary voting power to elect a majority of the board of directors or the equivalent thereof of such corporation, company or similar business entity (irrespective of whether at the time Shares of any other class or classes of the Shares of such corporation, company or similar business entity shall or might have voting power upon the occurrence of any contingency) is at the time directly or indirectly owned by such Person, by such Person and one or more other Subsidiaries of such Person, or by one or more other Subsidiaries of such Person.
“Subsidiary Notice” shall have the meaning ascribed thereto in Section 11.2(o) .
“ SW/Borrower Secured Assets ” means all of the present and after acquired property of the Borrower other than Excluded Collateral (as defined in the SLW Silver Purchase Agreement).
“ SWC ” means Silver Wheaton (Caymans) Ltd., a corporation incorporated under the laws of the Cayman Islands.
“ SWC Obligations ” means the obligations of the Obligors and others under the SLW Silver Purchase Agreement, the Borrower Silver Purchase Guarantee, the PEM Silver Purchase Guarantee and the SWC Security.
“ SWC Security ” means, collectively, (i) the security interests granted by STB to SWC in the SW/STB Secured Assets as security for the obligations of STB under the SLW Silver Purchase Agreement, (ii) the security interests granted by the Borrower to SWC in the SW/Borrower Secured Assets as security for the obligations of the Borrower under the Borrower Silver Purchase Guarantee, (iii) the security interests granted by PEM to SWC in the SW/PEM Secured Assets as security for the obligations of PEM under the PEM Silver Purchase Guarantee, (iv) the security interests granted by the minority shareholders of PEM to SWC in the shares of PEM as security for the obligations of such minority shareholders under or with respect to the SLW Silver Purchase Agreement and (v) the security interests to be granted by the Future Owners (as defined in the SLW Silver Purchase Agreement) in the present and future personal property of such Future Owners other than the Excluded Collateral (as defined in the SLW Silver Purchase Agreement) as security for the obligations of such Future Owners under or in respect of the SLW Silver Purchase Agreement.
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“ SWC Subsidiary Debtors ” means the following debtors under the SLW Silver Purchase Agreement and their respective successors and permitted assigns: PEM, Primero Compania Minera, S.A. de C.V., Primero Servicios Mineros, S.A. de C.V., Eduardo Luna (minority shareholder), STB and PML.
“ SW/PEM Secured Assets ” means all of the present and after acquired property of PEM other than Excluded Collateral (as defined in the SLW Silver Purchase Agreement).
“ SW/STB Secured Assets ” means all of the present and after acquired personal property of STB other than Excluded Collateral (as defined in the SLW Silver Purchase Agreement).
“ Tangible Net Worth ” means, at any particular time, the amount of Equity at such time less the aggregate of the amounts at such time, expressed in United States dollars, which would, in accordance with GAAP, be classified upon the consolidated balance sheet of the Borrower (but excluding any Subsidiaries which are not Guarantors) as goodwill and other intangible assets (measured at their book value).
“Tax Act” means the Income Tax Act (Canada), as amended from time to time, and regulations promulgated thereunder.
“Taxes” means all taxes, royalties, assessments, fees, rates, levies, imposts, deductions, dues, duties and other charges of any nature, including any interest, fines, penalties or other liabilities with respect thereto, imposed, levied, collected, withheld or assessed by any Official Body (including a federal, state, provincial, territorial, municipal or foreign Official Body), and whether disputed or not.
“Total Commitment Amount” means, at any particular time, the aggregate of the Individual Commitments of all of the Lenders at such time.
“ Total Net Debt ” means, at any particular time, the aggregate Indebtedness of the Borrower, calculated on a consolidated basis but excluding any Subsidiaries which are not Guarantors, at such time less the aggregate of (i) all Unrestricted Cash of the Obligors held in a Permitted Jurisdiction at such time and (ii) any such Indebtedness for which the holder thereof has no recourse to any of the Obligors.
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“ Total Net Debt Leverage Ratio ” means, at any particular time, the ratio of Total Net Debt at such time to Rolling EBITDA at such time.
“Transferee” shall have the meaning ascribed thereto in Section 15.5(d) .
“ Unrestricted Cash ” means Cash other than Cash held in reserve to satisfy any liabilities, contingent or otherwise.
“U.S.” and “ United States” means the United States of America.
“U.S. Dollar Equivalent” means the relevant Exchange Equivalent in United States dollars of any amount of Canadian dollars.
“Ventanas Property” means the exploration property located in the Ventanas Mining District or southern part of the San Dimas District along the western flank of the Sierra Madre Occidental mountain range in Durango State, Mexico, composed of 23 near-contiguous mining concessions covering approximately 3,470 hectares or 35 square kilometres that are centered near coordinates 23°54‘06”N latitude and 105°44‘58”W longitude, near the border of Sinaloa and Durango states and 120 kilometres west of the city of Durango, the capital of Durango State.
“Waste” means any waste, as defined by EPA.

1.2	Other Usages	
References to “this agreement”, “the agreement”, “hereof”, “herein”, “hereto” and like references refer to this agreement and not to any particular Article, Section or other subdivision of this agreement. Any references herein to any agreements or documents shall mean such agreements or documents as amended, supplemented, restated or otherwise modified from time to time in accordance with the terms hereof and thereof.

1.3	Plural and Singular	
Where the context so requires, words importing the singular number shall include the plural and vice versa.

1.4	Headings	
The division of this agreement into Articles and Sections and the insertion of headings in this agreement are for convenience of reference only and shall not affect the construction or interpretation of this agreement.

1.5	Currency	
Unless otherwise specified herein, all statements of or references to dollar amounts in this agreement shall mean lawful money of the United States.
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1.6	Applicable Law	
This agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein. Any legal action or proceeding with respect to this agreement may be brought in the courts of the Province of Ontario and, by execution and delivery of this agreement, the parties hereby accept for themselves and in respect of their property, generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts. Each party irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to such party to the address prescribed by Section 15.1, such service to become effective five Banking Days after such mailing. Nothing herein shall limit the right of any party to serve process in any manner permitted by law or to commence legal proceedings or otherwise proceed against any other party in any other jurisdiction.

1.7	Time of the Essence	
Time shall in all respects be of the essence of this agreement.

1.8	Non-Banking Days	
Subject to Section 7.4(c), whenever any payment to be made hereunder shall be stated to be due or any action to be taken hereunder shall be stated to be required to be taken on a day other than a Banking Day, such payment shall be made or such action shall be taken on the next succeeding Banking Day and, in the case of the payment of any amount, the extension of time shall be included for the purposes of computation of interest, if any, thereon.

1.9	Consents and Approvals	
Whenever the consent or approval of a party hereto is required in a particular circumstance, unless otherwise expressly provided for therein, such consent or approval shall not be unreasonably withheld or delayed by such party.

1.10	Amount of Credit	
Any reference herein to the “amount of credit outstanding” or “outstanding amount of credit” or any similar phrase shall mean, at any particular time:

 	(a)	in the case of a Prime Rate Loan or a BA Equivalent Loan, the U.S. Dollar Equivalent of the principal amount thereof;	
 	 	 	
 	(b)	in the case of a Bankers’ Acceptance, the U.S. Dollar Equivalent of the face amount of the Bankers’ Acceptance;	
 	 	 	
 	(c)	in the case of a Base Rate Loan or a LIBOR Loan, the principal amount thereof;	
 	 	 	
 	(d)	in the case of a Letter denominated in Canadian dollars, the U.S. Dollar Equivalent of the contingent liability of the Issuing Lender thereunder at such time; and	
 	 	 	
 	(e)	in the case of a Letter denominated in United States dollars, the contingent liability of the Issuing Lender thereunder at such time.	
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1.11	Schedules	
Each and every one of the schedules which is referred to in this agreement and attached to this agreement shall form a part of this agreement.

1.12	Extension of Credit	
For the purposes hereof, each drawdown, rollover and conversion shall be deemed to be an extension of credit to the Borrower hereunder.

1.13	Accounting Terms – GAAP	
All accounting terms not specifically defined in this agreement shall be interpreted in accordance with GAAP.

1.14	Change in Accounting Polices	
Whereas the Borrower may adopt new accounting policies from time to time, whereby such adoption is compelled by accounting or regulatory bodies having jurisdiction or at its own discretion, and whereas these accounting changes may result in a material change in the calculation of the financial covenants or financial covenant thresholds or terms used in this agreement or any other Credit Document, then the Borrower, the Administrative Agent and the Lenders agree to enter into good faith negotiations in order to amend such provisions of this agreement or such Credit Document, as applicable, so as to equitably reflect such accounting changes with the desired result that the criteria for evaluating the Borrower’s financial condition, financial covenants, financial covenant thresholds or terms used in this agreement or any other Credit Document shall be the same after such accounting changes as if such accounting changes had not been made; provided, however, that the agreement of the Majority Lenders to any required amendments of such provisions shall be sufficient to bind all Lenders. If the Borrower and the Majority Lenders cannot agree upon the required amendments immediately prior to the date of implementation of any accounting policy change, then all calculations of financial covenants, financial covenant thresholds or terms used in this agreement or any other Credit Document shall be prepared and delivered without reflecting the accounting policy change.

1.15	Paramountcy	
In the event of any conflict or inconsistency between the provisions of this agreement and the provisions of the Intercreditor Documents, the provisions of the Intercreditor Documents shall prevail and be paramount. If any covenant, representation, warranty or event of default contained in any other Security Document or Finance Document (other than the Intercreditor Documents) is in conflict with or is inconsistent with a provision of this agreement relating to the same specific matter, such covenant, representation, warranty or event of default shall be deemed to be amended to the extent necessary to ensure that it is not in conflict with or inconsistent with the provision of this agreement relating to the same specific matter.
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ARTICLE 2
CREDIT FACILITY

2.1	Establishment of Credit Facility	
Subject to the terms and conditions hereof, the Lenders hereby establish in favour of the Borrower a revolving term credit facility (the “ Credit Facility ”) in an amount equal to the Credit Limit (as such amount may be reduced from time to time).

2.2	Lenders’ Commitments	
Subject to the terms and conditions hereof, the Lenders agree to extend credit to the Borrower from time to time provided that the aggregate amount of credit extended by each Lender shall not at any time exceed the Individual Commitment of such Lender and further provided that the aggregate amount of credit outstanding shall not at any time exceed the amount of the Credit Limit. All credit requested shall be made available to the Borrower contemporaneously by all of the Lenders. Each Lender shall provide to the Borrower its Pro Rata Share of each credit, whether such credit is extended by way of drawdown, rollover or conversion. No Lender shall be responsible for any default by any other Lender in its obligation to provide its Pro Rata Share of any credit nor shall the Individual Commitment of any Lender be increased as a result of any such default of another Lender in extending credit hereunder. The failure of any Lender to make available to the Borrower its Pro Rata Share of any credit shall not relieve any other Lender of its obligation hereunder to make available to the Borrower its Pro Rata Share of such credit.

2.3	Reduction of Credit Limit	
The Borrower may, from time to time and at any time, by notice in writing to the Administrative Agent, permanently reduce the amount of the Credit Limit in whole or in part to the extent the Credit Facility is not being utilized at the time such notice is given, provided that such reduction shall not become effective until five Banking Days after such notice has been given. The amount of the Credit Limit will be permanently reduced with respect to repayment or prepayment made in accordance with Section 9.1 or 9.4. The Credit Limit shall also be permanently reduced, at the time of any Prepayment Trigger Event, by the amount, if any, of the Net Cash Proceeds not deployed by the Borrower as a mandatory prepayment under the Credit Facility pursuant to Section 9.4. Any repayment or prepayment of credit outstanding under the Credit Facility (other than as set forth above) shall not cause a reduction in the amount of the Credit Limit. Any repayment of outstanding credit which forms part of any conversion from one type of credit to another type of credit under Article 3 or Article 6 or of any rollover under Article 5 shall not cause any reduction in the amount of the Credit Limit. Upon any reduction of the amount of the Credit Limit, the Individual Commitment of each Lender shall thereupon be reduced by an amount equal to such Lender’s Pro Rata Share of such reduction of the amount of the Credit Limit.
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2.4	Termination of Credit Facility	

 	(a)	The Credit Facility shall terminate upon the earliest to occur of:	

 	(i)	the termination of the Credit Facility in accordance with Section 13.1;	
 	 	 	
 	(ii)	the date on which the amount of the Credit Limit has been permanently reduced to zero pursuant to Section 2.3; and	
 	 	 	
 	(iii)	the Maturity Date.	

 	(b)	Upon the termination of the Credit Facility, the right of the Borrower to obtain any credit hereunder and all of the obligations of the Lenders to extend credit hereunder shall automatically terminate.	
ARTICLE 3
GENERAL PROVISIONS RELATING TO CREDITS

3.1	Types of Credit Availments	
Subject to the terms and conditions hereof the Borrower may obtain credit from the Lenders through the Branch of Account by way of one or more Prime Rate Loans, BA Equivalent Loans, Bankers’ Acceptances, Base Rate Loans, LIBOR Loans and Letters. Any extension of credit hereunder by way of drawdown of LIBOR Loans shall be in the amount of at least $1,000,000. Any extension of credit hereunder by way of drawdown of Bankers’ Acceptances or BA Equivalent Loans shall be in the amount of at least Cdn.$1,000,000 or an integral multiple of Cdn.$100,000 in excess thereof and, in determining a Lender’s Pro Rata Share of outstanding Bankers’ Acceptances or BA Equivalent Loans, the Administrative Agent shall be entitled, in its sole discretion and notwithstanding any other provision hereof, to increase or decrease the face amount of any Bankers’ Acceptance or the principal amount of any BA Equivalent Loan to the nearest Cdn.$100,000. The aggregate face amount of all outstanding Letters shall not at any time exceed $25,000,000.

3.2	Funding of Loans	
Each Lender shall make available to the Administrative Agent its Pro Rata Share of the principal amount of each Loan prior to 11:00 a.m. (Toronto time) on the date of the extension of credit. The Administrative Agent shall, upon fulfilment by the Borrower of the terms and conditions set forth in Article 12 and unless otherwise irrevocably authorized and directed in the Drawdown Notice, make such funds available to the Borrower on the date of the extension of credit by crediting the relevant Designated Account (or causing such account to be credited). Unless the Administrative Agent has been notified by a Lender at least one Banking Day prior to the date of the extension of credit that such Lender will not make available to the Administrative Agent its Pro Rata Share of such Loan, the Administrative Agent may assume that such Lender has made such portion of the Loan available to the Administrative Agent on the date of the extension of credit in accordance with the provisions hereof and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount. If the Administrative Agent has made such assumption, to the extent such Lender shall not have so made its Pro Rata Share of the Loan available to the Administrative Agent, such Lender agrees to pay to the Administrative Agent, forthwith on demand, such Lender’s Pro Rata Share of the Loan and all reasonable costs and expenses incurred by the Administrative Agent in connection therewith together with interest thereon at the then prevailing interbank rate for each day from the date such amount is made available to the Borrower until the date such amount is paid or repaid to the Administrative Agent; provided, however, that notwithstanding such obligation, if such Lender fails so to pay, the Borrower shall, without prejudice to any rights that the Borrower might have against such Lender, repay such amount to the Administrative Agent forthwith after demand therefor by the Administrative Agent. The amount payable by each Lender to the Administrative Agent pursuant hereto shall be set forth in a certificate delivered by the Administrative Agent to such Lender and the Borrower (which certificate shall contain reasonable details of how the amount payable is calculated) and shall constitute prima facie evidence of such amount payable. If such Lender makes the payment to the Administrative Agent required herein, the amount so paid shall constitute such Lender’s Pro Rata Share of the Loan for purposes of this agreement and shall entitle the Lender to all rights and remedies against the Borrower in respect of such Loan.
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3.3	Failure of Lender to Fund Loan	
If any Lender (a “ Defaulting Lender ”) fails to make available to the Administrative Agent its Pro Rata Share of any Loan as required and the Administrative Agent has not funded pursuant to Section 3.2, the Administrative Agent shall forthwith give notice of such failure by such Defaulting Lender to the Borrower and the other Lenders and such notice shall state that any Lender may make available to the Administrative Agent all or any portion of the Defaulting Lender’s Pro Rata Share of such Loan (but in no way shall any other Lender or the Administrative Agent be obliged to do so) in the place and stead of the Defaulting Lender. If more than one Lender gives notice that it is prepared to make funds available in the place and stead of a Defaulting Lender in such circumstances and the aggregate of the funds which such Lenders (herein collectively called the “ Contributing Lenders ” and individually called the “ Contributing Lender ”) are prepared to make available exceeds the amount of the advance which the Defaulting Lender failed to make, then each Contributing Lender shall be deemed to have given notice that it is prepared to make available its pro rata share of such advance based on the Contributing Lenders’ relative commitments to advance in such circumstances. If any Contributing Lender makes funds available in the place and stead of a Defaulting Lender in such circumstances, then the Defaulting Lender shall pay to any Contributing Lender making the funds available in its place and stead, forthwith on demand, any amount advanced on its behalf together with interest thereon at the then prevailing interbank rate for each day from the date of advance to the date of payment, against payment by the Contributing Lender making the funds available of all interest received in respect of the Loan from the Borrower. In addition to interest as aforesaid, the Borrower shall pay all amounts owing by the Borrower to the Defaulting Lender hereunder (with respect to the amounts advanced by the Contributing Lenders on behalf of the Defaulting Lender) to the Contributing Lenders until such time as the Defaulting Lender pays to the Administrative Agent for the Contributing Lenders all amounts advanced by the Contributing Lenders on behalf of the Defaulting Lender.
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3.4	Funding of Bankers’ Acceptances .	

 	(a)	If the Administrative Agent receives from the Borrower a Drawdown Notice, Rollover Notice or Conversion Notice requesting a drawdown of, a rollover of or a conversion into Bankers’ Acceptances, the Administrative Agent shall notify each of the Lenders prior to 11:00 a.m. (Toronto time) on the second Banking Day prior to the date of such extension of credit of such request and of each Lender’s Pro Rata Share of such extension of credit. The Administrative Agent shall also at such time notify the Borrower of each Lender’s Pro Rata Share of such extension of credit. Each Lender shall, not later than 11:00 a.m. (Toronto time) on the date of each extension of credit by way of Bankers’ Acceptance, accept drafts of the Borrower which are presented to it for acceptance and which have an aggregate face amount equal to such Lender’s Pro Rata Share of the total extension of credit being made available by way of Bankers’ Acceptances on such date, as advised by the Administrative Agent. Each Lender shall purchase the Bankers’ Acceptances which it has accepted for a purchase price equal to the BA Discounted Proceeds therefor. Each Lender may at any time and from time to time hold, sell, rediscount or otherwise dispose of any and all Bankers’ Acceptances accepted and purchased by it.	
 	 	 	
 	(b)	The Borrower shall provide for payment to the accepting Lenders of the face amount of each Bankers’ Acceptance at its maturity, either by payment of such amount or through an extension of credit hereunder or through a combination of both. The Borrower hereby waives presentment for payment of Bankers’ Acceptances by the Lenders and any defence to payment of amounts due to a Lender in respect of a Bankers’ Acceptance which might exist by reason of such Bankers’ Acceptance being held at maturity by the Lender which accepted it and agrees not to claim from such Lenders any days of grace for the payment at maturity of Bankers’ Acceptances.	
 	 	 	
 	(c)	In the case of a drawdown by way of Bankers’ Acceptance, each Lender shall, forthwith after the acceptance of drafts of the Borrower as aforesaid, make available to the Administrative Agent the BA Proceeds with respect to the Bankers’ Acceptances accepted by it. The Administrative Agent shall, upon fulfilment by the Borrower of the terms and conditions set forth in Article 12, make such BA Proceeds available to the Borrower on the date of such extension of credit by crediting the relevant Designated Account. In the case of a rollover of or conversion into Bankers’ Acceptances, each Lender shall retain the Bankers’ Acceptance accepted by it and shall not be required to make any funds available to the Administrative Agent for deposit to the relevant Designated Account; however, forthwith after the acceptance of drafts of the Borrower as aforesaid, the Borrower shall pay to the Administrative Agent on behalf of such Lenders an amount equal to the aggregate amount of the BA Acceptance Fees in respect of such Bankers’ Acceptances plus the amount by which the aggregate face amount of such Bankers’ Acceptances exceeds the aggregate BA Discounted Proceeds with respect thereto.	
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 	(d)	Any Bankers’ Acceptance may, at the option of the Borrower, be executed in advance by or on behalf of the Borrower (as otherwise provided herein), by mechanically reproduced or facsimile signatures of any two officers of the Borrower who are properly so designated and authorized by the Borrower from time to time. Any Bankers’ Acceptance so executed and delivered by the Borrower to the Lenders shall be valid and shall bind the Borrower and may be dealt with by the Lenders to all intents and purposes as if the Bankers’ Acceptance had been signed in the executing officers’ own handwriting.	
 	 	 	
 	(e)	The Borrower shall notify the Lenders as to those officers whose signatures may be reproduced and used to execute Bankers’ Acceptances in the manner provided in Section 3.4(d). Bankers’ Acceptances with the mechanically reproduced or facsimile signatures of designated officers may be used by the Lenders and shall continue to be valid, notwithstanding the death, termination of employment or termination of authorization of either or both of such officers or any other circumstance until such time as the Borrower shall otherwise notify the Lenders.	
 	 	 	
 	(f)	The Borrower hereby indemnifies and agrees to hold harmless the Lenders against and from all losses, damages, expenses and other liabilities caused by or attributable to the use of the mechanically reproduced or facsimile signature instead of the original signature of an authorized officer of the Borrower on a Banker’s Acceptance prepared, executed, issued and accepted pursuant to this agreement, except to the extent determined by a court of competent jurisdiction to be due to the negligence or wilful misconduct of the Lenders.	
 	 	 	
 	(g)	Each of the Lenders agrees that, in respect of the safekeeping of executed depository bills of the Borrower which are delivered to it for acceptance hereunder, it shall exercise the same degree of care which it gives to its own property, provided that it shall not be deemed to be an insurer thereof.	
 	 	 	
 	(h)	All Bankers’ Acceptances shall be issued in the form of depository bills made payable originally to and deposited with The Canadian Depository for Securities Limited pursuant to the Depository Bills and Notes Act (Canada).	
 	 	 	
 	(i)	To facilitate the issuance of Bankers’ Acceptances pursuant to this agreement, the Borrower irrevocably appoints each Lender from time to time as the attorney-in- fact of the Borrower to execute, endorse and deliver on behalf of the Borrower drafts in the forms prescribed by such Lender (if such Lender is not a Non-BA Lender) for bankers’ acceptances denominated in Canadian dollars (each such executed draft that has not yet been accepted by a Lender being referred to as a “ BA Draft ”) or non interest-bearing promissory notes of the Borrower in favour of such Lender (if such Lender is a Non-BA Lender) (each such promissory note being referred to as a “ BA Equivalent Note ”). Each Bankers’ Acceptance and BA Equivalent Note executed and delivered by a Lender on behalf of the Borrower as provided for in this Section 3.4(i) shall be as binding on the Borrower as if it had been executed and delivered by a duly authorized officer of the Borrower.	
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3.5	BA Equivalent Loans .	
If, in the sole judgement of a Lender, such Lender is unable to extend credit by way of Bankers’ Acceptances in accordance with this agreement, such Lender shall give an irrevocable notice to such effect to the Administrative Agent and the Borrower prior to 10:00 a.m. (Toronto time) on the date of the requested credit extension (such Lender being herein referred to as a “ Non-BA Lender ”) and shall make available to the Borrower prior to 11:00 a.m. (Toronto time) on the date of such requested credit extension a Canadian dollar loan (a “ BA Equivalent Loan ”) in the principal amount equal to such Lender’s Pro Rata Share of the total credit to be extended by way of Bankers’ Acceptances, such BA Equivalent Loan to be funded in the same manner as a Loan is funded pursuant to Sections 3.2 and 3.9. Such BA Equivalent Loan shall have the same term as the Bankers’ Acceptances for which it is a substitute and shall bear such rate of interest per annum throughout the term thereof as shall permit such Non-BA Lender to obtain the same effective rate as if such Non-BA Lender had accepted and purchased a Bankers’ Acceptance at the same BA Acceptance Fee and pricing at which the Administrative Agent would have accepted and purchased such Bankers’ Acceptance at approximately 11:00 a.m. (Toronto time) on the date such BA Equivalent Loan is made, on the basis that, and the Borrower hereby agrees that, for such a BA Equivalent Loan, interest shall be payable in advance on the date of the extension of credit by the Non-BA Lender deducting the interest payable in respect thereof from the principal amount of such BA Equivalent Loan. All BA Equivalent Loans shall be evidenced by a promissory note in the form of a depository note made payable originally to and deposited with The Canadian Depository for Securities Limited pursuant to the Depository Bills and Notes Act (Canada).

3.6	Timing of Credit Availments	
No LIBOR Loan, Bankers’ Acceptance or BA Equivalent Loan may have a maturity date later than the Maturity Date.

3.7	Inability to Fund U.S. Dollar Advances in Canada	
If a Lender determines in good faith, which determination shall be final, conclusive and binding on the Borrower, and the Administrative Agent notifies the Borrower that (i) by reason of circumstances affecting financial markets inside or outside Canada, deposits of United States dollars are unavailable to such Lender in Canada, (ii) adequate and fair means do not exist for ascertaining the applicable interest rate on the basis provided in the definition of LIBOR or Alternate Base Rate Canada, as the case may be, (iii) the making or continuation of United States dollar advances in Canada has been made impracticable by the occurrence of a contingency (other than a mere increase in rates payable by such Lender to fund the advance) which materially and adversely affects the funding of the advances at any interest rate computed on the basis of the LIBOR or the Alternate Base Rate Canada, as the case may be, or by reason of a change in any Applicable Law or government regulation, guideline or order (whether or not having the force of law but, if not having the force of law, one with which a responsible Canadian chartered bank would comply) or in the interpretation thereof by any Official Body affecting such Lender or any relevant financial market, which results in LIBOR or the Alternative Base Rate Canada, as the case may be, no longer representing the effective cost to such Lender of deposits in such market for a relevant Interest Period, or (iv) any change to present law or any future law, regulation, order, treaty or official directive (whether or not having the force of law but, if not having the force of law, one with which a responsible Canadian chartered bank would comply) or any change therein or any interpretation or application thereof by any Official Body has made it unlawful for such Lender to make or maintain or give effect to its obligations in respect of United States dollar advances in Canada as contemplated herein, then:
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 	(a)	the right of the Borrower to obtain any affected Base Rate Canada Loan or LIBOR Loan from such Lender shall be suspended until such Lender determines, acting reasonably, that the circumstances causing such suspension no longer exist and such Lender so notifies the Borrower;	
 	 	 	
 	(b)	if any affected Base Rate Canada Loan or LIBOR Loan is not yet outstanding, any applicable Drawdown Notice shall be cancelled and the advance requested therein shall not be made;	
 	 	 	
 	(c)	if any LIBOR Loan is already outstanding at any time when the right of the Borrower to obtain credit by way of a LIBOR Loan is suspended, it shall, subject to the Borrower having the right to obtain credit by way of a Base Rate Canada Loan at such time, be converted on the last day of the Interest Period applicable thereto (or on such earlier date as may be required to comply with any Applicable Law) to a Base Rate Canada Loan in the principal amount equal to the principal amount of the LIBOR Loan or, if the Borrower does not have the right to obtain credit by way of a Base Rate Canada Loan at such time, such LIBOR Loan shall be converted on the last day of the Interest Period applicable thereto (or on such earlier date as may be required to comply with any applicable law) to a loan in such other currency as may be mutually agreed upon in the principal amount equal to the Exchange Equivalent of such LIBOR Loan; and	
 	 	 	
 	(d)	if any Base Rate Canada Loan is already outstanding at any time when the right of the Borrower to obtain credit by way of a Base Rate Canada Loan is suspended, it shall, subject to the Borrower having the right to obtain credit by way of a LIBOR Loan at such time, be immediately converted to a LIBOR Loan in the principal amount equal to the principal amount of the Base Rate Canada Loan and having an Interest Period of one month or, if the Borrower does not have the right to obtain credit by way of a LIBOR Loan at such time, it shall be immediately converted to a loan in such other currency as may be mutually agreed upon in the principal amount equal to the Exchange Equivalent of the principal amount of the Base Rate Canada Loan.	

3.8	Time and Place of Payments	
Unless otherwise expressly provided herein, the Borrower shall make all payments pursuant to this agreement or pursuant to any document, instrument or agreement delivered pursuant hereto by deposit to the relevant Designated Account before 12:00 noon (Toronto time) on the day specified for payment and the Administrative Agent shall be entitled to withdraw the amount of any payment due to the Administrative Agent or the Lenders hereunder from such account on the day specified for payment. In addition to the foregoing, the Borrower authorizes and directs the Administrative Agent to debit automatically, by mechanical, electronic or manual means, any bank account of the Borrower maintained with the Administrative Agent for all amounts due and payable by the Borrower under this agreement, including the repayment of principal and the payment of interest, fees and all charges for the keeping of that bank account. The Administrative Agent shall notify the Borrower as to the particulars of those debits in the normal course.
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3.9	Remittance of Payments	
Forthwith after the withdrawal from the relevant Designated Account or other bank account by the Administrative Agent of any payment of principal, interest, fees or other amounts for the benefit of the Lenders pursuant to Section 3.6, the Administrative Agent shall, subject to Sections 3.3 and 8.3 remit to each Lender, in immediately available funds, such Lender’s Pro Rata Share of such payment (except to the extent such payment results from a Loan with respect to which a Lender had failed, pursuant to Section 3.2, to make available to the Administrative Agent its Pro Rata Share and, where any other Lender has made funds available in the place and stead of a Defaulting Lender); provided that if the Administrative Agent, on the assumption that it will receive, on any particular date, a payment of principal (including, without limitation, a prepayment), interest, fees or other amount hereunder, remits to each Lender its Pro Rata Share of such payment and the Borrower fails to make such payment, each Lender agrees to repay to the Administrative Agent, forthwith on demand, to the extent that such amount is not recovered from the Borrower on demand and after reasonable efforts by the Administrative Agent to collect such amount (without in any way obligating the Administrative Agent to take any legal action with respect to such collection), such Lender’s Pro Rata Share of the payment made to it pursuant hereto together with interest thereon at the then prevailing interbank rate for each day from the date such amount is remitted to the Lenders until the date such amount is paid or repaid to the Administrative Agent, the exact amount of the repayment required to be made by the Lenders pursuant hereto to be as set forth in a certificate delivered by the Administrative Agent to each Lender, which certificate shall constitute prima facie evidence of such amount of repayment.

3.10	Evidence of Indebtedness	
The Administrative Agent shall open and maintain accounts wherein it shall record the amount and type of credit outstanding, each advance and each payment of principal and interest on account of each Loan, each Bankers’ Acceptance accepted and cancelled, the amount and currency of each Letter issued and drawn upon and all other amounts becoming due to and being paid to the Lenders (including the Issuing Lender) and the Administrative Agent hereunder. The Administrative Agent’s accounts constitute, in the absence of manifest error, prima facie evidence of the indebtedness of the Borrowers to the Lenders (including the Issuing Lender) and the Administrative Agent hereunder.

3.11	General Provisions Relating to All Letters	

 	(a)	Each request by the Borrower for the issuance or amendment of a Letter shall be deemed to be a representation by the Borrower that the extension of credit so requested complies with the conditions set forth in Section 12.1. The Borrower hereby acknowledges and confirms to the Issuing Lender that the Issuing Lender shall not be obliged to make any inquiry or investigation as to the right of any beneficiary to make any claim or Draft under a Letter and payment by the Issuing Lender pursuant to a Letter shall not be withheld by the Issuing Lender by reason of any matters in dispute between the beneficiary thereof and the Borrower. The sole obligation of the Issuing Lender with respect to Letters issued by it is to cause to be paid a Draft drawn or purporting to be drawn in accordance with the terms of the applicable Letter and for such purpose the Issuing Lender is only obliged to determine that the Draft purports to comply with the terms and conditions of the relevant Letter.	
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 	(b)	The Issuing Lender shall not have any responsibility or liability for or any duty to inquire into the form, sufficiency (other than to the extent provided in the preceding paragraph), authorization, execution, signature, endorsement, correctness (other than to the extent provided in the preceding paragraph), genuineness or legal effect of any Draft, certificate or other document presented to it pursuant to a Letter issued by the Issuing Lender and the Borrower unconditionally assumes all risks with respect to the same. The Borrower agrees that it assumes all risks of the acts or omissions of the beneficiary of any Letter with respect to the use by such beneficiary of the relevant Letter. The Borrower shall promptly examine a copy of each Letter and each amendment thereto that is delivered to it and, in the event of any claim of non-compliance with the Borrower’s instructions or other irregularity, the Borrower will immediately notify the Issuing Lender. The Borrower shall be conclusively deemed to have waived any such claim against the Issuing Lender and its correspondents unless such notice is given as aforesaid.	
 	 	 	
 	(c)	The obligations of the Borrower hereunder with respect to Letters shall be absolute, unconditional and irrevocable and shall not be reduced by any event or occurrence including, without limitation:	

 	(i)	any lack of validity or enforceability of this agreement or any such Letter;	
 	 	 	
 	(ii)	any amendment or waiver of or any consent to departure from this agreement;	
 	 	 	
 	(iii)	the existence of any claim, set-off, defense or other rights which the Borrower may have at any time against any beneficiary or any transferee of any such Letter (or any person or entities for whom any such beneficiary or any such transferee may be acting), any Lender, the Issuing Lender or any other person or entity;	
 	 	 	
 	(iv)	any Draft, statement or other document presented under any such Letter proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect whatsoever;	
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 	(v)	any non-application or misapplication by the beneficiary of such Letter of the proceeds of any drawing under such Letter;	
 	 	 	
 	(vi)	the surrender or impairment of any Security;	
 	 	 	
 	(vii)	any reduction or withdrawal of the Issuing Lender’s credit rating by any rating agency; or	
 	 	 	
 	(viii)	any other circumstance or happening whatsoever, similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower.	
The obligations of the Borrower hereunder with respect to Letters shall remain in full force and effect and shall apply to any amendment to or extension of the expiration date of any such Letter, approved in writing by the Borrower. The Issuing Lender shall not be under any obligation to amend any Letter if (A) the Issuing Lender would have no obligation at such time to issue such Letter in its amended form under the terms hereof, or (B) the beneficiary of such Letter does not accept the proposed amendment to such Letter.

 	(d)	Any action, inaction or omission taken or suffered by the Issuing Lender or any of its correspondents under or in connection with a Letter or any Draft made thereunder, if in good faith and in conformity with foreign or domestic laws, regulations or customs applicable thereto, shall be binding upon the Borrower and shall not place the Issuing Lender or any of its correspondents under any resulting liability to the Borrower. Without limiting the generality of the foregoing, the Issuing Lender and its correspondents may receive, accept or pay as complying with the terms of a Letter, any Draft thereunder, otherwise in order which may be signed by, or issued to, the administrator or any executor of, or the trustee in bankruptcy of, or the receiver for any property of, or other person or entity acting as the representative or in the place of, such beneficiary or its successors and assigns. The Borrower covenants that it will not take any steps, issue any instructions to the Issuing Lender or any of its correspondents or institute any proceedings intended to derogate from the right or ability of the Issuing Lender or its correspondents to honour and pay any Draft or Drafts.	
 	 	 	
 	(e)	The Borrower agrees that the Lenders, the Issuing Lender and the Administrative Agent shall have no liability to it for any reason in respect of or in connection with any Letter, the issuance thereof, any payment thereunder, or any other action taken by the Lenders, the Issuing Lender or the Administrative Agent or any other Person in connection therewith, other than on account of the Issuing Lender’s gross negligence or wilful misconduct.	
 	 	 	
 	(f)	Save to the extent expressly provided otherwise in this Section 3.9, the rights and obligations between the Issuing Lender and the Borrower with respect to each Letter shall be determined in accordance with the applicable provisions of the (i) Uniform Customs and Practice for Documentary Credits, ICC Publications 600 or (ii) the International Standby Practices - ISP98, ICC Publication No. 590, as applicable.	
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 	(g)	The Issuing Lender shall act on behalf of the Lenders with respect to any Letters issued by it and the documents associated therewith, and the Issuing Lender shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article 14 with respect to any acts taken or omissions suffered by the Issuing Lender in connection with Letters issued by it or proposed to be issued by it and any documentation pertaining to such Letters as fully as if the term “Administrative Agent” as used in Article 14 included the Issuing Lender with respect to such acts or omissions, and (B) as additionally provided herein with respect to the Issuing Lender.	
 	 	 	
 	(h)	Immediately upon the issuance of each Letter, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Lender a risk participation in such Letter in an amount equal to the product of such Lender’s Pro Rata Share times the amount of such Letter.	
 	 	 	
 	(i)	None of the Issuing Lender, the Administrative Agent nor any correspondent, participant or assignee of the Issuing Lender shall be liable to any Lender for (i) any action of any of the Issuing Lender, the Administrative Agent or any correspondent, participant or assignee of the Issuing Lender taken or omitted in connection herewith at the request or with the approval of the Lenders or the Majority Lenders, as applicable, (ii) any action of any of the Issuing Lender, the Administrative Agent or any correspondent, participant or assignee of the Issuing Lender taken or omitted in the absence of such party’s gross negligence or wilful misconduct; or (iii) any deficiency in the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter.	

3.12	Notice Periods	
Each Drawdown Notice, Rollover Notice, Conversion Notice and Prepayment Notice shall be given to the Administrative Agent or the Issuing Lender, as the case may be:

 	(a)	prior to 10:00 a.m. (Toronto time) on the tenth day prior to the date of any voluntary prepayment;	
 	 	 	
 	(b)	prior to 10:00 a.m. (Toronto time) on the fifth Banking Day prior to the issuance of a Letter;	
 	 	 	
 	(c)	prior to 10:00 a.m. (Toronto time) on the third Banking Day prior to the date of a drawdown of, rollover of, conversion into or conversion of a LIBOR Loan; and	
 	 	 	
 	(d)	prior to 10:00 a.m. (Toronto time) on the second Banking Day prior to the date of any other drawdown, rollover or conversion.	

3.13	Administrative Agent’s Discretion to Allocate	
Notwithstanding the provisions of Section 3.2 with respect to the funding of Loans in accordance with each Lender’s Pro Rata Share, the Administrative Agent shall be entitled to reallocate the funding obligations among the Lenders in order to ensure, to the greatest extent practicable, that after such funding the aggregate amount of credit extended hereunder by each Lender coincides with such Lender’s Pro Rata Share of the aggregate amount of credit extended by all of the Lenders, provided that no such allocation shall result in the aggregate amount of credit extended hereunder by any Lender exceeding such Lender’s Individual Commitment.
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ARTICLE 4
DRAWDOWNS

4.1	Drawdown Notice	
Subject to Sections 3.1 and 3.7 and provided that all of the applicable conditions precedent set forth in Article 12 have been fulfilled by the Borrower or waived by the Lenders as provided in Section 14.14, the Borrower may, from time to time, obtain credit hereunder by giving to the Administrative Agent an irrevocable notice in substantially the form of Schedule E hereto (“ Drawdown Notice ”) in accordance with Section 3.12 and specifying, as applicable:

 	(a)	the date the credit is to be obtained;	
 	 	 	
 	(b)	whether the credit is to be obtained by way of a Prime Rate Loan, a BA Equivalent Loan, a Base Rate Loan, a LIBOR Loan, a Bankers’ Acceptance or a Letter;	
 	 	 	
 	(c)	in the case of any credit to be obtained by way of a Loan, the principal amount of the Loan;	
 	 	 	
 	(d)	if the credit is to be obtained by way of LIBOR Loan, the applicable Interest Period;	
 	 	 	
 	(e)	if the credit is to be obtained by way of Bankers’ Acceptances, the aggregate face amount of the Bankers’ Acceptances to be issued and the term of the Bankers’ Acceptances;	
 	 	 	
 	(f)	if the credit is to be obtained by way of Letter, the date of issuance of the Letter, whether the Letter is to be a letter of credit or a letter of guarantee, the named beneficiary of the Letter, the maturity date and amount of the Letter, the currency in which the Letter is to be denominated and all other terms of the Letter; and	
 	 	 	
 	(g)	the details of any irrevocable authorization and direction pursuant to Section 3.2.	
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ARTICLE 5
ROLLOVERS

5.1	LIBOR Loans	
Subject to Section 3.7 and provided that the Borrower has, by giving notice to the Administrative Agent in accordance with Section 5.3, requested the Lenders to continue to extend credit by way of a LIBOR Loan to replace all or a portion of an outstanding LIBOR Loan as it matures, each Lender shall, on the maturity of such LIBOR Loan, continue to extend credit to the Borrower by way of a LIBOR Loan (without a further advance of funds to the Borrower) in the principal amount equal to such Lender’s Pro Rata Share of the principal amount of the matured LIBOR Loan or the portion thereof to be replaced.

5.2	Bankers’ Acceptances	
Subject to Section 3.4 and provided that the Borrower has, by giving notice to the Administrative Agent in accordance with Section 5.3, requested the Lenders to accept its drafts to replace all or a portion of outstanding Bankers’ Acceptances as they mature, each Lender shall, on the maturity of such Bankers’ Acceptances and concurrent with the payment by the Borrower to such Lender of the face amount of such Bankers’ Acceptances or the portion thereof to be replaced, accept the Borrower’s draft or drafts having an aggregate face amount equal to its Pro Rata Share of the aggregate face amount of the matured Bankers’ Acceptances or the portion thereof to be replaced.

5.3	Rollover Notice	
The notice to be given to the Administrative Agent pursuant to Section 5.1 or 5.2 (“ Rollover Notice ”) shall be irrevocable, shall be given in accordance with Section 3.12, shall be in substantially the form of Schedule F hereto and shall specify:

 	(a)	the maturity date of the maturing Bankers’ Acceptances or the expiry date of the Interest Period of the LIBOR Loan to be replaced, as the case may be;	
 	 	 	
 	(b)	the face amount of the maturing Bankers’ Acceptances or the principal amount of the LIBOR Loan to be replaced, as the case may be, and the portion thereof to be replaced; and	
 	 	 	
 	(c)	the aggregate face amount of the new Bankers’ Acceptances and the term or terms of the new Bankers’ Acceptances or the principal amount of the new LIBOR Loans, as the case may be, and the Interest Period or Interest Periods of the new LIBOR Loans.	

5.4	Rollover by Lenders	
Upon written notice to such effect to the Borrower at such time as a Default has occurred and is continuing, the Administrative Agent may, as applicable:
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 	(a)	on the maturity date of a LIBOR Loan, rollover such LIBOR Loan into a LIBOR Loan having an Interest Period of one month or such other period as the Lenders may determine, as though a notice to such effect had been given in accordance with Section 5.3.	
 	 	 	
 	(b)	on the maturity date of a Bankers’ Acceptance, rollover such Bankers’ Acceptance into a Bankers’ Acceptance having a term of 30 days or such other period as the Lenders may determine, as though a notice to such effect had been given in accordance with Section 5.3.	
ARTICLE 6
CONVERSIONS

6.1	Converting Loan to Other Type of Loan	
Subject to Sections 3.1 and 3.7 and provided that the Borrower has, by giving notice to the Administrative Agent in accordance with Section 6.4, requested the Lenders to convert all or a portion of an outstanding Loan into another type of Loan, each Lender shall, on the date of conversion (which, in the case of the conversion of all or a portion of an outstanding LIBOR Loan, shall be the date on which such Loan matures), continue to extend credit to the Borrower by way of the type of Loan into which the outstanding Loan or a portion thereof is converted (with a repayment and a subsequent advance of funds to the Borrower) in the aggregate principal amount equal to such Lender’s Pro Rata Share of the principal amount of the outstanding Loan or the portion thereof which is being converted.

6.2	Converting Loan to Bankers’ Acceptances	
Subject to Section 3.4 and provided that the Borrower has, by giving notice to the Administrative Agent in accordance with Section 6.4, requested the Lenders to accept its drafts to replace all or a portion of an outstanding Loan and, if a LIBOR Loan or a BA Equivalent Loan is to be replaced, the date of conversion is the date on which such Loan matures, each Lender shall, on the date of conversion and concurrent with the payment by the Borrower to each Lender of the principal amount of such outstanding Loan or the portion thereof which is being converted, accept the Borrower’s draft or drafts having an aggregate face amount as provided in the Conversion Notice.

6.3	Converting Bankers’ Acceptances to Loan	
Each Lender shall, on the maturity date of a Bankers’ Acceptance which such Lender has accepted, pay to the holder thereof the face amount of such Bankers’ Acceptance. Subject to Sections 3.1 and 3.7, and provided that the Borrower has, by giving notice to the Administrative Agent in accordance with Section 6.4, requested the Lenders to convert all or a portion of outstanding maturing Bankers’ Acceptances into a particular type of Loan, each Lender shall, upon the maturity date of such Bankers’ Acceptances and the payment by such Lender to the holders of such Bankers’ Acceptances of the aggregate face amount thereof, make credit available to the Borrower by way of the Loan into which the matured Bankers’ Acceptances or a portion thereof are converted in the aggregate principal amount as provided in the Conversion Notice. Where a particular Non-BA Lender has funded the Borrower by way of a BA Equivalent Loan rather than by way of Bankers’ Acceptances, the provisions of this Section 6.3 as they relate to Bankers’ Acceptances shall apply mutatis mutandis to such BA Equivalent Loan.
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6.4	Conversion Notice	
The notice to be given to the Administrative Agent pursuant to Section 6.1, 6.2 or 6.3 (“ Conversion Notice ”) shall be irrevocable, shall be given in accordance with Section 3.12, shall be in substantially the form of Schedule G hereto and shall specify:

 	(a)	whether an outstanding Loan or Bankers’ Acceptances are to be converted and, if an outstanding Loan is to be converted, the type of Loan to be converted;	
 	 	 	
 	(b)	the date on which the conversion is to take place;	
 	 	 	
 	(c)	the face amount of the Bankers’ Acceptances or the portion thereof which is to be converted or the principal amount of the Loan or the portion thereof which is to be converted;	
 	 	 	
 	(d)	the type and amount of the Loan or Bankers’ Acceptances into which the outstanding Loan or Bankers’ Acceptances are to be converted;	
 	 	 	
 	(e)	if outstanding extension of credit is to be converted into a LIBOR Loan, the applicable Interest Period; and	
 	 	 	
 	(f)	if an outstanding Loan is to be converted into Bankers’ Acceptances, the aggregate face amount of the new Bankers’ Acceptances to be issued, the term or terms of the new Bankers’ Acceptances.	

6.5	Absence of Notice	
Subject to Section 3.6 and 3.7, in the absence of a Rollover Notice or Conversion Notice within the appropriate time periods referred to herein, a maturing Bankers’ Acceptance or BA Equivalent Loan shall be automatically converted to a Prime Rate Loan and a maturing LIBOR Loan shall be automatically converted to a Base Rate Loan as though a notice to such effect had been given in accordance with Section 6.4.

6.6	Conversion by Lenders	
If an Event of Default has occurred and is continuing at 10:00 a.m. (Toronto time) on the third Banking Day prior to the maturity date of a Bankers’ Acceptance, BA Equivalent Loan or a LIBOR Loan, such Bankers’ Acceptances or BA Equivalent Loan shall be automatically converted to a Prime Rate Loan and such LIBOR Loan shall be automatically converted to a Base Rate Loan as though a notice to such effect had been given in accordance with Section 6.4.
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ARTICLE 7
INTEREST AND FEES

7.1	Interest Rates	
The Borrower shall pay to the Lenders, in accordance with Section 3.8, interest on the outstanding principal amount from time to time of each Loan and on overdue interest thereon, at the rate per annum equal to:

 	(i)	in the case of each Prime Rate Loan, the Prime Rate plus the Applicable Margin;	
 	 	 	
 	(ii)	in the case of each Base Rate Loan, the Alternate Base Rate Canada plus the Applicable Margin; and	
 	 	 	
 	(iii)	in the case of each LIBOR Loan, LIBOR plus the Applicable Margin.	

7.2	Calculation and Payment of Interest	

 	(a)	Interest on the outstanding principal amount from time to time of each LIBOR Loan and on overdue interest thereon shall accrue from day to day from and including the date on which credit is obtained by way of such Loan or on which such overdue interest is due, as the case may be, to but excluding the date on which such Loan or overdue interest, as the case may be, is repaid in full (both before and after maturity and judgment) and shall be calculated on the basis of the actual number of days elapsed divided by 360.	
 	 	 	
 	(b)	Interest on the outstanding principal amount from time to time of each Prime Rate Loan and Base Rate Loan and on overdue interest thereon shall accrue from day to day from and including the date on which credit is obtained by way of such Loan or on which such overdue interest is due, as the case may be, to but excluding the date on which such Loan or overdue interest, as the case may be, is repaid in full (both before and after maturity and judgment) and shall be calculated on the basis of the actual number of days elapsed divided by 365 or, in the case of a leap year, 366.	
 	 	 	
 	(c)	Accrued interest shall be paid,	

 	(i)	in the case of interest on Prime Rate Loans and Base Rate Loans, monthly in arrears on the last day of each calendar month; and	
 	 	 	
 	(ii)	in the case of interest on LIBOR Loans, in arrears on the last day of the applicable Interest Period but, in any event, at least every 3 months.	

7.3	General Interest Rules	

 	(a)	For the purposes hereof, whenever interest is calculated on the basis of a year of 360 or 365 days, each rate of interest determined pursuant to such calculation expressed as an annual rate for the purposes of the Interest Act (Canada) is equivalent to such rate as so determined multiplied by the actual number of days in the calendar year in which the same is to be ascertained and divided by 360 or 365 days, respectively.	
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 	(b)	Interest on each Loan and on overdue interest thereon shall be payable in the currency in which such Loan is denominated during the relevant period.	
 	 	 	
 	(c)	If the Borrower fails to pay any fee or other amount (other than principal or interest) of any nature payable by it to the Administrative Agent or the Lenders hereunder or under any document, instrument or agreement delivered pursuant hereto on the due date therefor, the Borrower shall pay to the Administrative Agent or the Lenders, as the case may be, interest on such overdue amount in the same currency as such overdue amount is payable from and including such due date to but excluding the date of actual payment (as well before and after judgment) at the rate per annum, calculated and compounded monthly, which is equal to the Alternate Base Rate Canada plus 4.00%. Such interest on overdue amounts shall become due and be paid on demand made by the Administrative Agent.	
 	 	 	
 	(d)	No interest or fee to be paid hereunder shall be paid at a rate exceeding the maximum rate permitted by Applicable Law. In the event that such interest or fee exceeds such maximum rate, such interest or fees shall be reduced or refunded, as the case may be, so as to be payable at the highest rate recoverable under Applicable Law.	

7.4	Selection of Interest Periods	
With respect to each LIBOR Loan, the Borrower shall specify in the Drawdown Notice, Rollover Notice or Conversion Notice, the duration of the Interest Period provided that:

 	(a)	Interest Periods shall have a duration from one, two, three or six months (subject to availability and subject to the right of the Administrative Agent, in its sole discretion, to restrict the term or maturity date of Interest Periods);	
 	 	 	
 	(b)	the first Interest Period for a LIBOR Loan shall commence on and include the day on which credit is obtained by way of such Loan and each subsequent Interest Period applicable thereto shall commence on and include the date of the expiry of the immediately preceding Interest Period applicable thereto; and	
 	 	 	
 	(c)	if any Interest Period would end on a day which is not a Banking Day, such Interest Period shall be extended to the next succeeding Banking Day unless such next succeeding Banking Day falls in the next calendar month, in which case such Interest Period shall be shortened to end on the immediately preceding Banking Day.	
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7.5	BA Acceptance Fees	
With respect to each BA Draft of the Borrower accepted pursuant hereto and each BA Equivalent Note issued hereunder, the Borrower shall pay to the Lenders, in advance, the BA Acceptance Fee therefor. Such BA Acceptance Fees shall be non-refundable and shall be fully earned when due.

7.6	Standby Fees	
Upon the first Banking Day following the completion of each Fiscal Quarter and on the termination of the Credit Facility, the Borrower shall pay, in accordance with Section 3.6, to the Lenders, in arrears, a standby fee calculated at the rate per annum, on the basis of the actual number of days elapsed and a year of 365 or 366 days, as the case may be, set forth in Schedule A hereto, on the Available Credit, such fee to accrue daily from the date of the execution and delivery of this agreement to and including the termination of the Credit Facility.

7.7	Letter Fees	

 	(a)	The Borrower shall pay in accordance with Section 3.8 to the Administrative Agent, for the benefit of the Lenders, an issuance fee (in the currency which the Letter is denominated) in advance on the date each Letter is issued or renewed, calculated at the rate per annum equal to the Applicable Margin (on the basis of a year of 365 or 366 days, as the case may be) on the amount of each such Letter. In addition, with respect to all Letters, the Borrower shall from time to time pay to the Lenders its usual and customary fees (at the then prevailing rates) for the amendment, delivery and administration of letters of credit and letters of guarantee such as the Letters. Each such payment is non-refundable and fully earned when due.	
 	 	 	
 	(b)	With respect to each Letter issued hereunder at the time when there is one or more Lenders other than the Issuing Lender, the Borrower shall pay to the Administrative Agent for the account of the Issuing Lender a fee (in the currency in which the Letter is denominated) in advance on the date each such Letter is issued or renewed, calculated at a rate per annum equal to 0.25% on the amount of each such Letter for the number of days in the term of such Letter in the year of 365 or 366 days, as the case may be, in which the Letter is issued or renewed. Each such payment is non-refundable and fully earned when due.	
ARTICLE 8
RESERVE, CAPITAL, INDEMNITY AND TAX PROVISIONS

8.1	Conditions of Credit	
The obtaining or maintaining of credit hereunder shall be subject to the terms and conditions contained in this Article 8.
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8.2	Change of Circumstances	

 	(a)	If, with respect to any type of credit, the introduction or adoption of any law, regulation, guideline, request or directive (whether or not having the force of law) of any governmental authority, central bank or comparable agency (“ Restraint ”) or any change therein or in the application thereof to the Borrower or to any Lender or in the interpretation or administration thereof or any compliance by any Lender therewith:	

 	(i)	prohibits or restricts extending or maintaining such type of credit or the charging of interest or fees in connection therewith, the Borrower agrees that such Lender shall have the right to comply with such Restraint, shall have the right to refuse to permit the Borrower to obtain such type of credit and shall have the right to require, at the option of the Borrower, the conversion of such outstanding credit to another type of credit to permit compliance with the Restraint or repayment in full of such credit together with accrued interest thereon on the last day on which it is lawful for such Lender to continue to maintain and fund such credit or to charge interest or fees in connection therewith, as the case may be; or	
 	 	 	
 	(ii)	shall impose or require any reserve, special deposit requirements or tax (excluding taxes measured with reference to the net income of such Lender or capital taxes or receipts and franchise taxes), shall establish an appropriate amount of capital to be maintained by such Lender or shall impose any other requirement or condition which results in an increased cost to such Lender of extending or maintaining a credit or obligation hereunder or reduces the amount received or receivable by such Lender with respect to any credit under this agreement or reduces such Lender’s effective return hereunder or on its capital or causes such Lender to make any payment or to forego any return based on any amount received or receivable hereunder, then, on notification to the Borrower by such Lender, the Borrower shall pay immediately to such Lender such amounts as shall fully compensate such Lender for all such increased costs, reductions, payments or foregone returns which accrue up to and including the date of receipt by the Borrower of such notice and thereafter, upon demand from time to time, the Borrower shall pay such additional amount as shall fully compensate such Lender for any such increased or imposed costs, reductions, payments or foregone returns. Such Lender shall notify the Borrower of any actual increased or imposed costs, reductions, payments or foregone returns forthwith on becoming aware of same and shall concurrently provide to the Borrower a certificate of an officer of such Lender setting forth the amount of compensation to be paid to such Lender and the basis for the calculation of such amount. Notwithstanding this Section 8.2(a)(ii), the Borrower shall not be liable to compensate such Lender for any such cost, reduction, payment or foregone return occurring more than 60 days before receipt by the Borrower of the aforementioned notification from such Lender; provided, however, that the aforementioned limitation shall not apply to any such cost, reduction, payment or foregone return of a retroactive nature.	
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For certainty, the Dodd-Frank Wall Street Reform and Consumer Protection Act as well as Basel III and all request, rules, guidelines or directives thereunder or issued in connection therewith shall be deemed to be a “ Restraint ”, regardless of the date enacted, adopted, promulgated or issued.

 	(b)	Each Lender agrees that, as promptly as practicable after it becomes aware of the occurrence of an event or the existence of a condition that would cause it to seek additional amounts from the Borrower pursuant to Section 8.2(a), it will use reasonable efforts to make, fund or maintain the affected credit of such Lender through another lending office or take such other actions as it deems appropriate, in its sole discretion, if as a result thereof the additional moneys which would otherwise be required to be paid in respect of such credit pursuant to Section 8.2(a), would be reduced and if, as determined by such Lender in its sole discretion, the making, funding or maintaining of such affected credit through such other lending office or the taking of such other actions would not otherwise adversely affect such credit or such Lender and would not, in such Lender’s sole discretion, be commercially unreasonable.	

8.3	Failure to Fund as a Result of Change of Circumstances	
If any Lender but not all of the Lenders seeks additional compensation pursuant to Section 8.2(a), if any Lender becomes either a Defaulting Lender or a Lender in respect of which any amounts are paid or become payable by the Borrower pursuant to Section 8.6 (the “ Affected Lender ”), then the Borrower may indicate to the Administrative Agent in writing that it desires to replace the Affected Lender with one or more of the other Lenders, and the Administrative Agent shall then forthwith give notice to the other Lenders that any such Lender or Lenders may, in the aggregate, advance all (but not part) of the Affected Lender’s Pro Rata Share of the affected credit and, in the aggregate, assume all (but not part) of the Affected Lender’s Individual Commitment and obligations hereunder and acquire all (but not part) of the rights of the Affected Lender and assume all (but not part) of the obligations of the Affected Lender under each of the other Credit Documents (but in no event shall any other Lender or the Administrative Agent be obliged to do so). If one or more Lenders shall so agree in writing (herein collectively called the “Assenting Lenders” and individually called an “ Assenting Lender ”) with respect to such advance, acquisition and assumption, the Pro Rata Share of such credit of each Assenting Lender and the Individual Commitment and the obligations of such Assenting Lender hereunder and the rights and obligations of such Assenting Lender under each of the other Credit Documents shall be increased by its respective pro rata share (based on the relative Individual Commitment of the Assenting Lenders) of the Affected Lender’s Pro Rata Share of such credit and Individual Commitment and obligations hereunder and rights and obligations under each of the other Credit Documents on a date mutually acceptable to the Assenting Lenders and the Borrower. On such date, the Assenting Lenders shall extend to the Borrower the Affected Lender’s Pro Rata Share of such credit and shall prepay to the Affected Lender the advances of the Affected Lender then outstanding, together with all interest accrued thereon and all other amounts owing to the Affected Lender hereunder, and, upon such advance and prepayment by the Assenting Lenders, the Affected Lender shall cease to be a “ Lender ” for purposes of this agreement and shall no longer have any obligations hereunder. Upon the assumption of the Affected Lender’s Individual Commitment as aforesaid by an Assenting Lender, Schedule B hereto shall be deemed to be amended to increase the Individual Commitment of such Assenting Lender by the respective amounts of such assumption.
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8.4	Indemnity Relating to Credits	
Upon notice from the Administrative Agent to the Borrower, the Borrower shall pay to the Administrative Agent, for the benefit of the Lenders (including the Issuing Lender), such amount or amounts (as determined by each lender in accordance with its usual practice) as will compensate the Lenders for any loss, cost or expense incurred by them:

 	(a)	in the liquidation or redeposit of any funds acquired by the Lenders to fund or maintain any portion of a LIBOR Loan or a BA Equivalent Loan as a result of:	

 	(i)	the failure of the Borrower to borrow or make repayments on the dates specified under this agreement or in any notice from the Borrower to the Administrative Agent (provided that if any notice specifies the repayment of a LIBOR Loan or a BA Equivalent Loan at any time other than its maturity date, then the Borrower shall be responsible for any loss, costs or expenses referred to above); or	
 	 	 	
 	(ii)	the repayment or prepayment of any amounts on a day other than the payment dates prescribed herein or in any notice from the Borrower to the Administrative Agent (provided that if any notice specifies the repayment of a LIBOR Loan or a BA Equivalent Loan at any time other than its maturity date, then the Borrower shall be responsible for any loss, costs or expenses referred to above); or	

 	(b)	with respect to any Bankers’ Acceptance or Letter, arising from claims or legal proceedings, and including reasonable legal fees and disbursements, respecting the collection of amounts owed by the Borrower hereunder in respect of such Bankers’ Acceptance or Letter or the enforcement of the Administrative Agents’ or Lenders’ rights hereunder in respect of such Bankers’ Acceptance or Letter including, without limitation, legal proceedings attempting to restrain the Lenders (including the Issuing Lender) from paying any amount under such Bankers’ Acceptance or Letter; or	
 	 	 	
 	(c)	in converting United States dollars into Canadian dollars or Canadian dollars into United States dollars as a result of the failure of the Borrower to make repayments of outstanding credit hereunder in the currency in which such outstanding credit was denominated.	
The aforesaid notice from the Administrative Agent shall be accompanied by a written certificate from each Lender showing in reasonable detail the basis for such claim, which shall be deemed to be prima facie correct absent manifest error.
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8.5	Indemnity for Transactional and Environmental Liability	

 	(a)	The Borrower hereby agrees to indemnify and hold the Administrative Agent, each Lender and each of their respective Affiliates, shareholders, officers, directors, employees, and agents (collectively, the “Indemnified Parties” ) free and harmless from and against any and all claims, demands, actions, causes of action, suits, losses, costs, charges, liabilities and damages, and expenses in connection therewith (irrespective of whether such Indemnified Party is a party to the action for which indemnification hereunder is sought), and including, without limitation, reasonable legal fees and out of pocket disbursements and amounts paid in settlement which are approved by the Borrower (collectively in this Section 8.5(a), the “ Indemnified Liabilities ”), incurred or suffered by, or asserted against, the Indemnified Parties or any of them as a result of, or arising out of, or relating to (i) the extension of credit contemplated herein, (ii) any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of any credit extended hereunder, (iii) any actual or threatened investigation, litigation or other proceeding relating to any credit extended or proposed to be extended as contemplated herein or (iv) the execution, delivery, performance or enforcement of the Credit Documents and any instrument, document or agreement executed pursuant hereto, except for any such Indemnified Liabilities that a court of competent jurisdiction’s binding and non- appealable decision held that such Indemnified Liability arose on account of the relevant Indemnified Party’s gross negligence or willful misconduct.	
 	 	 	
 	(b)	Without limiting the generality of the indemnity set out in the preceding clause (a), the Borrower hereby further agrees to indemnify and hold the Indemnified Parties free and harmless from and against any and all claims, demand, actions, causes of action, suits, losses, costs, charges, liabilities and damages, and expenses in connection therewith, including, without limitation, reasonable and documented legal fees and out of pocket disbursements and amounts paid in settlement which are approved by the Borrower, of any and every kind whatsoever paid (collectively in this Section 8.5(b), the “Indemnified Liabilities” ), incurred or suffered by, or asserted against, the Indemnified Parties or any of them for, with respect to, or as a direct or indirect result of, (i) the presence on or under, or the escape, seepage, leakage, spillage, discharge, emission or release from, any real property legally or beneficially owned (or any estate or interest which is owned), leased, used or operated by any Company of any Hazardous Material, Contaminant, Pollutant or Waste, and (ii) any other violation of or liability pursuant to an Environmental Law with respect to any Company, and regardless of whether caused by, or within the control of, such Company, except for any such Indemnified Liabilities that a court of competent jurisdiction’s binding and non-appealable decision held that such Indemnified Liability arose on account of the relevant Indemnified Party’s gross negligence or willful misconduct.	
 	 	 	
 	(c)	All obligations provided for in this Section 8.5 shall survive indefinitely the permanent repayment of the outstanding credit hereunder and the termination of the Credit Agreement. The obligations provided for in this Section 8.5 shall not be reduced or impaired by any investigation made by or on behalf of the Administrative Agent or any of the Lenders.	
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 	(d)	The Borrower hereby agrees that, for the purposes of effectively allocating the risk of loss placed on the Borrower by this Section 8.5, the Administrative Agent and each Lender shall be deemed to be acting as the agent or trustee on behalf of and for the benefit of their respective shareholders, officers, directors, employees and agents.	
 	 	 	
 	(e)	If, for any reason, the obligations of the Borrower pursuant to this Section 8.5 shall be unenforceable, the Borrower agrees to make the maximum contribution to the payment and satisfaction of each obligation that is permissible under Applicable Law.	
 	 	 	
 	(f)	The indemnity under this Section 8.5 shall not apply to any matters specifically dealt with in Sections 8.2, 8.4, 8.6 or 11.2(f).	

8.6	Payments Free and Clear of Taxes	

 	(a)	Any and all payments made by or on behalf of the Borrower under this agreement or under any other Credit Document (any such payment being hereinafter referred to as a “ Payment ”) to or for the benefit of the Administrative Agent or any Lender shall be made without set-off or counterclaim, and free and clear of, and without deduction or withholding for, or on account of, any and all present or future Taxes except to the extent that such deduction or withholding is required by law or the administrative practice of any Official Body. If any such Taxes are so required to be deducted or withheld from or in respect of any Payment made to or for the benefit of the Administrative Agent or any Lender, the Borrower shall:	

 	(i)	promptly notify the Administrative Agent of such requirement;	
 	 	 	
 	(ii)	with respect to Taxes other than Excluded Taxes, pay to the Administrative Agent or Lender, as the case may be, in addition to the Payment to which the Administrative Agent or Lender is otherwise entitled, such additional amount as is necessary to ensure that the net amount actually received by the Administrative Agent or Lender (free and clear, and net, of any such Taxes, including the full amount of any Taxes required to be deducted or withheld from any additional amount paid by the Borrower under this Section 8.6(a), whether assessable against the Borrower, the Administrative Agent or such Lender) equals the full amount the Administrative Agent or Lender, as the case may be, would have received had no such deduction or withholding been required;	
 	 	 	
 	(iii)	make such deduction or withholding;	
 	 	 	
 	(iv)	pay to the relevant Official Body in accordance with Applicable Law the full amount of Taxes required to be deducted or withheld (including the full amount of Taxes required to be deducted or withheld from any additional amount paid by the Borrower to the Administrative Agent or Lender under this Section 8.6(a)), within the time period required by Applicable Law; and	
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 	(v)	as promptly as possible thereafter, forward to the Administrative Agent or Lender, as the case may be, an original official receipt (or a certified copy), or other documentation reasonably acceptable to the Administrative Agent or Lender, evidencing such payment to such Official Body.	

 	(b)	In addition, the Borrower agrees to pay any and all present or future Other Taxes.	
 	 	 	
 	(c)	The Borrower hereby indemnifies and holds harmless the Administrative Agent and each Lender, on an after-Taxes basis, for the full amount of Taxes and Other Taxes, interest, penalties and other liabilities, levied, imposed or assessed against (and whether or not paid directly by) the Administrative Agent or any Lender, as applicable, and for all expenses, resulting from or relating to the Borrower’s failure to:	

 	(i)	remit to the Administrative Agent or any Lender the documentation referred to in Section 8.6(a)(v); or	
 	 	 	
 	(ii)	pay any Taxes or Other Taxes when due to the relevant Official Body (including, without limitation, any Taxes imposed by any Official Body on amounts payable under this Section 8.6)),	
whether or not such Taxes were correctly or legally assessed. The Administrative Agent or any Lender who pays any Taxes or Other Taxes, shall promptly notify the Borrower of such payment, provided, however, that failure to provide such notice shall not detract from, or compromise, the obligations of the Borrower under this Section 8.6. Payment pursuant to this indemnification shall be made within 30 days from the date the Administrative Agent or any Lender, as the case may be, makes written demand therefor accompanied by a certificate as to the amount of such Taxes or Other Taxes and the calculation thereof, which calculation shall be prima facie evidence of such amount.

 	(d)	If the Borrower determines in good faith that a reasonable basis exists for contesting any Taxes for which a payment has been made under this Section 8.6, the relevant Lender or the Administrative Agent, as applicable, shall, if so requested by the Borrower, cooperate with the Borrower in challenging such Taxes at the Borrower’s expense.	
 	 	 	
 	(e)	If any Lender or the Administrative Agent, as applicable, receives a refund of, or credit for, Taxes for which a payment has been made by the Borrower under this Section 8.6, which refund or credit in the good faith judgment of such Lender or the Administrative Agent, as the case may be, is attributable to the Taxes giving rise to such payment made by the Borrower, then such Lender or the Administrative Agent, as the case may be, shall reimburse the Borrower for such amount (if any, but not exceeding the amount of any payment made under this Section 8.6 that gives rise to such refund or credit), net of out-of-pocket expenses of such Lender or the Administrative Agent, as the case may be, which the Administrative Agent or such Lender, as the case may be, determines in its absolute discretion will leave it, after such reimbursement, in no better or worse position than it would have been in if such Taxes had not been exigible. The Borrower, upon the request of the Administrative Agent or any Lender, agrees to repay the Administrative Agent or Lender, as the case may be, any portion of any such refund or credit paid over to the Borrower that the Administrative Agent or Lender, as the case may be, is required to pay to the relevant Official Body and agrees to pay any interest, penalties or other charges paid by the Administrative Agent or Lender, as the case may be, as a result of or related to such payment to such Official Body. Neither the Administrative Agent nor any Lender shall be under any obligation to arrange its tax affairs in any particular manner so as to claim any refund or credit. None of the Lenders nor the Administrative Agent shall be obliged to disclose any information regarding its tax affairs or computations to the Borrower or any other Person in connection with this Section 8.6(f) or any other provision of this Section 8.6.	
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 	(f)	The Borrower also hereby indemnifies and holds harmless the Administrative Agent and each Lender, on an after-Taxes basis, for any additional taxes on net income that the Administrative Agent or any Lender may be obliged to pay as a result of the receipt of amounts under this Section 8.6.	
 	 	 	
 	(g)	Any Lender that is entitled to an exemption from or reduction of withholding Taxes or Other Taxes (collectively, “ Relevant Taxes ”) under the law of the jurisdiction in which the Borrower is resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to Payments shall, at the request of the Borrower, deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by Applicable Law or reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by Applicable Law (if any) as will permit such payments to be made without withholding or at a reduced rate of withholding or a reduced rate of Relevant Taxes. In addition, (i) any Lender, if requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by Applicable Law (if any) or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to withholding or information reporting requirements, and (ii) any Lender that ceases to be, or to be deemed to be, resident in Canada for purposes of Part XIII of the Tax Act or any successor provision thereto in respect of Payments shall within five Business Days thereof notify the Borrower and the Administrative Agent in writing. Notwithstanding the foregoing, no Lender shall be required to deliver any documentation pursuant to this Section 8.6(h) that such Lender is not legally able to deliver.	
 	 	 	
 	(h)	Additional amounts payable under Section 8.6(a) have the same character as the Payments to which they relate. For greater certainty, for example, additional amounts payable under Section 8.6(a), in respect of interest payable under a Credit Document, shall be payments of interest under such Credit Document.	
 	 	 	
 	(i)	The Borrower’s obligations under this Section 8.6 shall survive without limitation the termination of the Credit Facility and this agreement and all other Credit Documents and the permanent repayment of the outstanding credit and all other amounts payable hereunder.	
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ARTICLE 9
REPAYMENTS AND PREPAYMENTS

9.1	Repayment of Credit Facility	
The Borrower shall repay to the Administrative Agent, for the account of the Lenders, in full the outstanding credit under the Credit Facility on the Maturity Date together with all accrued and unpaid interest thereon and all accrued and unpaid fees with respect thereto.

9.2	Extension of Maturity Date	

 	(a)	The Borrower may request in writing (a “ Request for Offer of Extension ”) from the Lenders (each, a “ Requested Lender ”), not more than 120 days and not less than 90 days prior to the current Maturity Date, and each successive anniversary of the Maturity Date thereafter, or such other date as may be agreed to by the Lenders (the “ Anniversary Date ”), an offer by the Requested Lenders to the Borrower to extend the then current Maturity Date for a specified period on specific terms and conditions (an “ Offer of Extension ”). Such request shall be made by the Borrower by delivering to the Administrative Agent an executed Request for Offer of Extension and such other information as the Administrative Agent and Requested Lenders may request. The Administrative Agent shall forthwith notify each Requested Lender of such request by the Borrower and each Requested Lender shall notify the Administrative Agent and the Borrower as to whether or not it agrees (in its sole discretion) to such request no later than 30 days following receipt by such Requested Lender of notice of such request; provided that, if a Requested Lender does not so notify the Administrative Agent and the Borrower, such Requested Lender shall be deemed to have elected not to agree to such request.	
 	 	 	
 	(b)	Any such Requested Lender that does not, or is deemed not to, agree to such request shall become a “ Non-Agreeing Lender ” and unless its Individual Commitment is purchased pursuant to Section 9.2(d), the Secured Obligations owing to such Requested Lender shall be repaid in accordance with and subject to Section 9.2(e).	
 	 	 	
 	(c)	If the Majority Lenders agree to such request, the Administrative Agent shall within two (2) Banking Days deliver to the Borrower an Offer of Extension. Any such Offer of Extension shall be open for acceptance by the Borrower until the Banking Day immediately preceding the next succeeding Anniversary Date. Upon written notice by the Borrower to the Administrative Agent accepting an Offer of Extension and agreeing to the terms and conditions specified therein, if any, the Maturity Date, in respect of those Lenders agreeing to such extension (the “ Agreeing Lenders ”), shall be extended to the date specified in the Offer of Extension and the terms and conditions, if any, specified thereunder, shall become effective on the first day after the succeeding Anniversary Date referred to above.	
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 	(d)	Each of the Agreeing Lenders shall have the right (but not the obligation) to purchase the Individual Commitment of any Non-Agreeing Lender for a purchase price in an amount equal to the aggregate outstanding principal amount of the Secured Obligations owing to such Non-Agreeing Lender, including accrued interest thereon to the date of payment of such principal amount and all other amounts payable to such Non-Agreeing Lender under this agreement. Each of the Agreeing Lenders (each, an “ Extension Purchasing Lender” ) wishing to exercise its rights to purchase the Individual Commitment of a Non-Agreeing Lender shall forthwith so notify the Borrower, the Administrative Agent and each of the other Lenders, if any, and such Extension Purchasing Lender shall thereupon be obligated to purchase not less than fifteen (15) days prior to the then current Anniversary Date an undivided share of the Individual Commitment of each Non-Agreeing Lender equal to the ratio that such Extension Purchasing Lender's Individual Commitment is of the aggregate of all Extension Purchasing Lenders' Individual Commitments or as otherwise agreed to by the Borrower and all Extension Purchasing Lenders. The Non-Agreeing Lenders, the Extension Purchasing Lenders, the Administrative Agent, the Borrower and each of the other Lenders, if any, shall forthwith duly execute and deliver any necessary documentation to give effect to such purchase, whereupon each Non-Agreeing Lender shall, as of the effective date thereof, be released from its obligations to the Borrower hereunder and under the other Credit Documents arising subsequent to such date.	
 	 	 	
 	(e)	If a Non-Agreeing Lender's Individual Commitment is not purchased pursuant to Section 9.2(d), so long as there exists no Default, the Borrower shall repay all Secured Obligations owing hereunder to such Non-Agreeing Lender on its then current Maturity Date and, upon such repayment, (A) such Non-Agreeing Lender shall cease to be a Lender hereunder and such Non-Agreeing Lender's Individual Commitment shall be terminated, (B) the Total Commitment Amount shall be reduced by the amount of the Non-Agreeing Lender's terminated Individual Commitment, and (C) the Pro Rata Share of each remaining Lender shall be adjusted accordingly.	
 	 	 	
 	(f)	If an Offer of Extension has been provided to the Borrower which it has accepted as required thereby, the Maturity Date for each Lender that has approved the Request for Offer of Extension shall be extended to the date which is set out in the Offer of Extension, and the terms and conditions specified in such Offer of Extension shall be immediately effective. If an Offer of Extension is not provided to the Borrower, the provisions of Section 9.2(d) and (f) shall not be applicable, and the Borrower shall repay all Secured Obligations outstanding hereunder on the Maturity Date.	
 	 	 	
 	(g)	This Section 9.2 shall apply from time to time to permit successive extensions of the Maturity Date, if and for so long as the Majority Lenders have agreed in accordance with Section 9.2(c).	
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9.3	Voluntary Prepayments	
Subject to Section 9.5, the Borrower shall be entitled to prepay all or any portion of the outstanding Loans at any time, without penalty, provided that Section 8.4 shall be complied with in connection with any such prepayment. Other than any payments required pursuant to Section 8.4 , there are no premiums, penalties or other additional payments associated with any voluntary prepayments under this Section 9.3. Amounts which are prepaid as aforesaid may be reborrowed.

9.4	Mandatory Prepayments	
The Borrower shall, within five Banking Days of the occurrence of a Prepayment Trigger Event, prepay outstanding credit under the Credit Facility in an amount equal to 100% of the Net Cash Proceeds in respect of such Prepayment Trigger Event. Amounts which are prepaid as aforesaid under the Credit Facility may not be reborrowed. Section 8.4 shall be complied with in connection with any prepayment pursuant to this Section 9.4.

9.5	Prepayment Notice	
The Borrower shall give written notice to the Administrative Agent of each voluntary prepayment pursuant to Section 9.3. Such notice (a “ Prepayment Notice ”) shall be irrevocable, shall be given in accordance with Section 3.12 and shall specify:

 	(a)	the date on which the prepayment is to take place; and	
 	 	 	
 	(b)	the type and principal amount of the Loan or the portion thereof which is to be prepaid (which amount shall be at least $1,000,000).	

9.6	Currency of Repayment	
All payments and repayments of outstanding credit hereunder shall be made in the currency of such outstanding credit.

9.7	Repayments of Credit Excess	
In the event that the Credit Excess at any time exceeds 3% of the aggregate amount of credit outstanding at such time, the Borrower shall repay to the Lenders, upon the demand of the Administrative Agent, the amount of the Credit Excess at such time, but nothing herein shall be deemed to obligate any Lender or the Administrative Agent to fund the Credit Excess.
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9.8	Reimbursement or Conversion on Presentation of Letters	

 	(a)	On presentation of a Letter and payment thereunder by the Issuing Lender, the Borrower shall forthwith pay to the Issuing Lender, and thereby reimburse the Issuing Lender for, all amounts paid by the Issuing Lender pursuant to such Letter. Failing such payment, the Borrower shall be deemed to have effected a conversion of such Letter into a Prime Rate Loan (in the case of a Letter denominated in Canadian dollars) or into a Base Rate Loan (in the case of a Letter denominated in United States dollars) to the extent of the payment of the Issuing Lender thereunder.	
 	 	 	
 	(b)	If the Issuing Lender makes payment under any Letter and the Borrower does not fully reimburse the Issuing Lender on or before the date of payment, then Section 9.8(a) shall apply to deem a Loan to be outstanding to the Borrower under this agreement in the manner therein set out. Each Lender shall, on request by the Issuing Lender, immediately pay to the Issuing Lender an amount equal to such Lender’s Pro Rata Share of the amount paid by the Issuing Lender such that each Lender is participating in the deemed Loan in accordance with its Pro Rata Share.	
 	 	 	
 	(c)	Each Lender shall immediately on demand indemnify the Issuing Lender to the extent of such Lender’s Pro Rata Share of any amount paid or liability incurred by the Issuing Lender under each Letter issued by it hereunder to the extent that the Borrower does not fully reimburse the Issuing Lender therefor.	
 	 	 	
 	(d)	For certainty, the obligations of the Lenders in this Section 9.8 shall continue as obligations of the Persons who were Lenders at the time each such Letter was issued notwithstanding that such Lender may assign its rights and obligations hereunder, unless the Issuing Lender specifically releases such Lender from such obligations in writing.	

9.9	Letters Subject to an Order	
The Borrower shall pay to the Issuing Lender for deposit to the Letter Cash Collateral Account an amount equal to the maximum amount available to be drawn under any unexpired Letter which becomes the subject of any Order and concurrently with such payment deliver to the Administrative Agent a certificate of a senior officer of SWC addressed to the Administrative Agent that no SWC Payment Default (as defined in the Intercreditor Agreement) has occurred and is continuing; payment in respect of each such Letter shall be due forthwith upon demand in the currency in which such Letter is denominated. The Issuing Lender shall apply funds in the Letter Cash Collateral Account to (a) satisfy any reimbursements obligations of the Borrower to the Issuing Lender under Section 9.8, or (b) refund to the Borrower any amounts payable by the Issuing Lender to the Borrower under Section 13.4.

9.10	Reimbursement Obligation for Maturing Bankers’ Acceptances	
The Borrower hereby unconditionally agrees to pay to the Lenders on the maturity date (whether at stated maturity, by acceleration or otherwise) of each Bankers’ Acceptance drawn by the Borrower the undiscounted face amount of such then-maturing Bankers’ Acceptance. The obligation of the Borrower to reimburse the Lenders for then-maturing Bankers’ Acceptances may be satisfied by the Borrower by:
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 	(a)	paying to the Lenders, in accordance with Section 3.8, on the maturity date of such Bankers’ Acceptances an amount equal to the aggregate undiscounted face amount thereof, provided that the Borrower shall notify the Administrative Agent of its intention to reimburse the Lenders in such manner prior to 10:00 a.m. (Toronto time) on such maturity date;	
 	 	 	
 	(b)	replacing the maturing Bankers’ Acceptances with new Bankers’ Acceptances in accordance with Section 5.2; or	
 	 	 	
 	(c)	converting the maturing Bankers’ Acceptances into a Loan in accordance with Section 6.3, 6.5 or 6.6.	
In no event shall the Borrower claim from the Lenders any grace period with respect to the aforesaid obligation of the Borrower to reimburse the Lenders.
ARTICLE 10
REPRESENTATIONS AND WARRANTIES

10.1	Representations and Warranties	
To induce the Lenders and the Administrative Agent to enter into this agreement and to induce the Lenders to extend credit hereunder, the Borrower hereby represents and warrants to the Lenders and the Administrative Agent, as of the date of this agreement, as of the date of each extension of credit hereunder and as of the last day of each Fiscal Quarter, as follows and acknowledges and confirms that the Lenders and the Administrative Agent are relying upon such representations and warranties in entering into this agreement and in extending credit hereunder:

 	(a)	Status and Power of Obligors. Each Company is a corporation duly incorporated and organized and validly subsisting in good standing under the laws of its jurisdiction of incorporation. Each Company is duly qualified, registered or licensed in all jurisdictions where the nature of its business makes such qualification, registration or licensing necessary. Each Company has all requisite corporate capacity, power and authority to own, hold under licence or lease its properties, to carry on its business as now conducted. Each Company has all necessary corporate capacity to enter into, and carry out the transactions contemplated by, the Finance Documents to which is a party.	
 	 	 	
 	(b)	Authorization and Enforcement. All necessary action, corporate or otherwise, has been taken to authorize the execution, delivery and performance by each Company of the Finance Documents to which it is a party. Each Company has duly executed and delivered the Finance Documents to which it is a party. The Finance Documents to which each Company is a party are legal, valid and binding obligations of such Company, enforceable against such Company in accordance with its terms, except to the extent that the enforceability thereof may be limited by (i) applicable bankruptcy, insolvency, moratorium, reorganization and other similar laws of general application limiting the enforcement of creditors’ rights generally, (ii) the fact that the courts may deny the granting or enforcement of equitable remedies and (iii) the fact that, pursuant to the Currency Act (Canada), no court in Canada may make an order expressed in any currency other than lawful money of Canada.	
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 	(c)	Compliance with Other Instruments. The execution, delivery and performance by Company Obligor of the Finance Documents to which it is a party, and the consummation of the transactions contemplated herein and therein, do not and will not conflict with, result in any breach or violation of, or constitute a default under, the terms, conditions or provisions of, the charter or constating documents or by-laws of, or any shareholder agreement or declaration relating to, such Company. The execution, delivery and performance by each Company of the Finance Documents to which it is a party, and the consummation of the transactions contemplated herein and therein, do not and will not conflict with, result in any material breach or violation of, or constitute a material default under, the terms, conditions or provisions of, any law, regulation, judgment, decree or order binding on or applicable to such Company or to which its property is subject or of any Material Agreement or any material lease, licence, permit or other instrument to which such Company is a party or is otherwise bound or by which such Company benefits or to which its property is subject and do not require the consent or approval of any Official Body or any other party.	
 	 	 	
 	(d)	Financial Statements. The consolidated financial statements of the Borrower for the most recently completed Fiscal Quarter or Fiscal Year, as the case may be, were prepared in accordance with GAAP and no Material Adverse Change has occurred in the condition, financial or otherwise, of the Obligors since the date of such consolidated financial statements. The balance sheet of the aforesaid consolidated financial statements presents a fair statement of the financial condition and assets and liability of the Borrower as at the date thereof and the statements of operations, retained earnings and cash flows contained in the aforesaid consolidated financial statements fairly presents the results of the consolidated operations of the Borrower throughout the period covered thereby. Except to the extent reflected or reserved against in the aforesaid balance sheet (including the notes thereto) and except as incurred in the ordinary and usual course of the business of the Borrower, the Borrower does not have any outstanding indebtedness or any liability or obligations (whether accrued, absolute, contingent or otherwise) of a material nature customarily reflected or reserved against in a balance sheet (including the notes thereto) prepared in accordance with GAAP.	
 	 	 	
 	(e)	Litigation. Other than the Ejidos Claims, there are no actions, suits, inquiries, claims or proceedings (whether or not purportedly on behalf of any Obligor) pending or threatened in writing against or affecting any Obligor before any Official Body which in any case or in the aggregate could reasonably be expected to have a Material Adverse Effect.	
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 	(f)	Title to Assets. Each Obligor has good and marketable title to its property, assets and undertaking, free from any Lien other than the Permitted Liens.	
 	 	 	
 	(g)	Conduct of Business. No Obligor is in violation of any Capital Lease and otherwise no Obligor is in violation of any other agreement, mortgage, franchise, licence, judgment, decree, order, statute, statutory trust, rule or regulation relating in any way to itself or to the operation of its business or to its property or assets (including, for certainty, all Environmental Laws) and which could reasonably be expected to have a Material Adverse Effect. Each Obligor holds all licenses, certificates of approval, approvals, registrations, permits and consents which are required to operate its businesses where they are currently being operated except where the failure to have such licenses, certificates of approval, approvals, registrations, permits and consents could not reasonably be expected to have a Material Adverse Effect.	
 	 	 	
 	(h)	Outstanding Defaults. No Default or Event of Default exists or would result from the incurring of any Secured Obligations. No event has occurred which constitutes or which, with the giving of notice, lapse of time or both, would constitute a default under or in respect of any Material Agreement, undertaking or instrument to which any Obligor is a party or to which its respective property or assets may be subject, and which could reasonably be expected to have a Material Adverse Effect.	
 	 	 	
 	(i)	Solvency Proceedings. No Obligor has:	

 	(i)	admitted its inability to pay its debts generally as they become due or failed to pay its debts generally as they become due;	
 	 	 	
 	(ii)	in respect of itself, filed an assignment or petition in bankruptcy or a petition to take advantage of any insolvency statute;	
 	 	 	
 	(iii)	made an assignment for the benefit of its creditors;	
 	 	 	
 	(iv)	consented to the appointment of a receiver of the whole or any substantial part of its assets;	
 	 	 	
 	(v)	filed a petition or answer seeking a reorganization, arrangement, adjustment or composition in respect of itself under applicable bankruptcy laws or any other Applicable Law or statute of Canada, the United States, Mexico, Barbados, Luxembourg or other applicable jurisdiction or any subdivision thereof; or	
 	 	 	
 	(vi)	been adjudged by a court having jurisdiction a bankrupt or insolvent, nor has a decree or order of a court having jurisdiction been entered for the appointment of a receiver, liquidator, trustee or assignee in bankruptcy of any Obligor with such decree or order having remained in force and undischarged or unstayed for a period of 30 days.	
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 	(j)	Tax Returns and Taxes. Each Obligor has filed all material Tax returns and Tax reports required by law to have been filed by it and has paid all Taxes thereby shown to be owing, except any such Taxes which are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books.	
 	 	 	
 	(k)	Expropriation or Condemnation. There is no present or threatened (in writing) expropriation or condemnation of the property or assets of any Obligor.	
 	 	 	
 	(l)	Environmental Compliance.	

 	(i)	All facilities and property (including underlying groundwater) owned, leased, used or operated by any Company have been, and continue to be, owned or leased in material compliance with all Environmental Laws;	
 	 	 	
 	(ii)	There are no pending or threatened in writing:	

 	(A)	claims, complaints, notices or requests for information received by any Company with respect to any alleged violation of any Environmental Law which alleged violation could reasonably be expected to have a Material Adverse Effect;	
 	 	 	
 	(B)	complaints, notices or inquiries to any Company regarding potential material liability under any Environmental Law;	

 	(iii)	There have been no Releases of any Hazardous Materials or any escape, seepage, leakage, spillage, discharge, emission or release of any Hazardous Materials at, on, under or from any property now or previously owned, operated, used or leased by any Company in violation of Environmental Laws other than any such escape, seepage, leakage, spillage, discharge, emission or release which has been corrected in compliance with Applicable Law or which could not reasonably be expected to have a Material Adverse Effect;	
 	 	 	
 	(iv)	Each Company has been issued and is in material compliance with all permits, certificates, approvals, licenses and other authorizations under any Environmental Laws to carry on its business; and	
 	 	 	
 	(v)	No conditions exist at, on or under any property now or previously owned, operated, used or leased by any Company which, with the passage of time, or the giving of notice or both, would give rise to material liability under any Environmental Law.	

 	(m)	Subsidiaries and Partnerships. There are no direct Subsidiaries of the Borrower other than the Guarantors. No Obligor is, directly or indirectly, a member of, or a partner or participant in, any partnership, joint venture or syndicate.	
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 	(n)	Corporate Structure. As at the date hereof, and hereafter, except as such information may change as a result of a transaction permitted hereby and reported to the Administrative Agent in accordance with Section 11.2(b)(iii), the chart attached hereto as Schedule H accurately sets out the corporate structure of the Borrower and all of its Subsidiaries and evidences (i) intercorporate share ownership and (ii) ownership of projects and mines (including, without limitation, the Material Properties).	
 	 	 	
 	(o)	Assets Insured. The property and assets of the Obligors are insured with insurers, in amounts, for risks and otherwise which are reasonable in relation to such property and assets (subject to the amount of such deductibles as are reasonable and normal in the circumstances) against loss or damage, and there has been no default or failure by the party or parties insured under the provisions of such policies of insurance maintained which would prevent the recovery by the Obligor insured thereunder of the full amount of any material insured loss. The named insured under all insurance policies maintained by the Obligors is not in default under any of the material provisions contained in any such insurance policies.	
 	 	 	
 	(p)	Intellectual Property . Each Obligor owns or is licensed or otherwise has the right to use all Intellectual Property that is used in the operation of its businesses without conflict with the rights of any other Person (other than any Intellectual Property the absence of which or any such conflict with respect to which would not have a Material Adverse Effect). No Obligor has received any notice of any claim of infringement or similar claim or proceeding relating to any of the Intellectual Property which if determined against such Obligor could reasonably be expected to have a Material Adverse Effect. No present or former employee of any Obligor and no other Person owns or claims in writing to own or has or claims in writing to have any interest, direct or indirect, in whole or in part, in any of the Intellectual Property of such Obligor that could reasonably be expected to have a Material Adverse Effect.	
 	 	 	
 	(q)	Employment and Labour Agreements . Each Obligor is in compliance with the terms and conditions of all collective bargaining agreements and other labour agreements except where the failure to so comply could not reasonably be expected to have a Material Adverse Effect.	
 	 	 	
 	(r)	Capital of the Guarantors . All Shares issued by each Guarantor are fully paid and non-assessable. There are no outstanding warrants, options or other agreements which require or may require the issuance of any Shares of the Guarantors or the issuance of any debt or securities convertible into Shares of the Guarantors, there are no outstanding debt or securities convertible into Shares of the Guarantors and there are no such Shares allotted for issuance. There is no unanimous shareholder agreement with respect to any of the Obligors.	
 	 	 	
 	(s)	Mining Properties . The Mining Properties have been validly granted and recorded in the name of the relevant Obligor, are owned by the relevant Obligor and are in full force and effect. No Person other than the relevant Obligor has any right, title or interest in or to the Mining Properties owned by such Obligor. The Mining Properties are subject to the relevant Obligor’s continued compliance with Applicable Law relating thereto. The Mining Properties give the relevant Obligor the exclusive right to mine or exploit any and all minerals on the areas covered by the relevant Mining Properties. All fees, including without limitation maintenance fees, and other payments due to any Official Body in respect of the Mining Properties have been paid in full on a timely basis except any such fees which are being diligently contested in good faith and for which adequate reserves in accordance with GAAP shall have been set aside on its books or where such non-payment could not be reasonably expected to have a Material Adverse Effect. Other than the Royalties, no fees, royalties or other payments payable to any Person other than Official Bodies are or shall become due with respect to any of the Mining Properties. Except with respect to the SLW Silver Purchase Agreement, the Sandstorm Gold Purchase Agreement, the Royalties and payments to Official Bodies required pursuant to Applicable Law, no Obligor is a party to, and has no knowledge of, any royalty or similar agreements pursuant to which such Obligor or any other party is obligated to pay to any Person any amount with respect to any of the Mining Properties.	
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 	(t)	Liens . The Liens granted to the Administrative Agent or the Mexican Collateral Agent, as applicable, pursuant to the Security Documents are fully perfected first priority Liens in and to the Secured Assets (subject only to Permitted Liens which by their nature or by reason of the Intercreditor Documents would constitute prior ranking security) and will, upon the acquisition of additional Secured Assets by each Obligor, constitute first charges or security interests upon all such Secured Assets of such Obligor (subject only to Permitted Liens which by their nature or by reason of the Intercreditor Documents would constitute prior ranking security) free and clear of all Liens except Permitted Liens.	
 	 	 	
 	(u)	Consents, Approvals, etc. No consents, approvals, acknowledgements, undertakings, non-disturbance agreements, directions or other documents or instruments which have not already been provided to the Administrative Agent or the Mexican Collateral Agent are required to be entered into by any Person (i) to make effective the Security created or intended to be created by the Obligors in favour of the Administrative Agent or the Mexican Collateral Agent, as applicable, pursuant to the Security Documents, (ii) to ensure the perfection and the intended priority of such Security and (iii) to implement the transactions contemplated hereby.	
 	 	 	
 	(v)	Material Agreements. As at the date hereof, the only Material Agreements are those identified in the definition thereof. The Material Agreements (to the extent that such Material Agreements have been entered into) are:	

 	(i)	in full force and effect;	
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 	(ii)	enforceable by the relevant Obligor against all other parties thereto in accordance with their terms (subject to bankruptcy and insolvency laws and other similar laws affecting creditors’ rights generally and to general equitable principles); and	
 	 	 	
 	(iii)	in the form previously or concurrently delivered to the Administrative Agent pursuant to this agreement.	
All performance required under each Material Agreement (and, to the best of the knowledge of the Borrower, of each other party thereto) required at the date of making this representation from time to time has occurred, except to the extent any such non-performance would not reasonably be expected to result in a Material Adverse Effect. No default (however denominated) in the performance of the obligations of the Borrower (or, to the best of the knowledge of the Borrower, of any other party thereto) under any Material Agreement has occurred and is continuing. There is no prohibition on assignment in any Material Agreement other than where consent to assignment has been obtained prior to the assignment of such Material Agreement. The entry into and performance by the Obligors of the Credit Documents will not conflict with any term of any Material Agreement.

 	(w)	Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) . The Borrower's most recent audited balance sheet states that the Borrower has net assets of at least CDN$75,000,000. The Borrower's shares are traded on a Canadian stock exchange or a stock exchange designated under subsection 262(1) of the Tax Act. The Borrower operates in a country that is a member of the Financial Action Task Force. The Borrower is not a charity registered with the Canada Revenue Agency nor does it solicit charitable financial donations from the public.	
 	 	 	
 	(x)	Perfection Certificate . Other than as may be updated from time to time pursuant to Section 11.2(b), 11.2(o) and 11.2(p), all information in the Perfection Certificate is hereby certified to be true and correct.	
 	 	 	
 	(y)	No Omissions. None of the representations and statements of fact set forth in this Section 10.1 omits to state any material fact necessary to make any such representation or statement of fact not misleading in any material respect.	

10.2	Survival of Representations and Warranties	
All of the representations and warranties of the Borrower contained in Section 10.1 shall survive the execution and delivery of this agreement until all credit outstanding hereunder has been repaid in full and the Credit Facility has been terminated, notwithstanding any investigation made at any time by or on behalf of the Administrative Agent or any of the Lenders.
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ARTICLE 11
COVENANTS

11.1	Financial Covenants	
The Borrower hereby covenants and agrees with the Administrative Agent and the Lenders that, until all credit outstanding hereunder has been repaid in full and the Credit Facility has been terminated, and unless waived in writing in accordance with Section 14.14:

 	(a)	Tangible Net Worth . The Borrower shall at all times maintain Tangible Net Worth in an amount greater than or equal to U.S. $763,419,000 plus 50% of the aggregate positive Net Income for the Fiscal Quarters during the period from April 1, 2014 to the last day of the Fiscal Quarter which has been most recently completed at such time. For the purpose of the foregoing, if the Net Income for a particular Fiscal Quarter is negative, the Net Income for such Fiscal Quarter shall be deemed to be zero.	
 	 	 	
 	(b)	Total Net Debt Leverage Ratio . The Borrower shall at all times maintain the Total Net Debt Leverage Ratio in an amount less than or equal to 3.5 to 1.	
 	 	 	
 	(c)	Senior Net Debt Leverage Ratio. The Borrower shall at all times maintain the Senior Net Debt Leverage Ratio in an amount less than or equal to 2.0 to 1.	
 	 	 	
 	(d)	Interest Coverage Ratio . The Borrower shall at all times maintain the Interest Coverage Ratio in an amount greater than or equal to 4.5 to 1.	

11.2	Affirmative Covenants	
The Borrower hereby covenants and agrees with the Administrative Agent and the Lenders that, until all credit outstanding hereunder has been repaid in full and the Credit Facility has been terminated, and unless waived in writing in accordance with Section 14.14:

 	(a)	Prompt Payment . The Borrower shall duly and punctually pay, or cause to be duly and punctually paid to the Administrative Agent and, if applicable, the Mexican Collateral Agent, all amounts payable by each Obligor under the Credit Documents to which it is a party at the times and places and in the currency and manner mentioned therein.	
 	 	 	
 	(b)	Financial Reporting. The Borrower shall furnish the Administrative Agent with the following statements and reports with sufficient copies for all of the Lenders (the filing of any of the following documents on SEDAR shall satisfy the delivery obligation in relation to such documents so filed when the Borrower has provided written notice of such filing to the Administrative Agent):	

 	(i)	within 90 days after the end of each Fiscal Year, copies of the audited consolidated financial statements of the Borrower for such Fiscal Year together with the auditors’ report on such audited financial statements in form and substance satisfactory to the Administrative Agent, as well as a chart setting out the corporate structure of the Borrower and all of its Subsidiaries, whether direct or indirect, and evidencing (i) intercorporate share ownership and (ii) ownership of the Material Properties;	
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 	(ii)	within 45 days after the end of each Fiscal Quarter, the unaudited consolidated financial statements of the Borrower;	
 	 	 	
 	(iii)	concurrent with the deliveries of financial statements pursuant to any of clauses (i) and (ii) above, a duly executed and completed Compliance Certificate and, where disclosure in the Perfection Certificate has changed as of such date, an updated Perfection Certificate together with written notification of any change in the information certified in the Perfection Certificate;	
 	 	 	
 	(iv)	within 45 days of each Fiscal Year end, (I) a budget for the Borrower on a consolidated basis and for each Material Property for the ensuing Fiscal Year (with a breakdown for each month), (II) a consolidated financial model for the Borrower including a life of mine plan for each Material Property and (III) a statement of mineral reserves and resources for each Material Property as at the end of such Fiscal Year prepared by the Borrower and based on the most recent statement of mineral reserves and resources publicly disclosed by the Borrower under National Instrument 43-101, as reconciled with subsequent actual mining production by the Borrower and its Subsidiaries, in each case in form and substance satisfactory to the Administrative Agent;	
 	 	 	
 	(v)	within 21 days of each calendar month end, an operating report for each Material Property;	
 	 	 	
 	(vi)	such other statements, reports and information as the Administrative Agent on the instructions of the Majority Lenders may reasonably request from time to time.	
The Borrower shall, upon request, furnish the Administrative Agent with copies of all documents which are filed by the Borrower with the Ontario Securities Commission or with any similar Official Body in any other jurisdiction in compliance with applicable securities legislation which are not available on SEDAR.

 	(c)	Use of Proceeds. The Borrower shall apply all of the proceeds of the Credit Facility to the general corporate purposes of the Borrower, including the funding of Permitted Acquisitions (which does not include hostile acquisitions). For certainty, the Borrower shall not use any proceeds of the Credit Facility to make a Restricted Payment.	
 	 	 	
 	(d)	Insurance . The Borrower shall, and shall cause each other Obligor to, maintain on an individual or aggregate basis, with financially sound and reputable insurers, insurance with respect to the properties and business of the Obligors against loss,damage, risk or liability of the kinds customarily insured against by Persons carrying on a similar business. The Borrower shall cause the Administrative Agent (and, in the case of the Mexican Collateral Agent, the Mexican Collateral Agent) to be named in each such policy as secured party or mortgagee and lender’s loss payee or additional insured, as appropriate, in a manner acceptable to the Administrative Agent. Each policy of insurance shall contain a clause or endorsement requiring the insurer to give not less than thirty (30) days’ prior written notice to the Administrative Agent in the event of cancellation of the policy for any reason whatsoever. The Borrower shall, and shall cause each other Obligor to, comply with all of the material provisions contained in all such insurance policies. All premiums for such insurance shall be paid by the Borrower when due and certificates of insurance and, if requested, photocopies of the policies shall be delivered to the Administrative Agent. The Borrower shall promptly notify the Administrative Agent of any loss, damage, or destruction to the Secured Assets, whether or not covered by insurance, in excess of $1,000,000. If any Default shall be continuing, the Majority Lenders may determine, in their sole discretion, whether any insurance proceeds shall be used for repair or replacement. If a Default exists, the Administrative Agent (and, in the case of the Mexican Collateral Agent, the Mexican Collateral Agent) shall collect the insurance proceeds directly and no Obligor shall enter into any settlement agreement with the applicable insurance company without the prior written consent of the Administrative Agent, which consent shall not be unreasonably withheld.	
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 	(e)	Access to Senior Financial Officers. Upon the request of the Administrative Agent at reasonable intervals, the Borrower shall, and shall cause each other Obligor to, make available its senior financial officers to answer questions concerning such Obligor’s business and affairs.	
 	 	 	
 	(f)	Reimbursement of Expenses. Regardless of whether any credit has been extended hereunder, the Borrower shall (i) reimburse the Administrative Agent, on demand, for all reasonable out-of-pocket costs, charges and expenses incurred by or on behalf of the Administrative Agent (including, without limitation, the reasonable and documented fees, disbursements and other charges of one primary legal counsel and any local or special legal counsel to the Administrative Agent as well as the reasonable costs of any engineering reports and environmental audits and studies as required by the Administrative Agent) in connection with the due diligence review undertaken by the Administrative Agent, the negotiation, preparation, execution, delivery, syndication, participation, administration and interpretation of the Credit Documents and the closing documentation ancillary to the completion of the transactions contemplated hereby and thereby and any amendments and waivers hereto and thereto (whether or not consummated or entered into), the charges of Intralinks and any lien search fees and lien registration fees, and (ii) reimburse the Administrative Agent and the Lenders, on demand, for all reasonable out-of-pocket costs, charges and expense incurred by or on behalf of any of them (including the fees, disbursements and other charges of counsel) in connection with the enforcement of the Credit Documents.	
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 	(g)	Notice of Expropriation or Condemnation, Litigation and Default. The Borrower shall promptly notify the Administrative Agent in writing of:	

 	(i)	the commencement or the written threat of any expropriation or condemnation of any material assets, property or undertaking of any Obligor or of the institution of any proceedings related thereto;	
 	 	 	
 	(ii)	any actions, suits, inquiries, disputes, claims or proceedings (whether or not purportedly on behalf of any Obligor) commenced or threatened in writing against or affecting any Obligor before any Official Body which in any case or in the aggregate could reasonably be expected to have a Material Adverse Effect;	
 	 	 	
 	(iii)	upon the occurrence of a Default of which the Borrower is aware, the nature and date of occurrence of such Default, the Borrower’s assessment of the duration and effect thereof and the action which the Borrower proposes to take with respect thereto; and	
 	 	 	
 	(iv)	in addition to, and not in limitation of, paragraph (iii) above, notice of any breach, default or missed payment under any Capital Lease, or any anticipated breach, default or missed payment under any Capital Lease together with any written notice or demand in respect thereof delivered to the relevant Obligor by the subject lessor.	

 	(h)	Corporate Existence. The Borrower shall, and shall cause each other Obligor to, maintain its corporate existence in good standing and qualify and remain duly qualified to carry on business and own property in each jurisdiction where the nature of its business makes such qualification necessary.	
 	 	 	
 	(i)	Conduct of Business. The Borrower shall, and shall cause each other Obligor to, conduct its business in such a manner so as to comply with all laws and regulations, so as to observe and perform all its obligations under leases, licences and agreements (including Material Agreements) necessary for the proper conduct of its business and so as to preserve and protect its property and assets and the earnings, income and profits therefrom except to the extent such non-compliance, non-observance or non-performance could not reasonably be expected to have a Material Adverse Effect. The Borrower shall, and shall cause each other Obligor to, perform all obligations incidental to any trust imposed upon it by statute and shall ensure that any breaches of the said obligations and the consequences of any such breach shall be promptly remedied. The Borrower shall, and shall cause each other Obligor to, obtain and maintain all licenses, permits, government approvals, franchises, authorizations and other rights necessary for the operation of its business where failure to do so could reasonably be expected to have a Material Adverse Effect.	
 	 	 	
 	(j)	Taxes. The Borrower shall pay, and shall cause each other Obligor to pay, all material Taxes levied, assessed or imposed upon it and upon its property or assets or any part thereof, as and when the same become due and payable, save and except when and so long as the validity of any such Taxes is being contested in good faith by appropriate proceedings and reserves are being maintained in accordance with GAAP.	
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 	(k)	Environmental Matters. The Borrower shall, and shall cause each other Company to, promptly notify the Administrative Agent and provide copies upon receipt of all written claims, complaints, notices or inquiries from any Official Body relating to the condition of its facilities and properties or material compliance with Environmental Laws and shall proceed diligently to resolve any such claims, complaints, notices or inquiries relating to material compliance with Environmental Laws and provide such information and certifications which the Administrative Agent may reasonably request from time to time to evidence compliance with this Section 11.2(k).	
 	 	 	
 	(l)	Books and Records. The Borrower shall, and shall cause each other Obligor to, keep proper books of account and records covering all its business and affairs on a current basis, make full, true and correct entries of its transactions in such books, set aside on its books from their earnings all such proper reserves as required by GAAP and permit representatives of the Administrative Agent to inspect such books of account, records and documents and to make copies therefrom during reasonable business hours and upon reasonable notice and to discuss the affairs, finances and accounts of such Obligor with its auditors during reasonable business hours and upon reasonable notice. On not less than three days prior written notice where no Default has occurred or is continuing and on not less than twenty-four hours prior notice where a Default has occurred and is continuing, the Borrower shall, and shall cause each other Obligor to, permit the Finance Parties or any of their respective representatives during reasonable business hours to inspect any and all of its properties and operations (including the Material Properties), to visit all of its offices or any other location where relevant personnel or records are located, to discuss its financial matters with its officers, its banks and its independent chartered accountants or certified public accountants, as the case may be, (and hereby authorizes such independent chartered accountants or certified public accountants, as the case may be, to discuss its financial matters with any of the foregoing persons or its representatives whether or not any representative of the relevant Obligor is present) and to examine (and photocopy extracts from) any of its books or other corporate records or any instrument, document or correspondence relating to the Material Properties.	
 	 	 	
 	(m)	Change of Name or Jurisdiction of Formation . If any Obligor changes its legal name or its jurisdiction of formation or the jurisdiction of its location for the purposes of Sections 7 and 7.1 of the PPSA or adopts a French form of its legal name, the Borrower shall promptly notify the Administrative Agent in writing of the details of such change or adoption.	
 	 	 	
 	(n)	Maintenance of Secured Assets . The Borrower shall, and shall cause each other Obligor to, maintain, preserve, protect and keep:	
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 	(i)	all of its ownership, lease, use, licence and other interests in the Secured Assets as are necessary or advisable for it to be able to operate the Material Properties substantially in accordance with sound mining and business practice; and	
 	 	 	
 	(ii)	all of the Secured Assets owned by it in good repair, working order, and condition, and make necessary and proper repairs, renewals, and replacements so that the business carried on in connection therewith may be properly conducted at all times, unless the continued maintenance of any of such Secured Assets is no longer necessary or economically desirable for the operation of the Material Properties, such operation to be substantially in accordance with sound mining and business practice.	

 	(o)	Additional Guarantees and Security	

 	(i)	At least ten Banking Days prior to the direct or indirect formation or acquisition by the Borrower of a Material Subsidiary after the date hereof, the Borrower shall notify the Administrative Agent of such proposed formation or acquisition (a “ Subsidiary Notice ”).	
 	 	 	
 	(ii)	On or before the date of the formation or acquisition of any Material Subsidiary referred to in a Subsidiary Notice, the Borrower shall provide to the Administrative Agent or the Mexican Collateral Agent, as applicable, an updated Perfection Certificate and such other information regarding such Material Subsidiary and its business, finances and assets as the Lenders may request.	
 	 	 	
 	(iii)	The Borrower shall, or shall cause each entity which is to become a Material Subsidiary and is referred to in a Subsidiary Notice to, within ten Banking Days after the formation or acquisition of such Material Subsidiary, deliver to the Administrative Agent or the Mexican Collateral Agent, as applicable, the following:	

 	(A)	a Guarantee executed by such Material Subsidiary in favour of the Administrative Agent or the Mexican Collateral Agent, as applicable;	
 	 	 	
 	(B)	Security Documents executed by such Material Subsidiary in favour of the Administrative Agent or the Mexican Collateral Agent, as applicable;	
 	 	 	
 	(C)	a Closing Certificate of such Material Subsidiary;	
 	 	 	
 	(D)	an instrument of adhesion executed by such Material Subsidiary and pursuant to which such Material Subsidiary agrees to be bound by the terms of the Postponement and Subordination Undertaking;	
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 	(E)	opinions of such Material Subsidiary’s counsel with respect to, inter alia , such Material Subsidiary, the enforceability of the afore- mentioned Credit Documents and as to such other matters as the Administrative Agent or the Mexican Collateral Agent, as applicable, may reasonably request, and otherwise in form and substance satisfactory to the Administrative Agent;	
 	 	 	
 	(F)	an updated Perfection Certificate containing all relevant information relating to such Material Subsidiary; and	
 	 	 	
 	(G)	a certificate of a senior officer of the Borrower certifying that no Default has occurred and is continuing or would occur or arise immediately after or as a result of such Material Subsidiary becoming a Guarantor hereunder;	
whereupon such Material Subsidiary shall become a Guarantor for all purposes of this agreement.

 	(p)	Change in Information in Perfection Certificate . If any of the information contained in the Perfection Certificate shall change, the Borrower shall promptly notify the Administrative Agent or the Mexican Collateral Agent, as applicable, in writing of the details of such change and the Perfection Certificate shall thereupon be deemed to be amended accordingly.	
 	 	 	
 	(q)	Intercompany Indebtedness . The Borrower shall cause all Indebtedness owing by any Obligor to another Company to be subordinated and postponed, pursuant to the Postponement and Subordination Undertaking, to the Secured Obligations of such Obligor for so long as a Default has occurred and is continuing. The Borrower shall cause any other Company, prior to the incurrence of any such Indebtedness, to execute and deliver to the Administrative Agent the Postponement and Subordination Undertaking or an instrument of adhesion thereto. The Borrower shall not, and shall not suffer or permit, any acceleration of any Indebtedness owed by any Company to another Company.	
 	 	 	
 	(r)	Security. The Borrower shall ensure that, at all times, the Secured Obligations of the Obligors are collaterally secured by the Security.	
 	 	 	
 	(s)	BA Cash Collateral Account and Letter Cash Collateral Account . The Borrower shall, upon the request of the Administrative Agent, promptly establish the BA Cash Collateral Account and the Letter Cash Collateral Account with the Administrative Agent.	
 	 	 	
 	(t)	Ventanas Property. On or before the date on which the Borrower publicly announces that the Ventanas Property has achieved commercial production, PEM shall transfer ownership thereof to a wholly-owned Person which is a Guarantor and the Ventanas Property shall be a Secured Asset charged pursuant to a Security Document granted solely in favour of the Administrative Agent (and not, for certainty, the Mexican Collateral Agent).	
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11.3	Restrictive Covenants	
The Borrower hereby covenants and agrees with the Administrative Agent and the Lenders that, until all credit outstanding hereunder has been repaid in full and the Credit Facility has been terminated, and unless waived in writing in accordance with Section 14.14:

 	(a)	Liens. The Borrower shall not, and shall not permit or suffer any other Obligor to, enter into or grant, create, assume or suffer to exist any Lien affecting any of their respective properties, assets or undertaking, whether now owned or hereafter acquired, save and except only for the Permitted Liens (provided, however, no Liens other than the Security shall be permitted on the Shares of any of the Guarantors) and provided that no Default or Event of Default has occurred and is continuing at the time of or would arise as a result of the granting of such Permitted Lien.	
 	 	 	
 	(b)	Corporate Existence. Except as contemplated by any Permitted Reorganization, the Borrower shall not, and shall not permit or suffer any other Obligor to, take part in any amalgamation, merger, dissolution, winding up, corporate reorganization or similar proceeding or arrangement or discontinue any businesses.	
 	 	 	
 	(c)	Dispositions. The Borrower shall not, and shall not suffer or permit any other Obligor to, Dispose of any of their respective assets other than Permitted Dispositions.	
 	 	 	
 	(d)	Risk Management Agreements. The Borrower shall not, and shall not suffer or permit any other Obligor to, enter into any Risk Management Agreement for speculative purposes, any Risk Management Agreement with any counterparty on a margined basis, any Risk Management Agreement with a counterparty that is not a Lender or a Qualified Affiliate (unless it is on an unsecured basis).	
 	 	 	
 	(e)	Amendments. The Borrower shall not, and shall not suffer or permit any other Obligor to, amend their constating documents in a manner that necessitates any amendments to the Security Documents or related Lien filings or that otherwise would negatively impact the Credit Documents (including, for certainty, any amendments that in any way impose transfer restrictions on the Shares of the relevant Obligor) or amend or terminate any of the Material Agreements (other than as permitted pursuant to the Intercreditor Documents). For avoidance of doubt, this Section 11.3(e) does not apply to a change of name that complies with Section 11.2(m).	
 	 	 	
 	(f)	Restricted Payments. The Borrower shall not make any Restricted Payments unless each of the following conditions is satisfied:	

 	(i)	no Default or Event of Default has occurred and is continuing at the time of the Restricted Payment or would be likely to arise as a result of the Restricted Payment; and	
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 	(ii)	the Total Net Debt Leverage Ratio would be less than 2.0 to 1 after giving effect to the Restricted Payment.	

 	(g)	Indebtedness. The Borrower shall not, and shall not suffer or permit any other Obligor to, create, incur, assume or suffer to exist any Indebtedness other than Permitted Indebtedness.	
 	 	 	
 	(h)	Investments. The Borrower shall not, and shall not permit any other Obligor to, make any Investments other than Permitted Investments.	
 	 	 	
 	(i)	Acquisitions. The Borrower shall not, and shall not suffer or permit any other Obligor to, make any Acquisitions other than Permitted Acquisitions.	
 	 	 	
 	(j)	Transactions with Affiliates . Unless undertaken in connection with a Permitted Reorganization, the Borrower shall not, and shall not permit any other Obligor to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates other than in the ordinary course of business at prices and on terms and conditions not less favourable to such Obligor than could be obtained on an arm’s length basis from unrelated third parties. Unless undertaken in connection with a Permitted Reorganization, the Borrower shall not, and shall not suffer or permit any other Obligor to, enter into any transaction or series of transactions with Affiliates of any of the Obligors, which involve an outflow of money or other property from such Obligor to an Affiliate of any of the Obligors, including payment of management fees, affiliation fees, administration fees, compensation, salaries, asset purchase payments or any other type of fees or payments similar in nature, other than on terms and conditions substantially as favourable to such Obligor as would be obtainable by such Obligor in a reasonably comparable arm’s length transaction with a Person other than an Affiliate of such Obligor.	
 	 	 	
 	(k)	Business Activities. The Borrower shall not, and shall not suffer or permit any of its Subsidiaries to, engage in any business activity other than the acquisition, development and operation of precious and base metal mines in the Permitted Jurisdictions, Brazil, Peru, Chile, Columbia, Guyana, Suriname or Uruguay and any activity incidental thereto.	

11.4	Performance of Covenants by Administrative Agent	
The Administrative Agent may, on the instructions of the Majority Lenders and upon notice by the Administrative Agent to the Borrower, perform any covenant of the Borrower under this agreement which the Borrower fails to perform or cause to be performed and which the Administrative Agent is capable of performing, including any covenants the performance of which requires the payment of money, provided that the Administrative Agent shall not be obligated to perform any such covenant on behalf of the Borrower and no such performance by the Administrative Agent shall require the Administrative Agent to further perform the Borrower’s covenants or shall operate as a derogation of the rights and remedies of the Administrative Agent and the Lenders under this agreement or as a waiver of such covenant by the Administrative Agent. Any amounts paid by the Administrative Agent as aforesaid shall be reimbursed by the Lenders in their Pro Rata Shares and shall be repaid by the Borrower to the Administrative Agent on behalf of the Lenders on demand.
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ARTICLE 12
CONDITIONS PRECEDENT TO OBTAINING CREDIT

12.1	Conditions Precedent to All Credit	
The obligation of the Lenders to extend credit hereunder is subject to fulfilment of the following conditions precedent on the date such credit is extended:

 	(a)	the Borrower shall have complied with the requirements of Article 4, Article 5 or Article 6, as the case may be, in respect of the relevant credit;	
 	 	 	
 	(b)	no Default or Event of Default has occurred and is continuing or would arise immediately after giving effect to or as a result of such extension of credit; and	
 	 	 	
 	(c)	the representations and warranties of the Borrower contained in Section 10.1 shall be true and correct in all respects on the date such credit is extended as if such representations and warranties were made on such date unless such representations and warranties relate solely to an earlier date.	

12.2	Conditions Precedent to Initial Extension of Credit	
The obligations of the Lenders to extend credit by way of the initial drawdown under the Credit Facility is subject to the fulfilment of the following conditions precedent at the time, or immediately following, such extension of credit:

 	(a)	the conditions precedent set forth in Section 12.1 have been fulfilled;	
 	 	 	
 	(b)	the Obligors and Cerro Resources NL shall have duly executed and delivered to the Administrative Agent and the Mexican Collateral Agent the Credit Documents to which each is a party, in form and substance satisfactory to the Administrative Agent;	
 	 	 	
 	(c)	each relevant Subsidiary of the Borrower has executed and delivered to the Administrative Agent the Postponement and Subordination Undertaking, in form and substance satisfactory to the Administrative Agent, and any other documents in connection therewith as the Administrative Agent may require;	
 	 	 	
 	(d)	all of the parties thereto shall have executed and delivered the Intercreditor Documents;	
 	 	 	
 	(e)	Sandstorm shall have executed and delivered to the Administrative Agent the Sandstorm Subordination Agreement and Primero Gold shall have acknowledged such agreement;	
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 	(f)	the Administrative Agent or the Mexican Collateral Agent, as applicable, has received, in form and substance satisfactory to the Administrative Agent:	

 	(i)	the Perfection Certificate;	
 	 	 	
 	(ii)	a Closing Certificate of each Obligor;	
 	 	 	
 	(iii)	a Compliance Certificate;	
 	 	 	
 	(iv)	a certificate of status or good standing for each Obligor (where available) issued by the appropriate governmental body or agency of the jurisdiction in which such Obligor is incorporated;	
 	 	 	
 	(v)	certificates representing all of the issued and outstanding Shares of the Guarantors (other than Shares of PML which are uncertificated and the Shares of STB, the certificates for which will continue to be held in pledge by SWC pursuant to the SWC Security and the Intercreditor Documents), duly endorsed in blank or accompanied by an executed stock transfer power of attorney;	
 	 	 	
 	(vi)	certified copies of the Material Agreements;	
 	 	 	
 	(vii)	a schedule detailing all policies of insurance maintained in accordance with Section 11.2(d) and the coverage effected thereby, such evidence with respect to the adequacy of insurance cover stipulated pursuant to Section 11.2(d) as the Administrative Agent may require, endorsements to all such insurance policies signed by the issuers of such policies and acknowledging the interests of the Administrative Agent and the Mexican Collateral Agent for and on behalf of, inter alia , the Finance Parties in such policies as referred to in Section 11.2(d) and evidence reasonably satisfactory to it that all such policies are in full force and effect;	
 	 	 	
 	(viii)	an opinion of counsel to each Obligor addressed to, inter alia , the Administrative Agent and the Finance Parties and, as applicable, the Mexican Collateral Agent and their counsel, relating to the status and capacity of such Obligor, the due authorization, execution and delivery and the validity and enforceability of the Credit Documents to which such Obligor is a party in the jurisdiction where the Secured Assets are located and the jurisdiction of incorporation of such Obligor and such other matters as the Administrative Agent may reasonably request;	
 	 	 	
 	(ix)	in respect of each Material Property, title insurance for the benefit of, or a title opinion addressed to, each Finance Party (and if such Material Property is located in Mexico, the Mexican Collateral Agent) in form and substance satisfactory to the Administrative Agent, acting reasonably;	
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 	(x)	an opinion of the Administrative Agent’s counsel with respect to such matters as may be reasonably required by the Administrative Agent in connection with the transactions hereunder;	
 	 	 	
 	(xi)	requisite information to identify the Obligors under the applicable “know your client” legislation, delivered sufficiently in advance for each Lender to complete such identification;	
 	 	 	
 	(xii)	certified copies of current collective bargaining agreements with employees of the Material Properties, in form and substance satisfactory to the Lenders; and	
 	 	 	
 	(xiii)	evidence that all material licenses and permits which are required to operate the Material Properties, in form and substance satisfactory to the Lenders, have been obtained and are in full force and effect;	

 	(g)	prior to or concurrent with the initial drawdown hereunder, the Goldcorp Note shall be repaid in full and any guarantee thereof and any security therefor shall be released and discharged;	
 	 	 	
 	(h)	there has not occurred a Material Adverse Change since December 31, 2013;	
 	 	 	
 	(i)	there shall exist no pending or threatened (in writing) litigation, proceedings or investigations which (x) contest the consummation of the Credit Facility or any part thereof or (y) could reasonably be expected to have a Material Adverse Effect;	
 	 	 	
 	(j)	the Lenders shall have completed and be satisfied with its legal, technical and environmental due diligence review of the Obligors, the Material Agreements and the Material Properties, which shall include but not be limited to a review of the current mineral reserve and resource statement, mine plan, financial model and operating permits;	
 	 	 	
 	(k)	the Administrative Agent and its counsel shall be satisfied, acting reasonably, that all necessary approvals, acknowledgements, directions and consents have been given and that all relevant laws have been complied with in respect of all agreements and transactions referred to herein;	
 	 	 	
 	(l)	all documents and instruments shall have been properly registered, recorded and filed in all places which, searches shall have been conducted in all jurisdictions which, and deliveries of all consents, approvals, directions, acknowledgements, undertakings, limitation of liability letters, access agreements and non-disturbance agreements, negotiable documents of title, ownership certificates and other documents and instruments to the Administrative Agent or, as applicable, the Mexican Collateral Agent shall have been made which, in the opinion of the Administrative Agent’s counsel, are desirable or required to make effective the Security created or intended to be created by the Obligors in favour of the Collateral Agent pursuant to the Security Documents and to ensure the perfection and the intended priority of the Security;	
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 	(m)	the Borrower shall have paid to the Administrative Agent, the Lead Arranger and the Lenders all fees and expenses (including, without limitation, the fees and expenses of Lenders’ legal counsel) required to be paid on or before the initial extension of credit under the Credit Facility;	
 	 	 	
 	(n)	all outstanding Indebtedness of the Obligors which is not Permitted Indebtedness shall have been permanently repaid and cancelled and all guarantees and security agreements executed and delivered under or in connection therewith shall have been released and discharged, satisfactory arrangements for the discharge of all attendant security registrations shall have been made and all collateral security in connection therewith shall have been returned to the Borrower; and	
 	 	 	
 	(o)	all outstanding legal fees of counsel to the Administrative Agent shall have been paid.	

12.3	Waiver	
The terms and conditions of Sections 12.1 and 12.2 are inserted for the sole benefit of the Administrative Agent and the Lenders, and the Lenders may waive them in accordance with Section 14.14, in whole or in part, with or without terms or conditions, in respect of any extension of credit, without prejudicing their right to assert the terms and conditions of Section 12.1 and 12.2 in whole or in part in respect of any other extension of credit.
ARTICLE 13
DEFAULT AND REMEDIES

13.1	Events of Default	
Upon the occurrence of any one or more of the following events, unless expressly waived in writing in accordance with Section 14.14:

 	(a)	the breach by the Borrower of the provisions of Section 9.1;	
 	 	 	
 	(b)	the failure of any Obligor to pay any amount due under the Credit Documents (other than amounts due pursuant to Section 9.1) within three Banking Days after the payment is due;	
 	 	 	
 	(c)	other than pursuant to a Permitted Reorganization, the commencement by any Obligor or by any other Person of proceedings for the dissolution, liquidation or winding up of any Obligor or for the suspension of operations of any Obligor (other than such proceedings commenced by another Person which are diligently defended and are discharged, vacated or stayed within thirty days after commencement);	
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 	(d)	if any Obligor ceases or threatens to cease to carry on its business or is adjudged or declared bankrupt or insolvent or admits its inability to pay its debts generally as they become due or fails to pay its debts generally as they become due or makes an assignment for the benefit of creditors, petitions or applies to any tribunal for the appointment of a receiver or trustee for it or for any part of its property (or such a receiver or trustee is appointed for it or any part of its property), or commences (or any other Person commences) any proceedings relating to it under any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction whether now or hereafter in effect (other than such proceedings commenced by another Person which are diligently defended and are discharged, vacated or stayed within thirty days after commencement), or by any act indicates its consent to, approval of, or acquiescence in, any such proceeding for it or for any part of its property, or suffers the appointment of any receiver or trustee, sequestrator or other custodian;	
 	 	 	
 	(e)	if any representation or warranty made by any Obligor in any Finance Document or in any other document, agreement or instrument delivered pursuant hereto or referred to herein or any material information furnished in writing to the Administrative Agent or the Mexican Collateral Agent by any Obligor proves to have been incorrect in any material respect when made or furnished which, if capable of being cured, has not been remedied within ten Banking Days after written notice to do so has been given by the Administrative Agent or the Mexican Collateral Agent to the Borrower;	
 	 	 	
 	(f)	if a judgment, writ, execution, attachment or similar process is entered, issued or levied against any Obligor or against all or any portion of the property of any Obligor in connection with any judgment against it in an amount of at least $5,000,000 (individually or in the aggregate), and such judgment, writ, execution, attachment or similar process is not released, bonded, satisfied, discharged, vacated or stayed within thirty days after its entry, issuance, commencement or levy;	
 	 	 	
 	(g)	any breach of any provision of Section 11.1 or Section 11.3;	
 	 	 	
 	(h)	the breach or failure of due observance or performance by any Company of any covenant or provision of any Finance Document (other than those previously referred to in this Section 13.1) or of any other document, agreement or instrument delivered pursuant hereto or thereto or referred to herein or therein to which any of the Finance Parties is a party and such breach or failure continues for 10 Banking Days after the earlier of (x) the Borrower becoming aware of such breach or failure or (y) the Mexican Collateral Agent, the Administrative Agent or any other Finance Party giving the Borrower notice of such breach or failure;	
 	 	 	
 	(i)	the breach or failure of due observance or performance by the Obligors of one or more covenants or provisions of one or more Material Agreements resulting in a claim against the Obligors in excess of $5,000,000 in the aggregate and such breaches or failures continue for 10 Banking Days after the earlier of (x) the Borrower becoming aware of such breaches or failures or (y) the Mexican Collateral Agent, the Administrative Agent or any other Finance Party giving the Borrower notice of such breaches or failures;	
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 	(j)	if one or more encumbrancers, liens or landlords take possession of any part of the property of any Obligor or attempt to enforce their security or other remedies against such property and their claims remain unsatisfied for such period as would permit such property to be sold thereunder and such property which has been repossessed or is capable of being sold has an aggregate fair market value of at least $5,000,000 (individually or in the aggregate);	
 	 	 	
 	(k)	if an event of default under any one or more agreements, indentures or instruments, under which any Obligor has outstanding Indebtedness in an amount of at least $5,000,000 (individually or in the aggregate) or under which another Person has outstanding Indebtedness in an amount of at least $3,000,000 (individually or in the aggregate) which is guaranteed by any Obligor, shall happen (with all applicable grace periods having expired) and be continuing, or if any Indebtedness of or guaranteed by any Obligor in an amount of at least $5,000,000 (individually or in the aggregate) which is payable on demand is not paid on demand or if any Obligor fails to make any payment under any Capital Lease when due;	
 	 	 	
 	(l)	the occurrence of a Change of Control;	
 	 	 	
 	(m)	the occurrence of a Brigus Event of Default (as defined in the Sandstorm Gold Purchase Agreement) or otherwise the occurrence of an event of default under any other Material Agreement or the termination or amendment of any other Material Agreement if such event of default, termination or amendment could reasonably be expected to have a Material Adverse Effect;	
 	 	 	
 	(n)	the expropriation, condemnation or abandonment of the a Material Property or any part thereof or any restriction or limitation imposed by any Official Body on the relevant Obligor’s legal right to use the Mining Properties owned by it for mining and exploration activities whether as a result of the Ejido Litigation or otherwise and such imposition resulting in such restriction or limitation has not been discharged, vacated or stayed within 30 days;	
 	 	 	
 	(o)	any one or more of the Finance Documents is determined by a court of competent jurisdiction not to be a legal, valid and binding obligation of any Company which is a party thereto, enforceable by the Mexican Collateral Agent, the Finance Parties or any of them against such Obligor and such Finance Document has not been replaced by a legal, valid, binding and enforceable document which is equivalent in effect to such Finance Document, assuming such Finance Document had originally been legal, valid, binding and enforceable, in form and substance acceptable to the relevant Finance Parties, within 30 days of such determination, provided, however, that such grace period shall only be provided if such Company actively co-operates with the relevant Finance Party and, if applicable, the Mexican Collateral Agent to so replace such Finance Document;	
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 	(p)	the validity, enforceability or priority of any of the Finance Documents is contested in any manner by any Company;	
 	 	 	
 	(q)	any Finance Document is terminated or rescinded or any Person takes an action to terminate or rescind any Finance Document;	
 	 	 	
 	(r)	any Security Document does not create legal, valid, binding and enforceable security over the assets charged under that Security Document;	
 	 	 	
 	(s)	any Security Document does not constitute first ranking, priority security in the Secured Assets (subject to Permitted Liens which by their nature or by reason of the Intercreditor Agreement would constitute prior ranking security); or	
 	 	 	
 	(t)	the occurrence of a Material Adverse Change;	
the Administrative Agent (with the approval and instructions of the Majority Lenders) may, by notice to the Borrower, terminate the Credit Facility (provided, however, that the Credit Facility shall automatically terminate, without notice of any kind, upon the occurrence of an event described in clause (c) or (d) above) and the Administrative Agent (with the approval and instructions of the Majority Lenders) may, by the same or further notice to the Borrower, declare all indebtedness of the Borrower to the Lenders pursuant to this agreement to be immediately due and payable whereupon all such indebtedness shall immediately become and be due and payable without further demand or other notice of any kind, all of which are expressly waived by the Borrower (provided, however, that all such indebtedness of the Borrower to the Lenders shall automatically become due and payable, without notice of any kind, upon the occurrence of an event described in clause (c) or (d) above).

13.2	Bankers’ Acceptances	
The Borrower acknowledges that extensions of credit hereunder by way of Bankers’ Acceptances and BA Equivalent Loans may not be repaid prior to the maturity thereof. If any Bankers’ Acceptance or BA Equivalent Loan is repaid prior to the scheduled maturity date thereof (whether as a result of acceleration or otherwise), the Administrative Agent will invest any funds in respect of such purported repayment in a term deposit maturing on the scheduled maturity date of the Bankers’ Acceptance or BA Equivalent Loan. Any interest accruing on the term deposit will be paid to the Borrower on the maturity date thereof, provided that no Event of Default has occurred.

13.3	Letters	
With respect to any Letters which are outstanding at the time that all indebtedness of the Borrower to the Lenders pursuant to this agreement become immediately due and payable pursuant to Section 13.1, the Borrower shall forthwith (i) pay to the Administrative Agent for deposit to the Letter Cash Collateral Account the then aggregate contingent liability of the Issuing Lender under such Letters and (ii) a certificate of a senior officer of SWC addressed to the Administrative Agent that no SWC Payment Default (as defined in the Intercreditor Agreement) has occurred and is continuing. Thereafter, the Administrative Agent shall apply the funds so deposited in the Letter Cash Collateral Account at the direction of the Issuing Lender to (a) satisfy the reimbursement obligations of the Borrower to the Issuing Lender under Section 9.8 as Letters are drawn upon or (b) refund to the Borrower any amounts payable by the Issuing Lender to the Borrower under Section 13.4.
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13.4	Refund of Overpayments	
With respect to each Letter for which the Issuing Lender has been paid all of its contingent liability pursuant to Section 9.9 or 13.3 and provided that all amounts due by the Borrower to the Administrative Agent under Section 9.9 or 13.3 have been paid, the Issuing Lender agrees to pay to the Borrower, upon the earlier of:

 	(a)	the date on which either the original counterpart of such Letter is returned to the Issuing Lender for cancellation or the Issuing Lender is released by the beneficiary thereof from any further obligations in respect of such Letter;	
 	 	 	
 	(b)	the expiry of such Letter; and	
 	 	 	
 	(c)	the Issuing Lender is permanently enjoined by a court of competent jurisdiction from honouring such Letter pursuant to a final Order;	
an amount equal to any excess of the amount received by the Issuing Lender hereunder in respect of its contingent liability under such Letter over the total of amounts applied to reimburse the Issuing Lender for amounts paid by it under or in connection with such Letter (the Issuing Lender having the right to so appropriate such funds).

13.5	Remedies Cumulative	
The Borrower expressly agrees that the rights and remedies of the Administrative Agent and the Lenders under this agreement are cumulative and in addition to and not in substitution for any rights or remedies provided by law. Any single or partial exercise by the Administrative Agent or any Lender of any right or remedy for a default or breach of any term, covenant or condition in this agreement does not waive, alter, affect or prejudice any other right or remedy to which the Administrative Agent or such Lender may be lawfully entitled for the same default or breach. Any waiver by the Administrative Agent with the approval of the Majority Lenders or all of the Lenders in accordance with Section 14.14 of the strict observance, performance or compliance with any term, covenant or condition of this agreement is not a waiver of any subsequent default and any indulgence by the Lenders with respect to any failure to strictly observe, perform or comply with any term, covenant or condition of this agreement is not a waiver of the entire term, covenant or condition or any subsequent default. No failure or delay by the Mexican Collateral Agent, the Administrative Agent or any Lender in exercising any right shall operate as a waiver of such right nor shall any single or partial exercise of any power or right preclude its further exercise or the exercise of any other power or right.
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13.6	Set-Off	
In addition to any rights now or hereafter granted under Applicable Law, and not by way of limitation of any such rights, the Administrative Agent and each Lender is authorized, at any time that an Event of Default has occurred and is continuing without notice to the Borrower or to any other Person, any such notice being expressly waived by the Borrower, to set-off, appropriate and apply any and all deposits, matured or unmatured, general or special, and any other indebtedness at any time held by or owing by the Administrative Agent or such Lender, as the case may be, to or for the credit of or the account of the Borrower against and on account of the obligations and liabilities of the Borrower which are due and payable to the Administrative Agent or such Lender, as the case may be, under the Finance Documents.
ARTICLE 14
THE ADMINISTRATIVE AGENT

14.1	Appointment and Authorization of Administrative Agent	

 	(a)	Each Finance Party hereby appoints and authorizes, and hereby agrees that it will require any assignee of any of its interests in the Credit Documents (other than the holder of a participation in its interests herein or therein) to appoint and authorize the Administrative Agent to take such actions as agent on its behalf and to exercise such powers under the Credit Documents as are delegated to the Administrative Agent or the Administrative Agent by such Finance Party by the terms hereof, together with such powers as are reasonably incidental thereto. Neither the Administrative Agent nor any of its directors, officers, employees or agents shall be liable to any of the Finance Parties for any action taken or omitted to be taken by it or them hereunder or thereunder or in connection herewith or therewith, except for its own gross negligence or wilful misconduct and each Finance Party hereby acknowledges that the Administrative Agent is entering into the provisions of this Section 14.1 on its own behalf and as agent and trustee for its directors, officers, employees and agents.	
 	 	 	
 	(b)	Each Lender hereby authorizes the Administrative Agent to execute and deliver the Intercreditor Documents and to designate and appoint (A) Banco Nacional de Mexico, S.A. as the Mexican Collateral Agent, and (B) Citibank, as the Non- Mexican Proceeds Agent in each case under the Intercreditor Documents and each of the Lenders hereby recognizes such designations and appointments, without the need of any further requirement, formalization or notice. Each of the Lenders hereby agrees that it shall take any and all necessary or appropriate further actions as it might be required to take, by law or otherwise, to authorize the Administrative Agent to carry out the foregoing or for the Mexican Collateral Agent or Non-Mexican Proceeds Agent to exercise its faculties and powers, and to comply with its obligations, under the Intercreditor Documents and the Mexican Collateral Documents, as the case may be, directly or through its attorneys-in-fact or designees, including but not limited to the individualization of any required special power of attorney.	
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14.2	Interest Holders	
The Administrative Agent may treat each Lender set forth in Schedule B hereto or the person designated in the last notice delivered to it under Section 15.5 as the holder of all of the interests of such Lender under the Credit Documents.

14.3	Consultation with Counsel	
The Administrative Agent may consult with legal counsel selected by it as counsel for the Administrative Agent and the Lenders and shall not be liable for any action taken or not taken or suffered by it in good faith and in accordance with the advice and opinion of such counsel.

14.4	Documents	
The Administrative Agent shall not be under any duty to the Finance Parties to examine, enquire into or pass upon the validity, effectiveness or genuineness of the Credit Documents or any instrument, document or communication furnished pursuant to or in connection with the Credit Documents and the Administrative Agent shall, as regards the Finance Parties, be entitled to assume that the same are valid, effective and genuine, have been signed or sent by the proper parties and are what they purport to be.

14.5	Administrative Agent as Finance Party	
With respect to those portions of the Credit Facility made available by it, the Administrative Agent shall have the same rights and powers under the Credit Documents as any other Finance Party and may exercise the same as though it were not the Administrative Agent. The Administrative Agent and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrower and its Affiliates and persons doing business with the Borrower and/or any of its Affiliates as if it were not the Administrative Agent and without any obligation to account to the Finance Parties therefore.

14.6	Responsibility of Administrative Agent	
The duties and obligations of the Administrative Agent to the Finance Parties under the Credit Documents are only those expressly set forth herein. The Administrative Agent shall not have any duty to the Finance Parties to investigate whether a Default or an Event of Default has occurred. The Administrative Agent shall, as regards the Lenders, be entitled to assume that no Default or Event of Default has occurred and is continuing unless the Administrative Agent has actual knowledge or has been notified by the Borrower of such fact or has been notified by a Finance Party that such Finance Party considers that a Default or Event of Default has occurred and is continuing, such notification to specify in detail the nature thereof.

14.7	Action by Administrative Agent	
The Administrative Agent shall be entitled to use its discretion with respect to exercising or refraining from exercising any rights which may be vested in it on behalf of the Finance Parties by and under this agreement; provided, however, that the Administrative Agent shall not exercise any rights under Section 13.1 or under the Guarantees or the Security Documents or expressed to be on behalf of or with the approval of the Majority Lenders or instruct the Mexican Lien Agent to exercise any rights under the Mexican Collateral Document without the request, consent or instructions of the Majority Lenders. Furthermore, any rights of the Administrative Agent expressed to be on behalf of or with the approval of the Majority Lenders shall be exercised by the Administrative Agent upon the request or instructions of the Majority Lenders. The Administrative Agent shall incur no liability to the Finance Parties under or in respect of any of the Credit Documents with respect to anything which it may do or refrain from doing in the reasonable exercise of its judgment or which may seem to it to be necessary or desirable in the circumstances, except for its gross negligence or wilful misconduct. The Administrative Agent shall in all cases be fully protected in acting or refraining from acting under any of the Credit Documents in accordance with the instructions of the Majority Lenders and any action taken or failure to act pursuant to such instructions shall be binding on all Finance Parties. In respect of any notice by or action taken by the Administrative Agent hereunder, the Borrower shall at no time be obliged to enquire as to the right or authority of the Administrative Agent to so notify or act.
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14.8	Notice of Events of Default	
In the event that the Administrative Agent shall acquire actual knowledge or shall have been notified of any Default or Event of Default, the Administrative Agent shall promptly notify the Lenders and shall take such action and assert such rights under Section 13.1 of this agreement and under the other Credit Documents as the Majority Lenders shall request in writing and the Administrative Agent shall not be subject to any liability by reason of its acting pursuant to any such request. If the Majority Lenders shall fail for five Banking Days after receipt of the notice of any Default or Event of Default to request the Administrative Agent to take such action or to assert such rights under any of the Credit Documents in respect of such Default or Event of Default, the Administrative Agent may, but shall not be required to, and subject to subsequent specific instructions from the Majority Lenders, take such action or assert such rights (other than rights under Section 13.1 of this agreement or under the other Credit Documents and other than giving an express waiver of any Default or any Event of Default) as it deems in its discretion to be advisable for the protection of the Lenders except that, if the Majority Lenders have instructed the Administrative Agent not to take such action or assert such rights, in no event shall the Administrative Agent act contrary to such instructions unless required by law to do so.

14.9	Responsibility Disclaimed	
The Administrative Agent shall be under no liability or responsibility whatsoever as agent hereunder:

 	(a)	to the Borrower or any other Person as a consequence of any failure or delay in the performance by, or any breach by, any Lender or Lenders of any of its or their obligations under any of the Credit Documents;	
 	 	 	
 	(b)	to any Lender or Lenders as a consequence of any failure or delay in performance by, or any breach by, any Obligor of any of its obligations under any of the Credit Documents; or	
 	 	 	
 	(c)	to any Lender or Lenders for any statements, representations or warranties in any of the Credit Documents or in any other documents contemplated hereby or thereby or in any other information provided pursuant to any of the Credit Documents or any other documents contemplated thereby or for the validity, effectiveness, enforceability or sufficiency of any of the Credit Documents or any other document contemplated hereby or thereby.	
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14.10	Indemnification	
The Lenders agree to indemnify the Administrative Agent (to the extent not reimbursed by the Borrower) in their respective Pro Rata Shares from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any nature whatsoever which may be imposed on, incurred by or asserted against the Administrative Agent in any way relating to or arising out of any of the Credit Documents or any other document contemplated hereby or thereby or any action taken or omitted by the Administrative Agent under any of the Credit Documents or any document contemplated hereby or thereby, except that no Lender shall be liable to the Administrative Agent for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the gross negligence or wilful misconduct of the Administrative Agent.

14.11	Credit Decision	
Each Lender represents and warrants to the Administrative Agent that:

 	(a)	in making its decision to enter into this agreement and to make its Pro Rata Share of the Credit Facility available to the Borrower, it is independently taking whatever steps it considers necessary to evaluate the financial condition and affairs of the Obligors and that it has made an independent credit judgment without reliance upon any information furnished by the Administrative Agent; and	
 	 	 	
 	(b)	so long as any portion of the Credit Facility is being utilized by the Borrower, it will continue to make its own independent evaluation of the financial condition and affairs of the Obligors.	

14.12	Successor Administrative Agent	
Subject to the appointment and acceptance of a successor Administrative Agent as provided below, the Administrative Agent may, with the prior written consent of the Borrower (which consent shall not be required for so long as a Default has occurred and is continuing), resign at any time by giving 30 days written notice thereof to the Borrower and the Lenders. Upon any such resignation, the Majority Lenders, with the prior written consent of the Borrower (which consent shall not be required (x) if the successor Administrative Agent is an Affiliate or Subsidiary of the Administrative Agent on the date hereof or (y) for so long as a Default has occurred and is continuing), shall have the right to appoint a successor Administrative Agent who shall be one of the Lenders unless none of the Lenders wishes to accept such appointment. If no successor Administrative Agent shall have been so appointed and shall have accepted such appointment by the time of such resignation, then the retiring Administrative Agent may, on behalf of the Finance Parties and with the prior written consent of the Borrower (which consent shall not be required for so long as an Event of Default has occurred and is continuing), appoint a successor Administrative Agent which shall be a bank which has combined capital and reserves in excess of $250,000,000. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges, duties and obligations of the retiring Administrative Agent (in its capacity as Administrative Agent but not in its capacity as a Finance Party) and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder (in its capacity as Administrative Agent but not in its capacity as a Finance Party). After any retiring Administrative Agent’s resignation hereunder as the Administrative Agent, provisions of this Article 14 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Administrative Agent.
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14.13	Delegation by Administrative Agent	
With the prior approval of the Majority Lenders, the Administrative Agent shall have the right to delegate any of its duties or obligations hereunder as Administrative Agent to any Affiliate of the Administrative Agent so long as the Administrative Agent shall not thereby be relieved of such duties or obligations.

14.14	Waivers and Amendments	

 	(a)	Subject to Sections 14.14(b) and (c), any term, covenant or condition of any of the Credit Documents may only be amended with the prior consent of the Borrower and the Majority Lenders or compliance therewith may be waived (either generally or in a particular instance and either retroactively or prospectively) by the Majority Lenders and in any such event the failure to observe, perform or discharge any such covenant, condition or obligation, so amended or waived (whether such amendment is executed or such consent or waiver is given before or after such failure), shall not be construed as a breach of such covenant, condition or obligation or as a Default or Event of Default.	
 	 	 	
 	(b)	Notwithstanding Section 14.14(a), without the prior written consent of each Lender, no such amendment or waiver shall directly:	

 	(i)	increase the amount of the Credit Facility or the amount of the Individual Commitment of any Lender;	
 	 	 	
 	(ii)	extend the Maturity Date;	
 	 	 	
 	(iii)	extend the time for the payment of interest on Loans, forgive any portion of principal thereof, reduce the stated rate of interest thereon or amend the requirement of pro rata application of all amounts received by the Administrative Agent;	
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 	(iv)	change the percentage of the Lenders’ requirement to constitute the Majority Lenders or otherwise amend the definition of Majority Lenders;	
 	 	 	
 	(v)	reduce the stated amount or postpone the date for payment of any fees or other amount to be paid pursuant to Article 7 or Article 8 of this agreement;	
 	 	 	
 	(vi)	permit any subordination or postponement of any of the Secured Obligations;	
 	 	 	
 	(vii)	except as otherwise permitted pursuant to Section 14.20, release or discharge the Guarantees or the Security Documents, in whole or in part; or	
 	 	 	
 	(viii)	alter the terms of this Section 14.14.	

 	(c)	Notwithstanding Section 14.14(a), without the prior written consent of each Lender, each Qualified Cash Management Lender and each Qualified Risk Management Lender, no such amendment or waiver shall directly:	

 	(i)	change the percentage of the Lenders’ requirement to constitute the Majority Lenders or otherwise amend the definition of Majority Lenders;	
 	 	 	
 	(ii)	permit any subordination of any of the Secured Obligations;	
 	 	 	
 	(iii)	except as otherwise permitted pursuant to Section 14.20, release or discharge the Guarantees or the Security Documents, in whole or in part;	
 	 	 	
 	(iv)	alter the terms of this Section 14.14;	
 	 	 	
 	(v)	amend the definitions of “ Common Cash Management Agreement ”, “ Common Risk Management Agreement ”, “ Enforcement Date ”, “ Exposure ”, “ Finance Document ”, “ Finance Party ”, “ Qualified Affiliate ”, “ Qualified Cash Management Lender ”, “ Qualified Risk Management Lender ”, “ Cash Management Agreement ”, “ Risk Management Agreement ” or “ Secured Obligations ”; or	
 	 	 	
 	(vi)	change the ability of a Qualified Risk Management Lender to close out or terminate a Risk Management Agreement or the ability to net or set-off; or	
 	 	 	
 	(vii)	amend or waive Section 11.3(d), Section 14.21, Section 14.22 or Section 14.24.	

 	(d)	No amendment to or waiver of any provision hereof to the extent it affects the rights or obligations of the Administrative Agent shall be effective without the prior written consent of the Administrative Agent.	
 	 	 	
 	(e)	No amendment to or waiver of any provision hereof to the extent it affects the rights or obligations of the Issuing Lender shall be effective without the prior written consent of the Issuing Lender.	
 	 	 	
 	(f)	Notwithstanding Section 14.14(b)(iii), the Administrative Agent shall be entitled, without the consent of any Lender, to authorize the Mexican Collateral Agent to execute and deliver a release or discharge of any Security over any Secured Assets at the time of any disposition of such assets which is permitted hereunder.	
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14.15	Determination by Administrative Agent Conclusive and Binding	
Any determination to be made by the Administrative Agent on behalf of or with the approval of the Lenders or the Majority Lenders under this agreement shall be made by the Administrative Agent in good faith and, if so made, shall be binding on all parties, absent manifest error. The Obligors are entitled to assume that any action taken by the Administrative Agent under or in connection with any Credit Document has been appropriately authorized by the Lenders or the Majority Lenders, as the case may be, pursuant to the terms hereof.

14.16	Adjustments among Lenders after Acceleration	

 	(a)	The Lenders agree that, at any time after all indebtedness of the Borrower to the Lenders pursuant hereto has become immediately due and payable pursuant to Section 13.1 or after the cancellation or termination of the Credit Facility, they will at any time or from time to time upon the request of any Lender through the Administrative Agent purchase portions of the availments made available by the other Lenders which remain outstanding, and make any other adjustments which may be necessary or appropriate, in order that the amounts of the availments made available by the respective Lenders which remain outstanding, as adjusted pursuant to this Section 14.16, will be in the same proportions as their respective Pro Rata Shares thereof immediately prior to such acceleration, cancellation or termination.	
 	 	 	
 	(b)	The Lenders agree that, at any time after all indebtedness of the Borrower to the Lenders pursuant hereto has become immediately due and payable pursuant to Section 13.1 or after the cancellation or termination of the Credit Facility, the amount of any repayment made by the Borrower under this agreement, and the amount of any proceeds of the exercise of any rights or remedies of the Lenders under the Credit Documents, which are to be applied against amounts owing hereunder as principal, will be so applied in a manner such that to the extent possible, the availments made available by the Lenders which remain outstanding, after giving effect to such application, will be in the same proportions as their respective Pro Rata Shares thereof immediately prior to such acceleration, cancellation or termination.	
 	 	 	
 	(c)	For greater certainty, the Lenders acknowledge and agree that without limiting the generality of the provisions of Section 14.16(a) and (b), such provisions will have application if and whenever any Lender shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, compensation, or otherwise), other than on account of any monies owing or payable by the Borrower to it under the Finance Documents in excess of its pro rata share of payments on account of monies owing by the Borrower to all the Finance Parties thereunder.	
 	 	 	
 	(d)	The Borrower agrees to be bound by and to do all things necessary or appropriate to give effect to any and all purchases and other adjustments made by and between the Lenders pursuant to this Section 14.16.	
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14.17	Redistribution of Payment	
If a Lender shall receive payment of a portion of the aggregate amount of principal and interest due to it hereunder which is greater than the proportion received by any other Lender in respect of the aggregate amount of principal and interest due (having regard to the respective Individual Commitments of the Lenders), the Lender receiving such proportionately greater payment shall purchase a participation (which shall be deemed to have been done simultaneously with receipt of such payment) in that portion of the aggregate outstanding credit of the other Lender or Lenders so that the respective receipts shall be pro rata to their respective participation in the credits; provided, however, that if all or part of such proportionately greater payment received by such purchasing Lender shall be recovered from the Borrower, such purchase shall be rescinded and the purchase price paid for such participation shall be returned by such selling Lender or Lenders to the extent of such recovery, but without interest.

14.18	Distribution of Notices	
Except as otherwise expressly provided herein, promptly after receipt by the Administrative Agent of any notice or other document which is delivered to the Administrative Agent hereunder on behalf of the Lenders, the Administrative Agent shall provide a copy of such notice or other document to each of the Lenders.

14.19	Other Security Not Permitted	
None of the Finance Parties shall be entitled to enjoy any Lien with respect to any of the Secured Assets other than the Security.

14.20	Discharge of Security	
To the extent a sale or other disposition of the Secured Assets is permitted pursuant to the provisions hereof, the Lenders hereby authorize the Administrative Agent, at the cost and expense of the Borrower, to execute such discharges and other instruments (or, if applicable, to so authorize the Mexican Collateral Agent) which are necessary for the purposes of releasing and discharging the Security therein or for the purposes of recording the provisions or effect thereof in any office where the Security Documents may be registered or recorded or for the purpose of more fully and effectively carrying out the provisions of this Section 14.20.
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14.21	Determination of Exposures	
Concurrent with any request for any approval or instructions of the Majority Lenders and prior to any distribution of Cash Proceeds of Realization to the Finance Parties, the Administrative Agent shall request each Finance Party to provide to the Administrative Agent a written calculation of such Finance Party’s Exposure, each such calculation to be certified true and correct by the Finance Party providing same. Each Finance Party shall so provide such calculation within two Banking Days following the request of the Administrative Agent. Any such calculation provided by a particular Finance Party shall, absent manifest error, constitute prima facie evidence of such Finance Party’s Exposure at such time. With respect to each determination of the Exposure of the Finance Parties, the Administrative Agent shall promptly notify the Finance Parties. For the purposes of determining a particular Finance Party’s Exposure:

 	(a)	the Exposure of a Finance Party under any Credit Documents shall be the aggregate amount (expressed in United States dollars) owing to such Finance Party thereunder on such date;	
 	 	 	
 	(b)	the Exposure of a Qualified Risk Management Lender in respect of Common Risk Management Agreements shall be measured as the net exposure of such Qualified Risk Management Lender under all Common Risk Management Agreements with the Obligors to which such Qualified Risk Management Lender is a party, being the aggregate exposure of such Qualified Risk Management Lender thereunder less the aggregate exposure of the Obligors thereunder; the exposure of a party to a Common Risk Management Agreement shall be, in the case of a Common Risk Management Agreement which has not been terminated as of such date, the total amount which would be owing to such party by the other party under such Common Risk Management Agreement in the event of the early termination as of such date of such Common Risk Management Agreement as a result of the occurrence of a default, event of default or termination event (however specified or designated) with respect to such party thereunder or, in the case of a Common Risk Management Agreement which has been terminated as of such date, the total amount which is owing to such party by the other party under such Common Risk Management Agreement, in each case expressed in United States dollars;	
 	 	 	
 	(c)	the Exposure of a Qualified Cash Management Lender in respect of Common Cash Management Agreements shall be measured as the net exposure of such Qualified Cash Management Lender under all Common Cash Management Agreements with the Obligors to which such Qualified Cash Management Lender is a party, being the aggregate exposure of such Qualified Cash Management Lender thereunder less the aggregate exposure of the Obligors thereunder; the exposure of a party to a Common Cash Management Agreement shall be, in the case of a Common Cash Management Agreement which has not been terminated as of such date, the total amount which would be owing to such party by the other party under such Common Cash Management Agreement in the event of the early termination as of such date of such Common Cash Management Agreement as a result of the occurrence of a default, event of default or termination event (however specified or designated) with respect to such party thereunder or, in the case of a Common Cash Management Agreement which has been terminated as of such date, the total amount which is owing to such party by the other party under such Common Cash Management Agreement, in each case expressed in United States dollars;	
 	 	 	
 	(d)	any amount of Secured Obligations denominated in Canadian dollars shall be expressed as the U.S. Dollar Equivalent thereof; and	
 	 	 	
 	(e)	the Exposure of the Administrative Agent, for the purposes of Section 14.24(b)(iii) and for no other purposes, shall not include the amounts distributed pursuant to Sections 14.24(b)(i) and (ii).	
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14.22	Decision to Enforce Security	
Upon the Security becoming enforceable in accordance with its terms, the Administrative Agent shall promptly so notify each of the Finance Parties. Any Lender may thereafter provide the Administrative Agent with a written request to enforce the Security. Forthwith after the receipt of such a request, the Administrative Agent shall seek the instructions of the Majority Lenders as to whether the Security should be enforced and the manner in which the Security should be enforced. In seeking such instructions, the Administrative Agent shall submit a specific proposal to the Finance Parties. From time to time, any Lender may submit a proposal to the Administrative Agent as to the manner in which the Security should be enforced and the Administrative Agent shall submit any such proposal to the Lenders for approval of the Majority Lenders. The Administrative Agent shall promptly notify the Finance Parties of all instructions and approvals of the Majority Lenders. If the Majority Lenders instruct the Administrative Agent to enforce the Security, each of the Lenders agrees to accelerate the Secured Obligations owed to it to the extent permitted under the relevant Finance Document and in accordance with the relevant Finance Document.

14.23	Enforcement	
The Administrative Agent reserves the sole right to enforce, or otherwise deal with (and instruct the Mexican Collateral Agent to enforce or otherwise deal with), the Security and to deal with the Obligors in connection therewith; provided, however, that the Administrative Agent shall so enforce, or otherwise deal with, the Security as the Majority Lenders shall instruct.

14.24	Application of Cash Proceeds of Realization	

 	(a)	All Proceeds of Realization not in the form of cash shall be forthwith delivered to the Administrative Agent and disposed of, or realized upon, by the Administrative Agent as set forth in the Intercreditor Documents and otherwise in such manner as the Majority Lenders may approve so as to produce Cash Proceeds of Realization.	
 	 	 	
 	(b)	Subject to the claims, if any, of secured creditors of the Obligors whose security ranks in priority to the Security, all Cash Proceeds of Realization shall be applied and distributed, and the claims of the Finance Parties shall be deemed to have the relative priorities which would result in the Cash Proceeds of Realization being applied and distributed, as follows:	
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 	(i)	firstly, to the payment of all reasonable costs and expenses incurred by the Administrative Agent or, if applicable, the Mexican Collateral Agent (including, without limitation and in each case, all legal fees and disbursements) in the exercise of all or any of the powers granted to them hereunder or under the Security Documents and the Guarantees and in payment of all of the remuneration of any Receiver and all costs and expenses properly incurred by such Receiver (including, without limitation, all legal fees and disbursements) in the exercise of all or any powers granted to it under the Security Documents;	
 	 	 	
 	(ii)	secondly, in payment of all amounts of money borrowed or advanced by the Administrative Agent, the Mexican Collateral Agent or such Receiver pursuant to the Security Documents and any interest thereon;	
 	 	 	
 	(iii)	thirdly, to the payment of the Secured Obligations (including holding as cash collateral to be applied against Secured Obligations which have not then matured) to the Finance Parties pro rata in accordance with their relative Exposures; and	
 	 	 	
 	(iv)	the balance, if any, in accordance with Applicable Law.	

 	(c)	Notwithstanding the foregoing, at any time that the Intercreditor Documents are in force and effect, Proceeds of Realization and Cash Proceeds of Realization shall be dealt with in accordance with the Intercreditor Documents.	

14.25	Entering Into Contracts	
The Administrative Agent may enter into any Credit Document (including the Intercreditor Documents) as agent for and on behalf of the Finance Parties.

14.26	Survival	
The provisions of this Article 14 and all other provisions of this agreement which are necessary to give effect to each of the provisions of this Article 14 shall survive the permanent repayment in full of the Credit Facility and the termination of all of the commitments of the Lenders in connection therewith until such time as all of the Secured Obligations have been satisfied in full and all of the commitments of the Finance Parties in connection therewith have been terminated.
ARTICLE 15
MISCELLANEOUS

15.1	Notices	

 	(a)	All notices and other communications provided for herein shall be in writing and shall be personally delivered to an officer or other responsible employee of the addressee or sent by telefacsimile, charges prepaid, at or to the applicable addresses or telefacsimile numbers, as the case may be, set out opposite the parties’ name on the signature page hereof or at or to such other address or addresses, telefacsimile number or numbers as any party hereto may from time to time designate to the other parties in such manner. Any communication which is personally delivered as aforesaid shall be deemed to have been validly and effectively given on the date of such delivery if such date is a Banking Day and such delivery is received before 4:00 p.m. (London time); otherwise, it shall be deemed to have been validly and effectively given on the Banking Day next following such date of delivery. Any communication which is transmitted by telefacsimile as aforesaid shall be deemed to have been validly and effectively given on the date of transmission if such date is a Banking Day and such transmission was received before 4:00 p.m. (London time); otherwise, it shall be deemed to have been validly and effectively given on the Banking Day next following such date of transmission.	
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 	(b)	Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communication (including e-mail, Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any party thereto if such party has notified the Administrative Agent that it is incapable of receiving notices under this Section 15.1 by electronic communication. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.	
 	 	 	
 	(c)	Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not sent prior to 4:00 p.m. (London time) such notice or communication shall be deemed to have been sent at the opening of business on the next Banking Day, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e- mail address as described in the foregoing subsection (i) of notification that such notice or communication is available and identifying the website address therefor.	

15.2	Severability	
Any provision hereof which is prohibited or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof.

15.3	Counterparts	
This agreement may be executed in one or more counterparts, each of which shall be deemed to be an original and all of which taken together shall be deemed to constitute one and the same instrument. Delivery of an executed counterpart by facsimile or electronic means shall be equally as effective as delivery of an original executed counterpart.
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15.4	Successors and Assigns	
This agreement shall enure to the benefit of and shall be binding upon the parties hereto and their respective successors and permitted assigns.

15.5	Assignment	

 	(a)	Neither the Credit Documents nor the benefit thereof may be assigned by the Borrower.	
 	 	 	
 	(b)	A Lender may at any time sell to one or more other persons (“ Participants ”) participating interests in any credit outstanding hereunder, any commitment of such Lender hereunder or any other interest of the Lender hereunder. In the event of any such sale by a Lender of a participating interest to a Participant, such Lender’s obligations under this agreement to the Borrower shall remain unchanged, such Lender shall remain solely responsible for the performance thereof and the Borrower shall continue to be obligated to such Lender in connection with such Lender’s rights under this agreement. The Borrower agrees that if amounts outstanding under this agreement are due and unpaid, or shall have been declared to be or shall have become due and payable upon the occurrence of an Event of Default, or any Default which might mature into an Event of Default, each Participant shall be deemed to have the right of setoff in respect of its participating interest in amounts owing under this agreement to the same extent as if the amount of its participating interest were owing directly to it as the relevant Lender under this agreement. The Borrower also agrees that each Participant shall be entitled to the benefits of Article 8 with respect to its participation hereunder and for the purposes of Article 8 such Participant shall be deemed to be a Lender to the extent of such participation, provided, that such Participant shall have complied with obligations of a Lender provided in Article 8 and that no Participant shall be entitled to receive any greater amount pursuant to such Article than the relevant Lender would have been entitled to receive in respect of the amount of the participation transferred by the relevant Lender to such Participant had no such transfer occurred.	
 	 	 	
 	(c)	With the prior written consent of, (x) the Administrative Agent, (y) the Issuing Lender and (z) at any time that no Default has occurred and is continuing, the Borrower (provided, however, that if the Borrower does not respond to a request for its consent to any such sale within five Banking Days of such receipt, the Borrower shall be deemed to have consented thereto), a Lender may at any time sell all or any part of its rights and obligations under the Credit Documents (but not less than the lesser of (x) $2,000,000 and (y) the amount of its Individual Commitment) to one or more Persons (“ Purchasing Lenders ”). For certainty, no consent from the Borrower shall be required for any sale by a Lender to another Lender or by a Lender to any of its Affiliates of such Lender’s interest hereunder.	
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Upon such sale, the relevant Lender shall, to the extent of such sale, be released from its obligations under the Credit Documents and each of the Purchasing Lenders shall become a party to the Credit Documents to the extent of the interest so purchased. Any such assignment by a Lender shall not be effective unless and until such Lender has paid to the Administrative Agent an assignment fee in the amount of $3,500 for each Purchasing Lender, unless and until the Purchasing Lender has executed an instrument substantially in the form of Schedule D hereto whereby the Purchasing Lender has agreed to be bound by the terms of the Credit Documents as a Lender and has agreed to a specific Individual Commitment and a specific address and telefacsimile number for the purpose of notices as provided in Section 15.1 and unless and until the requisite consents to such assignment have been obtained, unless and until a copy of a fully executed copy of such instrument has been delivered to each of the Administrative Agent and the Borrower. Upon any such assignment becoming effective, Schedule B hereto shall be deemed to be amended to include the Purchasing Lender as a Lender with the specific Individual Commitment, address and telefacsimile number as aforesaid and the Individual Commitment of the Lender making such assignment shall be deemed to be reduced by the amount of the Individual Commitment of the Purchasing Lender.

 	(d)	The Borrower authorizes the Administrative Agent and the Lenders to disclose to any Participant or Purchasing Lender (each, a “ Transferee ”) and any prospective Transferee or any professional advisor of any Transferee or prospective Transferee and authorizes each of the Lenders to disclose to any other Lender any and all financial information in their possession concerning the Borrower which has been delivered to them by or on behalf of the Borrower pursuant to this agreement or which has been delivered to them by or on behalf of the Borrower in connection with their credit evaluation of the Obligors prior to becoming a party to this agreement, so long as any such Transferee agrees not to disclose any confidential, non-public information to any person other than its non-brokerage affiliates, employees, accountants or legal counsel, unless required by law and authorizes each of the Lenders to disclose to any other Lender and to any Person where disclosure is required by law, regulation, legal process or regulatory authority (for certainty under any circumstance and not solely in connection with assignment of rights).	

15.6	Entire Agreement	
This agreement and the agreements referred to herein and delivered pursuant hereto (including, without limitation, the Fee Letters) constitute the entire agreement between the parties hereto and supersede any prior agreements, undertakings, declarations, representations and understandings, both written and verbal, in respect of the subject matter hereof.

15.7	Further Assurances	
The Borrower shall, and shall cause the Guarantors to, from time to time and at all times hereafter, upon every reasonable request of the Administrative Agent, make, do, execute, and deliver or cause to be made, done, executed and delivered all such further acts, deeds, assurances and things as may be necessary in the opinion of the Administrative Agent for more effectually implementing and carrying out the true intent and meaning of the Credit Documents or any agreement delivered pursuant hereto or thereto and such additional security, legal opinions, consents, approvals, acknowledgements, undertakings, non-disturbance agreements, directions and negotiable documents of title in connection with the property and assets of the Obligors, in form and substance satisfactory to the Administrative Agent, as the Administrative Agent may from time to time request, to ensure (i) that all Secured Assets are subject to a Lien in favour of the Administrative Agent or, as applicable, the Mexican Collateral Agent and (ii) the intended first ranking priority of such Liens (subject to Permitted Liens which by their nature or by reason of the Intercreditor Agreement would constitute prior ranking security).
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15.8	Judgment Currency	

 	(a)	If, for the purpose of obtaining or enforcing judgment against the Borrower in any court in any jurisdiction, it becomes necessary to convert into a particular currency (such currency being hereinafter in this Section 15.8 referred to as the “ Judgment Currency ”) an amount due in another currency (such other currency being hereinafter in this Section 15.8 referred to as the “ Indebtedness Currency ”) under this agreement, the conversion shall be made at the rate of exchange prevailing on the Banking Day immediately preceding:	

 	(i)	the date of actual payment of the amount due, in the case of any proceeding in the courts of the Province of Ontario or in the courts of any other jurisdiction that will give effect to such conversion being made on such date; or	
 	 	 	
 	(ii)	the date on which the judgment is given, in the case of any proceeding in the courts of any other jurisdiction (the date as of which such conversion is made pursuant to this Section 15.8(a)(ii) being hereinafter in this Section 15.8 referred to as the “ Judgment Conversion Date ”).	

 	(b)	If, in the case of any proceeding in the court of any jurisdiction referred to in Section 15.8(a)(ii), there is a change in the rate of exchange prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the Borrower shall pay to the appropriate judgment creditor or creditors such additional amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the rate of exchange prevailing on the date of payment, will produce the amount of the Indebtedness Currency which could have been purchased with the amount of Judgment Currency stipulated in the judgment or judicial order at the rate of exchange prevailing on the Judgment Conversion Date.	
 	 	 	
 	(c)	Any amount due from the Borrower under the provisions of Section 15.8(b) shall be due to the appropriate judgment creditor or creditors as a separate debt and shall not be affected by judgment being obtained for any other amounts due under or in respect of this agreement.	
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 	(d)	The term “rate of exchange” in this Section 15.8 means the noon spot rate of exchange for Canadian interbank transactions applied in converting the Indebtedness Currency into the Judgment Currency published by the Bank of Canada for the day in question.	

15.9	Confidentiality	
Each Finance Party agrees to use commercially reasonable efforts to ensure that financial statements or other information relating to the Obligors which may be delivered to it pursuant to this agreement and which are not publicly filed or otherwise made available to the public generally will be treated confidentially by such Finance Party and that such financial statements or other information will not, except with the written consent of the Borrower, be distributed or otherwise made available by any Finance Party to any Person other than its affiliates or its directors, officers, employees, authorized agents, counsel, auditors or other representatives (provided the other representatives have agreed or are under a duty to keep all information confidential) who that Finance Party considers appropriate to have such information. Each Finance Party is authorized to deliver a copy of any financial statements or any other information which may be delivered to it pursuant to this agreement, to (i) another Finance Party, (ii) any actual or potential Transferee provided prior written notice is given to the Borrower and the Transferee agrees to keep all such information confidential and (iii) any Official Body having jurisdiction over such Finance Party in order to comply with any Applicable Law, regulation or legal process; provided, however, that the foregoing confidentiality provisions shall not apply to information which is already known to the relevant Finance Party at the time of disclosure or is lawfully obtained by such Finance Party after disclosure.
[The remainder of this page is intentionally left blank.]
Credit Agreement - Primero Mining

SCHEDULE A
PRICING GRID
Applicable Margin

 	Total Net	BA	Prime Rate	Standby Fee	
 	Debt	Acceptance	Margin;	Rate (% p.a.)	
 	Leverage	Fee Rate;	Alternate	 	
 	Ratio	LIBOR	Base Rate	 	
 	 	Margin;	Canada	 	
 	 	Letter Fee	Margin (%	 	
 	 	Rate (%	p.a.)	 	
 	 	p.a.)	 	 	
Level I	< 1.50x	2.00	1.00	0.4500	
Level II	>  1.50x and < 2.50x	2.50	1.50	0.5625	
Level III	>  2.50x	3.00	2.00	0.6750	
Credit Agreement - Primero Mining

SCHEDULE B
LENDERS AND INDIVIDUAL COMMITMENTS

Lender	Individual Commitment	
Bank of Montreal	$37,500,000	
The Bank of Nova Scotia	$37,500,000	
Credit Agreement - Primero Mining

SCHEDULE C
COMPLIANCE CERTIFICATE

TO:	BANK OF MONTREAL	
I, ____________________, the [senior financial officer] of Primero Mining Corp. (the " Borrower "), hereby certify that:

1.	I am a duly appointed senior financial officer of the Borrower named in the credit agreement made as of May 23, 2014, as amended (the “ Credit Agreement ”) between, inter alia , the Borrower, the Lenders named therein and Bank of Montreal, as administrative agent of the Lenders, and as such I am providing this Certificate for and on behalf of the Borrower pursuant to the Credit Agreement.	
 	 	
2.	I am familiar with and have examined the provisions of the Credit Agreement including, without limitation, those of Article 10, Article 11 and Article 13 therein.	
 	 	
3.	To the best of my knowledge, information and belief and after due inquiry, no Default has occurred and is continuing.	
As at or for the relevant period ending _______________________, the amounts and financial ratios as contained in Sections 11.1 of the Credit Agreement are as follows and detailed calculations thereof are attached hereto:

  	 	 	Actual	Required Amount or	
 	 	 	Amount or	Percentage	
 	 	 	Percentage	 	
 	(a)	 Tangible Net Worth	_______________	_______________	
 	(b)	 Total Net Debt Leverage Ratio	_______________	<  3.50:1	
 	(c)	 Senior Net Debt Leverage Ratio	_______________	<  2.00:1	
 	(c)	 Interest Coverage Ratio	_______________	>  4.50:1	

4.	Unless the context otherwise requires, capitalized terms in the Credit Agreement which appear herein without definitions shall have the meanings ascribed thereto in the Credit Agreement.	
DATED this _______day of _____________, 20____.

 	(Signature)	
 	 	
 	(Name - please print)	
 	 	
 	(Title of Senior Financial Officer)	
Credit Agreement - Primero Mining

SCHEDULE D
FORM OF ASSIGNMENT
Dated __________, 20___
Reference is made to the Credit Agreement made as of May 23, 2014 (as amended, the “ Credit Agreement ”) between, inter alia , Primero Mining Corp., as borrower, the Lenders named therein and Bank of Montreal, as administrative agent of the Lenders (in that capacity, the “ Administrative Agent ”). Terms defined in the Credit Agreement are used herein as therein defined.
_________________ (the “ Assignor ”) and _________________ (the “ Assignee ”) agree as follows:
(a)     The Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, a ______ % interest in and to all of the Assignor’s rights and obligations under the Credit Agreement as of the Effective Date (as defined below) (including, without limitation, such percentage interest in the Assignor’s Individual Commitment as in effect on the Effective Date, the credit extended by the Assignor and outstanding on the Effective Date and the corresponding rights and obligations of the Assignor under all of the Credit Documents).
(b)     The Assignor (i) represents and warrants that as of the date hereof its Individual Commitment is $___________ (without giving effect to assignments thereof which have not yet become effective, including, but not limited to, the assignment contemplated hereby), and the aggregate outstanding amount of credit extended by it is $___________ (without giving effect to assignments thereof which have not yet become effective, including, but not limited to, the assignment contemplated hereby); (ii) represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim; (iii) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Credit Documents or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Documents or any other instrument or document furnished pursuant thereto; (iv) makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Obligor or the performance or observance by the Obligors of any of their obligations under the Credit Documents or any other instrument or document furnished pursuant thereto; and (v) gives notice to the Administrative Agent and the Borrower of the assignment to the Assignee hereunder.
(c)     The effective date of this Assignment (the “ Effective Date ”) shall be the later of ___________ and the date on which a copy of a fully executed copy of this Assignment has been delivered to the Borrower and the Administrative Agent in accordance with Section 15.5(c) of the Credit Agreement.
(e)     The Assignee hereby agrees to the specific Individual Commitment of $___________ and to the address and telefacsimile number set out after its name on the signature page hereof for the purpose of notices as provided in Section 15.1 of the Credit Agreement.
Credit Agreement - Primero Mining

(f) As of the Effective Date (i) the Assignee shall, in addition to any rights and obligations under the Credit Documents held by it immediately prior to the Effective Date, have the rights and obligations under the Credit Documents that have been assigned to it pursuant to this Assignment and (ii) the Assignor shall, to the extent provided in this Assignment, relinquish its rights and be released from its obligations under the Credit Documents.
(g) The Assignor and Assignee shall make all appropriate adjustments in payments under the Credit Documents for periods prior to the Effective Date directly between themselves.
This Assignment shall be governed by, and construed in accordance with, the laws of the Province of Ontario and the laws of Canada applicable therein.

 	[ASSIGNOR]	

 	By:  		
 	 	Title:	
 	 	 	
 	[ASSIGNEE]	

 	By:  		
 	 	Title:	
 	 	 	
 	Address  		

 	 	 	
 	 	 	
 	Attention:  		
 	Telefax:  		
Credit Agreement - Primero Mining

Acknowledged and agreed to as of this ___________day of ___________ , 20__.

BANK OF MONTREAL, as Administrative	
Agent and Issuing Lender	

By:  		 	
 	Name:	 	
 	Title:	 	
Acknowledged and agreed to as of this _________day of _____________ , 20__.
1 PRIMERO MINING CORP.

By:  	 	 	
 	Name:	 	
 	Title:	 	
____________________________________
1 Only required if no Default has occurred and is continuing.
Credit Agreement - Primero Mining

SCHEDULE E
FORM OF DRAWDOWN NOTICE

TO:	Bank of Montreal	
 	 	
RE:	Credit Agreement made as of May 23, 2014 (as amended to the date hereof, the “ Credit Agreement ”) between, inter alia , Primero Mining Corp., as borrower, the Lenders named therein and Bank of Montreal, as administrative agent of the Lenders	
Pursuant to the terms of the Credit Agreement, the undersigned hereby irrevocably notifies you that it wishes to draw down under the Credit Facility on [date of drawdown] as follows:

 	Availment Option: ___________________________________________________	
 	 	
 	Amount: ___________________________________________________	
 	 	
 	If Bankers’ Acceptance, term: ________________________	
 	 	
 	If LIBOR Loan, Interest Period: ________________________	
 	 	
 	If Letter:	

 	Currency and amount: ________________________	
 	 	
 	Named beneficiary: ________________________	
 	 	
 	Maturity date: ____________________________	
 	 	
 	Other terms: ____________________________	
[You are hereby irrevocably authorized and directed to pay the proceeds of the drawdown to _______________ and this shall be your good and sufficient authority for so doing.]
Credit Agreement - Primero Mining

No Default or Event of Default has occurred and is continuing or will arise immediately after giving effect to or as a result of the extension of credit requested hereby.
All capitalized terms defined in the Credit Agreement and used herein shall have the meanings ascribed thereto in the Credit Agreement.
DATED the ______day of _______________, 20___.

 	PRIMERO MINING CORP.	

 	By:  		
 	 	Name:	
 	 	Title:	
Credit Agreement - Primero Mining

SCHEDULE F
FORM OF ROLLOVER NOTICE

TO:	Bank of Montreal	
 	 	
RE:	Credit Agreement made as of May 23, 2014 (as amended to the date hereof, the “ Credit Agreement ”) between, inter alia , Primero Mining Corp., as borrower, the Lenders named therein and Bank of Montreal, as administrative agent of the Lenders	
Pursuant to the terms of the Credit Agreement, the undersigned hereby irrevocably requests a rollover of outstanding credit under the Credit Facility on [date of rollover] as follows:
LIBOR Loans

 	Maturity Date of Maturing LIBOR Loan	_____________________ 	
 	Principal Amount of Maturing LIBOR	$_____________________	
 	Loan	 	
 	Portion Thereof to be Replaced	$_____________________	
 	Interest Period of New LIBOR Loan	__________ months	
Bankers’ Acceptances

 	Maturity Date of Maturing BAs	_____________________ 	
 	Face Amount of Maturing BAs	$_______________________	
 	Portion Thereof to be Replaced	$_______________________	
 	Term of New BAs	__________ days	
No Default or Event of Default has occurred and is continuing or will arise immediately after giving effect to or as a result of the extension of credit requested hereby.
All capitalized terms defined in the Credit Agreement and used herein shall have the meaning ascribed thereto in the Credit Agreement.
DATED the _________day of ________________, 20____.

 	PRIMERO MINING CORP.	

 	By:  		
 	 	Name:	
 	 	Title:	
Credit Agreement - Primero Mining

SCHEDULE G
FORM OF CONVERSION NOTICE

TO:	Bank of Montreal	
 		
RE:	Credit Agreement made as of May 23, 2014 (as amended to the date hereof, the “ Credit Agreement ”) between, inter alia , Primero Mining Corp., as borrower, the Lenders named therein and Bank of Montreal, as administrative agent of the Lenders	
Pursuant to the terms of the Credit Agreement, the undersigned hereby irrevocably requests a conversion of outstanding credit under the Credit Facility on [date of conversion] as follows:

Converting From	 	Converting Into	 	
 	 	 	 	
Prime Rate Loan	 	Prime Rate Loan	 	
 	 	 	 	
Principal amount Of
Prime Rate Loan to
be converted	$_____________	Principal amount of
new Prime Rate Loan	$____________	
 	 	 	 	
Bankers’ Acceptances	 	Bankers’ Acceptances	 	
 	 	 	 	
Maturity date of
maturing BAs	_____________________	Face amount of
new BAs	$____________	
 	 	 	 	
Face amount of
of maturing BAs	$_______________	Term of new BAS	__________ days	
 	 	 	 	
Portion thereof to
Be converted	$_______________			
 	 	 	 	
LIBOR Loan	 	LIBOR Loan	 	
 	 	 	 	
Maturity date of
maturing LIBOR Loan	_____________________	Principal amount of
new LIBOR Loan	$_____________	
 	 	 	 	
Principal amount of
maturing LIBOR Loan	$_____________	Interest	__________ months	
 	 	 	 	
Portion thereof to
be converted	$_____________	Period of
new LIBOR Loan		
 	 	 	 	
Base Rate Loan	 	Base Rate Loan	 	
 	 	 	 	
Principal Amount of
Base Rate Loan to
be converted	$_____________	Principal amount of
new Base Rate Loan	$_____________	
Credit Agreement - Primero Mining

No Default or Event of Default has occurred and is continuing or will arise immediately after giving effect to or as a result of the extension of credit requested hereby.
All capitalized terms defined in the Credit Agreement and used herein shall have the meaning ascribed thereto in the Credit Agreement.
DATED the ________day of _____________, 20____.

 	PRIMERO MINING CORP.	

 	By:  		
 	 	Name:	
 	 	Title:	
Credit Agreement - Primero Mining

SCHEDULE H
CORPORATE STRUCTURE

Credit Agreement - Primero Mining

SCHEDULE I
SECURITY DOCUMENTS
Primero Mining Corp.

 	(a)	Downstream Guarantee;	
 	 	 	
 	(b)	General Security and Pledge Agreement;	
 	 	 	
 	(c)	Uncertificated Issuer Control Agreement;	
 	 	 	
 	(d)	Omnibus Obligor Subordination and Postponement Agreement granted by each of the Companies;	
 	 	 	
 	(e)	Luxembourg Share Pledge Agreement with respect to Primero Luxembourg;	
 	 	 	
 	(f)	Barbadian Charge over Shares (over shares in shares in Silver Trading);	
 	 	 	
 	(g)	Mexican Amended and Restated Share Pledge Agreement (Convenio Modificatorio y de Reexpresión al Contrato de Prenda sobre Acciones) with respect to shares held by the Borrower and Eduardo Luna Arellano (“ ELA ”) in PEM (First Priority);	
 	 	 	
 	(h)	Mexican Share Pledge Agreement (Contrato de Prenda sobre Acciones) with respect to shares held by the Borrower and Kings in SAM (First Priority); and	
 	 	 	
 	(i)	Mexican Share Pledge Agreement (Contrato de Prenda sobre Acciones) with respect to shares held by the Borrower and Kings in SAO (First Priority).	
Primero Mining Luxembourg

 	(a)	Guarantee;	
 	 	 	
 	(b)	Luxembourg Account Pledge Agreement;	
 	 	 	
 	(c)	Luxembourg Notice of Pledge to ING with respect to Luxembourg Accounts; and	
 	 	 	
 	(d)	Mexican Mercantile Pledge Agreement ( Contrato de Prenda Mercantil ) with respect to promissory notes held by PML in PEM (First Priority).	
Silver Trading (Barbados) Limited

 	(a)	Guarantee; and	
 	 	 	
 	(b)	Barbadian Debenture/Mortgage.	
Primero Gold Canada Inc.

 	(a)	Guarantee;	
 	 	 	
 	(b)	General Security and Pledge Agreement;	
Credit Agreement - Primero Mining

 	(c)	Debenture with respect to the (i) Black Fox Mine and (ii) Grey Fox Project; and	
 	 	 	
 	(d)	Debenture Deliver Agreement with respect to the (i) Black Fox Mine and (ii) Grey Fox Project.	
Primero Empresa Minera, S.A. de C.V.

 	(a)	Mexican Guarantee ( Fianza );	
 	 	 	
 	(b)	Mexican Amended and Restated Mortgage Agreement (Convenio Modificatorio y de Reexpresión al Contrato de Hipoteca) with respect to Real Estate Property (First Priority);	
 	 	 	
 	(c)	Mexican Amended and Restated Mortgage Agreement (Convenio Modificatorio y de Reexpresión al Contrato de Hipoteca) with respect to Mining Concessions (First Priority) (re: San Dimas);	
 	 	 	
 	(d)	Mexican Amended and Restated Mortgage Agreement (Convenio Modificatorio y de Reexpresión al Contrato de Hipoteca) with respect to Mining Concessions (First Priority) (re: Ventanas);	
 	 	 	
 	(e)	Mexican Amended and Restated Non Possessory Pledge Agreement (Prenda sin Transmisión de Posesión; Asset Pledge) with respect to PEM’s Assets (First Priority);	
 	 	 	
 	(f)	Mexican Amended and Restated Share Pledge Agreement (Convenio Modificatorio y de Reexpresión al Convenio Modificatorio y de Reexpresión al Contrato de Prenda sobre Acciones) with respect to shares held by PEM and ELA in Primero Compania Minera, S.A. de C.V. (First Priority);	
 	 	 	
 	(g)	Mexican Amended and Restated Share Pledge Agreement (Convenio Modificatorio y de Reexpresión al Contrato de Prenda sobre Acciones) with respect to shares held by PEM and ELA in Primero Servicios Mineros, S.A. de C.V. (First Priority);	
 	 	 	
 	(h)	Mexican Share Pledge Agreement (Contrato de Prenda sobre Acciones) with respect to shares held by PEM and Primero Servicios Mineros, S.A. de C.V. in Primero Auxiliares de Administración, S.A. de C.V. (First Priority); and	
 	 	 	
 	(i)	Mexican Share Pledge Agreement (Contrato de Prenda sobre Acciones) with respect to shares held by PEM and Cuauhtémoc Federico Simental Loera in Primero Transportes Aéreos, S.A. de C.V. (First Priority).	
San Anton Resource Corporation (“SARC”)

 	(a)	Guarantee;	
 	 	 	
 	(b)	General Security and Pledge Agreement; and	
Credit Agreement - Primero Mining

 	(c)	Mexican Share Pledge Agreement (Contrato de Prenda sobre Acciones) with respect to shares held by SARC and Cerro in Kings (First Priority).	
Cerro Resources Pty Ltd. (“Cerro”)

 	(a)	Mexican Share Pledge Agreement (Contrato de Prenda sobre Acciones) with respect to shares held by Cerro and SARC in Kings (First Priority).	
Kings-San Anton, S.A. de C.V. (“Kings”)

 	(a)	Mexican Guarantee ( Fianza );	
 	 	 	
 	(b)	Mexican Share Pledge Agreement ( Contrato de Prenda sobre Acciones ) with respect to shares held by Kings and the Borrower in SAM (First Priority); and	
 	 	 	
 	(c)	Mexican Share Pledge Agreement ( Contrato de Prenda sobre Acciones ) with respect to shares held by Kings and the Borrower in SAO (First Priority).	
San Anton de las Minas, S.A. de C.V. (“SAM”)

 	(a)	Mexican Guarantee ( Fianza );	
 	 	 	
 	(b)	Mexican Mortgage Agreement ( Contrato de Hipoteca ) with respect to Real Estate Property (El Gallo) (First Priority); and	
 	 	 	
 	(c)	Mexican Non Possessory Pledge Agreement ( Prenda sin Transmisión de Posesión; Asset Pledge ) with respect to Mining Concessions (El Gallo) (First Priority).	
San Anton del Oro, S.A. de C.V. (“SAO”)

 	(a)	Mexican Guarantee ( Fianza ); and	
 	 	 	
 	(b)	Mexican Mortgage Agreement ( Contrato de Hipoteca ) with respect to Real Estate Property (El Gallo) (First Priority).	
Credit Agreement - Primero Mining

SCHEDULE J
QUALIFIED AFFILIATE INSTRUMENT OF ADHESION

TO:	BANK OF MONTREAL , as Administrative Agent	
 	 	
AND TO:	THE OTHER PARTIES TO THE CREDIT AGREEMENT REFERRED TO BELOW	
Reference is made to the credit agreement dated as of May 23, 2014 by and among, inter alia , Primero Mining Corp., as Borrower, the Lenders who may from time to time be parties thereto, and Bank of Montreal, as Administrative Agent (such credit agreement, as amended, modified, supplemented, replaced or restated from time to time, being the “ Credit Agreement ”. The terms defined therein and not otherwise defined herein being used herein as therein defined).
WHEREAS the Credit Agreement provides that an Affiliate of a Lender may become a Qualified Affiliate under the Credit Agreement if it executes this instrument and delivers it to the Administrative Agent;
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the undersigned, the undersigned hereby represents, warrants and covenants as follows:

1.	By executing this instrument, the undersigned hereby covenants and agrees to be bound by the terms and conditions of the Credit Agreement as a Qualified Affiliate, including all amendments, supplements and additions thereto, deletions therefrom and restatements thereof, solely as relates to the terms and conditions set forth in Article 14 of the Credit Agreement.	
 	 	
2.	The undersigned hereby acknowledges that it has been provided with a copy of the Credit Agreement.	
DATED this ______day of ____________, ______.

 	[INSERT NAME OF QUALIFIED	
 	AFFILIATE]	

 	By:  		
 	 	Name:	
 	 	Title:	
Credit Agreement - Primero Mining

SCHEDULE K
EJIDOS LITIGATION
FILE No. 176/2008 FOURTH CIVIL COURT
PLAINTIFF: Guarisamey Ejido, San Dimas Municipality, Durango.
DEFENDANT: James W. Swent and the person in charge of the Public Property Registry in Tayoltita, San Dimas. It appears that the deeds to the property (dated in the 1930s) identify James W. Swent as the owner. James W. Swent is deceased.
COMMENTS: The initial proceeding was brought without the knowledge of Desarollos Mineros San Luis S.A. de C.V., the legal owner of the property at the time, and resulted in an initial order in favour of the plaintiff. The order covers land with an area of 1,254 hectares. The order was based on a deed made on behalf of Mr. James W. Swent, registered on June 24, 1932. In the side notes of the public deeds there are no notations indicating that the plaintiff is the owner of the property. Based on a map provided to the court by the Ejido, the notary public established a new public deed covering 1,890 hectares, showing the Guarisamey Ejido as the owner. This land is important since it contains several roads, part of the Tayoltita’s airstrip and the powder magazine.
PEM will have to initiate a lawsuit to reverse the order in favour of the Guarisamey Ejido. Currently PEM is gathering facts. One important finding is that the 1,890 hectares of land covered by the new deed is the historical home of the Ejido Las Huertas, which casts the legitimacy of the Guarisamey Ejido’s claim into question.
File No. 797/2009 Seventh District Agricultural Court in Durango
PLAINTIFF: San Dimas Ejido.
DEFENDANT: Desarrollos Mineros San Luis, S.A. de C.V.
COMMENTS: The Ejidos sued Desarrollos Mineros San Luis, S.A. de C.V. claiming restitution of about 507 hectares located in an area known as “La Abra”, based on their interpretation of a presidential decree granting the Ejidos the right to use the land. The Ejidos also offered file No. 264/2010 (see below) as evidence, although the land claimed in each case is different. Desarrollos Mineros San Luis, S.A. de C.V. responded to the claim, offering a different interpretation of the presidential decree and calling Maderera Industrial San Dimas, another of Goldcorp’s subsidiaries, to the trial because Maderera Industrial San Dimas used to be the owner of part of the claimed land.
The court resolved in favor of Desarrollos Mineros San Luis, S.A. de C.V. in March, 2013.
Credit Agreement - Primero Mining

FILE No. 264/2010 FOURTH CIVIL COURT
PLAINTIFF: Guamúchil Ejido, San Dimas Municipality, Durango State.
DEFENDANT: San Luis Mining Company (“SLMC”) and the person in charge for the Public Property Registry in Tayoltita, Durango.
COMMENTS: The trial started in 2010, approximately the same time as Primero was acquiring the San Dimas mine. The Ejido is claiming to own the land through the concepts of “adverse possession” or “acquisition by prescription”, which are methods of acquiring ownership rights to property, against the owner and other third parties, through possession of the property for an uninterrupted period of time. Under the Agrarian Law in Mexico “prescriptive rights” can be used to acquire ownership to property. The Guamúchil Ejido is claiming approximately 5,000 hectares of land known as “San Dimas” and “Lechuguilla”, which according to the Ejido were included in a public deed dated on May 10, 1899 that identified SLMC as the owner. The 1899 deed is still legally active in the Public Property Registry in Tayoltita. Primero’s attorneys are unable to ascertain at this time whether SLMC is an existing legal entity.
Since PEM is not a party to the proceeding, PEM has been advised to allow the proceeding to conclude and, in the event that the decision is in favour of the Ejido, to seek an annulment on the basis that it is in possession of the property and is the legitimate owner. If these legal proceedings (or any subsequent challenges to them) are not decided in favour of PEM, then the San Dimas mine could face higher operating costs associated with agreed or mandated payments that would be payable to the local Ejidos in respect of use of the properties.
FILE No. 477/2010 FOURTH CIVIL COURT.
PLAINTIFF: Guarizamey Ejido, San Dimas Municipality, Durango State.
DEFENDANT: James W. Swent and the person in charge of the Public Property Registry in Tayoltita, San Dimas (see note above in File No 176/2008 regarding James W. Swent).
COMMENTS: The Ejido is claiming “acquisition by prescription” (see File No 264/2010 above) of the land that configures Guarizamey, municipality of San Dimas of this State, with an area of 634 hectares. The action was brought against James W. Swent as he appears as the owner in a public deed dated in 1899 (this claim is similar to File No 264/2010). The 1899 public deed does not have any boundaries to define where the piece of land known as Guarizamey is located, but the Ejido maintain it is within Primero’s properties. Since Mr. Swent couldn’t respond to the suit (as he is deceased) he was found to be in contempt of court.
Since PEM is not a party to the proceeding it has been advised to allow the proceeding to conclude and, in the event that the decision is in favour of the Ejido, to seek an annulment on the basis that it is in possession of the property and is the legitimate owner. If these legal proceedings (or any subsequent challenges to them) are not decided in favour of PEM, then the San Dimas mine could face higher operating costs associated with agreed or mandated payments that would be payable to the local Ejidos in respect of use of the properties.
Credit Agreement - Primero Mining

Execution Version
FIRST AMENDING AGREEMENT AND CONSENT
THIS AGREEMENT made as of the 22 nd day of December, 2014.
BETWEEN:
PRIMERO MINING CORP, a corporation existing under the
laws of the Province of British Columbia
(herein called the “ Borrower ”)
- and -
BANK OF MONTREAL, a Canadian chartered bank
(herein called the “ Administrative Agent ”)
- and-
BANK OF MONTREAL and BANK OF NOVA SCOTIA
(herein called the “ Lenders ” and individually, a “ Lender ”)
WHEREAS the Borrower and the Administrative Agent entered into a credit agreement made as of May 23, 2014 (the “ Credit Agreement ”) and pursuant to which the Lenders established a certain credit facility in favour of the Borrower;
AND WHEREAS the parties hereto wish to amend certain provisions of the Credit Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the mutual covenants and agreements contained herein, the parties covenant and agree as follows:
ARTICLE 1
DEFINED TERMS
1.1           Capitalized Terms. All capitalized terms which are used herein without being specifically defined herein shall have the meaning ascribed thereto in the Credit Agreement as amended hereby.
ARTICLE 2
AMENDMENTS
2.1           General Rule. Subject to the terms and conditions herein contained, the Credit Agreement is hereby amended to the extent necessary to give effect to the provisions of this agreement and to incorporate the provisions of this agreement into the Credit Agreement.
First Amending Agreement and Consent

- 2 -
2.2           Tangible Net Worth. Section 11.1(a) of the Credit Agreement is hereby amended by deleting the reference therein to “U.S.$763,419,000” and replacing it with “U.S.$684,250,000”.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1           Representations and Warranties. To induce the Lenders and the Administrative Agent to enter into this agreement, the Borrower hereby represents and warrants to the Lenders and the Administrative Agent that the representations and warranties of the Borrower which are contained in Section 10.1 of the Credit Agreement, are true and correct. The Borrower hereby represents and warrants that no Default has occurred and is continuing.
ARTICLE 4
CONDITIONS PRECEDENT TO EFFECTIVENESS OF AGREEMENT
4.1           Conditions Precedent. This agreement shall not be effective until (i) the parties hereto shall have executed and delivered this agreement and (ii) each Obligor has entered into a confirmation of the Credit Documents to which it is a party, in form and substance satisfactory to the Lenders.
ARTICLE 5
MISCELLANEOUS
5.1           Future References to the Credit Agreement. On and after the date of this agreement, each reference in the Credit Agreement to “this agreement”, “hereunder”, “hereof”, or words of like import referring to the Credit Agreement, and each reference in any related document to the “Credit Agreement”, “thereunder”, “thereof”, or words of the like import relating to the Credit Agreement, shall mean and be a reference to the Credit Agreement as amended hereby. The Credit Agreement, as amended hereby, is and shall continue to be in full force and effect and is hereby in all respects ratified and confirmed.
5.2           Governing Law. This agreement shall be governed by and construed in accordance with the laws of the Province of Ontario.
5.3           Enurement. This agreement shall enure to the benefit of and shall be binding upon the parties hereto and their respective successors and permitted assigns.
5.4           Conflict. If any provision of this agreement is inconsistent or conflicts with any provision of the Credit Agreement, the relevant provision of this agreement shall prevail and be paramount.
5.5           Counterparts. This agreement may be executed in one or more counterparts, each of which shall be deemed to be an original and all of which taken together shall be deemed to constitute one and the same agreement. Delivery of an executed signature page of this agreement by facsimile transmission or by e-mail in pdf format shall be as effective as delivery of a manually executed counterpart thereof.
First Amending Agreement and Consent

- 3 -
5.6           Consent. Pursuant to a request letter from the Borrower addressed to the Administrative Agent scheduled hereto as Exhibit 1, the Borrower has requested that the Lenders consent to the partition and conveyance (the “ Proposed Conveyance ”) of certain real property interests constituting Secured Assets (the “ Tayoltita Lands ”) and the release of such Secured Assets from the Security. Pursuant to Section 11.3(c) of the Credit Agreement, the Proposed Conveyance is, absent the written consent of the Majority Lenders, a prohibited transaction. For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Lenders hereby (i) consent to the Proposed Conveyance and (ii) authorize the Administrative Agent to execute and deliver a direction, concurrently with or subsequent to the execution and delivery of an identical direction by each other Secured Creditor (as defined in the Intercreditor Agreement), all in accordance with Section 3.6 of the Intercreditor Agreement, to direct the Mexican Collateral Agent execute a release and discharge of the Security over the Tayoltita Lands.
5.7           Confirmation of Security. The Borrower confirms and agrees that the Liens and other obligations expressed to be created under or pursuant to each Security Document to which it is a party shall be binding upon the Borrower and its collateral (as described in each such Security Document) shall be unaffected by and shall continue in full force and effect notwithstanding the amendment of the Credit Agreement as constituted hereby and the execution and delivery and effectiveness of this Agreement shall not in any manner whatsoever reduce, release, discharge, impair or otherwise prejudice or change the rights of the Finance Parties arising under, by reason of or otherwise in respect of such Liens and other obligations constituted by each such Security Document. For the avoidance of doubt, the Borrower hereby confirms that each Security Document to which it is a party secures its Secured Obligations and that each such Security Document continues in full force and effect.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
First Amending Agreement and Consent

IN WITNESS WHEREOF the parties hereto have executed this agreement.

 	PRIMERO MINING CORP.	

 
First Amending Agreement and Consent

 	BANK OF MONTREAL, as Administrative	
 	Agent	

 	BANK OF MONTREAL, as Lender	

First Amending Agreement and Consent

 	THE BANK OF NOVA SCOTIA, as Lender	

Ursl Amending Agreement and Consent

EXHIBIT 1
PRIMERO CONSENT REQUEST LETTER
(See attached)
First Amending Agreement and Consent

First Amending Agreement and Consent

First Amending Agreement and Consent

SECOND AMENDING AGREEMENT
THIS AGREEMENT made as of the 5 th day of February, 2015.
BETWEEN:
PRIMERO MINING CORP, a corporation existing under the
laws of the Province of British Columbia
(herein called the “ Borrower ”)
- and -
BANK OF MONTREAL, a Canadian chartered bank
(herein called the “ Administrative Agent ”)
- and-
BANK OF MONTREAL and BANK OF NOVA SCOTIA
(herein called the “ Lenders ” and individually, a “ Lender ”)
WHEREAS the Borrower and the Administrative Agent entered into a credit agreement made as of May 23, 2014 (as amended pursuant to a first amending agreement dated December 22, 2014, the “ Credit Agreement ”) and pursuant to which the Lenders established a certain credit facility in favour of the Borrower;
AND WHEREAS the parties hereto wish to amend certain provisions of the Credit Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the mutual covenants and agreements contained herein, the parties covenant and agree as follows:
ARTICLE 1
DEFINED TERMS
1.1           Capitalized Terms. All capitalized terms which are used herein without being specifically defined herein shall have the meaning ascribed thereto in the Credit Agreement as amended hereby.
Second Amending Agreement

- 2 -
ARTICLE 2
AMENDMENTS
2.1           General Rule. Subject to the terms and conditions herein contained, the Credit Agreement is hereby amended to the extent necessary to give effect to the provisions of this agreement and to incorporate the provisions of this agreement into the Credit Agreement.
2.2           Definitions. Section 1.1 of the Credit Agreement is hereby amended as follows:

 	(a)	The following new definitions added in alphabetical order:	
 	 	 	
 		“ Convertible Debentures ” means the 5.75% convertible unsecured subordinated debentures issued or to be issued by the Borrower (i) on terms substantively similar, in the opinion of the Lenders, acting reasonably, to those terms set forth in the preliminary short form prospectus dated January 26, 2015 of the Borrower, and (ii) pursuant to the Debenture Indenture in the aggregate principal amount of amount of up to $75,000,000 (or up to $86,250,000 if the over-allotment option referred to in such short form prospectus is exercised in full) and which mature on or after February 28, 2020.	
 	 	 	
 		“ Debenture Indenture ” means the debenture indenture to be dated on or about February 9, 2015 among the Borrower, as issuer and Computershare Trust Company of Canada, as trustee and pursuant to which the Convertible Debentures will be issued.”	
 	 	 	
 	(b)	the definition of “ Permitted Indebtedness ” is hereby deleted in its entirety and replaced by the following:	
“Permitted Indebtedness” means any one or more of the following:

 	(a)	the Secured Obligations;	
 	 	 	
 	(b)	Indebtedness of the Obligors arising under Capital Leases and Purchase Money Indebtedness of the Obligors; provided that, at any particular time, the aggregate amount of such Indebtedness does not exceed $10,000,000;	
 	 	 	
 	(c)	Indebtedness of the Obligors under Other Capital Leases provided that, at any particular time, the aggregate amount of such Indebtedness does not exceed $30,000,000 (for the avoidance of doubt, such amount being in excess to the amount referenced in paragraph (b), above);	
 	 	 	
 	(d)	at all times that the Intercreditor Documents remain in full force and effect, Indebtedness of the Obligors existing at the date hereof including Indebtedness under the SLW Silver Purchase Agreement, the Borrower Silver Purchase Guarantee, the PEM Silver Purchase Guarantee and the Goldcorp Indemnity Agreement;	
 	 	 	
 	(e)	vendor-take-back Indebtedness incurred pursuant to a Permitted Acquisition which has no recourse to any entity which has any direct or indirect ownership interest in the San Dimas Mine and where the recourse of such Indebtedness is limited to (i) the acquired assets, (ii) the acquired entity, or (iii) the relevant Obligor’s equity interest in the acquired entity, in each case provided that the Borrower has provided evidence satisfactory to the Lenders that (x) no Default or Event of default has occurred and is continuing at the time of or would arise as a result of the incurring of such Indebtedness and (y) the Borrower would be in compliance with all of the financial covenants in Section 11.1 on a pro forma basis after giving effect to the incurring of such Indebtedness;	
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 	(f)	at all times that the Postponement and Subordination Undertaking remains in full force and effect, Indebtedness of the Obligors to any other Obligor or to any other Company;	
 	 	 	
 	(g)	trade payables and other accrued liabilities of the Obligors incurred in the ordinary course of business and payable in accordance with customary practices;	
 	 	 	
 	(h)	an unsecured overdraft facility in the maximum amount of $10,000,000 obtained in the ordinary course of business;	
 	 	 	
 	(i)	unsecured Risk Management Agreements with non-Lenders obtained in the ordinary course of business, including any guarantees given in relation to the same; provided that, at any particular time, the aggregate amount of such Indebtedness under such unsecured Risk Management Agreements does not exceed $10,000,000;	
 	 	 	
 	(j)	at all times that the Sandstorm Subordination Agreement remains in full force and effect, Indebtedness of Primero Gold under the Sandstorm Gold Purchase Agreement;	
 	 	 	
 	(k)	any guarantee or indemnity in respect of Permitted Indebtedness; and	
 	 	 	
 	(l)	Indebtedness which in the aggregate does not exceed $200,000,000 incurred under: (i) the Convertible Debentures; and (ii) any other unsecured instrument(s) or contract(s) for borrowed money or Indebtedness not referred to in clauses (a) to (k) above which does not have a maturity or any scheduled repayment due prior to the third anniversary of the Maturity Date and is otherwise on terms no more onerous than the Secured Obligations;	
in each case, provided that no Default or Event of Default has occurred and is continuing at the time of the incurrence of such Indebtedness or would arise immediately after the incurrence of such Indebtedness.

 	(c)	the definition of “ Restricted Payment ” is hereby amended by adding the following paragraph immediately after paragraph (c) thereof:	
“For greater certainty, neither (i) the payment of cash in lieu of the delivery of any fractional common share by the Borrower in connection with any conversion, redemption or repayment upon maturity of the Convertible Debentures from time to time, nor (ii) the delivery of common shares or other similar equity securities by the Borrower in connection with any conversion, retirement, redemption, repurchase or repayment of, or payment of interest on, the Convertible Debentures from time to time will constitute a Restricted Payment.”
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1           Representations and Warranties. To induce the Lenders and the Administrative Agent to enter into this agreement, the Borrower hereby represents and warrants to the Lenders and the Administrative Agent that the representations and warranties of the Borrower which are contained in Section 10.1 of the Credit Agreement, are true and correct on each of the date hereof and the date of the effectiveness of the amendment contemplated in Article 2, as if made on the date hereof and the date of the effectiveness of the amendment contemplated in Article 2, respectively. The Borrower hereby represents and warrants that no Default has occurred and is continuing nor will a Default arise as a result of the execution and delivery of this agreement or the incurrence of the Indebtedness under the Convertible Debentures.
ARTICLE 4
CONDITION PRECEDENT TO EFFECTIVENESS OF AGREEMENT
4.1           Condition Precedent. This agreement shall not be effective until (i) the parties hereto shall have executed and delivered this agreement and (ii) the Convertible Debentures (as defined in Section 2.2(a) above) are first issued by the Borrower.
ARTICLE 5
MISCELLANEOUS
5.1           Future References to the Credit Agreement. On and after the date of this agreement, each reference in the Credit Agreement to “this agreement”, “hereunder”, “hereof”, or words of like import referring to the Credit Agreement, and each reference in any related document to the “Credit Agreement”, “thereunder”, “thereof”, or words of the like import relating to the Credit Agreement, shall mean and be a reference to the Credit Agreement as amended hereby. The Credit Agreement, as amended hereby, is and shall continue to be in full force and effect and is hereby in all respects ratified and confirmed.
5.2           Governing Law. This agreement shall be governed by and construed in accordance with the laws of the Province of Ontario.
5.3           Enurement. This agreement shall enure to the benefit of and shall be binding upon the parties hereto and their respective successors and permitted assigns.
5.4           Conflict. If any provision of this agreement is inconsistent or conflicts with any provision of the Credit Agreement, the relevant provision of this agreement shall prevail and be paramount.
5.5           Counterparts. This agreement may be executed in one or more counterparts, each of which shall be deemed to be an original and all of which taken together shall be deemed to constitute one and the same agreement. Delivery of an executed signature page of this agreement by facsimile transmission or by e-mail in pdf format shall be as effective as delivery of a manually executed counterpart thereof.
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Second Amending Agreement

IN WITNESS WHEREOF the parties hereto have executed this agreement.

 	PRIMERO MINING CORP.	

 
Second Amending Agreement

 	BANK OF MONTREAL, as Administrative	
 	Agent	

 	BANK OF MONTREAL, as Lender	

Second Amending Agreement

 	THE BANK OF NOVA SCOTIA, as Lender	

Second Amending Agreement

Execution Version
FOURTH AMENDING AGREEMENT
THIS AGREEMENT made as of the 28 th day of December, 2016.
BETWEEN:
PRIMERO MINING CORP, a corporation existing under the
laws of the Province of British Columbia
(herein called the “ Borrower ”)
- and -
BANK OF MONTREAL, a Canadian chartered bank
(herein called the “ Administrative Agent ”)
- and-
BANK OF MONTREAL and BANK OF NOVA SCOTIA
(herein called the “ Lenders ” and individually, a “ Lender ”)
WHEREAS the Borrower and the Administrative Agent entered into a credit agreement made as of May 23, 2014 (as amended pursuant to a first amending agreement dated December 22, 2014, a second amending agreement dated February 5, 2015 and a third amending agreement dated December 31, 2015, the “ Credit Agreement ”) and pursuant to which the Lenders established a certain credit facility in favour of the Borrower;
AND WHEREAS the parties hereto wish to amend certain provisions of the Credit Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the mutual covenants and agreements contained herein, the parties covenant and agree as follows:
ARTICLE 1
DEFINED TERMS

1.1	Capitalized Terms.	
All capitalized terms which are used herein without being specifically defined herein shall have the meaning ascribed thereto in the Credit Agreement as amended hereby.
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ARTICLE 2
AMENDMENTS

2.1	General Rule.	
Subject to the terms and conditions herein contained, the Credit Agreement is hereby amended to the extent necessary to give effect to the provisions of this agreement and to incorporate the provisions of this agreement into the Credit Agreement.

2.2	Defined Terms.	
Section 1.1 of the Credit Agreement is hereby amended by adding the following new definitions in alphabetical order:
““ Cash on Hand ” means, at any particular time, the aggregate amount of the Borrower’s unrestricted Cash at such time (for the avoidance of doubt, Cash secured by the Security Documents shall be considered unrestricted Cash).
“ CIM Definition Standards ” means definition standards on mineral resources and reserves established by the Canadian Institute of Mining, Metallurgy and Petroleum, as updated from time to time.
“ Life of Mine ” means, in respect of each of the San Dimas Mine and/or the Black Fox Mine, as applicable, the period during which all Reserves and Resources at each such mine as reported in the Borrower’s most recent reserve statement or mine plan or other project description filed from time to time with Official Bodies in respect of such mine is projected to be extracted through planned mining activities at or in connection with such mine.
“ Mine Plan ” means (i) in respect of the San Dimas Mine and/or the Black Fox Mine, as applicable, the individual mine plan in form and substance satisfactory to the Lenders, acting reasonably, for such mine’s relevant Life of Mine and (ii) the consolidated annual budget of the Borrower for such mine which shall include projected exploration and corporate expenses (including sales, general and administrative expenses), delivered by or on behalf of the Borrower to the Lenders.
“ Reserves ” means “ Proven Mineral Reserves ” and “ Probable Mineral Reserves ” as such terms are defined in the CIM Definition Standards.
“ Resources ” means “ Measured Mineral Resources ” and “ Indicated Mineral Resources ” as such terms are defined in the CIM Definition Standards.”

2.3	Tangible Net Worth.	
Section 11.1(a) of the Credit Agreement is hereby deleted in its entirety and replaced with the following:
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 	“(a)	Tangible Net Worth . The Borrower shall at all times maintain Tangible Net Worth in an amount greater than or equal to the greater of	

 	(i)	U.S. $586,000,000 less an amount equal to 115% of the impairment charge, if any, booked by the Borrower in accordance with GAAP in respect of its fixed assets for the Fiscal Year ending December 31, 2016; and	
 	 	 	
 	(ii)	U.S. $340,000,000	
plus (in either case) 50% of the aggregate positive Net Income for the Fiscal Quarters during the period from January 1, 2017 to the last day of the Fiscal Quarter which has been most recently completed at such time. For the purpose of the foregoing, if the Net Income for a particular Fiscal Quarter is negative, the Net Income for such Fiscal Quarter shall be deemed to be zero.”

2.4	Total Net Debt Leverage Ratio.	
Section 11.1(b) of the Credit Agreement is hereby deleted in its entirety and replaced with the following:

 	“(b)	Total Net Debt Leverage Ratio. The Borrower shall at all times maintain the Total Net Debt Leverage Ratio in an amount less than or equal to	

 	(i)	3.50 to 1 at all times up to and including the Fiscal Quarter ending September 30, 2016;	
 	 	 	
 	(ii)	4.25 to 1 at all times during the Fiscal Quarter ending December 31, 2016; and	
 	 	 	
 	(iii)	3.50 to 1 at all times thereafter from and including March 31, 2017	
and shall calculate such ratio as at the last day of each Fiscal Quarter.”

2.5	Senior Net Debt Leverage Ratio.	
Section 11.1(c) of the Credit Agreement is hereby deleted in its entirety and replaced with the following:

 	“(c)	Senior Net Debt Leverage Ratio. The Borrower shall at all times maintain the Senior Net Debt Leverage Ratio in an amount less than or equal to	

 	(i)	2.0 to 1 at all times up to and including the Fiscal Quarter ending September 30, 2016;	
 	 	 	
 	(ii)	2.50 to 1 at all times during the Fiscal Quarter ending December 31, 2016; and	
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 	(iii)	2.0 to 1 at all times thereafter from and including March 31, 2017	
and shall calculate such ratio as at the last day of each Fiscal Quarter.”

2.6	Mine Plans.	
The following new Section 11.2(u) of the Credit Agreement is hereby added immediately following Section 11.2(t):
“ Mine Plans . The Borrower shall, on or before January 31, 2017, deliver to the Administrative Agent a Mine Plan in respect of each of the San Dimas Mine and the Black Fox Mine.”

2.7	Conditions Precedent to All Credit.	

 	(a)	Section 12.1(b) is hereby amended by deleting the reference to “and”;	
 	 	 	
 	(b)	Section 12.1(c) is hereby amended by deleting the reference “.” and replacing it with “; and”.	
 	 	 	
 	(c)	the following new Section 12.1(d) of the Credit Agreement is hereby added immediately following Section 12.1(c):	

 	“(d)	the Borrower shall have provided satisfactory evidence to the Administrative Agent, acting reasonably, that it has less than, or will have less than, $15,000,000 Cash on Hand on the date such credit is requested to be extended.”	
ARTICLE 3
REPRESENTATIONS AND WARRANTIES

3.1	Representations and Warranties.	
To induce the Lenders and the Administrative Agent to enter into this agreement, the Borrower hereby represents and warrants to the Lenders and the Administrative Agent that the representations and warranties of the Borrower which are contained in Section 10.1 of the Credit Agreement, are true and correct on each of the date hereof and the date of the effectiveness of the amendment contemplated in Article 2, as if made on the date hereof and the date of the effectiveness of the amendment contemplated in Article 2, respectively. The Borrower hereby represents and warrants that no Default has occurred and is continuing nor will a Default arise as a result of the execution and delivery of this agreement.
ARTICLE 4
CONDITION PRECEDENT TO EFFECTIVENESS OF AGREEMENT

4.1	Condition Precedent.	
This agreement shall not be effective until the parties hereto shall have executed and delivered this agreement.
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ARTICLE 5
MISCELLANEOUS

5.1	Future References to the Credit Agreement.	
On and after the date of this agreement, each reference in the Credit Agreement to “this agreement”, “hereunder”, “hereof”, or words of like import referring to the Credit Agreement, and each reference in any related document to the “Credit Agreement”, “thereunder”, “thereof”, or words of the like import relating to the Credit Agreement, shall mean and be a reference to the Credit Agreement as amended hereby. The Credit Agreement, as amended hereby, is and shall continue to be in full force and effect and is hereby in all respects ratified and confirmed.

5.2	Governing Law.	
This agreement shall be governed by and construed in accordance with the laws of the Province of Ontario.

5.3	Enurement.	
This agreement shall enure to the benefit of and shall be binding upon the parties hereto and their respective successors and permitted assigns.

5.4	Conflict.	
If any provision of this agreement is inconsistent or conflicts with any provision of the Credit Agreement, the relevant provision of this agreement shall prevail and be paramount.

5.5	Counterparts.	
This agreement may be executed in one or more counterparts, each of which shall be deemed to be an original and all of which taken together shall be deemed to constitute one and the same agreement. Delivery of an executed signature page of this agreement by facsimile transmission or by e-mail in pdf format shall be as effective as delivery of a manually executed counterpart thereof.

5.6	Confirmation of Finance Documents.	
By its acknowledgment, each Obligor confirms and agrees that the Liens and other obligations expressed to be created under or pursuant to each Finance Document to which it is a party shall be binding upon such Obligor and its collateral (as described in each such Security Document) shall be unaffected by and shall continue in full force and effect notwithstanding the amendment of the Credit Agreement as constituted hereby and the execution and delivery and effectiveness of this amendment shall not in any manner whatsoever reduce, release, discharge, impair or otherwise prejudice or change the rights of the Finance Parties arising under, by reason of or otherwise in respect of such Liens and other obligations constituted by each such Finance Document. For the avoidance of doubt, each Obligor hereby confirms that each Security Document to which it is a party secures its Secured Obligations and that each such Security Document continues in full force and effect.
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Fourth Amending Agreement

 	BANK OF MONTREAL, as Administrative	
 	Agent	

 	By:  		
 	 	Name:	
 	 	Title:	

 	By:  		
 	 	Name:	
 	 	Title:	

 	BANK OF MONTREAL, as Lender	

 	By:  		
 	 	Name:	
 	 	Title:	

 	By:  		
 	 	Name:	
 	 	Title:	
Fourth Amending Agreement

 	THE BANK OF NOVA SCOTIA, as Lender	

 	By:  		
 	 	Name:	
 	 	Title:	

 	By:  		
 	 	Name:	
 	 	Title:	
Fourth Amending Agreement

Execution Version
SIXTH AMENDING AGREEMENT
THIS AGREEMENT made as of the 2 nd day of October, 2017.
BETWEEN:
PRIMERO MINING CORP, a corporation existing under the laws of the Province of British Columbia
(herein called the “ Borrower ”)
- and -
BANK OF MONTREAL, a Canadian chartered bank
(herein called the “ Administrative Agent ”)
- and-
BANK OF MONTREAL and THE BANK OF NOVA SCOTIA
(herein called the “ Lenders ” and individually, a “ Lender ”)
WHEREAS the Borrower and the Administrative Agent entered into a credit agreement made as of May 23, 2014 (as amended pursuant to a first amending agreement dated December 22, 2014, a second amending agreement dated February 5, 2015, a third amending agreement dated December 31, 2015, a fourth amending agreement dated December 28, 2016 and a fifth amending agreement dated March 30, 2017, the “ Credit Agreement ”) and pursuant to which the Lenders established a certain credit facility in favour of the Borrower;
AND WHEREAS the parties hereto wish to amend certain provisions of the Credit Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the mutual covenants and agreements contained herein, the parties covenant and agree as follows:
ARTICLE 1
DEFINED TERMS

1.1	Capitalized Terms.	
All capitalized terms which are used herein without being specifically defined herein shall have the meaning ascribed thereto in the Credit Agreement as amended hereby.

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ARTICLE 2
AMENDMENTS

2.1	General Rule.	
Subject to the terms and conditions herein contained, the Credit Agreement is hereby amended to the extent necessary to give effect to the provisions of this agreement and to incorporate the provisions of this agreement into the Credit Agreement.

2.2	Defined Terms.	
Section 1.1 of the Credit Agreement is hereby amended as follows:

 	(a)	the definition of “ Material Properties ” is hereby deleted in its entirety and replaced with the following:	
 	 	 	
 		““ Material Properties ” means, at any particular time, the San Dimas Mine, the Black Fox Mine, the Grey Fox Project, the Cerro de Gallo Project and the Ventanas Property except to the extent the relevant property is sold pursuant to a Permitted Disposition.”	
 	 	 	
 	(b)	the definition of “ Permitted Dispositions ” is hereby deleted in its entirety and replaced with the following:	
 	 	 	
 		““ Permitted Dispositions ” means any one or more of the following:	

 	(a)	Dispositions of inventory, product or produced or unprocessed minerals, metals or other mineral or extracted materials Disposed of in the ordinary course of business;	
 	 	 	
 	(b)	Dispositions of worn out, unserviceable or obsolete equipment in the ordinary course of business;	
 	 	 	
 	(c)	Dispositions of publicly traded securities Disposed of for their fair market value; and	
 	 	 	
 	(d)	a Disposition of the Black Fox Mine and the Grey Fox Project in accordance with the Asset Purchase Agreement, provided that, at the time of such Disposition, (i) the Closing Date Liabilities do not exceed the Closing Date Assets (as such terms are defined in the Asset Purchase Agreement) by more than $4,000,000.00 and (ii) the aggregate amount of Primero Cash Collateral (as defined in the Asset Purchase Agreement) is less than or equal to CAD$6,145,465.00;	
in each case, further provided that a Disposition will be deemed not to be a Permitted Disposition if (i) the asset Disposed of is an asset of a Material Property (other than the Disposition of (A) the Black Fox Mine and Grey Fox Project pursuant to paragraph (d), above, (B) the Ventanas Property to an Obligor and (C) the Disposition of worn out, unserviceable or obsolete equipment Disposed of in the ordinary course of business) and/or (ii) a Default or Event of Default has occurred and is continuing at the time of such Disposition or would arise immediately after such Disposition as a result thereof.”

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 	(c)	the definition of “ Prepayment Trigger Event ” is hereby deleted in its entirety and replaced with the following:	
 	 	 	
 		““ Prepayment Trigger Events ” means the Black Fox Prepayment Trigger Event and the Insurance Prepayment Trigger Event and “ Prepayment Trigger Event ” means any one of the foregoing.”	
 	 	 	
 	(d)	the following new definitions are hereby added in alphabetical order:	
““ Asset Purchase Agreement ” means the Asset Purchase Agreement dated as of August 25, 2017 between McEwen Mining Inc. and the Borrower (which has been assigned by McEwen Mining Inc. to its wholly-owned subsidiary 10393444 Canada Inc. as of October 2, 2017).
“ Blackfox Prepayment Trigger Event ” means the Disposition of the Black Fox Mine and the Grey Fox Project by the Borrower.
“ Blackfox Repayment Amount ” means an amount equal to (a) the Purchase Price (as defined in the Asset Purchase Agreement) received by the Borrower (or any Affiliate) on the date of the Blackfox Prepayment Trigger Event, plus (b) all Closing Date Assets (as defined in the Asset Purchase Agreement), minus (c) all Closing Date Liabilities (as defined in the Asset Purchase Agreement), minus (d) the amounts set forth in paragraphs (a) and (b) of the definition of Net Cash Proceeds; provided that (i) the aggregate amount of parts (a), (b) and (c) above shall not be less than $27,500,000 and (ii) the aggregate amount of part (d) above shall not be greater than $2,500,000.
“ Closing Date Blackfox Repayment Amount ” means $25,000,000.
“ Insurance Prepayment Trigger Event ” means the receipt by any Company of any insurance proceeds in excess of $5,000,000 or the Exchange Equivalent thereof, where such proceeds or any portion thereof have not been used or committed by such Company to repair or replace the subject assets within six months of such Company’s receipt thereof.
“ Primero Cash Collateral ” means CAD$6,145,465, representing the cash collateral provided by Primero in connection with the Primero Financial Assurance (as defined in the Asset Purchase Agreement).”

2.3	Reduction of Credit Limit.	
Section 2.3 of the Credit Agreement is hereby deleted in its entirety and replaced with the following:

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“The Borrower may, from time to time and at any time, by notice in writing to the Administrative Agent, permanently reduce the amount of the Credit Limit in whole or in part to the extent the Credit Facility is not being utilized at the time such notice is given, provided that such reduction shall not become effective until five Banking Days after such notice has been given. The amount of the Credit Limit will be permanently reduced with respect to repayment or prepayment made in accordance with Section 9.1 or Section 9.4. The Credit Limit shall also be permanently reduced, at the time of any Insurance Prepayment Trigger Event, by the amount, if any, of the Net Cash Proceeds resulting from such Insurance Prepayment Trigger Event not deployed by the Borrower, as a mandatory prepayment under the Credit Facility pursuant to Section 9.4. The Credit Limit shall also be permanently reduced, commencing at the time of a Blackfox Prepayment Trigger Event, by any amount received by the Borrower (or any Affiliate thereof) representing all or part of the Blackfox Repayment Amount (including the Closing Date Blackfox Repayment Amount), such reduction to be made as of the date on which each such amount is received by the Agent. Any repayment or prepayment of credit outstanding under the Credit Facility (other than as set forth above), including the repayment of credit outstanding under the Credit Facility with the proceeds of Primero Cash Collateral in accordance with Section 9.4(b), shall not cause a permanent reduction in the amount of the Credit Limit. Any repayment of outstanding credit which forms part of any conversion from one type of credit to another type of credit under Article 3 or Article 6 or of any rollover under Article 5 shall not cause any reduction in the amount of the Credit Limit. Upon any permanent reduction of the amount of the Credit Limit, the Individual Commitment of each Lender shall thereupon be reduced by an amount equal to such Lender’s Pro Rata Share of such permanent reduction of the amount of the Credit Limit.”

2.4	Mine Plans.	
Section 11.2(u) of the Credit Agreement is hereby deleted in its entirety and replaced with the following:
“(u)     Mine Plans. The Borrower shall, on or before January 31, 2017, deliver to the Administrative Agent a Mine Plan in respect of the San Dimas Mine and, if still owned by the Borrower on such date, the Black Fox Mine.”

2.5	Mandatory Prepayments.	
Section 9.4 of the Credit Agreement is hereby deleted in its entirety and replaced with the following:
“9.4 Mandatory Prepayments

 	(a)	The Borrower shall, within five Banking Days of the occurrence of a Prepayment Trigger Event (other than a Blackfox Prepayment Trigger Event), prepay outstanding credit under the Credit Facility in an amount equal to 100% of the Net Cash Proceeds in respect of such Prepayment Trigger Event. The Borrower shall, within one Banking Day of the Closing Date (as defined in the Asset Purchase Agreement), prepay outstanding credit under the Credit Facility in an amount equal to 100% of the Closing Date Blackfox Repayment Amount. The Borrower shall also, forthwith upon determination of the final amount of the Blackfox Repayment Amount, prepay outstanding credit under the Credit Facility in an amount equal to 100% of the amount, if any, by which the Blackfox Repayment Amount, as finally determined, exceeds the Closing Date Blackfox Repayment Amount, such payment to be made by the Borrower within one Banking Day of receipt of any such amount. Amounts which are prepaid as aforesaid under the Credit Facility may not be reborrowed and shall permanently reduce the Credit Limit.	

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 	(b)	The Borrower shall, within two Banking Days of receipt of any Primero Cash Collateral, prepay outstanding credit under the Credit Facility in an amount equal to 100% of such Primero Cash Collateral received by the Borrower (or its Affiliate, as applicable), minus, if applicable, the amount by which the Closing Date Blackfox Repayment Amount was greater than the Blackfox Repayment Amount, as finally determined. Amounts which are prepaid pursuant to this Section 9.4(b) may be reborrowed pursuant hereto in accordance with the terms hereof.	
 	 	 	
 	(c)	Section 8.4 shall be complied with in connection with any prepayment pursuant to this Section 9.4.”	
ARTICLE 3
 REPRESENTATIONS AND WARRANTIES

3.1	Representations and Warranties.	
To induce the Lenders and the Administrative Agent to enter into this agreement, the Borrower hereby represents and warrants to the Lenders and the Administrative Agent that the representations and warranties of the Borrower which are contained in Section 10.1 of the Credit Agreement, are true and correct on each of the date hereof and the date of the effectiveness of the amendment contemplated in Article 2, as if made on the date hereof and the date of the effectiveness of the amendment contemplated in Article 2, respectively. The Borrower hereby represents and warrants that no Default has occurred that will be continuing after giving effect to this agreement, nor will a Default arise as a result of the execution and delivery of this agreement.

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ARTICLE 4
 CONDITIONS PRECEDENT TO EFFECTIVENESS OF AGREEMENT

4.1	Conditions Precedent.	
This agreement shall become effective upon the execution and delivery of this Agreement by each of the parties hereto and the execution and delivery by Wheaton Precious Metals Corp. of the consent and agreement attached hereto.
ARTICLE 5
MISCELLANEOUS

5.1	Future References to the Credit Agreement.	
On and after the date of this agreement, each reference in the Credit Agreement to “this agreement”, “hereunder”, “hereof”, or words of like import referring to the Credit Agreement, and each reference in any related document to the “Credit Agreement”, “thereunder”, “thereof”, or words of the like import relating to the Credit Agreement, shall mean and be a reference to the Credit Agreement as amended hereby. The Credit Agreement, as amended hereby, is and shall continue to be in full force and effect and is hereby in all respects ratified and confirmed.

5.2	Governing Law.	
This agreement shall be governed by and construed in accordance with the laws of the Province of Ontario.

5.3	Enurement.	
This agreement shall enure to the benefit of and shall be binding upon the parties hereto and their respective successors and permitted assigns.

5.4	Counterparts.	
This agreement may be executed in one or more counterparts, each of which shall be deemed to be an original and all of which taken together shall be deemed to constitute one and the same agreement. Delivery of an executed signature page of this agreement by facsimile transmission or by e-mail in pdf format shall be as effective as delivery of a manually executed counterpart thereof.

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5.5	Confirmation of Finance Documents.	
By its acknowledgment, each Obligor confirms and agrees that the Liens and other obligations expressed to be created under or pursuant to each Finance Document to which it is a party shall be binding upon such Obligor and its collateral (as described in each such Security Document) shall be unaffected by and shall continue in full force and effect notwithstanding the amendment of the Credit Agreement as constituted hereby and the execution and delivery and effectiveness of this amendment shall not in any manner whatsoever reduce, release, discharge, impair or otherwise prejudice or change the rights of the Finance Parties arising under, by reason of or otherwise in respect of such Liens and other obligations constituted by each such Finance Document. For the avoidance of doubt, each Obligor hereby confirms that each Security Document to which it is a party secures its Secured Obligations and that each such Security Document continues in full force and effect.
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	Sixth Amending Agreement	

NINTH AMENDING AGREEMENT
TIIIS AGREEMENT made as of the 30 th day of November, 2017.
BETWEEN:
PRIMER() MINING CORP, a corporation existing under the laws of the Province of British Columbia
(herein called the " Borrower ")
- and -
BANK OF MONTREAL , a Canadian chartered bank
(herein called the " Administrative Agent ")
- and-
BANK OF MONTREAL and THE BANK OF NOVA SCOTIA
(herein called the " Lenders " and individually, a " Lender ")
WHEREAS the Borrower and the Administrative Agent entered into a credit agreement made as of May 23, 2014 (as amended pursuant to a first amending agreement dated December 22, 2014, a second amending agreement dated February 5, 2015, a third amending agreement dated December 31, 2015, a fourth amending agreement dated December 28, 2016, a fifth amending agreement dated March 30, 2017, a sixth amending agreement dated October 2, 2017, a seventh amending agreement dated November 23, 2017 and an eighth amending agreement dated November 23, 2017, the " Credit Agreement ") and pursuant to which the Lenders established a certain credit facility in favour of the Borrower;
AND WHEREAS the parties hereto wish to amend certain provisions of the Credit Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the mutual covenants and agreements contained herein, the parties covenant and agree as follows:
ARTICLE 1
DEFINED TERMS

1.1	Capitalized Terms .	
All capitalized terms which are used herein without being specifically defined herein shall have the meaning ascribed thereto in the Credit Agreement as amended hereby.

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ARTICLE 2
AMENDMENTS

2.1	General Rule .	
Subject to the terms and conditions herein contained, the Credit Agreement is hereby amended to the extent necessary to give effect to the provisions of this agreement and to incorporate the provisions of this agreement into the Credit Agreement.

2.2	Defined Terms .	
The definition of "Maturity Date" in Section 1.1 of the Credit Agreement is hereby amended by deleting the reference therein to "December 1, 2017" and replacing it with "December 15, 2017".
ARTICLE 3
REPRESENTATIONS AND WARRANTIES

3.1	Representations and Warranties .	
To induce the Lenders and the Administrative Agent to enter into this agreement, the Borrower hereby represents and warrants to the Lenders and the Administrative Agent that the representations and warranties of the Borrower which are contained in Section 10.1 of the Credit Agreement, are true and correct on each of the date hereof and the date of the effectiveness of the amendment contemplated in Article 4, as if made on the date hereof and the date of the effectiveness of the amendment contemplated in Article 4, respectively. The Borrower hereby represents and warrants that no Default has occurred that will be continuing after giving effect to this agreement, nor will a Default arise as a result of the execution and delivery of this agreement.
ARTICLE 4
CONDITIONS PRECEDENT TO EFFECTIVENESS OF AGREEMENT

4.1	Conditions Precedent .	
This agreement shall become effective upon satisfaction of the following conditions precedent:

 	(a)	the execution and delivery of this Agreement by each of the parties hereto and the execution and delivery by Wheaton Precious Metals Corp. of the consent and agreement attached hereto;	
 	 	 	
 	(b)	the Borrower and PML shall have executed and delivered to the Administrative Agent, as applicable, confirmation letters in respect of each Security Document governed by the laws of Luxembourg to which it is a party;	
 	 	 	
 	(c)	all fees of legal counsel to the Administrative Agent shall have been paid; and	
 	 	 	
 	(d)	the Administrative Agent has received, in form and substance satisfactory to it:	

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 	(i)	a duly certified copy of the resolution of the board of directors of the Borrower authorizing it to execute, deliver and perform its obligations under this Agreement and under the Credit Agreement, as amended by this Agreement; and	
 	 	 	
 	(ii)	an opinion of counsel to the Borrower addressed to the Administrative Agent and the other Finance Parties, relating to the status and capacity of the Borrower, the due authorization, execution and delivery of this Agreement and the validity and enforceability of this Agreement and the Credit Agreement, as amended by this Agreement, and such other matters as the Administrative Agent may reasonably request.	
ARTICLE 5
MISCELLANEOUS

5.1	Future References to the Credit Agreement.	
On and after the date of this agreement, each reference in the Credit Agreement to "this agreement", "hereunder", "hereof', or words of like import referring to the Credit Agreement, and each reference in any related document to the "Credit Agreement", "thereunder", "thereof', or words of the like import relating to the Credit Agreement, shall mean and be a reference to the Credit Agreement as amended hereby. The Credit Agreement, as amended hereby, is and shall continue to be in full force and effect and is hereby in all respects ratified and confirmed.

5.2	Governing Law.	
This agreement shall be governed by and construed in accordance with the laws of the Province of Ontario.

5.3	Enurement.	
This agreement shall enure to the benefit of and shall be binding upon the parties hereto and their respective successors and permitted assigns.

5.4	Counterparts.	
This agreement may be executed in one or more counterparts, each of which shall be deemed to be an original and all of which taken together shall be deemed to constitute one and the same agreement. Delivery of an executed signature page of this agreement by facsimile transmission or by e-mail in pdf format shall be as effective as delivery of a manually executed counterpart thereof.

	Ninth Amending Agreement	

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5.5	Confirmation of Finance Documents.	
By its acknowledgment, each Obligor confirms and agrees that the Liens and other obligations expressed to be created under or pursuant to each Finance Document to which it is a party shall be binding upon such Obligor and its collateral (as described in each such Security Document) shall be unaffected by and shall continue in full force and effect notwithstanding the amendment of the Credit Agreement as constituted hereby and the execution and delivery and effectiveness of this amendment shall not in any manner whatsoever reduce, release, discharge, impair or otherwise prejudice or change the rights of the Finance Parties arising under, by reason of or otherwise in respect of such Liens and other obligations constituted by each such Finance Document. For the avoidance of doubt, each Obligor hereby confirms that each Security Document to which it is a party secures its Secured Obligations and that each such Security Document continues in full force and effect.
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	Ninth Amending Agreement	

TENTH AMENDING AGREEMENT
THIS AGREEMENT made as of the 15th day of December, 2017.
BETWEEN:
PRIMERO MINING CORP , a corporation existing under the laws of the Province of British Columbia
(herein called the " Borrower ")
- and -
BANK OF MONTREAL , a Canadian chartered bank
(herein called the " Administrative Agent ")
- and-
BANK OF MONTREAL and THE BANK OF NOVA SCOTIA
(herein called the " Lenders " and individually, a " Lender ")
WHEREAS the Borrower and the Administrative Agent entered into a credit agreement made as of May 23, 2014 (as amended pursuant to a first amending agreement dated December 22, 2014, a second amending agreement dated February 5, 2015, a third amending agreement dated December 31, 2015, a fourth amending agreement dated December 28, 2016, a fifth amending agreement dated March 30, 2017, a sixth amending agreement dated October 2, 2017, a seventh amending agreement dated November 23, 2017, an eighth amending agreement dated November 23, 2017 and a ninth amending agreement dated November 30, 2017, the "Credit Agreement") and pursuant to which the Lenders established a certain credit facility in favour of the Borrower;
AND WHEREAS the parties hereto wish to amend certain provisions of the Credit Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the mutual covenants and agreements contained herein, the parties covenant and agree as follows:

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ARTICLE 1
DEFINED TERMS

1.1	Capitalized Terms.	
All capitalized terms which are used herein without being specifically defined herein shall have the meaning ascribed thereto in the Credit Agreement as amended hereby.
ARTICLE 2
AMENDMENTS

2.1	General Rule.	
Subject to the terms and conditions herein contained, the Credit Agreement is hereby amended to the extent necessary to give effect to the provisions of this agreement and to incorporate the provisions of this agreement into the Credit Agreement.

2.2	Defined Terms.	
The definition of "Maturity Date" in Section 1.1 of the Credit Agreement is hereby amended by deleting the reference therein to "December 15, 2017" and replacing it with "December 22, 2017".
ARTICLE 3
REPRESENTATIONS AND WARRANTIES

3.1	Representations and Warranties.	
To induce the Lenders and the Administrative Agent to enter into this agreement, the Borrower hereby represents and warrants to the Lenders and the Administrative Agent that the representations and warranties of the Borrower which are contained in Section 10.1 of the Credit Agreement, are true and correct on each of the date hereof and the date of the effectiveness of the amendment contemplated in Article 4, as if made on the date hereof and the date of the effectiveness of the amendment contemplated in Article 4, respectively. The Borrower hereby represents and warrants that no Default has occurred that will be continuing after giving effect to this agreement, nor will a Default arise as a result of the execution and delivery of this agreement.
ARTICLE 4
 CONDITIONS PRECEDENT TO EFFECTIVENESS OF AGREEMENT

4.1	Conditions Precedent.	
This agreement shall become effective upon satisfaction of the following conditions precedent:

 	(a)	the execution and delivery of this Agreement by each of the parties hereto and the execution and delivery by Wheaton Precious Metals Corp. of the consent and agreement attached hereto;	

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 	(b)	the Borrower and PML shall have executed and delivered to the Administrative Agent, as applicable, confirmation letters in respect of each Security Document governed by the laws of Luxembourg to which it is a party;	
 	 	 	
 	(c)	all fees of legal counsel to the Administrative Agent shall have been paid; and	
 	 	 	
 	(d)	the Administrative Agent has received, in form and substance satisfactory to it:	

 	(i)	a duly certified copy of the resolution of the board of directors of the Borrower authorizing it to execute, deliver and perform its obligations under this Agreement and under the Credit Agreement, as amended by this Agreement; and	
 	 	 	
 	(ii)	an opinion of counsel to the Borrower addressed to the Administrative Agent and the other Finance Parties, relating to the status and capacity of the Borrower, the due authorization, execution and delivery of this Agreement and the validity and enforceability of this Agreement and the Credit Agreement, as amended by this Agreement, and such other matters as the Administrative Agent may reasonably request.	
ARTICLE 5
MISCELLANEOUS

5.1	Future References to the Credit Agreement .	
On and after the date of this agreement, each reference in the Credit Agreement to "this agreement", "hereunder", "hereof', or words of like import referring to the Credit Agreement, and each reference in any related document to the "Credit Agreement", "thereunder", "thereof', or words of the like import relating to the Credit Agreement, shall mean and be a reference to the Credit Agreement as amended hereby. The Credit Agreement, as amended hereby, is and shall continue to be in full force and effect and is hereby in all respects ratified and confirmed.

5.2	Governing Law .	
This agreement shall be governed by and construed in accordance with the laws of the Province of Ontario.

5.3	Enurement .	
This agreement shall enure to the benefit of and shall be binding upon the parties hereto and their respective successors and permitted assigns.

5.4	Counterparts .	
This agreement may be executed in one or more counterparts, each of which shall be deemed to be an original and all of which taken together shall be deemed to constitute one and the same agreement. Delivery of an executed signature page of this agreement by facsimile transmission or by e-mail in pdf format shall be as effective as delivery of a manually executed counterpart thereof.

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5.5	Confirmation of Finance Documents.	
By its acknowledgment, each Obligor confirms and agrees that the Liens and other obligations expressed to be created under or pursuant to each Finance Document to which it is a party shall be binding upon such Obligor and its collateral (as described in each such Security Document) shall be unaffected by and shall continue in full force and effect notwithstanding the amendment of the Credit Agreement as constituted hereby and the execution and delivery and effectiveness of this amendment shall not in any manner whatsoever reduce, release, discharge, impair or otherwise prejudice or change the rights of the Finance Parties arising under, by reason of or otherwise in respect of such Liens and other obligations constituted by each such Finance Document. For the avoidance of doubt, each Obligor hereby confirms that each Security Document to which it is a party secures its Secured Obligations and that each such Security Document continues in full force and effect.
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	Tenth Amending Agreement	

ELEVENTH AMENDING AGREEMENT
THIS AGREEMENT made as of the 22" day of December, 2017.
BETWEEN:
PRIMERO MINING CORP , a corporation existing under the laws of the Province of British Columbia
(herein called the "Borrower")
- and -
BANK OF MONTREAL, a Canadian chartered bank
(herein called the " Administrative Agent ")
- and-
BANK OF MONTREAL and THE BANK OF NOVA SCOTIA
(herein called the " Lenders " and individually, a " Lender ")
WHEREAS the Borrower and the Administrative Agent entered into a credit agreement made as of May 23, 2014 (as amended pursuant to a first amending agreement dated December 22, 2014, a second amending agreement dated February 5, 2015, a third amending agreement dated December 31, 2015, a fourth amending agreement dated December 28, 2016, a fifth amending agreement dated March 30, 2017, a sixth amending agreement dated October 2, 2017, a seventh amending agreement dated November 23, 2017, an eighth amending agreement dated November 23, 2017, a ninth amending agreement dated November 30, 2017 and a tenth amending agreement dated December 15, 2017, the " Credit Agreement ") and pursuant to which the Lenders established a certain credit facility in favour of the Borrower;
AND WHEREAS the parties hereto wish to amend certain provisions of the Credit Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the mutual covenants and agreements contained herein, the parties covenant and agree as follows:

	Eleventh Amending Agreement	

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ARTICLE 1
DEFINED TERMS

1.1	Capitalized Terms .	
All capitalized terms which are used herein without being specifically defined herein shall have the meaning ascribed thereto in the Credit Agreement as amended hereby.
ARTICLE 2
AMENDMENTS

2.1	General Rule .	
Subject to the terms and conditions herein contained, the Credit Agreement is hereby amended to the extent necessary to give effect to the provisions of this agreement and to incorporate the provisions of this agreement into the Credit Agreement.

2.2	Defined Terms .	
The definition of " Maturity Date " in Section 1.1 of the Credit Agreement is hereby amended by deleting the reference therein to "December 22, 2017" and replacing it with "January 11, 2018".
ARTICLE 3
REPRESENTATIONS AND WARRANTIES

3.1	Representations and Warranties.	
To induce the Lenders and the Administrative Agent to enter into this agreement, the Borrower hereby represents and warrants to the Lenders and the Administrative Agent that the representations and warranties of the Borrower which are contained in Section 10.1 of the Credit Agreement, are true and correct on each of the date hereof and the date of the effectiveness of the amendment contemplated in Article 4, as if made on the date hereof and the date of the effectiveness of the amendment contemplated in Article 4, respectively. The Borrower hereby represents and warrants that no Default has occurred that will be continuing after giving effect to this agreement, nor will a Default arise as a result of the execution and delivery of this agreement.
ARTICLE 4
CONDITIONS PRECEDENT TO EFFECTIVENESS OF AGREEMENT

4.1	Conditions Precedent .	
This agreement shall become effective upon satisfaction of the following conditions precedent:

 	(a)	the execution and delivery of this Agreement by each of the parties hereto and the execution and delivery by Wheaton Precious Metals Corp. of the consent and agreement attached hereto;	

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 	(b)	the Borrower and PML shall have executed and delivered to the Administrative Agent, as applicable, confirmation letters in respect of each Security Document governed by the laws of Luxembourg to which it is a party;	
 	 	 	
 	(c)	all fees of legal counsel to the Administrative Agent shall have been paid; and	
 	 	 	
 	(d)	the Administrative Agent has received, in form and substance satisfactory to it:	

 	(i)	a duly certified copy of the resolution of the board of directors of the Borrower authorizing it to execute, deliver and perform its obligations under this Agreement and under the Credit Agreement, as amended by this Agreement; and	
 	 	 	
 	(ii)	an opinion of counsel to the Borrower addressed to the Administrative Agent and the other Finance Parties, relating to the status and capacity of the Borrower, the due authorization, execution and delivery of this Agreement and the validity and enforceability of this Agreement and the Credit Agreement, as amended by this Agreement, and such other matters as the Administrative Agent may reasonably request.	
ARTICLE 5
MISCELLANEOUS

5.1	Future References to the Credit Agreement.	
On and after the date of this agreement, each reference in the Credit Agreement to "this agreement", "hereunder", "hereof', or words of like import referring to the Credit Agreement, and each reference in any related document to the "Credit Agreement", "thereunder", "thereof', or words of the like import relating to the Credit Agreement, shall mean and be a reference to the Credit Agreement as amended hereby. The Credit Agreement, as amended hereby, is and shall continue to be in full force and effect and is hereby in all respects ratified and confirmed.

5.2	Governing Law.	
This agreement shall be governed by and construed in accordance with the laws of the Province of Ontario.

5.3	Enurement.	
This agreement shall enure to the benefit of and shall be binding upon the parties hereto and their respective successors and permitted assigns.

5.4	Counterparts.	
This agreement may be executed in one or more counterparts, each of which shall be deemed to be an original and all of which taken together shall be deemed to constitute one and the same agreement. Delivery of an executed signature page of this agreement by facsimile transmission or by e-mail in pdf format shall be as effective as delivery of a manually executed counterpart thereof.

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5.5	Confirmation of Finance Documents.	
By its acknowledgment, each Obligor confirms and agrees that the Liens and other obligations expressed to be created under or pursuant to each Finance Document to which it is a party shall be binding upon such Obligor and its collateral (as described in each such Security Document) shall be unaffected by and shall continue in full force and effect notwithstanding the amendment of the Credit Agreement as constituted hereby and the execution and delivery and effectiveness of this amendment shall not in any manner whatsoever reduce, release, discharge, impair or otherwise prejudice or change the rights of the Finance Parties arising under, by reason of or otherwise in respect of such Liens and other obligations constituted by each such Finance Document. For the avoidance of doubt, each Obligor hereby confirms that each Security Document to which it is a party secures its Secured Obligations and that each such Security Document continues in full force and effect.
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	Eleventh Amending Agreement	

TWELFTII AMENDING AGREEMENT
THIS AGREEMENT made as of the 12 day of January, 2018.
BETWEEN:
PRIMERO MINING CORP, a corporation existing under the laws of the Province of British Columbia
(herein called the "Borrower")
- and -
BANK OF MONTREAL, a Canadian chartered bank
(herein called the "Administrative Agent")
- and-
BANK OF MONTREAL and THE BANK OF NOVA SCOTIA
(herein called the "Lenders" and individually, a "Lender")
WHEREAS the Borrower and the Administrative Agent entered into a credit agreement made as of May 23, 2014 (as amended pursuant to a first amending agreement dated December 22, 2014, a second amending agreement dated February 5, 2015, a third amending agreement dated December 31, 2015, a fourth amending agreement dated December 28, 2016, a fifth amending agreement dated March 30, 2017, a sixth amending agreement dated October 2, 2017, a seventh amending agreement dated November 23, 2017, an eighth amending agreement dated November 23, 2017, a ninth amending agreement dated November 30, 2017, a tenth amending agreement dated December 15, 2017 and an eleventh amending agreement dated December 22, 2017, the "Credit Agreement") and pursuant to which the Lenders established a certain credit facility in favour of the Borrower;
AND WHEREAS the parties hereto wish to amend certain provisions of the Credit Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the mutual covenants and agreements contained herein, the parties covenant and agree as follows:

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ARTICLE 1
DEFINED TERMS

1.1	Capitalized Terms.	
All capitalized terms which are used herein without being specifically defined herein shall have the meaning ascribed thereto in the Credit Agreement as amended hereby.
ARTICLE 2
AMENDMENTS

2.1	General Rule.	
Subject to the terms and conditions herein contained, the Credit Agreement is hereby amended to the extent necessary to give effect to the provisions of this agreement and to incorporate the provisions of this agreement into the Credit Agreement.

2.2	Defined Terms.	

 	(a)	The definition of "Maturity Date" in Section 1.1 of the Credit Agreement is hereby deleted and replaced with the following:	
 	 		
		""Maturity Date" means the date which is the earlier of (i) the Effective Date, (ii) the Termination Date and (iii) April 30, 2018.";	
 	 		
 	(b)	The following defined terms are hereby added to Section 1.1 of the Credit Agreement in alphabetical order:	

 	'Acquiror" means	First Majestic Silver Corp.	 	
"Arrangement Agreement" means the arrangement agreement dated January  11 , 2018 entered into between Primero and Acquiror.
"Effective Date" means the date on which all Shares issued by the Borrower are owned by the Acquiror pursuant to a plan of arrangement under the provisions of Division 5 of Part 9 of the Business Corporation Act (British Columbia).
"Termination Date" means the date which is seven Banking Days after the Arrangement Agreement has been terminated by one or both of the parties to the Arrangement Agreement."
ARTICLE 3
REPRESENTATIONS AND WARRANTIES

3.1	Representations and Warranties.	
To induce the Lenders and the Administrative Agent to enter into this agreement, the Borrower hereby represents and warrants to the Lenders and the Administrative Agent that the representations and warranties of the Borrower which are contained in Section 10.1 of the Credit Agreement, are true and correct on each of the date hereof and the date of the effectiveness of the amendment contemplated in Article 4, as if made on the date hereof and the date of the effectiveness of the amendment contemplated in Article 4, respectively. The Borrower hereby represents and warrants that no Default has occurred that will be continuing after giving effect to this agreement, nor will a Default arise as a result of the execution and delivery of this agreement.

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ARTICLE 4
CONDITIONS PRECEDENT TO EFFECTIVENESS OF AGREEMENT

4.1	Conditions Precedent.	
This agreement shall become effective upon satisfaction of the following conditions precedent:

 	(a)	the execution and delivery of this Agreement by each of the parties hereto and the execution and delivery by Wheaton Precious Metals Corp. of the consent and agreement attached hereto;	
 	 	 	
 	(b)	the Borrower and PML shall have executed and delivered to the Administrative Agent, as applicable, confirmation letters in respect of each Security Document governed by the laws of Luxembourg to which it is a party;	
 	 	 	
 	(c)	all fees of legal counsel to the Administrative Agent shall have been paid;	
 	 	 	
 	(d)	the Lenders and Wheaton Precious Metals Corp. shall have received an executed copy of the Arrangement Agreement; and	
 	 	 	
 	(e)	the Administrative Agent has received, in form and substance satisfactory to it:	

 	(i)	a duly certified copy of the resolution of the board of directors of the Borrower authorizing it to execute, deliver and perform its obligations under this Agreement and under the Credit Agreement, as amended by this Agreement; and	
 	 	 	
 	(ii)	an opinion of counsel to the Borrower addressed to the Administrative Agent and the other Finance Parties, relating to the status and capacity of the Borrower, the due authorization, execution and delivery of this Agreement and the validity and enforceability of this Agreement and the Credit Agreement, as amended by this Agreement, and such other matters as the Administrative Agent may reasonably request.	

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ARTICLE 5
MISCELLANEOUS

5.1	Future References to the Credit Agreement.	
On and after the date of this agreement, each reference in the Credit Agreement to "this agreement", "hereunder", "hereof', or words of like import referring to the Credit Agreement, and each reference in any related document to the "Credit Agreement", "thereunder", "thereof', or words of the like import relating to the Credit Agreement, shall mean and be a reference to the Credit Agreement as amended hereby. The Credit Agreement, as amended hereby, is and shall continue to be in full force and effect and is hereby in all respects ratified and confirmed.

5.2	Governing Law.	
This agreement shall be governed by and construed in accordance with the laws of the Province of Ontario.

5.3	Enurement.	
This agreement shall enure to the benefit of and shall be binding upon the parties hereto and their respective successors and permitted assigns.

5.4	Counterparts.	
This agreement may be executed in one or more counterparts, each of which shall be deemed to be an original and all of which taken together shall be deemed to constitute one and the same agreement. Delivery of an executed signature page of this agreement by facsimile transmission or by e-mail in pdf format shall be as effective as delivery of a manually executed counterpart thereof.

5.5	Confirmation of Finance Documents.	
By its acknowledgment, each Obligor confirms and agrees that the Liens and other obligations expressed to be created under or pursuant to each Finance Document to which it is a party shall be binding upon such Obligor and its collateral (as described in each such Security Document) shall be unaffected by and shall continue in full force and effect notwithstanding the amendment of the Credit Agreement as constituted hereby and the execution and delivery and effectiveness of this amendment shall not in any manner whatsoever reduce, release, discharge, impair or otherwise prejudice or change the rights of the Finance Parties arising under, by reason of or otherwise in respect of such Liens and other obligations constituted by each such Finance Document. For the avoidance of doubt, each Obligor hereby confirms that each Security Document to which it is a party secures its Secured Obligations and that each such Security Document continues in full force and effect.

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5.6	Effective Date.	
Notwithstanding the date on which this agreement or the consent appended hereto is executed and/or delivered, this agreement shall be to have effect from and as of January  11 , 2018.
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	Twelfth Amending Agreement	

EXECUTION VERSION

ARRANGEMENT AGREEMENT	
 	
FIRST MAJESTIC SILVER CORP.	
 	
- and -	
 	
PRIMERO MINING CORP.	
______________________________________
January 11, 2018

______________________________________

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TABLE OF CONTENTS	

ARTICLE 1 INTERPRETATION	1	
 	 	
     1.1	DEFINITIONS.	1	
     1.2	INTERPRETATION NOT AFFECTED BY HEADINGS, ETC.	16	
     1.3	CURRENCY.	16	
     1.4	NUMBER, ETC	16	
     1.5	DATE FOR ANY ACTION.	16	
     1.6	ENTIRE AGREEMENT.	17	
     1.7	ACCOUNTING MATTERS.	17	
     1.8	CONSTRUCTION.	17	
     1.9	KNOWLEDGE.	17	
     1.10	COMMERCIALLY REASONABLE EFFORTS.	18	
     1.11	ORDINARY COURSE OF BUSINESS.	18	
     1.12	EXHIBITS.	18	
 	 	 	
ARTICLE 2 THE ARRANGEMENT	18	
 	 	
     2.1	ARRANGEMENT.	18	
     2.2	INTERIM ORDER.	18	
     2.3	PRIMERO SHAREHOLDER MEETING.	19	
     2.4	SHAREHOLDER CIRCULAR.	20	
     2.5	FINAL ORDER.	22	
     2.6	COURT PROCEEDINGS.	22	
     2.7	LISTS OF SECURITYHOLDERS.	23	
     2.8	ANNOUNCEMENT AND SHAREHOLDER COMMUNICATIONS.	23	
     2.9	PAYMENT OF CONSIDERATION.	24	
     2.10	UNITED STATES SECURITIES LAW MATTERS.	24	
     2.11	EFFECTIVE DATE MATTERS.	24	
 	 	 	
ARTICLE 3 REPRESENTATIONS AND WARRANTIES	24	
 	 	
     3.1	REPRESENTATIONS AND WARRANTIES OF PRIMERO.	24	
     3.2	REPRESENTATIONS AND WARRANTIES OF FIRST MAJESTIC.	49	
     3.3	NON-WAIVER.	59	
     3.4	SURVIVAL	59	
 	 	 	
ARTICLE 4 COVENANTS	60	
 	 	
     4.1	COVENANTS OF PRIMERO.	60	
     4.2	COVENANTS OF FIRST MAJESTIC.	64	
     4.3	COVENANTS REGARDING NON-SOLICITATION.	66	
     4.4	NOTICE BY PRIMERO OF SUPERIOR PROPOSAL DETERMINATION.	68	
     4.5	ACCESS TO INFORMATION.	71	
     4.6	COVENANT REGARDING REPRESENTATIONS AND WARRANTIES.	71	
     4.7	INDEMNIFICATION, INSURANCE AND MUTUAL RELEASES.	71	
     4.8	PRE-ACQUISITION REORGANIZATIONS.	72	
     4.9	CONVERTIBLE DEBENTURES.	73	
     4.10	ASSISTANCE WITH FIRST MAJESTIC FINANCING.	74	

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ARTICLE 5 CONDITIONS	75	
 	 	
     5.1	MUTUAL CONDITIONS PRECEDENT.	75	
     5.2	ADDITIONAL CONDITIONS PRECEDENT TO THE OBLIGATIONS OF FIRST MAJESTIC.	75	
     5.3	ADDITIONAL CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PRIMERO.	77	
     5.4	NOTICE AND CURE PROVISIONS.	78	
     5.5	SATISFACTION OF CONDITIONS.	79	
 	 	 	
ARTICLE 6 AMENDMENT AND TERMINATION	79	
 	 	
     6.1	AMENDMENT.	79	
     6.2	TERMINATION.	79	
     6.3	TERMINATION PAYMENT.	81	
     6.4	LIQUIDATED DAMAGES.	82	
     6.5	REMEDIES.	82	
     6.6	EFFECTS OF TERMINATION PAYMENT OR EXPENSE REIMBURSEMENT.	82	
 	 	 	
ARTICLE 7 GENERAL	83	
 	 	
     7.1	PRIVACY.	83	
     7.2	NOTICES.	83	
     7.3	ASSIGNMENT.	84	
     7.4	BINDING EFFECT.	85	
     7.5	TIME OF ESSENCE.	85	
     7.6	WAIVER AND MODIFICATION.	85	
     7.7	THIRD PARTY BENEFICIARIES.	85	
     7.8	SEVERABILITY.	85	
     7.9	MUTUAL INTEREST	85	
     7.10	FURTHER ASSURANCES.	86	
     7.11	INJUNCTIVE RELIEF.	86	
     7.12	NO PERSONAL LIABILITY.	86	
     7.13	EXPENSES.	86	
     7.14	GOVERNING LAW; ATTORNMENT; SERVICE OF PROCESS	86	
     7.15	COUNTERPARTS.	87	

EXECUTION VERSION
ARRANGEMENT AGREEMENT
ARRANGEMENT AGREEMENT made as of the 11 th day of January, 2018.
BETWEEN:

 	FIRST MAJESTIC SILVER CORP., a company existing under	
 	the laws of the Province of British Columbia	
 	 	
 	(hereinafter referred to as “First Majestic”)	
AND :

 	PRIMERO MINING CORP., a company existing under the laws	
 	of the Province of British Columbia	
 	 	
 	(hereinafter referred to as “Primero)	
THIS AGREEMENT WITNESSETH THAT in consideration of the respective covenants and agreements herein contained and for other good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged by each Party), the Parties hereby covenant and agree as follows:
ARTICLE 1
INTERPRETATION

1.1	Definitions .	
In this Agreement, unless there is something in the subject matter or context inconsistent therewith, the following terms shall have the following meanings respectively:
“ Aboriginal Group ” includes any aboriginal person or people, native person or people, indigenous person or people, or any person or group asserting or otherwise claiming an aboriginal right (including aboriginal title) or any other aboriginal interest, and any Person or group representing, or purporting to represent, any of the foregoing but excluding an Ejido Group;
“ Acceptable Confidentiality Agreement ” means any confidentiality agreement between Primero and a third party other than First Majestic that is entered into in accordance with Section 4.3 and contains confidentiality and standstill restrictions that are no less favourable to Primero than those set out in the Confidentiality Agreement and does not limit or prohibit Primero from providing First Majestic and its affiliates and Representatives with any other information required to be given to them by Primero under Section 4.3 of this Agreement;
“ AcquisitionProposal ” means any proposal or offermade by any Person or any group of Persons acting jointly or in concert, whether written or oral, other than First Majestic (or any affiliate of First Majestic or any Person acting in concert with First Majestic or any affiliate of First Majestic) with respect to:

- 2-

 	(a)	the acquisition or purchase of any shares or other voting securities, or securities convertible into or exercisable or exchangeable for any shares or other voting securities of Primero or any of its affiliates representing 20% or more of the outstanding voting securities of Primero or such affiliate, on a fully diluted basis;	
 	 	 	
 	(b)	the acquisition or purchase of any assets of Primero and/or one or more of its affiliates which assets individually or in the aggregate contribute 20% or more of the consolidated revenue or represent 20% or more of the total asset value of Primero and its affiliates taken as a whole (in each case based on the most recent consolidated financial statements of Primero) (or any lease, license, royalty, long- term supply agreement or other arrangement having a similar economic effect);	
 	 	 	
 	(c)	a merger, recapitalization, restructuring, reorganization, amalgamation, arrangement, joint venture or other business combination involving Primero or any of its affiliates that if consummated, would result in any Person or group of Persons beneficially owning, directly or indirectly, 20% or more of the voting or equity securities of Primero or any of its affiliates or of the surviving entity or the resulting direct or indirect parent of Primero or the surviving entity;	
 	 	 	
 	(d)	any other extraordinary business transaction involving or otherwise relating to Primero or any of its affiliates (including pursuant to bankruptcy or insolvency proceedings); or	
 	 	 	
 	(e)	any public announcement of an intention to do any of the foregoing;	
“affiliate” has the meaning set out in the Business Corporations Act;
“Annual Financial Statements” means the audited consolidated financial statements of Primero or First Majestic, as the case may be, as at, and for the years ended, December 31, 2016 and December 31, 2015 including the notes thereto ;
“Anti-Corruption Laws” has the meaning set out in Section 3.1.36;
“Antitrust Clearance” means the issuance of an authorization by COFECE to First Majestic and Primero to consummate, on terms satisfactory to First Majestic and Primero, acting reasonably, the transactions contemplated hereby;
“Antitrust Filing” means the filing to be made with COFECE in respect of the Antitrust Clearance;
“Arrangement” means an arrangement under the provisions of Division 5 of Part 9 of the Business Corporations Act, on the terms set forth in the Plan of Arrangement, subject to any amendment or supplement thereto in accordance with this Agreement and the Plan of Arrangement or made at the direction of the Court in the Final Order;

- 3-
“Arrangement Resolution” means the special resolution approving the Arrangement, to be substantially in the form and content of Exhibit B, to be considered, and if deemed advisable, passed with or without variation, by the Primero Shareholders at the Primero Shareholder Meeting;
“Black Fox Asset Purchase Agreement” means the asset purchase agreement dated August 25, 2017 entered into by Primero and McEwen Mining Inc. pursuant to which McEwen Mining Inc. acquired the Black Fox mine and associated assets from Primero;
“Black Fox Sale” means the disposition of the Black Fox mine and associated assets located in Timmins, Ontario by Primero pursuant to the Black Fox Asset Purchase Agreement;
“Board Approved Budget” means the monthly budget for Primero for the 12-month period ending December 31, 2018 that replaces the Draft Budget, which shall be deemed to be effective when such budget has been approved by the Primero Board and delivered to First Majestic, unless the aggregate cash expenditures during the first four months of 2018 in such budget exceed the aggregate cash expenditures for such period in the Draft Budget by more than $4,000,000, in which event such budget shall only be effective when approved in writing by First Majestic, acting reasonably;
“Business” means the business of Primero and the Primero Subsidiaries as it is currently conducted, including the exploration for and exploitation of minerals in Mexico;
“Business Corporations Act” means the Business Corporations Act (British Columbia);
“Business Day” means any day other than Saturday, Sunday or any day on which major banks are closed for business in Vancouver, British Columbia or in Toronto, Ontario;
“Cerro del Gallo Sale” means the disposition of outstanding shares of San Anton Resource Corporation (being the indirect owner of the Cerro del Gallo project located in Mexico) by Primero pursuant to the Cerro del Gallo Share Purchase Agreement;
“Cerro del Gallo Share Purchase Agreement” means the share purchase agreement dated November 13, 2017 between Primero and Argonaut Gold Inc. pursuant to which Argonaut Gold Inc. acquired all of the outstanding shares of San Anton Resource Corporation from Primero;
“Change of Recommendation” means:

 	(a)	the Primero Board fails to publicly recommend or has withdrawn, qualified or modified or shall have changed its approval or recommendation of the Arrangement in a manner materially adverse to First Majestic;	
 	 	 	
 	(b)	the Primero Board fails to publicly reaffirm its recommendation of the Arrangement within five Business Days after a public announcement of any Acquisition Proposal;	
 	 	 	
 	(c)	the Primero Board, or any committee thereof, accepts, approves, endorses or recommends any Acquisition Proposal;	

- 4-

 	(d)	Primero accepts or enters into a letter of intent, memorandum of understanding, term sheet, agreement in principle, agreement, arrangement or understanding in respect of an Acquisition Proposal; or	
 	 	 	
 	(e)	Primero, the Primero Board, or any committee thereof, publicly proposes or announces its intention to do any of the foregoing;	
it being understood that publicly taking no position or a neutral position by the Primero Board with respect to an Acquisition Proposal for a period exceeding five Business Days after an Acquisition Proposal has been publicly announced shall be deemed to constitute such a withdrawal, qualification, modification or change;
“COFECE” means the Comision Federal de Competencia Económica (Mexico);
“Confidentiality Agreement” means the confidentiality agreement entered into between First Majestic and Primero dated February 1, 2017;
“Consideration” means the consideration to be received pursuant to the Plan of Arrangement in respect of each Primero Share that is issued and outstanding immediately prior to the Effective Time, consisting of 0.03325 of a First Majestic Share;
“Consideration Shares” means the aggregate number of First Majestic Shares to be issued in exchange for Primero Shares pursuant to the Arrangement;
“Court” means the British Columbia Supreme Court;
“Debentureholder Circular”  means the notice of the Primero Debentureholder Meeting and accompanying management proxy circular, including all schedules, appendices and exhibits to, and information incorporated by reference in, such circular, to be sent to the Primero Debentureholders in connection with the Primero Debentureholder Meeting, as amended, supplemented or otherwise modified from time to time in accordance with the terms of this Agreement;
“Debentureholder Proposal” means the proposal to amend the Primero Indenture such that the maturity date of the Primero Debentures shall be accelerated to the next Business Day following the Effective Date;
“Debentureholders’ Resolution” means the extraordinary resolution approving the Debentureholder Proposal, to be substantially in the form and content of Exhibit C, to be considered, and if deemed advisable, passed with or without variation, by the Primero Debentureholders at the Primero Debentureholder Meeting;
“Debt Instrument” means any bond, debenture, mortgage, promissory note or other instrument evidencing indebtedness for borrowed money;
“Depositary” has the meaning set out in the Plan of Arrangement;

- 5-
“Dissent Rights” means the rights of dissent in respect of the Arrangement described in the Plan of Arrangement ;
“Draft Budget” means the draft monthly budget for Primero for the 12-month period ending December 31, 2018, which has not been approved by the Primero Board, a copy of which is attached as Appendix B to the Primero Disclosure Letter;
“EDGAR” means the Electronic Data Gathering and Retrieval System of the SEC;
“Effective Date” means the date the Arrangement completes, as determined in accordance with Section 2.11;
“Effective Time” means the time when the transactions contemplated herein are deemed to have been completed, which shall be 12:01 a.m. (Vancouver time) on the Effective Date or such other time as the Parties agree to in writing before the Effective Date;
“Ejido” means a communal property regime under which the Ejido members individually possess specific parcels and as a group hold common land, which are incorporated through an executive action of the Mexican Federal Government and registered with the Mexican National Agrarian Registry ( Registro Agrario Nacional );
“Ejido Group” means the Ejido members;
“Employee Benefits” means:

 	(a)	stock option plans, stock purchase plans, incentive plans, deferred compensation plans, profit-sharing plans and other similar benefits, plans or arrangements; and	
 	 	 	
 	(b)	insurance, health, welfare, drug, disability, pension, retirement, travel, hospitalization, medical, dental, legal counseling, eye care and other similar benefits, plans or arrangements.	
“Encumbrance” means any mortgage, charge, easement, encroachment, lien, adverse claim, burden, payment and obligation due and payable, or performable, as the case may be, rental, production payment, assignment by way of security, security interest, servitude, pledge, hypothecation, conditional sale agreement, security agreement, title retention agreement, security trust ( fideicomiso de garantía ), financing statement, option, right of pre-emption, right of first refusal or right of first offer, privilege, obligation to assign, license, sublicense trust, royalty, carried, working, participation or net profits interest or other third party interest or other encumbrance or any agreement, option, right or privilege capable of becoming any of the foregoing;
“Environmental Laws” means all applicable Laws relating to pollution or the protection and preservation of the environment or Hazardous Substances, including Laws relating to Releases or threatened Releases of Hazardous Substances into the natural environment (including ambient air, surface water, groundwater, land, surface and subsurface strata) or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, Release, transport or handling of Hazardous Substances and all laws and regulations with regard to recordkeeping, notification, disclosure and reporting requirements respecting Hazardous Substances, and all laws relating to endangered or threatened species of fish, wildlife and plants;

- 6-
“EnvironmentalPermits” includes all permits, licenses, authorizations or program participation requirements with or from any Governmental Entity under any Environmental Laws;
“External Stream Agreement” means the Second Amended and Restated Silver Purchase Agreement dated August 6, 2010 entered into among Primero, Silver Trading (Barbados) Limited, Silver Wheaton (Caymans) Ltd. (now Wheaton Precious Metals International Limited) and WPM;
“Final Order” means the final order of the Court approving the Arrangement as such order may be amended at any time prior to the Effective Date or, if appealed, then, unless such appeal is abandoned or denied, as affirmed;
“Financial Statements” with respect to Primero or First Majestic, as applicable, means the Annual Financial Statements and the Interim Financial Statements of such Person;
“First Majestic Credit Agreement” means the Credit Agreement among First Majestic, Investec Bank PLC and the Bank of Nova Scotia, and certain other lenders from time to time, dated February 8, 2016, as amended, modified, restated or replaced from time to time;
“First Majestic Disclosure Letter” means the disclosure letter dated as of the date hereof executed by First Majestic and delivered to, and acknowledged and accepted by, Primero concurrently with the execution of this Agreement;
“First Majestic Financing” means the proposed debt or equity financing to be undertaken by First Majestic in connection with the transactions contemplated by this Agreement (including the Debentureholder Proposal, repayment of the Primero Credit Agreement and payment of other costs and expenses in connection with such transactions);
“First Majestic Information Record” means any annual information form, press release, material change report, information circular, financial statement, management's discussion and analysis or other document of First Majestic which has been publicly filed by it on SEDAR or EDGAR since December 31, 2015;
“First Majestic Material Agreements” means any legally binding agreement, commitment, contract, license, indenture, obligation or undertaking to which First Majestic or any of the First Majestic Subsidiaries is a party or by which it or any of the First Majestic Subsidiaries is bound or affected or to which any of their respective properties or assets is subject: (i) that if terminated or modified or if it ceased to be in effect, would reasonably be expected to have a Material Adverse Effect on First Majestic; (ii) relating directly or indirectly to the guarantee of any liabilities or obligations or to indebtedness for borrowed money in excess of $1,000,000 in the aggregate; (iii) restricting the incurrence of indebtedness by First Majestic or any of the First Majestic Subsidiaries or restricting the payment of dividends by First Majestic; (iv) under which First Majestic or any of the First Majestic Subsidiaries is obligated to make or expects to receive payments in excess of $1,000,000 over the remaining term of such agreement or commitment; (v) that creates an exclusive dealing arrangement or right of first offer or refusal that is material to First Majestic and the First Majestic Subsidiaries taken as a whole; (vi) that materially limits or restricts (A) the ability of First Majestic or any First Majestic Subsidiary to engage in any line of business or carry on business in any geographic area, or (B) the scope of Persons to whom First Majestic or any of the First Majestic Subsidiaries may sell products or deliver services; or (vii) that is otherwise material to First Majestic and the First Majestic Subsidiaries, taken as a whole;

- 7-
“First Majestic Material Subsidiaries” means Corporación First Majestic S.A. de C.V., First Majestic Plata S.A. de C.V., Minera El Pilon S.A. de C.V., Minera La Encantada S.A. de C.V., La Encantada Procesadora de Minerales, S.A. de C.V., First Majestic Del Toro, S.A. de C.V., La Guitarra Compañia Minera, S.A. de C.V. and Nusantara de Mexico, S.A. de C.V.;
“First Majestic Shares” means the common shares in the authorized share structure of First Majestic;
“FSE” means the Regulated Unofficial Market of the Frankfurt Stock Exchange;
“Governmental Entity” means any

 	(a)	international, multinational, federal, provincial, state, regional, municipal, local or other government, governmental or public department, central bank or Tribunal;	
 	 	 	
 	(b)	subdivision, agent, commission, board, or authority of any of the foregoing; or	
 	 	 	
 	(c)	quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing;	
“Guarantee” means any agreement, contract or commitment providing for the guarantee, indemnification, assumption or endorsement or any like commitment with respect to the obligations, liabilities (contingent or otherwise) or indebtedness of any Person;
“Hazardous Substance” means, collectively, any contaminant, toxic substance, explosives or other dangerous goods or pollutant or any other substance the Release of which to the natural environment is likely to cause, at some immediate or future time, material harm or degradation to the natural environment or material risk to human health, including (a) any petroleum substances, radioactive materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation, transformers or other equipment that contains dielectric fluid containing polychlorinated biphenyls, and radon gas; (b) any chemicals, materials or substances defined under Environmental Laws as or included in the definition of “hazardous substances, “hazardous wastes, “hazardous materials, “restricted hazardous materials, “extremely hazardous substances, “toxic substances, “contaminants or “pollutants or words of similar meaning and regulatory effect; or (c) any other chemical, material or substance, exposure to which is prohibited, limited, or regulated by any Environmental Law;
“IFRS” means International Financial Reporting Standards as incorporated in the Handbook of the Canadian Institute of Chartered Accountants and as issued by the International Accounting Standards Board, as at the relevant time and applied on a consistent basis;

- 8-
“Interim Period” means the period from and including the date hereof to and including the earlier of the Effective Time and the date of termination of this Agreement pursuant to Article 6;
“Interested Person” means any officer, director, employee or consultant of Primero or any Primero Subsidiary or any Person which Primero, any Primero Subsidiary or any of the foregoing does not deal at arm’s length within the meaning of the ITA (including a spouse, parent, child or sibling of any such Person);
“Interim Financial Statements” means the unaudited consolidated financial statements of Primero or First Majestic, as the case may be, as at, and for the nine months ended September 30, 2017 and September 30, 2016, including the notes thereto;
“InterimOrder” means the interim order of the Court made in connection with the Arrangement, as such order may be amended, supplemented or varied by the Court;
“Internal Stream Agreement” means the Third Amended and Restated Silver Purchase Agreement dated as of October 11, 2011 among PEM, Silver Trading (Barbados) Limited and Primero ;
“ITA” means the Income Tax Act (Canada);
“Laws” means any and all laws (statutory, common or otherwise), statutes, regulations, statutory rules, regulatory instruments, principles of law, orders, injunctions, judgments, published policies and guidelines (to the extent that they have the force of law), standards (including Normas Oficiales Mexicanas and Normas Mexicanas ) and terms and conditions of any grant of approval, permission, authority or license of any Governmental Entity, statutory body or self-regulatory authority, and the term “applicable with respect to such Laws and in the context that refers to one or more Persons means that such Laws apply to such Person or Persons or its or their business, undertaking, property or securities and emanate from a Person having jurisdiction over the Person or Persons or its or their business, undertaking, property or securities;
“Leased Property” means all the right, title and interest of Primero and the Primero Subsidiaries in and to the subject matter (whether realty or personal property) of the Leases;
“Leases” means the real or personal property leases or subleases, or other rights of occupancy relating to real property including with Ejidos, which Primero or any Primero Subsidiary is a party to or bound by, including those set forth and described in Schedule 3.1.21 of the Primero Disclosure Letter;
“Licenses” has the meaning set out in Section 3.1.29;
“Mailing Deadline” means, subject to Section 2.4(b), February 16, 2018 unless otherwise agreed by the Parties;
“Match Period” has the meaning set out in in Section 4.4(a)(vi);
“Material Adverse Change”, when used in connection with First Majestic or Primero, means:

- 9-

 	(a)	any change, effect, development, event or occurrence that, individually or in the aggregate, prevents, or would reasonably be expected to prevent such Party from performing its material obligations under this Agreement in any material respect prior to the Outside Date; or	
 	 	 	
 	(b)	any change, effect, development, event or occurrence that, individually or in the aggregate, is, or would reasonably be expected to be, material and adverse to the business, properties, assets, operations, condition, affairs, liabilities (contingent or otherwise), or obligations (whether absolute, conditional or otherwise) of such Party and its subsidiaries taken as a whole, other than any change, effect, development, event or occurrence:	

 	(i)	relating to the announcement of the execution of this Agreement or relating to the Arrangement or other transactions contemplated by this Agreement;	
 	 	 	
 	(ii)	relating to a decrease in the market price of such Partys common shares on any stock exchange (it being understood that, if the cause or causes of any decrease, in and of itself or themselves, is otherwise a Material Adverse Change, then such decrease may be taken into consideration when determining whether a Material Adverse Change has occurred);	
 	 	 	
 	(iii)	relating to the Canadian or international economy or securities markets in general;	
 	 	 	
 	(iv)	affecting the worldwide silver or gold mining industries in general, including any changes in the market price of silver or gold;	
 	 	 	
 	(v)	relating to any effect resulting from an act of terrorism or any outbreak of hostilities or war (or any escalation or worsening thereof);	
 	 	 	
 	(vi)	relating to any natural disaster;	
 	 	 	
 	(vii)	relating to any enactment, adoption, proposal, implementation or any change in applicable Laws or in IFRS; or	
 	 	 	
 	(viii)	relating to any action taken by First Majestic or Primero at the request of the other or that is required or contemplated by this Agreement;	

 	provided, however, that the effect referred to in clauses (iii) through (vii) above does not primarily relate to (or have the effect of primarily relating to) the Party or the Partys subsidiaries, taken as a whole, or disproportionately adversely affect the Party and the Partys subsidiaries, taken as a whole, compared with other companies of a similar size operating in the industry and jurisdiction in which that Party and that Partys subsidiaries operate;	
“Material Adverse Effect”, when used in connection with First Majestic or Primero, means any change, effect, development, event or occurrence that has an effect that is, or would reasonably be expected to cause, a Material Adverse Change with respect to such Party and its subsidiaries taken as a whole;

- 10-
“material factand ” “material change have the meanings set out in the Securities Act;
“Meeting Deadline” means, subject to terms of this Agreement, March 21, 2018, unless otherwise agreed by the Parties;
“Mineral Rights means all mineral title and rights, whether under law, contractual or otherwise, for the exploration for or exploitation or extraction of mineral resources and reserves, including all mining licenses, mineral claims, concessions, exploration licenses, exploitation licenses, prospecting licenses and mining leases, together with surface rights, water rights, royalty interests, expenses and assessment works surplus interests, fee interests, net profit interests, joint venture interests, carried interests and other leases, rights of way and enurements related to any such rights;
“MI 61-101” means Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ;
“misrepresentation” has the meaning set out in the Securities Act;
“NI 43-101” means National Instrument 43-101 - Standards of Disclosure for Mineral Projects ;
“NI 52-109” means National Instrument 52-109 - Certification of Disclosure in Issuers Annual and Interim Filings ;
“NYSE” means the New York Stock Exchange ;
“Outside Date” means the latest date by which the transactions contemplated by this Agreement are to be completed, which date, subject to the terms of this Agreement, shall be April 30, 2018 or such later date as may be agreed upon by the Parties; provided that, notwithstanding the foregoing, if (a) any applicable Antitrust Clearance has not been obtained prior to April 30, 2018, and (b) all of the other conditions set forth in Article 5 (other than the delivery of items to be delivered on the Effective Date and the satisfaction of those conditions that, by their terms, cannot be satisfied until immediately prior to the Effective Date) have been satisfied or waived, the Outside Date shall be extended for an additional sixty days;
“Parties” means First Majestic and Primero and “Party” means either of them;
“PEM” means Primero Empresa Minera, S.A. de C.V.;
“Permitted Encumbrances” means the Encumbrances created in connection with the Primero Credit Agreement and the External Stream Agreement and all other Encumbrances described on Schedule 1.1 of the Primero Disclosure Letter;
“Person” includes any individual, firm, partnership, joint venture, venture capital fund, association, trust, trustee, executor, administrator, legal personal representative, estate, group, body corporate, corporation, company, unincorporated association or organization, Governmental Entity, syndicate or other entity, whether or not having legal status;

- 11-
“Plan of Arrangement” means the plan of arrangement substantially in the form and content of Exhibit A hereto and any amendments or variations thereto made in accordance with this Agreement or the Plan of Arrangement or made at the direction of the Court in the Final Order and acceptable to each of the Parties hereto, acting reasonably;
“Primero Board” means the board of directors of Primero;
“Primero Budget” means the Draft Budget or the Board Approved Budget, as applicable;
“Primero Convertible Securities” means, collectively, the Primero Debentures, Primero Options, Primero Warrants, Primero PSUs and Primero DSUs;
“Primero Convertible Securities Plans” means the Primero Indenture, Primero Option Plan; Primero Warrant Indenture, Primero PSU Plan and Primero DSU Plan;
“Primero Credit Agreement” means the Credit Agreement among Primero, the Bank of Montreal, as agent, and the Bank of Montreal and The Bank of Nova Scotia, as lenders, dated May 23, 2014, as amended, modified, restated or replaced prior to the Effective Date;
“Primero Datasite Information” means the documents made available to First Majestic in the electronic data site established by Primero as in effect at 2:00 p.m. (Pacific time) on January 11, 2018, an index of which is contained in the Primero Disclosure Letter;
“Primero Debentureholder Approval” means the requisite approval by Primero Debentureholders for the Debentureholders Resolution as required pursuant to the Primero Indenture;
“Primero Debentureholder Meeting” means the special meeting of Primero Debentureholders, including any adjournment or postponement thereof, to be called and held in accordance with the Primero Indenture for the purpose of considering and, if thought fit, approving the Debentureholders Resolution;
“Primero Debentureholder” means any holder of one or more Primero Debentures ;
“Primero Debentures” means the convertible debentures issued pursuant to the Primero Indenture;
“Primero Disclosure Letter” means the disclosure letter dated the date hereof executed by Primero and delivered to, and acknowledged and accepted by, First Majestic concurrently with the execution of this Agreement ;
“Primero DSU Plan” means Primeros Deferred Share Unit Plan dated March 23, 2015;
“Primero DSUs” means the deferred share units granted pursuant to the Primero DSU Plan;

- 12-
“Primero Fairness Opinion” means the opinion of Rothschild (Canada) Inc. to the effect that, as of the date of such opinion and based upon and subject to the assumptions, limitations and qualifications set forth therein, the Consideration is fair, from a financial point of view, to the Primero Shareholders;
“Primero Indenture” means the trust indenture dated February 9, 2015 entered into between Primero and Computershare Trust Company of Canada;
“Primero Information Record” means any annual information form, press release, material change report, information circular, financial statement, management's discussion and analysis or other document of Primero which has been publicly filed by Primero on SEDAR since December 31, 2015;
“Primero Material Agreements” means any legally binding agreement, commitment, contract, license, indenture, obligation or undertaking to which Primero or any of the Primero Subsidiaries is a party or by which it or any of the Primero Subsidiaries is bound or affected or to which any of their respective properties or assets is subject: (i) that if terminated or modified or if it ceased to be in effect, would reasonably be expected to have a Material Adverse Effect on Primero; (ii) relating directly or indirectly to the guarantee of any liabilities or obligations or to indebtedness for borrowed money in excess of $250,000 in the aggregate; (iii) restricting the incurrence of indebtedness by Primero or any of the Primero Subsidiaries or restricting the payment of dividends by Primero; (iv) under which Primero or any of the Primero Subsidiaries is obligated to make or expects to receive payments in excess of $250,000 over the remaining term of such agreement or commitment; (v) that creates an exclusive dealing arrangement or right of first offer or refusal that is material to Primero and the Primero Subsidiaries taken as a whole; (vi) that materially limits or restricts (A) the ability of Primero or any Primero Subsidiary to engage in any line of business or carry on business in any geographic area, or (B) the scope of Persons to whom Primero or any of the Primero Subsidiaries may sell products or deliver services; or (vii) that is otherwise material to Primero and the Primero Subsidiaries, taken as a whole; and (viii) in respect of Primero, includes each of the contracts listed in Section 3.1.23 of the Primero Disclosure Letter;
“Primero Meetings means the Primero Shareholder Meeting and the Primero Debentureholder Meeting;
“Primero Mineral Rights has the meaning set out in Section 3.1.16(a);
“Primero Option” means an option to purchase Primero Shares;
“Primero Optionholder” means a holder of one or more Primero Options;
“Primero Option Plan” means Primeros Stock Option Plan dated May 4, 2016;
“Primero PSU Plan” means Primeros 2013 Phantom Share Unit Plan dated April 18, 2016;
“Primero PSUs” means the phantom share units granted pursuant to the Primero PSU Plan ;

- 13-
“Primero Securities” means, together, the Primero Shares and the Primero Convertible Securities;
“Primero Shareholder” means a holder of one or more Primero Shares;
“Primero Shareholder Approval” has the meaning set out in Section 2.2(b);
“Primero Shareholder Meeting” means the special meeting of Primero Shareholders, including any adjournment or postponement thereof, to be called and held in accordance with the Interim Order for the purpose of considering and, if thought fit, approving the Arrangement Resolution;
“PrimeroShares” means the common shares in the authorized share structure of Primero;
“Primero Strategic Process” means the strategic transaction process undertaken by Primero as disclosed in the news release issued by Primero on February 27, 2017;
“Primero Subsidiaries” means,collectively, Cerro Resources Pty Ltd., Cerro San Anton Pty Ltd., Silver Trading (Barbados) Limited, PEM, Primero Compania Minera, S.A. de C.V., Primero Servicios Mineros, S.A. de C.V., Primero Transportes Aereos, S.A. de C.V., Primero Auxiliares de Adminstracion S.A. de C.V., Primero Hidroelectrico S.A. de C.V. and Primero Mining Luxembourg s.a.r.l.;
“PrimeroTechnical Report” has the meaning set out in Section 3.1.17(b);
“Primero Warrant Indenture” means the common share purchase warrant indenture dated June 24, 2016 entered into between Primero and Computershare Trust Company of Canada;
“Primero Warrants” means the warrants issued pursuant to the Primero Warrant Indenture;
“Regulatory Approvals” means those sanctions, rulings, consents, orders, exemptions, permits and other approvals (including the waiver or lapse, without objection, of a prescribed time under a statute or regulation that states that a transaction may be implemented if a prescribed time lapses following the giving of a notice without an objection being made) of Governmental Entities required in connection with the consummation of the Arrangement or any of the transactions contemplated hereby, including the Antitrust Clearance;
“Release” means any release, spill, emission, discharge, leaking, pumping, dumping, escape, injection, deposit, disposal, discharge, dispersal, leaching or migration of Hazardous Substances into the indoor or outdoor environment (including, ambient air, surface water, ground water, and surface or subsurface strata) or into or out of any property, including the movement of Hazardous Substances through or in the air, soil, surface water, ground water or property;
“Replacement Option” has the meaning set out in the Plan of Arrangement;
“Replacement Stream Agreement” means the Precious Metals Purchase Agreement dated the date hereof and effective as of the Effective Date entered into among First Majestic, FM Metal Trading (Barbados) Inc. and Wheaton Precious Metals International Ltd.;

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“Representatives” means, collectively, with respect to a Party, the officers, directors, employees, consultants, advisors, agents or other representatives (including lawyers, accountants, investment bankers and financial advisors) of that Party and its affiliates;
“SEC” means the U.S. Securities and Exchange Commission;
“Section 3(a)(10) Exemption” means the exemption from the registration requirements of the U.S. Securities Act provided by Section 3(a)(10) thereof .
“Securities Act” means the Securities Act (British Columbia);
“Securities Authority” means the British Columbia Securities Commission and any other applicable securities commission or securities regulatory authority of a province or territory of Canada ;
“Securities Laws” means the securities Laws of each of the provinces and territories of Canada, the policies and regulations of any Canadian or U.S. stock exchange on which the applicable Partys securities are listed and posted for trading, the U.S. Securities Act and the U.S. Exchange Act and all other applicable state, federal and provincial securities Laws, rules, regulations and published policies thereunder, as now in effect and as they may be promulgated or amended from time to time;
“SEDAR” means the System for Electronic Disclosure Analysis and Retrieval;
“ShareholderCircular” means the notice of the Primero Shareholder Meeting and accompanying management proxy circular, including all schedules, appendices and exhibits to, and information incorporated by reference in, such circular, to be sent to the Primero Shareholders in connection with the Primero Shareholder Meeting, as amended, supplemented or otherwise modified from time to time in accordance with the terms of this Agreement and the Interim Order;
“subsidiary” has the meaning set out in the Business Corporations Act and includes, for greater certainty, an indirect subsidiary;
“Superior Proposal” means an unsolicited bona fide written Acquisition Proposal (provided, however, that for the purposes of this definition, all references to “20% shall be changed to “100%) made by a third party or parties acting jointly (other than First Majestic and its affiliates) that complies with Securities Laws and did not result from a breach of Section 4.3 and which:

 	(a)	is not subject to any financing condition and in respect of which any required financing to complete such Acquisition Proposal has been obtained or demonstrated to the satisfaction of the Primero Board acting in good faith (after receipt of advice from its financial advisors and outside legal counsel) to be reasonably likely to be obtained without undue delay;	
 	 	 	
 	(b)	is not subject to a due diligence condition and/or access condition;	

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 	(c)	is made available to all Primero Shareholders on the same terms and conditions; and	
 	 	 	
 	(d)	in the good faith determination of the Primero Board, after consultation with its financial advisors and outside legal counsel:	

 	(i)	is reasonably capable of being completed in accordance with its terms and without undue delay, taking into account all legal, financial, regulatory and other aspects of such proposal and the Person making such proposal; and	
 	 	 	
 	(ii)	would, if consummated and taking into account all of the terms and conditions of such Acquisition Proposal (but not assuming away the risk of non-completion), result in a transaction more favourable to the Primero Shareholders from a financial point of view than the Arrangement (including any adjustment to the terms and conditions of the Arrangement proposed by First Majestic pursuant to Section 4.4);	
“Tax Returns” includes all returns, reports, declarations, elections, notices, filings, forms, statements and other documents (whether in tangible, electronic or other form) and including any amendments, schedules, attachments, supplements, appendices and exhibits thereto and any claims for refund, declarations of estimated Taxes and information returns, made, prepared, filed or required by a Governmental Entity to be made, prepared or filed by Law and conclusive agreements ( acuerdos conclusivos ) in respect of Taxes;
“Taxes” means, with respect to any entity, all income taxes (including any tax on or based upon net income, gross income, income as specially defined, earnings, profits or selected items of income, earnings or profits) and all capital taxes, gross receipts taxes, environmental taxes, sales taxes, use taxes, ad valorem taxes, value added taxes, transfer taxes, franchise taxes, license taxes, withholding taxes, payroll taxes, employment taxes, Canada Pension Plan premiums, excise, severance, social security premiums, workers compensation premiums, employment insurance or compensation premiums, stamp taxes, occupation taxes, premium taxes, property taxes, production taxes, severance taxes, windfall profits taxes, profit sharing taxes, alternative or add-on minimum taxes, goods and services tax, customs duties, mining duties (including under the Federal Duties Act (Mexico) ( Ley Federal de Derechos )) or other taxes, fees, governmental royalties, special mining tax, imports, assessments or charges of any kind whatsoever, together with any interest and any penalties or additional amounts imposed by any taxing authority (domestic or foreign) on such entity, and any interest, penalties, additional taxes and additions to tax imposed with respect to the foregoing;
“Termination Payment” means an amount equal to $10,000,000 payable by Primero to First Majestic in certain circumstances in accordance with Section 6.3;
“Transaction Personal Information” has the meaning set out in Section 7.1;
“Tribunal” means:

 	(a)	any court (including a court of equity);	

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 	(b)	any federal, provincial, state, county, municipal or other government or governmental department, ministry, commission, board, bureau, agency or instrumentality;	
 	 	 	
 	(c)	any securities commission, Canadian or U.S. stock exchange or other regulatory or self-regulatory body; and	
 	 	 	
 	(d)	any arbitrator or arbitration tribunal;	
“TSX” means the Toronto Stock Exchange;
“U.S. Exchange Act” means the United States Securities Exchange Act of 1934 ;
“U.S. Securities Act” means the United States Securities Act of 1933 ;
“U.S. Investment Company Act” means the United States Investment Company Act of 1940;
“WPM” means Wheaton Precious Metals Corp. (previously known as Silver Wheaton Corp.), a company existing under the laws of British Columbia; and
“WPM Guarantee” means the agreement dated March 30, 2017 between Silver Trading (Barbados) Limited, Silver Wheaton (Caymans) Ltd. (now Wheaton Precious Metals International Ltd.), Primero and WPM .

1.2	Interpretation Not Affected by Headings, etc.	
The division of this Agreement into sections and other portions and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation hereof. Unless otherwise indicated, all references in this Agreement to a “Section followed by a number and/or a letter refer to the specified section of this Agreement, and all references in this Agreement to an Exhibit followed by a letter refer to the specified Exhibit to this Agreement. Unless otherwise indicated, the terms “this Agreement, “hereof, “herein, “hereunder and “hereby and similar expressions refer to this Agreement (including the Exhibits hereto), as amended or supplemented from time to time pursuant to the applicable provisions hereof, and not to any particular section or other portion hereof.

1.3	Currency.	
All sums of money referred to in this Agreement are expressed in lawful money of the United States of America and “$ refers to U.S. dollars, unless indicated as Canadian dollars (Cdn$).

1.4	Number, etc.	
Unless the context otherwise requires, words importing the singular shall include the plural and vice versa and words importing any gender shall include all genders.

1.5	Date For Any Action.	

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In the event that any date on which any action is required to be taken hereunder by any of the Parties hereto is not a Business Day, such action shall be required to be taken on the next succeeding day which is a Business Day.

1.6	Entire Agreement.	
This Agreement constitutes, together with the Confidentiality Agreement, the agreement relating to tax and certain other matters, dated the date hereof, between the parties hereto and the Disclosure Letter, the entire agreement among the Parties with respect to the Arrangement and other transactions contemplated hereby and supersedes all other prior agreements, understandings, negotiations and discussions, whether oral or written, among the Parties with respect thereto, other than the Confidentiality Agreement. There are no representations, warranties, terms, conditions, undertakings or collateral agreements, express, implied or statutory, between the Parties with respect thereto except as expressly set forth in this Agreement, the Confidentiality Agreement and the agreement relating to tax and certain other matters, dated the date hereof, between the parties hereto.

1.7	Accounting Matters.	
Unless otherwise indicated, all accounting terms used in this Agreement shall have the meanings attributable thereto under IFRS and all determinations of an accounting nature required to be made shall be made in a manner consistent with IFRS and past practice.

1.8	Construction.	
In this Agreement, unless otherwise indicated:

 	(a)	the words “include, “including or “in particular, when following any general term or statement, shall not be construed as limiting the general term or statement to the specific items or matters set forth or to similar items or matters, but rather as permitting the general term or statement to refer to all other items or matters that could reasonably fall within the broadest possible scope of the general term or statement;	
 	 		
 	(b)	a reference to a statute means that statute, as amended and in effect as of the date of this Agreement, and includes each and every regulation and rule made thereunder and in effect as of the date hereof; and	
 	 		
 	(c)	where a word, term or phrase is defined, its derivatives or other grammatical forms have a corresponding meaning.	

1.9	Knowledge.	
In this Agreement, the phrase “to the knowledge of any Person, “to the best knowledge of any Person, “known to any Person, “of which it is aware or any similar phrase means, unless otherwise indicated, (a) with respect to any Person who is an individual, the actual knowledge of such Person, and (b) with respect to any Person who is not an individual, the actual knowledge of the chief executive officer and chief financial officer of such Person and its affiliates after reasonable enquiry, and to the extent that such reasonable enquiry was not conducted, includes the knowledge that a reasonable Person would have had if such reasonable enquiry had been conducted.

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1.10	Commercially Reasonable Efforts.	
In this Agreement, the phrase “commercially reasonable efforts with respect to any Party means the cooperation of such Party and the use by such Party of its reasonable efforts consistent with reasonable commercial practice without payment or incurrence of any liability or obligation, other than reasonable expenses.

1.11	Ordinary Course of Business.	
In this Agreement the phrase “in the ordinary course of business or “ordinary course and similar expressions shall, as applicable, mean and refer to, with respect to an action taken by a Party, that such action is consistent with the past practices of such Party and is taken in the ordinary course of the normal day-to-day operations of the business of such Party.

1.12	Exhibits.	
The following Exhibits are annexed to this Agreement and are hereby incorporated by reference into this Agreement and form an integral part hereof:

Exhibit A	-	Plan of Arrangement	
 	 	 	
Exhibit B	-	Arrangement Resolution	
 	 	 	
Exhibit C	-	Debentureholders Resolution	
ARTICLE 2
THE ARRANGEMENT

2.1	Arrangement.	
The Parties agree that the Arrangement will be implemented in accordance with and subject to the terms and conditions contained in this Agreement and the Plan of Arrangement.

2.2	Interim Order.	
As soon as reasonably practicable following the execution of this Agreement, and in any event in sufficient time to hold the Primero Shareholder Meeting in accordance with Section 2.3, Primero shall apply to the Court in a manner acceptable to First Majestic, acting reasonably, pursuant to the Business Corporations Act and prepare, file and diligently pursue an application for the Interim Order, which shall provide, among other things:

 	(a)	for the class of Persons to whom notice is to be provided in respect of the Arrangement and the Primero Shareholder Meeting and for the manner in which such notice is to be provided;	

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 	(b)	that the requisite approval for the Arrangement Resolution shall be two-thirds of the votes cast on the Arrangement Resolution by the Primero Shareholders present in person or represented by proxy at the Primero Shareholder Meeting and, if required by MI 61-101, minority approval in accordance with MI 61-101 (the “ Primero Shareholder Approval );	
 	 	 	
 	(c)	that, in all other respects, the terms, restrictions and conditions of the articles of Primero, including quorum requirements and all other matters, shall apply in respect of the Primero Shareholder Meeting;	
 	 	 	
 	(d)	for the grant of the Dissent Rights;	
 	 	 	
 	(e)	for the notice requirements with respect to the presentation of the application to the Court for the Final Order;	
 	 	 	
 	(f)	that the Primero Shareholder Meeting may be adjourned or postponed from time to time by the Primero Board, subject to the terms of this Agreement, without the need for additional approval of the Court; and	
 	 	 	
 	(g)	for such other matters as First Majestic or Primero may reasonably require, subject to obtaining the prior consent of the other Party, such consent not to be unreasonably withheld or delayed.	

2.3	Primero Shareholder Meeting.	
Subject to receipt of the Interim Order and the terms of this Agreement:

 	(a)	Primero agrees to convene and conduct the Primero Shareholder Meeting in accordance with Primeros articles, applicable Laws and the Interim Order, as soon as reasonably practicable, and in any event on or before the Meeting Deadline. Primero agrees that it shall, in consultation with First Majestic, fix and publish a record date for the purposes of determining the Primero Shareholders entitled to receive notice of and vote at the Primero Shareholder Meeting in accordance with the Interim Order;	
 	 	 	
 	(b)	Primero shall not, except as required for quorum purposes, as required by Law, or otherwise as permitted under this Agreement, adjourn, postpone or cancel (or propose or permit the adjournment, postponement or cancellation of) the Primero Shareholder Meeting without First Majestics prior written consent;	
 	 	 	
 	(c)	Primero shall advise First Majestic as First Majestic may reasonably request, and at least on a daily basis on each of the last ten Business Days prior to the date of the Primero Shareholder Meeting, as to the aggregate tally of the proxies received by Primero in respect of the Arrangement Resolution;	
 	 	 	
 	(d)	Primero shall promptly advise First Majestic of any written notice of dissent or purported exercise by any Primero Shareholder of Dissent Rights received by Primero in relation to the Arrangement and any withdrawal of Dissent Rights received by Primero and any written communications sent by or on behalf of Primero to any Primero Shareholder exercising or purporting to exercise Dissent Rights in relation to the Arrangement;	

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 	(e)	Primero shall not make any payment or settlement offer, or agree to any payment or settlement prior to the Effective Time with respect to Dissent Rights without the prior written consent of First Majestic, acting reasonably; and	
 	 	 	
 	(f)	Primero shall provide notice to First Majestic of the Primero Shareholder Meeting and shall allow Representatives of First Majestic to attend the Primero Shareholder Meeting.	

2.4	Shareholder Circular.	

 	(a)	As promptly as reasonably practicable following execution of this Agreement, Primero shall prepare the Shareholder Circular together with any other documents required by applicable Laws in connection with the Primero Shareholder Meeting.	
 	 		
 	(b)	As promptly as reasonably practicable following issuance of the Interim Order, and in any event prior to the close of business on the Mailing Deadline, Primero shall cause the Shareholder Circular to be sent to the Primero Shareholders and filed as required by the Interim Order and applicable Laws.	
 	 		
 	(c)	If Primero provides notice to First Majestic regarding an Acquisition Proposal pursuant to this Agreement prior to the mailing of the Shareholder Circular, then unless the Parties agree otherwise, the Mailing Deadline will be extended by a period of time equal to the number of days from the date on which Primero first provides notice of such Acquisition Proposal to First Majestic until the earlier of:	

 	(i)	written notification from Primero to First Majestic that the Primero Board has determined that the Acquisition Proposal is not a Superior Proposal; or	
 	 	 	
 	(ii)	the date on which Primero and First Majestic enter into an amended agreement pursuant to Section 4.4 which results in the Acquisition Proposal in question not being a Superior Proposal.	
If the Mailing Deadline is so extended, the Meeting Deadline and the Outside Date shall be extended by the same number of days as the Mailing Deadline has been extended.

 	(d)	Primero shall ensure that the Shareholder Circular is complete and accurate in all material respects, complies in all material respects with all applicable Laws and shall contain sufficient detail to permit the Primero Shareholders to form a reasoned judgment concerning the matters to be placed before them at the Primero Shareholder Meeting. Without limiting the generality of the foregoing, Primero shall ensure that the Shareholder Circular does not contain any misrepresentation (other than with respect to any information relating to and provided by First Majestic or its subsidiaries). First Majestic acknowledges that it shall be solely responsible for the completeness, accuracy or sufficiency of any information relating to First Majestic or its subsidiaries included in the Shareholder Circular and that Primero shall not be responsible for ensuring the completeness, accuracy or sufficiency of such information.	

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 	(e)	Without limiting the generality of the foregoing, Primero shall disclose in the Shareholder Circular:	

 	(i)	that the Primero Board has received the Primero Fairness Opinion and that, subject to the scope of review, assumptions and limitations set out in such opinion, the Consideration is fair from a financial point of view to the Primero Shareholders (other than First Majestic and its affiliates);	
 	 	 	
 	(ii)	the complete text of the Primero Fairness Opinion; and	
 	 	 	
 	(iii)	that the Primero Board has determined, after receiving financial and legal advice, that the Arrangement is fair to the Primero Shareholders (other than First Majestic and its affiliates) and in the best interests of Primero.	

 	(f)	Subject to the terms of this Agreement (i) Primero shall solicit proxies in favour of the Arrangement Resolution and against any resolution submitted by a Primero Shareholder, including, if so requested by First Majestic and at First Majestics expense, using the services of dealers and proxy solicitation services selected by First Majestic and permitting First Majestic to otherwise assist Primero in such solicitation, and take all other actions that are reasonably necessary or desirable to seek the approval of the Arrangement Resolution by the Primero Shareholders; (ii) the Primero Board shall recommend to the Primero Shareholders that they vote in favour of the Arrangement Resolution and shall include in the Shareholder Circular a statement to such effect; and (iii) Primero shall include in the Shareholder Circular a statement that each director and executive officer of Primero intends to vote all of such Persons Primero Shares in favour of the Arrangement Resolution, subject to the other terms of this Agreement.	
 	 	 	
 	(g)	First Majestic shall provide to Primero all information regarding First Majestic and its affiliates and the First Majestic Shares as may be required by Law to be included in the Shareholder Circular. First Majestic shall also obtain any necessary consents from any of its auditors and any other advisors to the use of any financial, technical or other expert information required to be included in the Shareholder Circular and to the identification in the Shareholder Circular of each such advisor. First Majestic shall ensure that such information is complete and accurate in all material respects, complies in all material respects with applicable Laws and, without limiting the generality of the foregoing, does not include any misrepresentation concerning First Majestic, its affiliates or the First Majestic Shares.	
 	 	 	
 	(h)	First Majestic hereby indemnifies and saves harmless Primero, its subsidiaries and their respective Representatives from and against any and all liabilities, claims,demands, losses, costs, damages and expenses to which Primero, any subsidiary or any of their respective Representatives may be subject or may suffer as a result of, or arising from, any misrepresentation or alleged misrepresentation contained in any information included in the Shareholder Circular that was provided by First Majestic, including as a result of any order made, or any inquiry, investigation or proceeding instituted by any Securities Authority or other Governmental Entity based on any such misrepresentation or alleged misrepresentation.	

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 	(i)	First Majestic and its legal counsel shall be given a reasonable opportunity to review and comment on the Shareholder Circular prior to the Shareholder Circular being printed or filed with any Governmental Entity, and reasonable consideration shall be given to any comments made by First Majestic and its legal counsel; provided, however, that all information relating solely to First Majestic and its intention to rely on the Section 3(a)(10) Exemption, its affiliates and the First Majestic Shares included in the Shareholder Circular shall be in form and content satisfactory to First Majestic, acting reasonably.	
 	 		
 	(j)	Primero and First Majestic shall each promptly notify the other if, at any time before the Effective Date, either becomes aware that the Shareholder Circular contains a misrepresentation, or that an amendment or supplement to the Shareholder Circular is otherwise required, and Primero and First Majestic shall co-operate in the preparation of any amendment or supplement to the Shareholder Circular as required or appropriate. Primero shall promptly mail or otherwise publicly disseminate any amendment or supplement to the Shareholder Circular to the Primero Shareholders and, if required by the Court or applicable Laws, file the same with the Securities Authorities, the SEC and any other Governmental Entity as required and, in such circumstances, the date of the Primero Shareholder Meeting shall be postponed if and to the extent required by applicable Laws (and the Meeting Deadline shall, if necessary, be postponed to such date).	

2.5	Final Order.	
If (a) the Interim Order is obtained, and (b) the Arrangement Resolution is passed at the Primero Shareholder Meeting as provided for in the Interim Order and as required by applicable Laws, then, subject to the terms of this Agreement, Primero shall diligently pursue and take all steps necessary or desirable to have the hearing before the Court of the application for the Final Order pursuant to the Business Corporations Act held as soon as reasonably practicable and, in any event, within three Business Days following the approval of the Arrangement Resolution at the Primero Shareholder Meeting.

2.6	Court Proceedings.	
Subject to the terms of this Agreement, First Majestic will cooperate with and assist Primero in seeking the Interim Order and the Final Order, including by providing Primero on a timely basis any information required to be supplied by First Majestic in connection therewith. Primero will provide legal counsel to First Majestic with reasonable opportunity to review and comment upon drafts of all material to be filed with the Court in connection with the Arrangement, and will give reasonable consideration to all such comments. Subject to applicable Laws, Primero will not file any material with the Court in connection with the Arrangement or serve any such material, and will not agree to modify or amend materials so filed or served, except as contemplated by this Section 2.6 or with First Majestics prior written consent, such consent not to be unreasonably withheld, conditioned or delayed; provided, however, that nothing herein shall require First Majestic to agree or consent to any increase in consideration or other modification or amendment to such filed or served materials that expands or increases First Majestics obligations set forth in any such filed or served materials or under this Agreement or the Arrangement. Primero shall also provide to First Majestics legal counsel on a timely basis copies of any notice of appearance or other Court documents served on Primero in respect of the application for the Interim Order or the Final Order or any appeal therefrom and of any notice, whether written or oral, received by Primero indicating any intention to oppose the granting of the Interim Order or the Final Order or to appeal the Interim Order or the Final Order. Primero will ensure that all materials filed with the Court in connection with the Arrangement are consistent in all material respects with the terms of this Agreement and the Plan of Arrangement. In addition, Primero will not object to legal counsel to First Majestic making such submissions on the hearing of the motion for the Interim Order and the application for the Final Order as such counsel considers appropriate; provided, however, that Primero is advised of the nature of any submissions prior to the hearing and such submissions are consistent with this Agreement and the Plan of Arrangement. Primero will also oppose any proposal from any party that the Final Order contain any provision inconsistent with this Agreement, and, if at any time after the issuance of the Final Order and prior to the Effective Date, Primero is required by the terms of the Final Order or by Law to return to Court with respect to the Final Order, it shall do so after notice to, and in consultation and cooperation with, First Majestic.

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2.7	Lists of Securityholders.	
At the reasonable request of First Majestic from time to time, Primero shall provide First Majestic with lists (in both written and electronic form) of (a) the names and addresses of all registered Primero Shareholders, together with their respective holdings of Primero Shares, (b) the names and addresses and holdings of all Persons having rights issued by Primero to acquire Primero Shares (including holders of Primero Convertible Securities), (c) the names of all participants and book based nominee registrants such as CDS & Co., CEDE & Co. and DTC, together with their respective holdings of Primero Shares and Primero Debentures, and (d) the names of all non-objecting beneficial owners of Primero Shares and Primero Debentures, together with their addresses and respective holdings of Primero Shares and Primero Debentures. Primero shall from time to time require that its registrar and transfer agent furnish First Majestic with such additional information, including updated or additional lists of Primero Shareholders and holders of Primero Convertible Securities and lists of holdings and other assistance as First Majestic may reasonably request, solely for the purpose of communicating with respect to the Arrangement with the Primero Shareholders and holders of Primero Convertible Securities.

2.8	Announcement and Shareholder Communications.	
First Majestic and Primero shall each publicly announce the transactions contemplated hereby promptly following the execution of this Agreement, the text and timing of each Partys announcement to be approved by the other Party in advance, acting reasonably. First Majestic and Primero agree to co-operate in the preparation of presentations, if any, to the Primero Shareholders and Primero Debentureholders regarding the transactions contemplated by this Agreement and no Party shall issue any press release or otherwise make public announcements with respect to this Agreement, the Arrangement or any Acquisition Proposal without the consent of the other Party (which consent shall not be unreasonably withheld, conditioned or delayed), provided, however, that the foregoing shall be subject to each Partys overriding obligation to make any disclosure required under applicable Laws, and the Party making such disclosure shall use all commercially reasonable efforts to give prior oral or written notice to the other Party and a reasonable opportunity to review or comment on the disclosure, and if prior notice is not possible, to give such notice immediately following the making of such disclosure.

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2.9	Payment of Consideration.	
Following receipt by Primero of the Final Order, First Majestic will deposit in escrow with the Depositary sufficient First Majestic Shares to satisfy the aggregate Consideration payable by First Majestic pursuant to the Plan of Arrangement (other than payment to any Primero Shareholder exercising Dissent Rights and who has not withdrawn its notice of objection).

2.10	United States Securities Law Matters.	
The Parties agree that the Arrangement will be carried out with the intention that, assuming the Final Order is granted by the Court, all Consideration Shares and Replacement Options issued under the Arrangement to the holders of Primero Shares and Primero Options, as the case may be, will be issued by First Majestic in reliance on the Section 3(a)(10) Exemption.

2.11	Effective Date Matters.	
The Effective Date shall be the date the Final Order is deposited at the registered office of Primero, which shall be (a) the date that is the earlier of: (i) the date that is three Business Days after the satisfaction or waiver (subject to applicable Laws) of the conditions set forth in Article 5 (other than the delivery of items to be delivered on the Effective Date and the satisfaction of those conditions that, by their terms, cannot be satisfied until immediately prior to the Effective Date); and (ii) the date that is the day prior to the Outside Date; provided that the conditions set forth in Article 5 have been satisfied or waived as of such date; or (b) such date as mutually agreed in writing by the Parties. Subject to the satisfaction or waiver (subject to applicable Laws) of the conditions (excluding conditions that, by their terms, cannot be satisfied until the Effective Time, but subject to the satisfaction or, where permitted, waiver of those conditions as of the Effective Time) set forth in Article 5, the Arrangement will, from and after the Effective Time, have all of the effects provided under applicable Laws.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Except as disclosed in the Primero Disclosure Letter or the Primero Informa

3.1	Representations and Warranties of Primero.	
tion Record as of the date hereof, Primero hereby represents and warrants to, and in favour of, First Majestic as follows and acknowledges that First Majestic is relying on such representations and warranties in connection with the transactions herein contemplated:

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3.1.1	Incorporation and Organization. Primero and each of the Primero Subsidiaries is a corporation duly incorporated under the laws of its respective jurisdiction of incorporation, is validly subsisting, has full corporate and legal power and authority to own, lease and operate the properties currently owned, leased and operated by it and to conduct its business as currently conducted and is in good standing with respect to the filing of annual returns or the equivalent. Primero and each of the Primero Subsidiaries is duly qualified or licensed to do business and is in good standing as a foreign corporation or organization authorized to do business in all jurisdictions in which the character of the properties owned, leased or operated or the nature of the business conducted by it would make such qualification or licensing necessary. True and complete copies of the constating documents of Primero have been provided to First Majestic and no amendments to such constating documents have been authorized which have not been provided to First Majestic.	
 	 	
3.1.2	Capitalization.	

 	(a)	The authorized capital of Primero consists of an unlimited number of Primero Shares and an unlimited number of preferred shares, of which, as of the date hereof, 193,045,822 Primero Shares are issued and outstanding and no preferred shares are issued and outstanding. As of the date hereof, there were outstanding: (i) 6,811,316 Primero Options; (ii) 11,011,250 Primero Warrants; (iii) 5,257,248 Primero PSUs; and (iv) 315,790 Primero DSUs. All outstanding Primero Shares have been duly authorized and are validly issued, are fully paid and non-assessable and were issued in compliance with the constating documents of Primero and all applicable Laws. There are, and have been, no preemptive rights relating to the allotment or issuance of any of the issued and outstanding Primero Shares. As of the date hereof, no Person other than First Majestic under this Agreement, or holders of any Primero Convertible Securities, have any other agreement, option, commitment, arrangement, or any other right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement, option or commitment (including any such right or privilege under convertible securities, warrants or convertible obligations of any nature) for the purchase, subscription, allotment or issuance of, or conversion into, any of the unissued shares or any other securities of Primero.	
 	 	 	
 	(b)	Primero has not, since December 31, 2014, declared or paid any dividends or made any other distributions (in either case, in stock or property) on any of its shares.	

3.1.3	Authority and No Violation.	

 	(a)	Primero has all requisite corporate power and authority to enter into this Agreement and the documents required to be executed by it in connection with the transactions contemplated herein, to perform its obligations hereunder and, subject to obtaining the Primero Shareholder Approval, the Interim Order and the Final Order as contemplated by Article 2, to consummate the Arrangement and the other transactions contemplated by this Agreement. The execution and delivery of this Agreement and such other documents by Primero and the consummation by Primero of the transactions contemplated by this Agreement (including the Arrangement) and such other documents have been duly authorized by the Primero Board and no other corporate proceedings on the part of Primero or any Primero Subsidiary are necessary to authorize this Agreement or the transactions contemplated hereby, other than with respect to the completion of the Arrangement, the approval of the Arrangement Resolution by the Primero Shareholders and such other corporate proceedings of Primero as may be required by the Interim Order.	

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 	(b)	This Agreement has been duly executed and delivered by Primero and constitutes a legal, valid and binding obligation, enforceable against it in accordance with its terms, subject to bankruptcy, insolvency and other similar Laws affecting creditors rights generally, and the discretion that a court may exercise in the granting of equitable remedies such as specific performance and injunction. All documents required to be executed by Primero in connection with the transactions contemplated herein will be duly executed and delivered by Primero and, when so executed and delivered, will constitute a legal, valid and binding obligation, enforceable against it in accordance with its terms, subject to bankruptcy, insolvency and other similar Laws affecting creditors rights generally, and the discretion that a court may exercise in the granting of equitable remedies such as specific performance and injunction.	
 	 	 	
 	(c)	The approval of this Agreement and the other documents required to be executed by Primero in connection with the transactions contemplated herein, the execution and delivery by Primero of this Agreement and such other documents, and the performance by Primero of its obligations hereunder and the completion of the Arrangement and the transactions contemplated thereby, will not:	

 	(i)	conflict with, result in a violation or breach of, constitute a default or require any consent (other than such as has already been obtained), to be obtained under, or give rise to any termination rights or payment obligation under, any provision of:	

 	(A)	its notice of articles or articles or any other agreement or understanding with any party holding an ownership interest in Primero;	
 	 	 	
 	(B)	any resolutions of the Primero Board (or any committee thereof) or shareholders;	

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 	(C)	any applicable Laws, subject to obtaining the Antitrust Clearance and any required approval of the TSX to the transactions contemplated herein; or	
 	 	 	
 	(D)	subject to obtaining any consent, approval, permit or acknowledgement which may be required thereunder in connection with the completion of the transactions herein contemplated, details of which are set forth in Schedule 3.1.3 of the Primero Disclosure Letter, any Primero Material Agreement;	

 	(ii)	except as would not, individually or in the aggregate, have a Material Adverse Effect on Primero, result in the imposition of any Encumbrance upon any of its assets or the assets of any of the Primero Subsidiaries, or restrict, hinder, impair or limit its ability to carry on its business as and where it is now being carried on or as and where it may be carried on in the future.	

 	(d)	No consent, approval, order, registration, notice, declaration or filing with, any Governmental Entity is required to be obtained by Primero or any Primero Subsidiary in connection with the execution and delivery of this Agreement or any of the other documents contemplated hereby, or the consummation by Primero of the transactions contemplated hereby or thereby, other than:	

 	(i)	any approvals required by the Interim Order;	
 	 	 	
 	(ii)	the Final Order;	
 	 	 	
 	(iii)	the Antitrust Clearance;	
 	 	 	
 	(iv)	any required approval of the TSX to the transactions contemplated herein; and	
 	 	 	
 	(v)	any other consents, approvals, orders, authorizations, declarations or filings of or with a Governmental Entity which are purely of an administrative nature and which could be completed or obtained without Material Adverse Effect on Primero or the Business immediately after the Effective Date or which, if not obtained, would not in the aggregate have a Material Adverse Effect on Primero.	

3.1.4	Ownership of Primero Subsidiaries. Other than (a) one share in the capital of each of PEM, Primero Compaia Minera, S.A. de C.V., and Primero Servicios Mineros, S.A. de C.V., which is held by Martin Aguilar Villaseor as nominee in trust for Primero, and (b) 219,375 Class I-F Series “A shares and 1,974,375 Class I-V Series “A shares in the capital of Primero Transportes Aereos, S.A. de C.V. which are held by Cuauhtemoc Federico Simental Loera as nominee in trust for Primero, either Primero or one or more of the Primero Subsidiaries is the sole beneficial and registered owner of all of the issued and outstanding shares in the capital of each of the Primero Subsidiaries with good and marketable title thereto,free and clear of all Encumbrances other than Permitted Encumbrances. No Person has any other agreement, option, commitment, arrangement, or any other right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement, option or commitment (including any such right or privilege under convertible securities, warrants or convertible obligations of any nature) for the purchase, subscription, allotment or issuance of, or conversion into, any of the issued or unissued shares or any other securities of any Primero Subsidiary. Other than the Primero Subsidiaries, Primero does not have any subsidiaries.	

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3.1.5	No Other Shares. Other than the shares which Primero owns in the Primero Subsidiaries or which any Primero Subsidiary owns in another Primero Subsidiary and as disclosed in the Financial Statements, neither Primero nor any of the Primero Subsidiaries owns, beneficially, any shares in the capital of any corporation, and neither Primero nor any of the Primero Subsidiaries holds any securities or obligations of any kind convertible into or exchangeable for shares in the capital of any corporation. Neither Primero nor any of the Primero Subsidiaries is a party to any agreement to acquire any shares in the capital of any corporation.	
 	 	
3.1.6	Reporting Issuer; Public Documents.	

 	(a)	Primero is a reporting issuer in all of the provinces of Canada and is not on the list of reporting issuers in default under applicable securities Laws.	
 	 	 	
 	(b)	Primero (i) is a “foreign private issuer as defined in Rule 405 under the U.S. Securities Act, and (ii) is not registered or required to register as an investment company under the U.S. Investment Company Act.	
 	 	 	
 	(c)	The Primero Shares are registered pursuant to Section 12(g) of the U.S. Exchange Act, Primero is subject to the reporting requirements of Section 13(a) or 15(d) of the U.S. Exchange Act and Primero is not in default in any material respect with its obligations under the U.S. Exchange Act. Since January 1, 2016, Primero has furnished or filed under the U.S. Exchange Act all documents and other information required to be so furnished or filed by Primero.	
 	 	 	
 	(d)	The Primero Shares are listed and posted for trading on the TSX and are not listed on any other market. Primero is in compliance in all material respects with the rules and policies of the TSX.	
 	 	 	
 	(e)	Primero is not subject to any cease trade or other order of the TSX or any Securities Authority, and, to the knowledge of Primero, no inquiry, review or investigation (formal or informal) or other proceedings involving Primero that may operate to prevent or restrict trading of any securities of Primero are currently in progress or pending before the TSX or any Securities Authority.	
 	 	 	
 	(f)	Primero has filed all documents required to be filed by it in accordance with applicable securities Laws and the rules and policies of the TSX. The Primero Information Record includes a true and complete copy of all forms, reports, statements, certifications, and other documents required to be filed by Primero. Such forms, reports, statements, certifications, and other documents, at the time filed or, if amended, as of the date of such amendment: (i) did not contain any misrepresentation; and (ii) complied in all material respects with the requirements of applicable Securities Laws except where such non-compliance has not had or would not reasonably be expected to have a Material Adverse Effect on Primero. Primero has not filed any confidential material change or other report or other document with any Securities Authorities, the TSX or other self-regulatory authority which at the date hereof remains confidential. None of the Primero Subsidiaries are required to file any reports or other documents with any of the Securities Authorities or the TSX.	

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 	(g)	There is and has been no failure on the part of Primero or any of its directors or officers, in their capacities as such, to comply with any provision of the United States Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations promulgated in connection therewith, including, without limitation, Section 402 thereof related to loans and Sections 302 and 906 thereof related to certifications.	

3.1.7	Financial Matters.	

 	(a)	The Financial Statements of Primero have been, and all financial statements of Primero which are publicly disseminated by Primero in respect of any subsequent periods prior to the Effective Date will be, prepared in accordance with IFRS, applied on a basis consistent with prior periods and all applicable Laws and present fairly or will present fairly, in all material respects:	

 	(i)	all the assets, liabilities (whether accrued, absolute, contingent or otherwise) and the financial condition of Primero and the Primero Subsidiaries, on a consolidated basis as at the respective dates thereof; and	
 	 	 	
 	(ii)	the revenues, earnings, results of operations and cash flows of Primero and the Primero Subsidiaries, on a consolidated basis for the respective periods covered thereby.	

 	(b)	To the knowledge of Primero as of the date of this Agreement:	

 	(i)	there are no material weaknesses in the design and implementation or maintenance of internal control over financial reporting of Primero that are reasonably likely to adversely affect the ability of Primero to record, process, summarize and report financial information;	
 	 	 	
 	(ii)	there is no fraud, whether or not material, that involves management or other employees who have a significant role in the internal control over financial reporting of Primero; and	
 	 	 	
 	(iii)	Primeros system of internal control over financial reporting is sufficient to (i) maintain records in reasonable detail in order to accurately and fairly reflect the transactions and dispositions of the assets of Primero and the Primero Subsidiaries; (ii) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of financial statements in accordance with IFRS, and that receipts and expenditures of Primero and the Primero Subsidiaries are made only with the authorization of management and directors of Primero and the Primero Subsidiaries, as applicable; and (iii) provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of the assets of Primero or the Primero Subsidiaries that could have a material effect of Primeros financial statements.	

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 	(c)	Since December 31, 2016, neither Primero nor any of the Primero Subsidiaries nor, to Primeros knowledge, any director, officer, employee, auditor, accountant or representative of Primero or any of the Primero Subsidiaries has received or otherwise had or obtained knowledge of any complaint, allegation, assertion, or claim, whether written or oral, regarding the accounting practices, procedures, methodologies or methods of Primero or any of the Primero Subsidiaries or their respective internal accounting controls, including any complaint, allegation, assertion, or claim that Primero or any of the Primero Subsidiaries has engaged in questionable accounting practices.	
 	 	 	
 	(d)	Primero has no knowledge of any material adjustments, potential liabilities or obligations, which individually or in the aggregate have not been reflected in its Annual Financial Statements, other than liabilities, indebtedness and obligations incurred by Primero and/or the Primero Subsidiaries in the ordinary course of business, or as contemplated in this Agreement.	
 	 	 	
 	(e)	Primero maintains a system of disclosure controls and procedures (as such term is defined in NI 52-109 to provide reasonable assurance that (i) material information relating to Primero is made known to Primeros management, including its chief financial officer and chief executive officer, particularly during the periods in which Primeros interim filings and annual filings (as such terms are defined in NI 52-109) are being prepared; and (ii) information required to be disclosed by Primero in its annual filings, interim filings or other reports filed or submitted by it under applicable securities Laws are recorded, processed, summarized and reported within the time periods specified in applicable securities Laws.	
 	 	 	
 	(f)	Primero maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the U.S. Exchange Act) to ensure that material information required to be disclosed by Primero in the reports that it files or submits under the U.S. Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms and is accumulated and communicated to Primeros management as appropriate to allow timely decisions regarding required disclosure, and (B) has disclosed, based on its most recent evaluation of such disclosure controls and procedures prior to the date hereof, to Primeros auditors and the audit committee of the Primero Board (1) any significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting that are reasonably likely to adversely affect in any material respect ability to record, process, summarize and report financial information and (2) any fraud, whether or not material, that involves management or other employees who have a significant role in Primeros internal controls over financial reporting.	

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 	(g)	Primero maintains a system of internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the U.S. Exchange Act) sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. Based upon the most recent evaluation by Primeros management, such internal control over financial reporting is effective, and since the date of such evaluation nothing has come to the attention of Primero to lead it to believe that such internal control over financial reporting is no longer effective. Primero maintains internal controls over financial reporting (as such term is defined in NI 52-109). To the knowledge of Primero, such internal controls over financial reporting are effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS.	
 	 		
 	(h)	Since December 31, 2016, there has been no change in Primeros internal control over financial reporting that has materially affected or is reasonably likely to materially affect, Primeros internal control over financial reporting.	
 	 		
 	(i)	Schedule 3.1.7 of the Primero Disclosure Letter sets forth a complete and accurate list of all intercompany indebtedness between and among Primero and the Primero Subsidiaries. Copies of all agreements evidencing such indebtedness have been provided to First Majestic or its Representatives. There are no outstanding loans made by Primero to any director or officer of Primero.	

3.1.8	Business Carried on in Ordinary Course. The Business has been carried on in the ordinary course since December 31, 2016 and since such date:	

 	(a)	there has not been any event, occurrence, development or state of circumstances or facts which has had or is reasonably likely to give rise to a Material Adverse Effect with respect to Primero that has not been disclosed in the Financial Statements;	
 	 	 	
 	(b)	there has not been any material write down by Primero of any assets of Primero except as disclosed in the Financial Statements;	
 	 	 	
 	(c)	Primero has not suffered any material casualty and there has been no damage, destruction or loss of any material tangible assets, whether covered by insurance or not, that could reasonably be expected to have a Material Adverse Effect on Primero;	
 	 	 	
 	(d)	there has not been any redemption, repurchase or other acquisition of Primero Shares by Primero, or any declaration, setting aside or payment of any dividend or other distribution (whether in cash, shares or property) with respect to the Primero Shares;	

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 	(e)	there has not been a material change in the level of accounts receivable or payable, inventories or employees, other than those changes in the ordinary course of business consistent with past practice ;	
 	 	 	
 	(f)	neither Primero nor any Primero Subsidiary has acquired or sold, pledged, leased, encumbered or otherwise disposed of any material property or assets, except (i) pursuant to the Black Fox Sale and the Cerro del Gallo Sale, or (ii) incurred or committed to incur any capital expenditure in excess of $250,000, as of the date hereof, or (iii) substantially in compliance with the Primero Budget;	
 	 	 	
 	(g)	except pursuant to the Black Fox Sale and the Cerro del Gallo Sale, there has not been any acquisition or sale, lease, license, expiry or other disposition by Primero or any of the Primero Subsidiaries of any material interest in any Mineral Rights;	
 	 	 	
 	(h)	there has not been any satisfaction or settlement of any material claim, liability or obligation of Primero;	
 	 	 	
 	(i)	neither Primero nor any Primero Subsidiary has made any change in accounting policies, principles, methods, practices or procedures (including for bad debts, contingent liabilities or otherwise);	
 	 	 	
 	(j)	there has been no waiver by Primero or any Primero Subsidiary or agreement to waive, any right of substantial value and neither Primero nor any Primero Subsidiary has entered into any commitment or transaction not in the ordinary course of business where such right, commitment or transaction is or would be material in relation to Primero or the Business; and	
 	 	 	
 	(k)	neither Primero nor any Primero Subsidiary has agreed, announced, resolved or committed to do any of the foregoing.	

3.1.9	Partnerships or Joint Ventures. Neither Primero nor any Primero Subsidiary is a partner or participant in any partnership, joint venture, profit-sharing arrangement or other business combination of any kind and is not party to any agreement under which it agrees to carry on any part of its Business or any other activity in such manner or by which it agrees to share any revenue or profit with any other Person.	
 	 	
3.1.10	Marketing of Production.	

 	(a)	Except pursuant to sales under the External Stream Agreement, since (and including) December 31, 2016, all sales of silver and other mineral products by Primero or any of the Primero Subsidiaries have been made on (and only on) the following basis:	

 	(i)	all such sales were spot sales to arms length third party purchasers;	

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 	(ii)	all such sales require or required payment by purchasers in United States dollars no later than 30 days from the date of delivery;	
 	 	 	
 	(iii)	all such sales otherwise were on terms based on, and consistent with, good international industry practice; and	
 	 	 	
 	(iv)	Primero and the Primero Subsidiaries have received or are entitled to receive the full sale price from the third party purchasers of such mineral products without any payment to or deduction in favour of any Person, and no purchaser has defaulted in any payment due in respect of any such sales;	
and since (and including) December 31, 2016, other than the External Stream Agreement, none of Primero or any of the Primero Subsidiaries is or was a party to or bound by, or incurred an obligation or liability under or in respect of, any agreement or arrangement that is in substance an interest rate, currency or commodity swap or any other rate fixing agreement for a financial transaction or any call arrangement of any sort or any forward sale agreement for commodities or any other commodities hedging or speculation arrangement or off take or royalty agreement with respect to any commodities extracted from the Primero Mineral Rights.

 	(b)	None of Primero or any of the Primero Subsidiaries is obligated under any prepayment contract or other prepayment arrangement other than the External Stream Agreement to deliver mineral products at some future time without then receiving full payment therefor.	

3.1.11	Minute Books and Corporate Records. Other than minutes that are being prepared in the ordinary course or in connection with the transactions contemplated herein, the minute and record books of Primero and each of the Primero Subsidiaries contain complete and accurate minutes in all material respects of all meetings of, and copies of all resolutions passed by, or consented to in writing by, its directors (and any committees thereof) and shareholders since its incorporation, all such meetings were duly called and held and all such resolutions were duly passed or enacted. Neither Primero nor any Primero Subsidiary is a party to or bound by or subject to any shareholder agreement or unanimous shareholder agreement governing its affairs or the relationships, rights and duties of shareholders and is not subject to a shareholder rights plan or “poison pill or similar plan.	
 	 	
3.1.12	Accuracy of Books and Records. The financial books and records of Primero and each of the Primero Subsidiaries fairly and correctly set out and disclose in all material respects, in accordance with IFRS, if required, its financial position as at the date hereof and all material financial transactions have been accurately recorded in such books and records on a consistent basis and in conformity with IFRS, if required. All material records, systems, controls, data or information (including any digital, electronic, mechanical, photographic or other technological process or device whether computerized or not) required to operate the Business are in the full possession and control of and are owned exclusively by Primero or the Primero Subsidiaries.	

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3.1.13	Guarantees. Neither Primero nor any Primero Subsidiary is a party to or bound by or subject to any Guarantee of the indebtedness of any other Person.	
 	 	
3.1.14	Interested Persons .	

 	(a)	To the knowledge of Primero and any Primero Subsidiary, since December 31, 2016, no payment has been made or authorized by Primero or any Primero Subsidiary to or for the benefit of any Person who was at the applicable time an Interested Person, except Employee Benefits, management or other fees payable in the ordinary course of business and at the regular rates or as reimbursement of expenses incurred on behalf of Primero or any Primero Subsidiary.	
 	 	 	
 	(b)	To the knowledge of Primero and any Primero Subsidiary, neither Primero nor any Primero Subsidiary is a party to or bound by or subject to any agreement, contract or commitment with any Interested Person, except for contracts relating to employment or severance or contracts of service with independent contractors.	
 	 	 	
 	(c)	Neither Primero nor any Primero Subsidiary has any loan or indebtedness outstanding (except for obligations incurred in the ordinary course of business with respect to wages, salary, bonuses or other employment compensation, vacation pay, Employee Benefits, management or other fees and the reimbursement of expenses incurred on behalf of Primero or such Primero Subsidiary) to any Interested Person.	
 	 	 	
 	(d)	To the knowledge of Primero and any Primero Subsidiary, no Interested Person owns, directly or indirectly, in whole or in part, any property used in the operation of the Business as heretofore carried on.	
 	 	 	
 	(e)	To the knowledge of Primero, no Interested Person has any cause of action or other claim whatsoever against, or owes any amount to, Primero or any Primero Subsidiary, except for (i) any claims in the ordinary course of business such as claims for salary, accrued vacation pay and accrued Employee Benefits, and (ii) claims for retention payments owing in respect of the transactions contemplated herein, details of which are listed in Schedule 3.1.15 of the Primero Disclosure Letter.	

3.1.15	Real Property. Except for the property set forth in Schedule 3.1.15 of the Primero Disclosure Letter (the “Primero Real Property ) and except for the Leases, neither Primero nor any Primero Subsidiary owns, has any freehold interest in, or is a party to or bound by or subject to any agreement, contract, commitment, or option to purchase, any freehold interest in real or immovable property. Title to the Primero Real Property is good and marketable, free and clear of all Encumbrances (other than Permitted Encumbrances). To the knowledge of Primero, the operation and maintenance by Primero and the Primero Subsidiaries of the Primero Real Property is in material compliance with any restrictive covenants registered or recorded against title to the Primero Real Property and does not materially encroach on any property owned by others. To the extent payable by Primero or any Primero Subsidiary, all payments have been made in respect of (i) local, state and/or federal taxes with respect to the Primero Real Property; and (ii) the use of water and electricity with respect to the Primero Real Property, in each case, to the extent due and owing.	

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3.1.16	Mineral Rights .	

 	(a)	All of Primeros and the Primero Subsidiaries Mineral Rights (collectively, the “ Primero Mineral Rights ), are set out in Schedule 3.1.16 of the Primero Disclosure Letter. Other than the Primero Mineral Rights set out in the Primero Disclosure Letter, none of Primero and the Primero Subsidiaries, owns or has any interest in any Mineral Rights.	
 	 	 	
 	(b)	Primero and the Primero Subsidiaries are collectively the sole legal and beneficial owner of all right, title and interest to the Primero Mineral Rights, free and clear of any Encumbrances other than Permitted Encumbrances.	
 	 	 	
 	(c)	Primero and each of the Primero Subsidiaries has conducted and is conducting its respective Business and has operated and maintained the Primero Mineral Rights in accordance with good mining industry practices and in compliance with applicable Laws.	
 	 	 	
 	(d)	All of the Primero Mineral Rights are valid and subsisting and, to the knowledge of the Primero, have been properly located and recorded in material compliance with applicable Laws.	
 	 	 	
 	(e)	The Primero Mineral Rights are in good standing under applicable Laws and, to the knowledge of Primero, all work required to be performed and filed in respect thereof as of the date hereof has been performed and filed, all Taxes, royalties, rentals, fees, expenditures and other payments in respect thereof that are due and owing prior to the date hereof have been paid, including in respect of royalty obligations in favour of Governmental Authorities or incurred and all filings in respect thereof that were required to be made prior to the date hereof have been made.	
 	 	 	
 	(f)	Neither Primero nor any of the Primero Subsidiaries has elected or refused to participate in any exploration, development or other operations with respect to the Primero Real Property or the Primero Mineral Rights which has or may give rise to any penalties, forfeitures or reduction of its interest by virtue of any conversion or other alteration occurring under the title and operating documents which govern the Primero Mineral Rights.	
 	 	 	
 	(g)	Primero has not received written notice of and is not otherwise aware of any material adverse claim against or challenge to the title to or ownership of the Primero Real Property or the Primero Mineral Rights. To the knowledge of Primero, there are no defects, failures or impairments in the title of Primero or the Primero Subsidiaries to any of the Primero Real Property or the Primero Mineral Rights whether or not an action, suit, proceeding or inquiry is pending or threatened and whether or not discovered by any third party, which in aggregate could have a Material Adverse Effect in respect of Primero.	

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 	(h)	There are no back-in rights, earn-in rights, farm-in rights, streaming arrangements, purchase options, rights of first refusal or similar provisions or rights or any agency marketing fees, volume or production based payments or any other arrangements or payments (actual or contingent) which would affect or entitle any Person to receive any payment in connection with Primeros or any of the Primero Subsidiaries interest in the Primero Real Property or any of the Primero Mineral Rights or the production or sale of minerals therefrom.	
 	 	 	
 	(i)	There are no material restrictions on the ability of Primero or any of the Primero Subsidiaries to use, transfer or exploit the Primero Real Property or any of the Primero Mineral Rights, except pursuant to applicable Laws or as set out in any of the Permitted Encumbrances.	
 	 	 	
 	(j)	Primero and each of the Primero Subsidiaries has, in all material respects, duly and timely satisfied all of the material obligations required to be satisfied, performed and observed by it under, and there exists no material default or event of default or event, occurrence, condition or act which, with the giving of notice, the lapse of time or the happening of any other event or condition, would become a material default or event of default by Primero or any Primero Subsidiary under, any material agreement pertaining to the Primero Mineral Rights or the Primero Real Property.	
 	 	 	
 	(k)	Subject to the rights, covenants, conditions and stipulations in the title documents or any other material agreement pertaining to the Primero Mineral Rights, Primero and each of the Primero Subsidiaries may enter into and upon, hold and enjoy its Primero Mineral Rights for the remainder of their respective terms and all renewals or extensions thereof for its own use and benefit without any lawful interruption of or by any other Person.	
 	 	 	
 	(l)	Primero and the Primero Subsidiaries own, or are entitled to use, all surface rights (including fee simple estates, leases, easements, rights of way and permits or licenses from landowners, Ejidos or Governmental Entities permitting the use of land by Primero and the Primero Subsidiaries, or other interests) that are required to exploit the development potential of the Primero Mineral Rights based on current operations, and there are no federally protected ecological areas or any sacred, indigenous or religious bans or limitations affecting such rights which would materially and adversely impair Primero or the Primero Subsidiaries use of such rights in connection with the Business as currently conducted.	
 	 	 	
 	(m)	Neither Primero nor any of the Primero Subsidiaries has received any notice, whether written or oral, from any Governmental Entity of any revocation or intention to revoke any interest of Primero or a Primero Subsidiary in any of the Primero Mineral Rights.	

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 	(n)	All mines located in or on the lands of Primero or any of the Primero Subsidiaries, or lands pooled or unitized therewith, which have been abandoned by Primero or any of the Primero Subsidiaries, have been abandoned in accordance with good mining practices and in material compliance with all applicable Laws, and all future abandonment, remediation and reclamation obligations known to Primero as of the date hereof have been accurately set forth in the Primero Information Record without omission of information necessary to make the disclosure not misleading.	
 	 	 	
 	(o)	Primero has provided First Majestic with access to full and complete copies of all material exploration information and data within its possession or control including, without limitation, all geological, geophysical and geochemical information and data (including all drill, sample and assay results and all maps) and all technical reports, feasibility studies and other similar reports and studies concerning the Primero Real Property or the Primero Mineral Rights, and Primero and the Primero Subsidiaries have the sole right, title and ownership of all such information, data, reports and studies.	

3.1.17	Technical Reports; Mineral Reserves and Resources.	

 	(a)	The San Dimas Mine (as described in the Primero Information Record) is the only material property of Primero for the purposes of NI 43-101.	
 	 	 	
 	(b)	The technical report prepared for Primero entitled “San Dimas Property, San Dimas District, Durango and Sinaloa States Mexico Technical Report dated April 18, 2014 (the “ Primero Technical Report) was prepared in all material respects in accordance with sound mining, engineering, geoscience and other applicable industry standards and practices and applicable Laws, including the requirements of NI 43-101 at the time of filing thereof and reasonably presented the quantity of mineral reserves and resources attributable to the properties evaluated therein as at the date stated therein based upon information available at the time the reports were prepared. Primero does not have knowledge of a material adverse change in any production, cost, price, reserves or resources from the amounts set forth in the Primero Information Record.	
 	 	 	
 	(c)	Primero made available to the author of the Primero Technical Report, prior to the issuance thereof, for the purpose of preparing such report, all information requested by the author, and none of such information contained any misrepresentation at the time such information was so provided.	
 	 	 	
 	(d)	All of the material assumptions underlying the reserve and resource estimates in the Primero Technical Report at the time of filing thereof were reasonable and appropriate.	

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 	(e)	Primero is in compliance in all material respects with the provisions of NI 43-101, has filed all technical reports required thereby, and there has been no material change of which Primero is aware that would change the amount of any mineral reserves and resources set out in the Primero Disclosure Record, other than depletion due to mining in the ordinary course. All information regarding the Primero Mineral Rights, including all drill results, technical reports and studies, that is required to be disclosed in accordance with applicable Laws, has been accurately and completely disclosed in the Primero Information Record on or before the date hereof.	
 	 	 	
 	(f)	Although Primero does not have knowledge of a material adverse change in any production, cost, price, reserves, resources or other relevant information, Primero has provided a summary of its 2017 ordinary course activities associated with mineral reserves and mineral resources in the Primero Datasite Information.	

3.1.18	Employment and Employee Benefit Matters.	

 	(a)	As at December 31, 2017, Primero and the Primero Subsidiaries had an aggregate of 1305 full time and part time employees, and an aggregate of 410 independent contractors or other non-employees who supply their services under personal services contracts (whether written or oral). The position of each executive officer of Primero and each other Person who receives, directly or indirectly, in excess of $150,000 in annual compensation from Primero or any Primero Subsidiary is set forth and described in Schedule 3.1.18 of the Primero Disclosure Letter.	
 	 	 	
 	(b)	Neither Primero nor any Primero Subsidiary has any obligation to amend any Employee Benefit and no amendments will be made or promised prior to the Effective Date, except as required by applicable Laws.	
 	 	 	
 	(c)	All obligations of Primero and the Primero Subsidiaries as of December 31, 2016 with respect to Employee Benefits are reflected in and have been fully accrued in the Financial Statements of Primero.	
 	 	 	
 	(d)	Neither Primero nor any Primero Subsidiary is a party to or bound by or subject to any collective bargaining agreement or other similar arrangement with any labour union or employee association nor has it made any commitment to or conducted any negotiation or discussion with any labour union or employee association with respect to any future agreement or arrangement and, to the knowledge of Primero, there is no current application for certification or other attempt to organize or establish any labour union or employee association with respect to employees of Primero or any Primero Subsidiary.	
 	 	 	
 	(e)	Primero and each of the Primero Subsidiaries has, in all material respects, complied with, and operated its Business in accordance with, all applicable Laws relating to employment and labour matters, including employment and labour standards, occupational health and safety, employment equity, pay equity,workers compensation, human rights and labour relations matters except for such non-compliance which individually or in the aggregate would not be reasonably expected to have a Material Adverse Effect with respect to Primero.	

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 	(f)	Neither Primero nor any of the Primero Subsidiaries is subject to any claim for wrongful dismissal, constructive dismissal or any other tort claim, actual or, to the knowledge of Primero, threatened, or any litigation actual, or to the knowledge of Primero, threatened, relating to employment or termination of employment of employees or independent contractors, except for such claims or litigation which individually or in the aggregate would not be reasonably expected to have a Material Adverse Effect with respect to Primero. To the knowledge of Primero, no labour strike, lock-out, slowdown or work stoppage is pending or threatened against or directly affecting Primero or any of the Primero Subsidiaries.	
 	 	 	
 	(g)	No Person will, as a result of the transactions contemplated hereby, become entitled to (A) any retirement, severance, bonus or other such payment, (B) the acceleration of the vesting or time to exercise of any outstanding Primero Convertible Securities or other Employee Benefits, (C) the forgiveness or postponement of payment of any indebtedness owing to Primero or any Primero Subsidiary, or (D) receive any additional payments or compensation under or in respect of any Employee Benefits.	
 	 	 	
 	(h)	All accruals for unpaid vacation pay, premiums for employment insurance, health premiums, Canada Pension Plan, accrued wages, salaries and commissions and other Employee Benefits have been reflected in the books and records of Primero and the Primero Subsidiaries.	
 	 	 	
 	(i)	All material obligations and payments of Primero and each of the Primero Subsidiaries before a Governmental Entity including the Instituto Mexicano del Seguro Social (IMSS), Instituto del Fondo Nacional de la Vivienda para los Trabajadores (INFONAVIT) and Comisin Nacional del Sistema de Ahorro para el Retiro (CONSAR) are paid and up to date.	

3.1.19	Pension and Retirement Plans. Neither Primero nor any Primero Subsidiary sponsors or participates in any Employee Benefit plan that is a pension or retirement plan, whether a money purchase plan or a defined benefit plan or otherwise.	
 	 	
3.1.20	Debt Instruments. Except for the Primero Debentures, neither Primero nor any Primero Subsidiary is bound by or subject to any Debt Instrument or any agreement, contract or commitment to create, assume or issue any Debt Instrument.	
 	 	
3.1.21	Leases and Leased Property .	

 	(a)	Neither Primero nor any Primero Subsidiary is a party to or bound by or subject to nor has Primero or any Primero Subsidiary agreed or become bound to enter into, any real or personal property lease or sublease or other right of occupancy relating to real property, whether as lessor or lessee, except for the Leases described in Schedule 3.1.21 of the Primero Disclosure Letter, true and complete copies of which have been provided to First Majestic prior to the date hereof. Except as disclosed in the Leases, Primero or the Primero Subsidiaries, as applicable, occupies and has the exclusive right to occupy and use all immovable Leased Property and has the exclusive right to use all movable Leased Property.	

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 	(b)	Each of the Leases is valid and subsisting and in good standing, all rental and other payments required to be paid by Primero or any Primero Subsidiary as lessee or sublessee and due and payable pursuant to the Leases have been duly paid to date and neither Primero nor any Primero Subsidiary is otherwise in default in any material resect of its obligations under any of the Leases. No event exists which, but for the passing of time or the giving of notice, or both, would constitute a default by Primero or any Primero Subsidiary or, to the knowledge of Primero, any other party to any Lease and neither Primero nor any Primero Subsidiary has received written notice from any other party to the Lease claiming any default by Primero or a Primero Subsidiary that remains outstanding or taking any action purportedly based upon any such default.	

3.1.22	Insurance.	

 	(a)	Primero has in place reasonable and prudent insurance policies appropriate for its size, nature and stage of development. Schedule 3.1.22 of the Primero Disclosure Letter sets out a complete and accurate list of all insurance policies ( collectively, “Insurance Policies ) held by Primero and the Primero Subsidiaries.	
 	 		
 	(b)	Each Insurance Policy is in full force and effect in accordance with its terms, no notice of cancellation or termination has been received, and there is no existing default or event which, with the giving of notice or lapse of time or both, would constitute a default thereunder. Primero has not received notice of any fact, condition or circumstance which, to its knowledge, might reasonably form the basis of any claim against Primero or any Primero Subsidiary which is not fully covered by insurance (subject to standard deductibles) maintained by it and which would reasonably be expected to have a Material Adverse Effect.	
 	 		
 	(c)	There is currently no outstanding claim under any Insurance Policy in excess of $25,000 and, to the knowledge of Primero, no fact, condition or circumstance currently exists which might reasonably form the basis of any claim in excess of $25,000.	
 	 		
 	(d)	All premiums payable prior to the date hereof under the Insurance Policies have been paid and neither Primero nor any of the Primero Subsidiaries has failed to make a claim thereunder on a timely basis. There has been no denial of a material claim and no material claim has been disputed by Primeros insurers in the past or present.	

3.1.23	Material Agreements.	

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 	(a)	Schedule 3.1.23 of the Primero Disclosure Letter sets out a complete and accurate list of all Primero Material Agreements. True and complete copies of the Primero Material Agreements have been provided to First Majestic via the Primero Datasite Information.	
 	 	 	
 	(b)	Each Primero Material Agreement is legal, valid, binding and in full force and effect and is enforceable by Primero or a Primero Subsidiary, as applicable, in accordance with its terms (subject to bankruptcy, insolvency and other Laws affecting creditors rights generally, and to general principles of equity) and is the product of fair and arms length negotiations between each of the parties to such Primero Material Agreements.	
 	 	 	
 	(c)	To the knowledge of Primero, Primero and each Primero Subsidiary have performed in all material respects all respective obligations required to be performed by them to date under the Primero Material Agreements and neither Primero nor any of the Primero Subsidiaries is in breach or default under any Primero Material Agreement, nor does Primero have knowledge of any condition that, with the passage of time or the giving of notice or both, would result in such a breach or default which, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.	
 	 	 	
 	(d)	Primero has not received any notice (whether written or oral), that any party to a Primero Material Agreement intends to cancel, terminate or otherwise modify or not renew its relationship with Primero or any Primero Subsidiary, and, to the knowledge of Primero, no such action has been threatened.	

3.1.24	Relationships with Customers, Service Providers, Suppliers and Sales Representatives. Primero has not received any written (or to the knowledge of Primero oral) notice that any customer, service provider or supplier intends to cancel, terminate or otherwise modify or not renew its relationship with Primero or any Primero Subsidiary, and, to the knowledge of Primero, no such action has been threatened, which, in either case, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.	
 	 	
3.1.25	Insolvency. Neither Primero nor any of the Primero Subsidiaries has sought protection under the Bankruptcy and Insolvency Act (Canada), the Companies Creditors Arrangement Act (Canada) or similar legislation.	
 	 	
3.1.26	Legal Proceedings. There are no claims, actions, suits, complaints, investigations or proceedings (whether private, governmental or otherwise, and whether or not purportedly on behalf of Primero or any Primero Subsidiary) in progress, pending, or to the knowledge of Primero, threatened, against or affecting Primero or any Primero Subsidiary (including actions, suits, investigations or proceedings against any directors, officers or employees of Primero or any Primero Subsidiary which relate to the Business, affairs, assets or operations of Primero ), at law or in equity, or before or by any Tribunal or Governmental Entity which, individually or in the aggregate, may reasonably be expected to have a Material Adverse Effect. There is no judgment, decree, injunction, ruling, order or award of any Tribunal outstanding against or affecting Primero or any Primero Subsidiary.	

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3.1.27	Tax Matters.	

 	(a)	Save for the requirement to file Tax Returns in respect of income taxes for the current taxation year (which return is not yet due), and any income Tax Return which is required to be filed as a result of or in connection with the transactions contemplated herein, Primero and each of the Primero Subsidiaries has duly filed in the prescribed manner and within the prescribed time all material Tax Returns required to be filed by it on or before the date hereof with any taxing or regulatory authority to which it is subject and each such material Tax Return was complete and accurate at the time filed.	
 	 	 	
 	(b)	Except as disclosed in its Annual Financial Statements, Primero and each of the Primero Subsidiaries has paid all Taxes and installments on account of Taxes that are due and payable by it, and any interest, penalties and fines in connection therewith, properly due and payable, and has paid all of same in connection with all known assessments, reassessments and adjustments.	
 	 	 	
 	(c)	Each of Primero and the Primero Subsidiaries has duly and timely collected all amounts on account of any sales, use or transfer Taxes, including all goods and services, harmonized sales, value added, provincial and territorial taxes and state and local taxes, required by Law to be collected by it and has duly and timely remitted to the appropriate Governmental Entity any such amounts required by Law to be remitted by it.	
 	 	 	
 	(d)	Except as disclosed in the Financial Statements, (i) there are no Taxes or fines in respect of Taxes claimed by any Governmental Entity against Primero or any Primero Subsidiary or which are known to Primero and may be due and owing by Primero or any Primero Subsidiary and, to the knowledge of Primero, (ii) there are no pending or threatened reassessments by any Governmental Entity in respect of Taxes owing by Primero or any Primero Subsidiary, and (iii) there are no matters of dispute or under discussion with any Governmental Entity relating to Taxes or fines in respect of Taxes asserted by such Governmental Entity against Primero or any Primero Subsidiary.	
 	 	 	
 	(e)	Except as disclosed in the Financial Statements, the Annual Financial Statements of Primero fully reflect accrued liabilities as at December 31, 2016 for all Taxes which were not yet then due and payable and for which Tax Returns were not yet then required to be filed.	
 	 	 	
 	(f)	There are no agreements, waivers or other arrangements made by Primero or any Primero Subsidiary providing for an extension of time with respect to any assessment or reassessment of Tax, the filing of any Tax Return or the payment of any Tax by Primero or any Primero Subsidiary.	

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 	(g)	Primero and each of the Primero Subsidiaries has withheld the amount of all Taxes and other deductions required under any applicable Laws to be withheld from each payment made by it and has paid all amounts withheld which are due and payable before the date hereof to the relevant taxing or other authority within the time prescribed under any applicable Laws.	
 	 		
 	(h)	Primero has satisfied in all material respects all obligations to incur expenses, make required disbursements and renounce to any third party any Canadian exploration expense or Canadian development expense with respect to any flow- through shares of Primero issued in connection with a “flow-through financing of Primero.	
 	 		
 	(i)	There are no material Encumbrances for Taxes upon any properties or assets of Primero or any Primero Subsidiary (other than Encumbrances relating to Taxes not yet due and payable and for which adequate reserves have been recorded in the Annual Financial Statements of Primero.	
 	 		
 	(j)	For all transactions between Primero and the Primero Subsidiaries and any Person who is not resident in Canada for purposes of the ITA with whom Primero or the Primero Subsidiaries, as the case may be, was not dealing at arms length for purposes of the ITA, Primero or the Primero Subsidiary, as the case may be, has made or obtained records or documents that meet the requirements of paragraphs 247(4)(a) to (c) of the ITA (or comparable provisions of any other applicable legislation).	
 	 		
 	(k)	For the purposes of the ITA and any other relevant Tax purposes: (i) Primero is resident in Canada and is a taxable Canadian corporation; and (ii) each Primero Subsidiary is resident in the jurisdiction in which it was formed, and is not resident in any other country.	
 	 		
 	(l)	None of Sections 78 or 80 to 80.04 of the ITA (or comparable provisions of any other applicable legislation) have applied to Primero or a Primero Subsidiary, and there are no circumstances existing which could reasonably be expected to result in the application of Sections 78 or 80 to 80.04 of the ITA (or comparable provisions of any other applicable Laws) to Primero or a Primero Subsidiary.	
 	 		
 	(m)	Neither Primero nor any Primero Subsidiary is a party to or bound by any material Tax sharing agreement, Tax indemnity agreement, Tax allocation agreement or similar agreement. Neither Primero nor any Primero Subsidiary has any material liability for the Taxes of any other Person under any applicable Laws, as a transferee or successor, by contract or otherwise.	

3.1.28	Compliance with Applicable Laws. Primero and each of the Primero Subsidiaries has conducted and is conducting its Business in compliance in all material respects with all applicable Laws, is not in material breach of any of such Laws except for non-compliance which individually or in the aggregate would not be reasonably expected to have a Material Adverse Effect with respect to Primero and is duly licensed or registered in each jurisdiction in which it owns or leases its property and assets or carries on its Business, so as to enable its Business to be carried on as now conducted and its property and assets to be so owned or leased. Neither Primero nor any Primero Subsidiary has received notice of any violation of applicable Laws in any jurisdiction.	

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3.1.29	Licenses.	

 	(a)	Schedule 3.1.29 of the Primero Disclosure Letter sets out a complete and accurate list of all material licenses, permits, approvals, consents, certificates, registrations and authorizations (whether governmental, regulatory or similar type) relating to the Business (the “ Licenses ), and there are no other material licenses, permits, approvals, consents, certificates, registrations, or authorizations, necessary to carry on its Business as presently carried on or to own or lease any of the property or the assets utilized by Primero or any Primero Subsidiary. Each License is valid and subsisting and in good standing and there is no default or breach of any License and, to the knowledge of Primero, no proceeding is pending or threatened to revoke or limit any License. No License is non-renewable or contains any burdensome term, provision, condition or limitation which has or could have a Material Adverse Effect on Primero or the Business.	
 	 	 	
 	(b)	Primero and each of the Primero Subsidiaries has complied in all material respects with applicable Laws in connection with obtaining each License. Neither Primero nor any Primero Subsidiary is subject to any form of material penalty in connection with, or arising from, non-compliance with such Licenses.	
 	 	 	
 	(c)	There are no claims pending or, to the knowledge of Primero, threatened, against Primero or any Primero Subsidiary affecting any License required for the Business that has resulted, or could result, in an adverse modification of any of the Licenses.	

3.1.30	No Business Restrictions. There is no agreement (non-compete or otherwise), commitment, judgment, injunction, order, award or decree to which Primero or any Primero Subsidiary is party or which is otherwise binding upon Primero or any Primero Subsidiary which has or reasonably could be expected to have the effect of prohibiting or materially impairing any business practice of Primero or such Primero Subsidiary, any acquisition of property (tangible or intangible) by Primero or such Primero Subsidiary or the conduct of business by Primero or such Primero Subsidiary, as currently conducted.	
 	 	
3.1.31	Liabilities. There are no material liabilities of Primero or any Primero Subsidiary of any kind (whether accrued, absolute, contingent or otherwise and whether matured or unmatured) existing on the date hereof except for:	

 	(a)	liabilities (including liabilities for unpaid Taxes) disclosed on, reflected in or provided for in the Financial Statements;	
 	 	 	
 	(b)	liabilities disclosed or referred to in this Agreement;	

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 	(c)	liabilities incurred in the ordinary course of business and attributable to the period since September 30, 2017, none of which, individually or in the aggregate, have a Material Adverse Effect on Primero; and	
 	 	 	
 	(d)	liabilities incurred in connection with this Agreement or the transactions contemplated in this Agreement.	

3.1.32	Condition and Sufficiency of Assets. Primero and the Primero Subsidiaries collectively own or lease all of the property and assets used in or necessary for the conduct of the Business as it is currently being conducted with good and marketable title to all material property and assets which are owned by Primero or any Primero Subsidiary, free and clear of any and all Encumbrances (other than Permitted Encumbrances). Since December 31, 2016, there has not been any significant interruption of operations, Licenses, supplies, access or services by contractors of the Business due to inadequate maintenance of any of the property or assets owned and used by Primero or any Primero Subsidiary.	
 	 	
3.1.33	Environmental .	

 	(a)	The operation of the Business by Primero and each of the Primero Subsidiaries has been and is in compliance with all Environmental Laws (except where non- compliance would not have a Material Adverse Effect in respect of Primero). Each of Primero and the Primero Subsidiaries has complied with all reporting and monitoring requirements under all Environmental Laws (except where non- compliance would not have a Material Adverse Effect in respect of Primero).	
 	 	 	
 	(b)	To the extent required by applicable Environmental Laws, Primero and the Primero Subsidiaries have obtained all Environmental Permits and have filed all applications necessary to renew or obtain all Environmental Permits in a timely fashion so as to allow it to continue to operate its Business in material compliance with applicable Environmental Laws.	
 	 	 	
 	(c)	Neither Primero nor any of the Primero Subsidiaries is, and, to the knowledge of Primero, there is no reasonable basis upon which Primero or any of the Primero Subsidiaries could become, responsible for any clean up or corrective action under any Environmental Laws that could reasonably be expected to have a Material Adverse Effect on Primero.	
 	 	 	
 	(d)	All material audits, assessments, investigation reports and studies with respect to Environmental Laws relating to Primero or any of the Primero Subsidiaries have been made available to First Majestic via the Primero Datasite Information.	

3.1.34	Intellectual Property.	

 	(a)	There are no trade-marks, service marks and trade names used by Primero and the Primero Subsidiaries in connection with the Business.	

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 	(b)	To the knowledge of Primero, the operation of the Business does not infringe or misappropriate the intellectual property rights of any Person, violate the rights of any Person (including rights to privacy or publicity) or constitute unfair competition or trade practices under the Laws of any jurisdiction in which Primero or any Primero Subsidiary carries on business.	

3.1.35	Advisory Fees; Third Party Expenses. Except for the accountants, lawyers, investment bankers and other advisors of Primero retained to negotiate, advance, carry out and complete the transactions contemplated herein, there is no investment banker, broker, finder or other intermediary or advisor that has been retained by or is authorized to act on behalf of Primero, any Primero Subsidiary who might be entitled to any fee, commission or reimbursement of expenses from Primero or any Primero Subsidiary upon consummation of the transactions contemplated by this Agreement. Schedule 3.1.35 of the Primero Disclosure Letter sets forth a reasonable estimate of all legal, accounting, financial advisory, investment banking and consulting fees which are reasonably expected to be incurred by Primero and the Primero Subsidiaries in connection with the negotiation and implementation of the terms and conditions of this Agreement and the transactions contemplated hereby.	
 	 	
3.1.36	Corrupt Practices. None of Primero, any of the Primero Subsidiaries, nor to the knowledge of Primero, any of their respective Representatives has taken, directly or indirectly any action which would cause Primero or any of the Primero Subsidiaries or affiliates to be in violation of the United States Foreign Corrupt Practices Act of 1977, as amended (and the regulations promulgated thereunder), the Corruption of Foreign Public Officials Act (Canada) (and the regulations promulgated thereunder), the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) (and the regulations promulgated thereunder), the Extractive Sector Transparency Measures Act (Canada) (and the regulations promulgated thereunder) or any applicable Laws of similar effect of any other jurisdiction (collectively, the “Anti-Corruption Laws) and to the knowledge of Primero no such action has been taken by any of its Representatives or affiliates. Primero and the Primero Subsidiaries have conducted the Business in compliance in all material respects with Anti-Corruption Laws and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.	

3.1.37	Aboriginal and Ejido Affairs.	

 	(a)	To the knowledge of Primero (i) it is carrying on the Business in compliance in all material respects with all legal and governmental requirements and agreements associated with aboriginal-related and Ejido-related matters, and (ii) there are no facts that could give rise to material non-compliance by Primero in respect of any such legal or governmental requirements.	
 	 	 	
 	(b)	To the knowledge of Primero, there is no material claim, complaint or other proceeding threatened by or on behalf of any Aboriginal Group or Ejido Group of which Primero has received written notice with respect to any Primero Real Property, immovable Leased Property, Primero Mineral Right or any authorization issued by any Governmental Entity in respect of, or otherwise related to Primero or any Primero Subsidiary.	

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 	(c)	Since December 31, 2015, there has not been any blockade or, to the knowledge of Primero other program of civil disobedience undertaken by any Aboriginal Group or Ejido Group with respect to the Primero Real Property, immovable Leased Property or the Primero Mineral Rights or otherwise affecting the Primero Real Property or the Primero Mineral Rights, or to the knowledge of Primero has any responsible official of any Aboriginal Group or Ejido Group since December 31, 2015, threatened Primero with any blockade or other program of civil disobedience with respect to the Primero Real Property, immovable Leased Property or the Primero Mineral Rights or which could reasonably be expected to affect the Primero Real Property or the Primero Mineral Rights.	
 	 	 	
 	(d)	Schedule 3.1.37 of the Primero Disclosure Letter sets out all agreements between Primero and any Aboriginal Group or Ejido Group.	
 	 	 	
 	(e)	Neither Primero nor any of the Primero Subsidiaries has received any notice from any Governmental Entity, Aboriginal Group or Ejido Group or any Persons representing or purporting to represent an Aboriginal Group or Ejido Group (i) of the exercise of aboriginal rights or Ejido rights in, or assertion of aboriginal title or Ejido title to the Primero Real Property, immovable Leased Property or Primero Mineral Rights or Primeros or Primero Subsidiaries interests in the Primero Real Property, immovable Leased Property or Primero Mineral Rights; or (ii) of an impact on the asserted aboriginal title or rights or Ejido title or rights on Primeros or Primero Subsidiaries works on the Primero Real Property, immovable Leased Property or Primero Mineral Rights.	
 	 	 	
 	(f)	Where applicable and to Primeros knowledge, the incorporation to the private property regime of any owned Primero Real Property or Primero Mineral Rights, formerly under an Ejido regime, was effected under the terms and conditions of applicable Laws including without limitation, of the Mexican Agrarian Law ( Ley Agraria ) and duly recorded before the applicable Governmental Entity, except where the failure to so effect would not have a Material Adverse Effect.	
 	 	 	
 	(g)	Where applicable and to Primeros knowledge, all the assemblies, notices and/or other acts and/or procedures required under the Mexican Agrarian Law ( Ley Agraria ) for the incorporation of any owned Primero Real Property, immovable Leased Property or Primero Mineral Rights, were performed, except where the failure to so perform would not have a Material Adverse Effect.	
 	 	 	
 	(h)	Where applicable and to Primeros knowledge, all expropriation procedures over owned Primero Real Property, immovable Leased Property or Primero Mineral Rights located in Mexico were carried out in compliance in all material respects with applicable Laws, including, without limitation, the Mexican Expropriation Law ( Ley de Expropiación ).	

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3.1.38	Non-Governmental Organizations and Community Groups. No material dispute between Primero or any of the Primero Subsidiaries and any non- governmental organization, community, community group or civil organization exists or, to Primeros knowledge, is threatened or imminent with respect to any of Primeros or any of the Primero Subsidiaries properties or exploration activities. Primero has provided First Majestic and First Majestics Representatives with full and complete access to all material correspondence received by Primero, the Primero Subsidiaries or their Representatives from any non-governmental organization, community, community group or civil organization.	
 	 	
3.1.39	No Option on Assets. No Person has any agreement or option or any right or privilege capable of becoming an agreement or option for the purchase from Primero or the Primero Subsidiaries of any of the material assets of Primero or any of the Primero Subsidiaries other than pursuant to the transactions contemplated in this Agreement.	
 	 	
3.1.40	Expropriation. No property or asset of Primero or any of the Primero Subsidiaries (including any Primero Mineral Rights) has been taken or expropriated by any Governmental Entity nor has any notice or proceeding in respect thereof been given or commenced nor, to the knowledge of Primero, is there any intent or proposal to give such notice or to commence such proceeding.	
 	 	
3.1.41	Competition Act. As determined in accordance with the Competition Act and the notifiable transaction regulations thereto, and accounting for the Black Fox Sale as permitted under section 14 of the notifiable transaction regulations, the size of transaction threshold under section 110(3) of the Competition Act is not exceeded.	

3.1.42	Fairness Opinion and Recommendation. As of the date hereof:	

 	(a)	Rothschild (Canada) Inc. has delivered an opinion to the Primero Board, to the effect that as of the date of such opinion, the Consideration is fair from a financial point of view to the Primero Shareholders (other than First Majestic and its affiliates);	
 	 	 	
 	(b)	the Primero Board has determined, after receiving financial and legal advice, that the Arrangement is fair to the Primero Shareholders (other than First Majestic and its affiliates) and in the best interests of Primero; and	
 	 	 	
 	(c)	the Primero Board has decided to recommend that the Primero Shareholders vote in favour of the Arrangement Resolution.	

3.1.43	No Collateral Benefits. To the knowledge of Primero, no related party of Primero:	

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 	(a)	is a party to any connected transaction to the Arrangement; or	
 	 	 	
 	(b)	is entitled to receive as a consequence of the Arrangement or the other transactions contemplated by this Agreement any benefit, other than a benefit described in paragraph (c) of the definition of collateral benefit where either (i) the related party, together with its associated entities beneficially owns or exercises control or direction over less than one percent or more of the outstanding Primero Shares or (ii) the requirements of clause (c)(iv)(B)(I) and (II) of the definition of collateral benefit have been satisfied with respect to that benefit and Primero will provide the disclosure contemplated by clause (c)(iv)(B)(III) in the Circular.	
 	 	 	
 		The terms “ related party , “ connected transaction , “ associated entity and “collateral benefit are used in this paragraph as defined in MI 61-101.	

3.1.44	Full Disclosure. This Agreement, the Primero Disclosure Letter, the agreement related to tax and certain other matters, the Primero Information Record and the Primero Datasite Information taken together disclose all material facts related to Primero, the Primero Subsidiaries and their respective businesses, financial conditions, assets, liabilities and operations.	
 	 	
3.2	Representations and Warranties of First Majestic .	
Except as disclosed in the First Majestic Disclosure Letter or the First Majestic Information Record as of the date hereof, First Majestic hereby represents and warrants to, and in favour of, Primero as follows and acknowledges that Primero is relying on such representations and warranties in connection with the transactions herein contemplated:

3.2.1	Incorporation and Organization. First Majestic is a corporation duly incorporated under the laws of its jurisdiction of incorporation, is validly subsisting, has full corporate and legal power and authority to own, lease and operate the properties currently owned, leased and operated by it and to conduct its business as currently conducted, and is in good standing with respect to the filing of annual returns. First Majestic is duly qualified or licensed to do business and is in good standing as a foreign corporation or organization authorized to do business in all jurisdictions in which the character of the properties owned, leased or operated or the nature of the business conducted by it would make such qualification or licensing necessary. No proceedings have been instituted or are pending for the dissolution or liquidation of First Majestic. True and complete copies of the constating documents of First Majestic have been provided to Primero and no amendments to such constating documents have been authorized which have not been provided to Primero.	
 	 	
3.2.2	Capitalization. The authorized capital of First Majestic consists of an unlimited number of First Majestic Shares, of which, as of the date hereof, 165,921,079 First Majestic Shares were issued and outstanding. All outstanding First Majestic Shares have been duly authorized and are validly issued, are fully paid and non-assessable and were issued in compliance with the articles of First Majestic and all applicable Laws. Except for employee stock options granted by First Majestic pursuant to employment compensation plans, no Person has any other agreement, option, commitment, arrangement, or any other right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement, option or commitment (including any such right or privilege under convertible securities, warrants or convertible obligations of any nature) for the purchase, subscription, allotment or issuance of, or conversion into, any of the unissued shares or any other securities of First Majestic or the purchase or other acquisition from First Majestic of any of its undertakings, business or assets. The Consideration Shares to be issued pursuant to the Arrangement, the First Majestic Shares issuable upon the exercise from time to time of the Replacement Options in accordance with their respective terms and the First Majestic Shares issuable upon the exercise from time to time of the Primero Warrants in accordance with their respective terms, will, when issued and delivered, be duly and validly issued by First Majestic on their respective dates of issue as fully paid and non-assessable shares and will not be issued in violation of the terms of any agreement or other understanding binding upon First Majestic at the time that such shares are issued and will be issued in compliance with the constating documents of First Majestic and all applicable Laws. As of the Effective Date, all of the Replacement Options will be outstanding as duly authorized and validly existing options to acquire First Majestic Shares, which will not be issued in violation of the terms of any agreement or other understanding binding upon First Majestic at the time at which they are issued.	

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3.2.3	Authority and No Violation.	

 	(a)	First Majestic has all requisite corporate power and authority to enter into this Agreement, to perform its obligations hereunder and to consummate the Arrangement and the other transactions contemplated by this Agreement. The execution and delivery of this Agreement and the approval of the issuance of the Consideration Shares and the underlying First Majestic Shares on conversion or exercise of Primero Convertible Securities by First Majestic and the consummation by First Majestic of the transactions contemplated by this Agreement (including the Arrangement) and such other documents have been duly authorized by its board of directors and no other corporate proceedings on its part are necessary to authorize this Agreement or the transactions contemplated hereby, other than the approval of the First Majestic board of directors of matters relating solely to the implementation of the Arrangement (and, for greater certainty, the issuance of First Majestic Shares pursuant to the Arrangement does not require the approval of any shareholders of First Majestic pursuant to applicable Laws or the policies of the TSX or NYSE).	
 	 	 	
 	(b)	This Agreement has been duly executed and delivered by First Majestic and constitutes a legal, valid and binding obligation, enforceable against it in accordance with its terms, subject to bankruptcy, insolvency and other similar Laws affecting creditors rights generally, and to general principles of equity. All documents required to be executed by First Majestic in connection with the transactions contemplated herein will be duly executed and delivered by First Majestic and, when so executed and delivered, will constitute a legal, valid and binding obligation, enforceable against it in accordance with its terms, subject to bankruptcy, insolvency and other similar Laws affecting creditors rights generally, and to general principles of equity.	

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 	(c)	The approval of this Agreement and the other documents required to be executed by First Majestic in connection with the transactions contemplated herein, the execution and delivery by First Majestic of this Agreement and such other documents, the performance by it of its obligations hereunder and the completion of the Arrangement and the transactions contemplated thereby, will not:	

 	(i)	conflict with, result in a violation or breach of, constitute a default, or require any consent (other than such as has already been obtained) to be obtained under, or give rise to any termination rights or payment obligation under any provision of:	

 	(A)	its notice of articles or articles or any other agreement or understanding with any party holding an ownership interest in First Majestic;	
 	 	 	
 	(B)	any resolutions of its board of directors (or any committee thereof) or shareholders;	
 	 	 	
 	(C)	any applicable Laws, subject to obtaining authorization for listing of the Consideration Shares, the First Majestic Shares issuable upon exercise of the Replacement Options and the First Majestic Shares issuable upon exercise of the Primero Warrants on the TSX and the NYSE and obtaining the Antitrust Clearance; or	
 	 	 	
 	(D)	any First Majestic Material Agreement;	

 	(ii)	except as would not, individually or in the aggregate, have a Material Adverse Effect on First Majestic, result in the imposition of any Encumbrance upon any of its assets or the assets of any of the First Majestic Material Subsidiaries (except pursuant to the Replacement Stream Agreement), or restrict, hinder, impair or limit its ability to carry on its business as and where it is now being carried on or as and where it may be carried on in the future.	

 	(d)	No consent, approval, order, registration, notice, declaration or filing with, any Governmental Entity is required to be obtained by First Majestic in connection with the execution and delivery of this Agreement or any of the other documents contemplated hereby, or the consummation by First Majestic of the transactions contemplated hereby or thereby other than:	

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 	(i)	obtaining authorization for listing of the Consideration Shares, the First Majestic Shares issuable and upon exercise of the Replacement Options and the First Majestic Shares issuable upon exercise of the Primero Warrants on the TSX and the NYSE;	
 	 	 	
 	(ii)	any approvals required by the Interim Order;	
 	 	 	
 	(iii)	the Final Order;	
 	 	 	
 	(iv)	the Antitrust Clearance; and	
 	 	 	
 	(v)	any other consents, approvals, orders, authorizations, declarations or filings of or with a Governmental Entity which are purely of an administrative nature and which could be completed or obtained without Material Adverse Effect on First Majestic immediately after the Effective Date or which, if not obtained, would not in the aggregate have a Material Adverse Effect on First Majestic.	

3.2.4	Ownership of First Majestic Material Subsidiaries. First Majestic or one or more subsidiaries of First Majestic is the sole beneficial and registered owner of all of the outstanding shares in the capital of each of the First Majestic Material Subsidiaries, with good and marketable title thereto, free and clear of all Encumbrances. No Person has any other agreement, option, commitment, arrangement, or any other right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement, option or commitment (including any such right or privilege under convertible securities, warrants or convertible obligations of any nature) for the purchase, subscription, allotment or issuance of, or conversion into, any of the issued or unissued shares or any other securities of any of the First Majestic Subsidiaries or the purchase or other acquisition from any of the First Majestic Subsidiaries of any of their undertakings, business or assets. The First Majestic Material Subsidiaries are the only subsidiaries of First Majestic which own or lease material property of First Majestic.	
 	 	
3.2.5	Sufficient Funds. First Majestic has adequate funds to pay any amounts owing to any Person in connection with the transactions contemplated by this Agreement and will have adequate financial liquidity to operate the Business following the Effective Time.	
 	 	
3.2.6	Reporting Issuer; Public Documents .	

 	(a)	First Majestic is a reporting issuer in each of the provinces of Canada, and is not on the list of reporting issuers in default under applicable securities Laws.	
 	 	 	
 	(b)	First Majestic (i) is a “foreign private issuer as defined in Rule 405 under the U.S. Securities Act, and (ii) is not registered or required to register as an investment company under the U.S. Investment Company Act.	

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 	(c)	The First Majestic Shares are registered pursuant to Section 12(b) of the U.S. Exchange Act, First Majestic is subject to the reporting requirements of Section 13(a) of the U.S. Exchange Act and First Majestic is not in default in any material respect with its obligations under the U.S. Exchange Act.	
 	 	 	
 	(d)	The First Majestic Shares are listed and posted for trading on the TSX, the NYSE, the FSE and the Bolsa Mexicana de Valores (provided that First Majestic has filed for delisting from the Bolsa Mexicana de Valores) and are not listed on any other market. First Majestic is in compliance in all material respects with the rules and policies of the TSX and the NYSE.	
 	 	 	
 	(e)	First Majestic is not subject to any cease trade or other order of the TSX, the NYSE, any Securities Authority or the SEC, and, to the knowledge of First Majestic, no inquiry, review or investigation (formal or informal) or other proceedings involving First Majestic that may operate to prevent or restrict trading of any securities of First Majestic are currently in progress or pending before the TSX, the NYSE, any Securities Authority or the SEC.	
 	 	 	
 	(f)	First Majestic has filed all documents required to be filed by it in accordance with applicable securities Laws and the rules and policies of the TSX and the NYSE. The First Majestic Information Record includes a true and complete copy of all forms, reports, statements, certifications, and other documents required to be filed by First Majestic. Such forms, reports, statements, certifications, and other documents, at the time filed or, if amended, as of the date of such amendment: (i) did not contain any misrepresentation; and (ii) complied in all material respects with the requirements of applicable Securities Laws except where such non-compliance has not had or would not reasonably be expected to have a Material Adverse Effect on First Majestic. First Majestic has not filed any confidential material change or other report or other document with any Securities Authorities, the SEC, the TSX, the NYSE or other self-regulatory authority which at the date hereof remains confidential.	
 	 	 	
 	(g)	First Majestic directly or indirectly owns or leases the material properties, business and assets or the interests in the material properties, business or assets referred to in the First Majestic Information Record, no party is challenging or disputing the title of First Majestic or any First Majestic Subsidiary to any such material properties, business or assets and all agreements by which First Majestic or any First Majestic Material Subsidiaries holds an interest in its material properties, business or assets are in good standing according to their terms and the properties are in good standing under the applicable laws of the jurisdictions in which they are situated.	

3.2.7	Financial Matters.	

 	(a)	The Financial Statements of First Majestic have been, and all financial statements of First Majestic which are publicly disseminated by First Majestic in respect of any subsequent periods prior to the Effective Date will be, prepared in accordancewith IFRS, applied on a basis consistent with prior periods and all applicable Laws and present fairly or will present fairly, in all material respects:	

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 	(i)	all the assets, liabilities (whether accrued, absolute, contingent or otherwise) and the financial condition of First Majestic and the First Majestic Material Subsidiaries, on a consolidated basis as at the respective dates thereof; an d	
 	 	 	
 	(ii)	the revenues, earnings, results of operations and cash flows of First Majestic and the First Majestic Material Subsidiaries, on a consolidated basis for the respective periods covered thereby .	

 	(b)	To the knowledge of First Majestic as of the date of this Agreement :	

 	(i)	there are no material weaknesses in the design and implementation or maintenance of internal controls over financial reporting of First Majestic that are reasonably likely to adversely affect the ability of First Majestic to record, process, summarize and report financial information ;	
 	 	 	
 	(ii)	there is no fraud, whether or not material, that involves management or other employees who have a significant role in the internal control over financial reporting of First Majestic; an d	
 	 	 	
 	(iii)	First Majestic’s system of internal control over financial reporting is sufficient to (i) maintain records in reasonable detail in order to accurately and fairly reflect the transactions and dispositions of the assets of First Majestic and the First Majestic Subsidiaries; (ii) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of financial statements in accordance with IFRS, and that receipts and expenditures of First Majestic and the First Majestic Subsidiaries are made only with the authorization of management and directors of First Majestic and the First Majestic Subsidiaries, as applicable; and (iii) provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of the assets of First Majestic or the First Majestic Subsidiaries that could have a material effect of First Majestic ’s financial statements .	

 	(c)	Since December 31, 2016, neither First Majestic nor any of the First Majestic Material Subsidiaries nor, to First Majestic’s knowledge, any director, officer, employee, auditor, accountant or representative of First Majestic or any of the First Majestic Material Subsidiaries has received or otherwise had or obtained knowledge of any complaint, allegation, assertion, or claim, whether written or oral, regarding the accounting practices, procedures, methodologies or methods of First Majestic or any of the First Majestic Material Subsidiaries or their respective internal accounting controls, including any complaint, allegation, assertion, or claim that First Majestic or any of the First Majestic Material Subsidiaries has engaged in questionable accounting practices .	

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 	(d)	First Majestic has no knowledge of any material adjustments, potential liabilities or obligations, which individually or in the aggregate have not been reflected in its Annual Financial Statements, other than liabilities, indebtedness and obligations incurred by First Majestic and/or the First Majestic Material Subsidiaries in the ordinary course of business, or as contemplated in this Agreement.	
 	 	 	
 	(e)	First Majestic maintains a system of disclosure controls and procedures (as such term is defined in NI 52-109 to provide reasonable assurance that (i) material information relating to First Majestic is made known to First Majestic’s management, including its chief financial officer and chief executive officer, particularly during the periods in which First Majestic’s interim filings and annual filings (as such terms are defined in NI 52-109) are being prepared; and (ii) information required to be disclosed by First Majestic in its annual filings, interim filings or other reports filed or submitted by it under applicable securities Laws are recorded, processed, summarized and reported within the time periods specified in applicable securities Laws.	
 	 	 	
 	(f)	First Majestic maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the U.S. Exchange Act) to ensure that material information required to be disclosed by First Majestic in the reports that it files or submits under the U.S. Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to First Majestic’s management as appropriate to allow timely decisions regarding required disclosure, and (B) has disclosed, based on its most recent evaluation of such disclosure controls and procedures prior to the date hereof, to First Majestic’s auditors and the audit committee of the First Majestic Board (1) any significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting that are reasonably likely to adversely affect in any material respect ability to record, process, summarize and report financial information and (2) any fraud, whether or not material, that involves management or other employees who have a significant role in First Majestic’s internal controls over financial reporting.	
 	 	 	
 	(g)	First Majestic maintains a system of internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the U.S. Exchange Act) sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. Based upon the most recent evaluation by First Majestic’s management, such internal control over financial reporting is effective, and since the date of such evaluation nothing has come to the attention of First Majestic to lead it to believe that such internal control over financial reporting is no longer effective. First Majestic maintains internal controls over financial reporting (as such term is defined in NI 52-109). To the knowledge of First Majestic, such internal controls over financial reporting are effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS.	

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 	(h)	Since December 31, 2016, there has been no change in First Majestic’s internal control over financial reporting that has materially affected or is reasonably likely to materially affect, First Majestic’s internal control over financial reporting.	

3.2.8	Absence of Certain Changes or Events. Since December 31, 2016 First Majestic has conducted its business only in the ordinary course of business and there has not been any event, circumstance or occurrence which has had or is reasonably likely to give rise to a Material Adverse Effect with respect to First Majestic.	
 	 	
3.2.9	Legal Proceedings . There are no material claims, actions, suits, complaints, investigations or proceedings (whether private, governmental or otherwise, and whether or not purportedly on behalf of First Majestic or any First Majestic Material Subsidiary) in progress, pending, or to the knowledge of First Majestic, threatened, against or affecting First Majestic or any First Majestic Material Subsidiary (including actions, suits, investigations or proceedings against any directors, officers or employees of First Majestic or any First Majestic Material Subsidiary which relate to the business, affairs, assets or operations of First Majestic), at law or in equity, or before or by any Tribunal which could reasonably be expected to have a Material Adverse Effect on First Majestic. First Majestic is not aware of any grounds on which any such action, suit, investigation or proceeding might be commenced with any reasonable likelihood of success.	
 	 	
3.2.10	Compliance with Applicable Laws. First Majestic and each of the First Majestic Material Subsidiaries has conducted and is conducting its business in compliance in all material respects with all applicable Laws in each jurisdiction in which its business is carried on, is not in material breach of any of such Laws and is duly licensed or registered in each jurisdiction in which it owns or leases its property and assets or carries on its business, so as to enable its business to be carried on as now conducted and its property and assets to be so owned or leased.	
 	 	
3.2.11	No Breach of Material Agreements. First Majestic and each of the First Majestic Material Subsidiaries has performed all of the material obligations required to be performed by it, and is entitled to all benefits under, and neither First Majestic nor any First Majestic Subsidiary is in default in respect of, any First Majestic Material Agreement to which it is a party. Except as disclosed in the First Majestic Disclosure Letter, each of the First Majestic Material Agreements is: (i) enforceable by First Majestic or a subsidiary of First Majestic, as applicable, in accordance with its terms (subject to any limitation under bankruptcy, insolvency or other Laws affecting creditors’ rights generally and to general principals of equity); (ii) is in full force and effect, unamended, and there exists no breach thereof or default or event of default or event, occurrence, condition or act with respect to First Majestic or any First Majestic Material Subsidiary or, to First Majestic’s knowledge, with respect to the other contracting party or otherwise that, with or without the giving of notice, the lapse of time or the happening of any other event or conditions, would (a) become a default or event of default under any First Majestic Material Agreement, or (b) result in the loss or expiration of any right or option by First Majestic or any First Majestic Material Subsidiary (or the gain thereof by any third party) under any First Majestic Material Agreement.	

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3.2.12	Environmental. The operation of the First Majestic Material Properties by First Majestic and the First Majestic Material Subsidiaries and the use, maintenance and operation thereof have been and are in compliance with all Environmental Laws (except where non-compliance would not have a Material Adverse Effect in respect of First Majestic). Each of First Majestic and the First Majestic Material Subsidiaries have complied with all reporting and monitoring requirements under all Environmental Laws (except where non-compliance would not have a Material Adverse Effect in respect of First Majestic).	
 	 	
3.2.13	Corrupt Practices. None of First Majestic, any of the First Majestic Material Subsidiaries, nor to the knowledge of First Majestic, any of their respective Representatives has taken, directly or indirectly any action which would cause First Majestic or any of the First Majestic Material Subsidiaries or affiliates to be in violation of Anti-Corruption Laws and to the knowledge of First Majestic no such action has been taken by any of its Representatives or affiliates. First Majestic and the First Majestic Material Subsidiaries have conducted their businesses in compliance in all material respects with Anti-Corruption Laws and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.	
 	 	
3.2.14	Investment Canada Act. First Majestic is a Canadian-controlled Person under the Investment Canada Act.	
 	 	
3.2.15	Other Negotiations . Neither First Majestic nor any First Majestic Subsidiary (a) has entered into any agreement that conflicts with any of the transactions contemplated by this Agreement, or (b) has entered into any agreement or had any discussions with any Person regarding any transaction involving First Majestic or any First Majestic Subsidiary which could reasonably be expected to result in any of Primero, First Majestic, any First Majestic Subsidiary or to the knowledge of First Majestic any of their respective officers, directors or employees being subject to any claim for liability to such Person as a result of entering into this Agreement or consummating the transactions contemplated hereby.	
 	 	
3.2.16	No Ownership of Primero Shares or Other Securities . Neither First Majestic nor any of its affiliates own any Primero Shares or any other securities of Primero.	
 	 	
3.2.17	Tax Matters .	

 	(a)	Save for the requirement to file Tax Returns in respect of income taxes for the current taxation year (which return is not yet due), and any income Tax Return which is required to be filed as a result of or in connection with the transactions contemplated herein, First Majestic and each of its subsidiaries has duly filed in the prescribed manner and within the prescribed time all material Tax Returns required to be filed by it on or before the date hereof with any taxing or regulatory authority to which it is subject and each such material Tax Return was complete and accurate at the time filed.	

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 	(b)	Except as set forth in its most recent condensed interim consolidated financial statements, First Majestic and each of its subsidiaries has paid all Taxes and installments on account of Taxes that are due and payable by it, and any interest, penalties and fines in connection therewith, properly due and payable, and has paid all of same in connection with all known assessments, reassessments and adjustments .	
 	 	 	
 	(c)	Each of First Majestic and each of its subsidiaries has duly and timely collected all amounts on account of any sales, use or transfer Taxes, including all goods and services, harmonized sales, value added, provincial and territorial taxes and state and local taxes, required by Law to be collected by it and has duly and timely remitted to the appropriate Governmental Entity any such amounts required by Law to be remitted by it .	
 	 	 	
 	(d)	Except as set forth in its most recent condensed interim consolidated financial statements, there are no Taxes or fines in respect of Taxes claimed by any Governmental Entity against First Majestic or any of its subsidiaries or which are known to First Majestic to be due and owing by First Majestic or any of its subsidiaries and, to the knowledge of First Majestic, there are no pending or threatened reassessments by any Governmental Entity in respect of Taxes owing by First Majestic or any of its subsidiaries, and there are no matters of dispute or under discussion with any Governmental Entity relating to Taxes or fines in respect of Taxes asserted by such Governmental Entity against First Majestic or any of its subsidiaries .	
 	 	 	
 	(e)	The most recent condensed interim consolidated financial statements of First Majestic fully reflect accrued liabilities as at December 31, 2016 for all Taxes which were not yet then due and payable and for which Tax Returns were not yet then required to be filed .	
 	 	 	
 	(f)	There are no agreements, waivers or other arrangements made by First Majestic or any of its subsidiaries providing for an extension of time with respect to any assessment or reassessment of Tax, the filing of any Tax Return or the payment of any Tax by First Majestic or any of its subsidiaries .	
 	 	 	
 	(g)	First Majestic and each of its subsidiaries has withheld the amount of all Taxes and other deductions required under any applicable Laws to be withheld from each payment made by it and has paid all amounts withheld which are due and payable before the date hereof to the relevant taxing or other authority within the time prescribed under any applicable Laws .	

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 	(h)	There are no material Encumbrances for Taxes upon any properties or assets of First Majestic or any of its subsidiaries (other than Liens relating to Taxes not yet due and payable and for which adequate reserves have been recorded in the most recent condensed interim consolidated financial statements of First Majestic).	
 	 	 	
 	(i)	For all transactions between First Majestic or any of its subsidiaries and any Person who is not resident in Canada for purposes of the ITA with whom First Majestic or its subsidiary, as the case may be, was not dealing at arm’s length for purposes of the ITA, First Majestic or the subsidiary, as the case may be, has made or obtained records or documents that meet the requirements of paragraphs 247(4)(a) to (c) of the ITA (or comparable provisions of any other applicable legislation).	
 	 	 	
 	(j)	For the purposes of the ITA and any other relevant Tax purposes: (i) First Majestic is resident in Canada and is a taxable Canadian corporation; and (ii) each subsidiary of First Majestic is resident in the jurisdiction in which it was formed, and is not resident in any other country.	
 	 	 	
 	(k)	None of Sections 78 or 80 to 80.04 of the ITA (or comparable provisions of any other applicable legislation) have applied to First Majestic or any of its subsidiaries, and there are no circumstances existing which could reasonably be expected to result in the application of Sections 78 or 80 to 80.04 of the ITA (or comparable provisions of any other applicable Laws) to First Majestic or any of its subsidiaries.	
 	 	 	
 	(l)	Neither First Majestic or any of its subsidiaries is a party to or bound by any material Tax sharing agreement, Tax indemnity agreement, Tax allocation agreement or similar agreement. Neither First Majestic nor any of its subsidiaries has any material liability for the Taxes of any other Person under any applicable Laws, as a transferee or successor, by contract or otherwise.	

3.3	Non-Waiver.	
No investigations made by or on behalf of any of the Parties at any time shall have the effect of waiving, diminishing the scope of or otherwise affecting any representation or warranty made by any other Party herein or pursuant hereto, unless disclosure of the fact at issue is expressly made in writing to the other Party prior to the execution hereof and such disclosure contains no material untrue statement.

3.4	Survival.	
For greater certainty, the representations and warranties of Primero and First Majestic contained herein shall survive the execution and delivery of this Agreement and shall terminate on the earlier of the termination of this Agreement in accordance with its terms and the Effective Date.

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ARTICLE 4
COVENANTS

4.1	Covenants of Primero.	

 	(a)	Primero covenants and agrees that, during the Pre-Effective Date Period, except with the consent of First Majestic to any deviation therefrom or with respect to any matter contemplated by this Agreement or the Plan of Arrangement or set forth in Schedule 4.1 of the Primero Disclosure Letter, Primero will, and will cause each of the Primero Subsidiaries to:	

 	(i)	carry on the Business in the ordinary course substantially in accordance with the Primero Budget and use all commercially reasonable efforts to preserve intact its present business organization and keep available the services of its present officers and employees and others having business dealings with it and maintain the goodwill of Primero and the Primero Subsidiaries;	
 	 	 	
 	(ii)	pay all ordinary course liabilities as they come due consistent with past practice including payment of any interest that may become due and payable on the Primero Debentures;	
 	 	 	
 	(iii)	use commercially reasonable efforts to maintain and preserve each of the Primero Mineral Rights in good standing and to maintain, preserve and keep in good standing all of its rights under each of its Licenses;	
 	 	 	
 	(iv)	not commence to undertake a substantial or unusual expansion of its business facilities or an expansion that is out of the ordinary course of business;	
 	 	 	
 	(v)	not split, combine or reclassify any of its outstanding shares, nor declare or pay any dividends on or make any other distributions (in either case, in stock or property) on or in respect of its outstanding shares;	
 	 	 	
 	(vi)	not amend its notice of articles or articles or other constating documents;	
 	 	 	
 	(vii)	not take any action or commence any voluntary proceeding for the dissolution, liquidation, winding up, bankruptcy or reorganization of Primero or any Primero Subsidiary or for the appointment of any trustee, receiver, manager or other administrator for Primero or any Primero Subsidiary or adopt a plan of liquidation or resolutions providing for the liquidation or dissolution of Primero or any Primero Subsidiary;	
 	 	 	
 	(viii)	not sell, pledge, encumber, allot, reserve, set aside or issue, authorize or propose or agree to the sale, pledge, encumbrance, allotment, reservation, setting aside or issuance of, or purchase or redeem or propose or agree to the purchase or redemption of, any shares or any class of securities convertible or exchangeable into, or rights, warrants or options to acquire, any such shares or other convertible or exchangeable securities, except for (A) the issuance of Primero Shares pursuant to the exercise of Primero Convertible Securities outstanding as of the date hereof; or (B) the issuance of Primero Shares as required by agreements in force and effect prior to the date hereof and disclosed in Schedule 3.1.2 of the Primero Disclosure Letter;	

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 	(ix)	not amend, vary or modify any of the Primero Convertible Securities Plans or any Primero Convertible Securities ;	
 	 	 	
 	(x)	not reorganize, amalgamate or merge with any other Person, nor acquire or agree to acquire by amalgamating, merging or consolidating with, purchasing substantially all of the assets of or otherwise, any business of any corporation, partnership, association or other business organization or division thereof ;	
 	 	 	
 	(xi)	not guarantee the payment of indebtedness by a third party or incur or repay any indebtedness for money borrowed prior to its maturity date or issue or sell any Debt Instruments ;	
 	 	 	
 	(xii)	except as required by Law or by the terms of the Employee Benefits in effect as of the date of this Agreement, not enter into or modify any employment, severance, collective bargaining or other Employee Benefits, policies or arrangements with, or grant any bonuses, salary increases, pension or supplemental pension benefits, profit sharing, retirement allowances, deferred compensation, incentive compensation, severance or termination pay to, or make any loan to, any officers, directors or employees of Primero or any of the Primero Subsidiaries ;	
 	 	 	
 	(xiii)	not, except in the ordinary course of business and substantially in accordance with the Primero Budget :	

 	(A)	satisfy or settle any claims or liabilities prior to the same being due (except such as have been reserved against in its Annual Financial Statements) which are, individually or in the aggregate, material ;	
 	 	 	
 	(B)	grant any waiver, exercise any option or relinquish any contractual rights which are, individually or in the aggregate, material; o r	
 	 	 	
 	(C)	enter into any interest rate, currency or commodity swap or any other rate fixing agreement for a financial transaction or any call arrangement of any sort or any forward sale agreement for commodities or any other commodities hedging or speculation arrangement or off take or royalty agreement with respect to any commodities extracted from the Primero Mineral Rights ;	

 	(xiv)	not settle or compromise any claim, action, suit or proceeding brought by any present, former or purported holder of any of its securities in connection with the transactions contemplated by this Agreement or the Arrangement or otherwise;	

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 	(xv)	comply in all material respects with the terms of all Primero Material Agreements ;	
 	 	 	
 	(xvi)	not enter into any Primero Material Agreement or amend, modify, relinquish, terminate or fail to renew in any material respect any Primero Material Agreement ;	
 	 	 	
 	(xvii)	not acquire or sell, pledge or otherwise dispose of or make subject to any Encumbrance (other than a Permitted Encumbrance) any material property or assets ;	
 	 	 	
 	(xviii)	not incur or commit to incur any expenses or capital expenditures except in substantial compliance with the Primero Budget ;	
 	 	 	
 	(xix)	use commercially reasonable efforts to cause its current insurance (or re- insurance) policies not to be cancelled or terminated or any of the coverage thereunder to lapse ;	
 	 	 	
 	(xx)	use commercially reasonable efforts to retain the services of Primero’s and the Primero Subsidiaries’ existing employees and consultants until the Effective Time, and will promptly provide written notice to First Majestic of the resignation or termination of any of its key employees or consultants ;	
 	 	 	
 	(xxi)	not make any changes to existing accounting practices, except as required by applicable Laws or IFRS ;	
 	 	 	
 	(xxii)	promptly advise First Majestic orally and, if then requested, in writing, with the full particulars of any :	

 	(A)	event occurring subsequent to the date of this Agreement that would render any representation or warranty of Primero contained in this Agreement (except any such representation or warranty which speaks as of a date prior to the date of this Agreement), if made on or as of the date of such event or the Effective Date, untrue or inaccurate in any material respect ;	
 	 	 	
 	(B)	Material Adverse Change in respect of Primero; an d	
 	 	 	
 	(C)	breach by Primero of any material covenant or agreement contained in this Agreement .	

 	(b)	Primero covenants and agrees that, during the Pre-Effective Date Period, Primero will, and will cause each of the Primero Subsidiaries to consult through meetings with First Majestic, as First Majestic may reasonably request, to allow First Majestic to monitor, and provide input with respect to the direction and control of the Business provided, for greater certainty, that First Majestic acknowledges and agrees that any input First Majestic provides pursuant to this Section 4.1(b) is advisory in nature and does not create an obligation on Primero to take any action suggested by First Majestic.	

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 	(c)	Primero shall perform all obligations required to be performed by it under this Agreement and shall do all such other acts and things as may be necessary in order to consummate and make effective, as soon as reasonably practicable, the transactions contemplated in this Agreement and without limiting the generality of the foregoing, Primero shall:	

 	(i)	use commercially reasonable efforts to obtain, on or before the Effective Date, all Regulatory Approvals required by Governmental Entities for Primero or the Primero Subsidiaries and to obtain and assist First Majestic in obtaining the Antitrust Clearance; and without limiting the generality of the foregoing, Primero shall use commercially reasonable efforts to satisfy, as soon as reasonably possible, any requests for information and documentation received from First Majestic or any Governmental Entity in respect of the Antitrust Filing and shall coordinate and cooperate with First Majestic in exchanging information and supplying assistance that is reasonably requested by First Majestic in connection with the Antitrust Filing;	
 	 	 	
 	(ii)	carry out the terms of the Interim Order and Final Order applicable to it and use commercially reasonable efforts to comply promptly with all requirements which applicable Laws may impose on Primero with respect to the transactions contemplated hereby and by the Arrangement;	
 	 	 	
 	(iii)	use commercially reasonable efforts to defend all lawsuits or other legal, regulatory or other proceedings challenging or affecting this Agreement or the consummation of the transactions contemplated hereby;	
 	 	 	
 	(iv)	use commercially reasonable efforts to have lifted or rescinded any injunction or restraining order or other order relating to it which may adversely affect the ability of the Parties to consummate the transactions contemplated hereby;	
 	 	 	
 	(v)	on or before the Effective Date, effect all necessary registrations, filings, notices and submissions of information required by Governmental Entities from Primero or the Primero Subsidiaries relating to the transactions contemplated hereby;	
 	 	 	
 	(vi)	in connection with the Arrangement and other transactions contemplated hereby, use commercially reasonable efforts to obtain, before the Effective Date, all waivers, consents and approvals required to be obtained by Primero or the Primero Subsidiaries from other parties pursuant to the Primero Material Agreements;	

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 	(vii)	use commercially reasonable efforts to cause Martin Aguilar Villasenor and Cuauhtemoc Federico Simental Loera to enter into agreements in a form satisfactory to First Majestic, to transfer the shares which each of them owns in each of the Primero Subsidiaries to such Person as First Majestic may direct, effective as of the Effective Time, for a purchase price of $1.00 or complete such transfer through any other lawful transfer option provided by Mexican Laws, such as donation or assignment, as determined by First Majestic, acting reasonably;	
 	 	 	
 	(viii)	use all reasonable efforts to obtain, on or before the Effective Date, written resignations effective as at the Effective Time, from all directors, administrators and officers of Primero and each of the Primero Subsidiaries, such resignations to be subject to obtaining the mutual releases provided for in Section 4.7(c); and	
 	 	 	
 	(ix)	use all reasonable commercial efforts to satisfy all conditions precedent set forth in Section 5.1 and Section 5.2 of this Agreement.	

 	(d)	In the event that First Majestic concludes that it is necessary or desirable to proceed with another form of transaction (such as a formal take-over bid or amalgamation) whereby First Majestic or its affiliates would effectively acquire all of the Primero Shares within approximately the same time periods and on the same economic terms and other terms and conditions (including tax treatment) and having consequences to Primero and the Primero Shareholders which are equivalent to or better than those contemplated by this Agreement (an “Alternative Transaction” ), Primero agrees to support the completion of such Alternative Transaction in the same manner as the Arrangement and shall otherwise fulfill its covenants contained in this Agreement in respect of such Alternative Transaction. In the event of any proposed Alternative Transaction, any reference in this Agreement to the Arrangement shall refer to the Alternative Transaction to the extent applicable, all terms, covenants, representations and warranties of this Agreement shall be and shall be deemed to have been made in the context of the Alternative Transaction and all references to time periods regarding the Arrangement, including the Effective Time, herein shall refer to the date of closing of the transactions contemplated by the Alternative Transaction (as such date may be extended from time to time) .	

4.2	Covenants of First Majestic.	
First Majestic hereby covenants and agrees:

 	(a)	to perform all obligations required to be performed by it under this Agreement and to do all such other acts and things as may be necessary or desirable in order to consummate and make effective, as soon as reasonably practicable, the transactions contemplated by this Agreement and, without limiting the generality of the foregoing, to:	

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 	(i)	use commercially reasonable efforts to obtain, on or before the Effective Date, all Regulatory Approvals, including the Antitrust Clearance, required by Governmental Entities for First Majestic or the First Majestic Material Subsidiaries and prepare and file the Antitrust Filing within 20 Business Days of the execution of this Agreement. First Majestic shall use commercially reasonable efforts to satisfy, as soon as reasonably possible, all requests for additional information and documentation requested by any Governmental Entity in respect of the Antitrust Filing and coordinate and cooperate with Primero in exchanging information, including providing Primero with copies in advance and reasonable opportunity to comment on all notices, submissions, filings and information supplied to or filed with a Governmental Entity in respect of the Antitrust Filing (except for notices and information which First Majestic considers confidential and competitively sensitive) ;	
 	 	 	
 	(ii)	use commercially reasonable efforts to have lifted or rescinded any injunction or restraining order or other order relating to First Majestic which may adversely affect the ability of First Majestic to consummate the transactions contemplated hereby ;	
 	 	 	
 	(iii)	on or before the Effective Date, effect all necessary registrations, filings and submissions of information required by Governmental Entities from First Majestic or the First Majestic Material Subsidiaries relating to the transactions contemplated herein ;	
 	 	 	
 	(iv)	on or before the Effective Date reserve a sufficient number of First Majestic Shares for issuance upon the completion of the Arrangement, the exercise from time to time of Replacement Options and the exercise from time to time of Primero Warrants; an d	
 	 	 	
 	(v)	use commercially reasonable efforts to satisfy all conditions precedent set forth in Section 5.1 and Section 5.3 of this Agreement ;	

 	(b)	carry out the terms of the Interim Order and Final Order applicable to it and use commercially reasonable efforts to comply promptly with all requirements which applicable Laws may impose on First Majestic with respect to the transactions contemplated hereby and by the Arrangement ;	
 	 	 	
 	(c)	in connection with the consummation of the transactions contemplated hereby and by the Arrangement, to use commercially reasonable efforts to obtain, before the Effective Date, all necessary waivers, consents and approvals required to be obtained by First Majestic or the First Majestic Subsidiaries from other parties to the First Majestic Material Agreements to which it or they may be a party; an d	

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 	( d)	until the Effective Date or the earlier termination of this Agreement in accordance with Article 6, except (i) with the consent of Primero to any deviation therefrom which shall not be unreasonably withheld; or (ii) with respect to any matter contemplated by this Agreement or the Plan of Arrangement, First Majestic will:	

 	(i)	not reorganize, amalgamate or merge First Majestic with any other Person, nor acquire or agree to acquire by amalgamating, merging or consolidating with, purchasing a majority of the voting securities of or substantially all of the assets of or otherwise, any business or Person which acquisition would reasonably be expected to materially delay the transactions contemplated hereby; and	
 	 	 	
 	(ii)	promptly advise Primero orally and, if then requested, in writing with the full particulars of any:	

 	(A)	event occurring subsequent to the date of this Agreement that would render any representation or warranty of First Majestic contained in this Agreement (except any such representation or warranty which speaks as of a date prior to the occurrence of such event), if made on or as of the date of such event or the Effective Date, untrue or inaccurate in any material respect;	
 	 	 	
 	(B)	Material Adverse Change in respect of First Majestic; or	
 	 	 	
 	(C)	breach by First Majestic of any material covenant or agreement contained in this Agreement .	

4.3	Covenants Regarding Non-Solicitation.	

 	(a)	Except as provided in this Agreement, Primero shall not, and shall cause its Representatives to not, directly or indirectly :	

 	(i)	make, initiate, solicit, encourage or otherwise knowingly facilitate (including by way of furnishing information or according access to information or any site visit) any inquiry, expression of interest, proposal or offer that constitutes an Acquisition Proposal or that could reasonably be expected to lead to an Acquisition Proposal ;	
 	 	 	
 	(ii)	participate in any discussions or negotiations with any Person (other than First Majestic and its affiliates) regarding an Acquisition Proposal or that could reasonably be expected to lead to an Acquisition Proposal ;	
 	 	 	
 	(iii)	effect a Change of Recommendation; o r	
 	 	 	
 	(iv)	accept, enter into, or propose publicly to accept or enter into, any letter of intent, memorandum of understanding, term sheet, agreement in principle, agreement, arrangement or understanding related to any Acquisition Proposal (except as permitted by Section 4.4).	

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Notwithstanding anything to the contrary contained in this Section 4.3, in the event that Primero receives a written Acquisition Proposal from any Person after the date hereof and prior to the Primero Shareholder Meeting that was not solicited by Primero and that did not otherwise result from a breach of this Section 4.3, and subject to Primero’s compliance with Section 4.3(d), Primero and its Representatives may (i) contact such Person to clarify the terms and conditions of such Acquisition Proposal, (ii) furnish information with respect to it to such Person pursuant to an Acceptable Confidentiality Agreement, provided that (A) Primero provides a copy of such Acceptable Confidentiality Agreement to First Majestic promptly upon its execution and (B) Primero contemporaneously provides to First Majestic a list of all non-public information concerning Primero that is provided to such Person and provides to First Majestic copies of any such non-public information which was not previously provided to First Majestic or its Representatives, and (iii) participate in any discussions or negotiations regarding such Acquisition Proposal; provided, however, that, prior to taking any action described in clauses (ii) or (iii) above, the Primero Board determines in good faith, after consultation with its financial advisors and outside legal counsel, that such Acquisition Proposal could reasonably be expected to lead to a Superior Proposal and failure to take such action would be inconsistent with its fiduciary duties under applicable Laws.

 	(b)	Primero shall, and shall cause its Representatives to, immediately cease and cause to be terminated any solicitation, encouragement, discussion, negotiation or other communications with any Person (other than First Majestic and its Representatives) conducted heretofore by Primero or any of its Representatives with respect to, or which may reasonably be expected to lead to, an Acquisition Proposal. To the extent it has not already done so, Primero shall immediately discontinue or deny access to all parties other than First Majestic and its Representatives to any and all data rooms which may have been opened. Primero shall promptly request the return or destruction of all confidential non-public information provided to any third parties (other than First Majestic and its Representatives) who have entered into a confidentiality agreement with Primero relating to a potential Acquisition Proposal, shall use all reasonable commercial efforts to ensure that such requests are honoured to the extent Primero is entitled to do so under such confidentiality agreements .	
 	 	 	
 	(c)	Primero represents and warrants that it has not waived any confidentiality, standstill or similar agreement or restriction to which Primero or a Primero Subsidiary is a party, except to permit submissions of expressions of interest prior to the date hereof pursuant to the Primero Strategic Process and Primero covenants and agrees that it shall :	

 	(i)	not release any Persons from, or terminate, amend, suspend, modify, or waive any obligation of any other Person under any confidentiality or standstill agreement; an d	

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 	( ii)	promptly and diligently enforce all standstill, non-disclosure, non- disturbance, non-solicitation and similar covenants of any other Person in any letter of intent, memorandum of understanding, term sheet, agreement in principle, agreement, arrangement or understanding that it has entered into prior to the date hereof or enters into after the date hereof.	

 	(d)	Primero shall promptly (and, in any event, within 24 hours of receipt) notify First Majestic, at first orally and then in writing, of receipt by Primero or any Primero Subsidiary or any of their respective Representatives of any Acquisition Proposal (whether or not in writing) or any enquiry that may reasonably be expected to lead to an Acquisition Proposal, or any amendments to the foregoing, or any request for information relating to Primero in connection with an Acquisition Proposal or for access to the properties, books or records of Primero by any Person that informs Primero or its Representatives that it is considering making, or has made, a proposal that constitutes, or may reasonably be expected to lead to an Acquisition Proposal. Such notice shall include a description of the material terms and conditions of any proposal and the identity of the Person making such proposal, enquiry or contact, and a copy of any written form of Acquisition Proposal and any other documents representing such Acquisition Proposal. Primero shall:	

 	(i)	keep First Majestic fully informed of the status including any change to the material terms of any such Acquisition Proposal or enquiry; and	
 	 	 	
 	(ii)	provide to First Majestic as soon as practicable after receipt or delivery thereof with copies of all correspondence and other written material sent or provided to Primero from any Person in connection with any Acquisition Proposal or sent or provided by Primero to any Person in connection with any Acquisition Proposal.	

 	(e)	Primero shall ensure that its Representatives are aware of the provisions of this Section 4.3, and it shall be responsible for any breach of this Section 4.3 by any such Representatives.	

4.4	Notice by Primero of Superior Proposal Determination.	

 	(a)	Notwithstanding Section 4.3 Primero may accept, approve, recommend or enter into any agreement, understanding or arrangement in respect of an Acquisition Proposal if, and only if :	

 	(i)	the Person making such Acquisition Proposal was not restricted from making such Acquisition Proposal pursuant to an existing standstill or similar restriction ;	
 	 	 	
 	(ii)	Primero shall have complied with all of its other obligations under Section 4.3 ;	
 	 	 	
 	(iii)	such Acquisition Proposal constitutes a Superior Proposal ;	

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 	(iv)	the Primero Shareholder Meeting has not occurred;	
 	 	 	
 	(v)	Primero has provided First Majestic with:	

 	(A)	a copy of the proposed definitive agreement for such Superior Proposal and any other documents representing the Superior Proposal; and	
 	 	 	
 	(B)	written notice advising First Majestic of the determination of the Primero Board that the Acquisition Proposal is a Superior Proposal and that the Primero Board has resolved, subject only to compliance with this Section 4.4 and termination of this Agreement, to accept, approve, recommend or enter into an agreement in respect of such Superior Proposal;	

 	(vi)	five Business Days shall have elapsed from the date First Majestic received the documentation referred to in Section 4.4(a)(v) (the “Match Period” ); and	
 	 	 	
 	(vii)	Primero has previously or concurrently will have:	

 	(A)	paid to First Majestic the Termination Payment, if any, payable under Section 6.3; and	
 	 	 	
 	(B)	terminated this Agreement pursuant to Section 6.2.	

 	(b)	Any information provided by Primero to First Majestic pursuant to this Section 4.4 or pursuant to Section 4.3 shall be subject to the provisions of the Confidentiality Agreement.	
 	 	 	
 	(c)	During the Match Period, Primero agrees that First Majestic shall have the right, but not the obligation, to offer to amend the terms of this Agreement and Primero shall co-operate with First Majestic with respect thereto, including negotiating in good faith with First Majestic during the Match Period. The Primero Board will review in good faith any offer by First Majestic to amend the terms of this Agreement in order to determine, in consultation with its financial advisors and outside legal counsel, whether First Majestic’s offer upon acceptance by Primero would result in such Acquisition Proposal ceasing to be a Superior Proposal. Primero agrees that, subject to its disclosure obligations under applicable Securities Laws, the fact of the making of, and each of the terms of, any such proposed amendments shall be kept strictly confidential and shall not be disclosed to any Person (including without limitation, the Person having made the Superior Proposal), other than Primero’s Representatives, without First Majestic’s prior written consent. If the Primero Board determines that such Acquisition Proposal would cease to be a Superior Proposal as a result of the amendments proposed by First Majestic, Primero will forthwith so advise First Majestic and will promptly thereafter accept the offer by First Majestic to amend the terms of this Agreement and the Arrangement and the Parties agree to take such actions and execute such documents as are necessary to give effect to the foregoing. Primero will, within two Business Days of entering into such amendment, reaffirm its recommendation of the Arrangement and issue a press release to that effect. If the Primero Board continues to believe, in good faith and after consultation with financial advisors and outside legal counsel, that such Acquisition Proposal remains a Superior Proposal and therefore rejects First Majestic’s amended proposal, Primero may terminate this Agreement pursuant to Section 6.2(a)(iv) .	

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 	(d)	The Primero Board shall reaffirm its recommendation of the Arrangement by press release: (i) promptly after any Acquisition Proposal (which is determined not to be a Superior Proposal) is publicly announced or made; or (ii) promptly after the Primero Board determines that a proposed amendment to the provisions of this Agreement would result in the Acquisition Proposal not being a Superior Proposal. First Majestic and its legal advisors shall be given a reasonable opportunity to review and comment on the form and content of any such press release and Primero shall incorporate all reasonable comments made by First Majestic and its legal advisors .	
 	 	 	
 	(e)	If, less than six Business Days before the Primero Shareholder Meeting, Primero has provided First Majestic with a notice under Section 4.4(a)(v), an Acquisition Proposal has been publicly disclosed or announced and the Match Period has not elapsed, then, subject to applicable Laws, at First Majestic’s request, Primero will postpone or adjourn the Primero Shareholder Meeting to a date acceptable to First Majestic and Primero, acting reasonably, which shall not be less than six Business Days and not more than 12 Business Days after the scheduled date of the Primero Shareholder Meeting and shall, in the event that First Majestic and Primero amend the terms of this Agreement pursuant to this Section 4.4, ensure that the details of such amended Agreement are communicated to the Primero Shareholders at or prior to the resumption of the adjourned Primero Shareholder Meeting .	
 	 	 	
 	(f)	Primero acknowledges and agrees that each successive modification to any material terms or conditions of any Acquisition Proposal or that results in an increase in or modification of the consideration (or value of such consideration) to be received by Primero or the Primero Shareholders or which otherwise results in the Primero Board determining that such Acquisition Proposal is a Superior Proposal shall constitute a new Acquisition Proposal for purposes of the requirement under Section 4.4(a)(vi) to initiate an additional five Business Day Match Period .	
 	 	 	
 	(g)	Nothing contained in this Section 4.4 shall prohibit the Primero Board from :	

 	(i)	responding through a directors’ circular or otherwise as required by Law to an Acquisition Proposal that it determines is not a Superior Proposal; o r	
 	 	 	
 	(ii)	calling and/or holding a meeting of Primero Shareholders requisitioned by Primero Shareholders in accordance with the Business Corporations Act or taking any other action with respect to an Acquisition Proposal to the extent ordered or otherwise mandated by a court of competent jurisdiction in accordance with Law.	

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4.5	Access to Information .	
Subject to the terms of the Confidentiality Agreement and applicable Laws, upon reasonable notice, Primero shall afford First Majestic’s Representatives access, during normal business hours in the Interim Period to such properties, books, contracts and records and other documents, information or data relating to Primero and the Primero Subsidiaries which First Majestic or its Representatives deem necessary or advisable to review in making an examination of Primero, the Primero Subsidiaries and the Business, as well as to its management personnel, and, during such period, Primero shall furnish to First Majestic all information concerning Primero, the Primero Subsidiaries and their respective Business, properties and personnel as First Majestic or its Representatives may reasonably request.

4.6	Covenant Regarding Representations and Warranties .	
Each of Primero and First Majestic covenants that it will use commercially reasonable efforts to ensure that the representations and warranties given by it and contained in Article 3 are true and correct on and as at the Effective Date (except as affected by transactions contemplated or permitted by this Agreement or otherwise consented to by the other Party) or if not true, do not have a Material Adverse Effect on such Party.

4.7	Indemnification, Insurance and Mutual Releases .	

 	(a)	First Majestic hereby covenants and agrees that, unless prohibited by applicable Laws, all rights to indemnification or exculpation in favour of the current and former directors and officers of Primero and any Primero Subsidiary provided in the current articles or by-laws (or the equivalent) of Primero or any Primero Subsidiary, or in any agreement to the extent disclosed in Schedule 4.7 to the Primero Disclosure Letter, and any directors’ and officers’ insurance now existing in favour of the directors or officers of Primero and any Primero Subsidiary shall survive the completion of the Arrangement (or be replaced with substantially equivalent coverage from another provider of at least equivalent standing to the current provider) and shall continue in full force and effect (either directly or via run-off insurance or insurance provided by an alternative provider of at least equivalent standing to the current provider) for a period of not less than six years from the Effective Date and First Majestic undertakes to ensure that this covenant shall remain binding upon its successors and assigns. First Majestic acknowledges that Primero may purchase run-off directors’ and officers’ liability insurance, at a cost not exceeding 200% of Primero’s current annual aggregate premium for directors’ and officers’ liability policies currently maintained by Primero, providing coverage for a period of up to six years from the Effective Date with respect to claims arising from or related to facts or events which occur on or prior to the Effective Date.	

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 	(b)	Primero shall act as agent and trustee of the benefits of the foregoing for its directors and officers and those of the Primero Subsidiaries for the purpose of this Section 4.7 and this Section 4.7 shall survive the execution and delivery of this Agreement and the completion of the Arrangement and shall be enforceable against First Majestic by the Persons described in Section 4.7(a) hereof.	
 	 	 	
 	(c)	First Majestic and Primero shall use commercially reasonable efforts to enter into a mutual release on or before the Effective Date with each director and officer of Primero and each of the Primero Subsidiaries, each such release to be effective as at the Effective Time and in a form acceptable to First Majestic and Primero, acting reasonably.	

4.8	Pre-Acquisition Reorganizations.	

 	(a)	Primero will use commercially reasonable efforts to effect such reorganization of its business, operations, subsidiaries and assets or such other transactions (each, a “Pre-Acquisition Reorganization” ) as First Majestic may reasonably request prior to the Effective Date, and the Arrangement, if required, will be modified accordingly; provided, however, that Primero need not effect a Pre-Acquisition Reorganization which would impede or materially delay the consummation of the Arrangement.	
 	 	 	
 	(b)	Without limiting the foregoing and other than as set forth in paragraph (a) above, First Majestic will use its commercially reasonable efforts to obtain all necessary consents, approvals or waivers from any persons to effect each Pre-Acquisition Reorganization, and Primero will cooperate with First Majestic in structuring, planning and implementing any such Pre-Acquisition Reorganization. First Majestic must provide written notice to Primero of any proposed Pre-Acquisition Reorganization at least fifteen Business Days prior to the date of the Primero Shareholder Meeting. In addition:	

 	(i)	any Pre-Acquisition Reorganization will not become effective unless the Parties will have confirmed in writing the satisfaction or waiver of all conditions in their favour set forth in Article 5 and will have confirmed in writing that they are prepared to promptly and without condition proceed to effect the Arrangement;	
 	 	 	
 	(ii)	any Pre-Acquisition Reorganization will be effective as close as reasonably practical to the Effective Date and, in any event, after all Regulatory Approvals are obtained;	
 	 	 	
 	(iii)	any Pre-Acquisition Reorganization will not prejudice Primero or the Primero Shareholders in any material respect;	
 	 	 	
 	(iv)	any Pre-Acquisition Reorganization will not require Primero to obtain the approval of the Primero Shareholders or the Primero Debentureholders;	

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 	(v)	unless the Parties otherwise agree, any Pre-Acquisition Reorganization will not require any filings with, notifications to or approvals of any Governmental Authority or third party;	
 	 	 	
 	(vi)	any Pre-Acquisition Reorganization will not require Primero to contravene any applicable Laws, its organizational documents or any Primero Material Agreement; and	
 	 	 	
 	(vii)	Primero will not be obligated to take any action that could result in any Taxes being imposed on, or any adverse Tax or other consequences to, any Primero Shareholder or holder of Primero Convertible Securities greater than the Taxes or more onerous than the other consequences to such party in connection with the consummation of the Arrangement in the absence of any Pre-Acquisition Reorganization.	

 	(c)	Primero and First Majestic acknowledge and agree that the planning for and implementation of any Pre-Acquisition Reorganization will not be considered a breach of any covenant under this Agreement and will not be considered in determining whether a representation or warranty of Primero hereunder has been breached (including where any such Pre-Acquisition Reorganization requires the consent of any third party under contract). First Majestic and Primero will work cooperatively and use commercially reasonable efforts to prepare prior to the Effective Time all documentation necessary and do such other acts and things as are necessary to give effect to such Pre-Acquisition Reorganization. For greater certainty, Primero will not be liable for the failure of First Majestic to benefit from any anticipated Tax efficiency as a result of a Pre-Acquisition Reorganization.	
 	 	 	
 	(d)	First Majestic agrees that it will be responsible for all costs and expenses associated with any Pre-Acquisition Reorganization to be carried out at its request and shall indemnify and save harmless Primero and its affiliates from and against any and all liabilities, losses, damages, claims, costs, expenses, interest awards, judgements and penalties suffered or incurred by any of them in connection with or as a result of any such Pre-Acquisition Reorganization (including in respect of any reversal, modification or termination of a Pre-Acquisition Reorganization).	

4.9	Convertible Debentures.	

 	(a)	Primero shall use commercially reasonable efforts to obtain, prior to the Effective Date, the approval of the Primero Debentureholders to the Primero Debentureholder Resolution.	
 	 	 	
 	(b)	Primero shall call and hold the Primero Debentureholder Meeting and prepare the Debentureholder Circular in accordance with its obligations regarding the Primero Shareholder Meeting and Shareholder Circular in Sections 2.3 and 2.4, mutatis mutandis including, for greater certainty soliciting proxies from Primero Debentureholders in connection with the Primero Debenture Meeting and disclosing to the Primero Debentureholders that the Primero Board has determined that the Debentureholder Proposal is fair to the Primero Debentureholders and recommending that the Primero Debentureholders vote in favour of the Primero Debentureholder Resolution, with the exception that:	

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 	(i)	the Primero Debentureholder Meeting shall not form part of the Plan of Arrangement or the Interim Order;	
 	 	 	
 	(ii)	the Primero Debentureholder Meeting shall occur immediately following the Primero Shareholder Meeting; and	
 	 	 	
 	(iii)	the Primero Debentureholder Meeting shall be convened and conducted in accordance with the Primero Indenture.	

 	(c)	First Majestic hereby covenants that, to the extent that any Primero Debentures remain outstanding following the Effective Time, it shall comply with, or cause Primero to comply with, as applicable, the terms and provisions of the Primero Indenture.	

4.10	Assistance with First Majestic Financing .	
Primero shall, and shall cause each of the Primero Subsidiaries to, provide such cooperation to First Majestic as First Majestic may reasonably request in connection with the First Majestic Financing (provided that such request is made on reasonable notice, including (and subject to the foregoing), as so requested:

 	(a)	reasonably cooperating with the marketing efforts of First Majestic and participating (and use reasonable commercial efforts to cause members of senior management of Primero to participate) in a reasonable number of meetings with actual or prospective investors, road shows, due diligence sessions, drafting sessions and sessions with rating agencies in connection with the First Majestic Financing;	
 	 	 	
 	(b)	using commercially reasonable efforts to obtain customary auditors’ consents and comfort letters (including “negative assurance” comfort), including, for the avoidance of doubt, any customary letters from Primero’s auditors, as reasonably requested by First Majestic as necessary and customary (including, without limitation, any offering of debt securities pursuant to the exemption from the registration requirements of the U.S. Securities Act provided by Rule 144A thereunder or under another exemption therefrom);	
 	 	 	
 	(c)	assisting First Majestic in the preparation of any offering documents, private placement memoranda, bank information memoranda and similar documents; and	
 	 	 	
 	(d)	obtaining customary authorization and representation letters requested by financing sources for the First Majestic Financing, which authorization letter, in part, authorizes the distribution of information to prospective lenders or investors.	

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ARTICLE 5
CONDITIONS

5.1	Mutual Conditions Precedent.	
The respective obligations of the Parties to complete the transactions contemplated by this Agreement shall be subject to the satisfaction, on or before the Effective Date, of the following conditions precedent, each of which may only be waived by the mutual consent of First Majestic and Primero:

 	(a)	the Arrangement Resolution shall have been approved by the Primero Shareholders at the Primero Shareholder Meeting in accordance with the Interim Order and applicable Laws;	
 	 	 	
 	(b)	the Interim Order and the Final Order shall each have been obtained in form and terms satisfactory to each of Primero and First Majestic, acting reasonably, and shall not have been set aside or modified in a manner unacceptable to either Party, acting reasonably, on appeal or otherwise;	
 	 	 	
 	(c)	no Law is in effect that makes the consummation of the Arrangement illegal or otherwise prohibits or enjoins Primero or First Majestic from consummating the Arrangement;	
 	 	 	
 	(d)	the Consideration Shares, the First Majestic Shares issuable upon exercise of the Replacement Options from time to time, the First Majestic Shares issuable upon exercise of the Primero Warrants from time to time and the First Majestic Shares issuable upon conversion of the Primero Debentures from time to time, shall have been authorized for listing on the TSX and the NYSE, subject to official notice of issuance, provided that First Majestic shall not be required to obtain any such authorization in connection with the First Majestic Shares issuable upon conversion of the Primero Debentures in the event the Debentureholders’ Resolution is approved at the Debentureholder Meeting;	
 	 	 	
 	(e)	the issuance of the Consideration Shares and the Replacement Options will be exempt from the registration requirements of the U.S. Securities Act pursuant to the Section 3(a)(10) Exemption, and such securities shall not be subject to hold periods under the Securities Laws in Canada or the U.S. Securities Act, except as may be imposed by Rule 144 under the U.S. Securities Act or except as disclosed in the Shareholder Circular, or except by reason of the existence of any controlling interest in First Majestic pursuant to the Securities Laws of any applicable jurisdiction; and	
 	 	 	
 	(f)	the Antitrust Clearance shall have been obtained.	

5.2	Additional Conditions Precedent to the Obligations of First Majestic .	
The obligations of First Majestic to complete the transactions contemplated by this Agreement shall also be subject to the satisfaction, on or before the Effective Date, of each of the following conditions precedent (each of which is for the exclusive benefit of First Majestic and may be waived by First Majestic):

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 	(a)	all covenants and agreements of Primero under this Agreement to be performed or observed on or before the Effective Date shall have been duly performed and observed by Primero in all material respects and First Majestic shall have received a certificate of Primero addressed to First Majestic and dated the Effective Date, signed on behalf of Primero by two directors or senior executive officers of Primero, confirming the same as at the Effective Date;	
 	 	 	
 	(b)	(i) the representations and warranties of Primero in Sections 3.1.1, 3.1.2, 3.1.3, and 3.1.4 shall be true and correct in all material respects as of the date of this Agreement and as of the Effective Date as if made on and as of such date (except to the extent such representations and warranties speak as of a specified date which is earlier than the date of this Agreement, in which event such representations and warranties shall be true and correct in all respects as of such earlier specified date, or except as affected by transactions contemplated or permitted by this Agreement or otherwise consented to by First Majestic); and (ii) the representations and warranties of Primero set forth in Section 3.1 (other than those referenced in clause (i) above) shall be true and correct in all material respects (it being understood that, for the purposes of determining the accuracy of such representations and warranties, all “Material Adverse Effect” qualifications and other materiality qualifications contained in such representations and warranties shall be disregarded) as of the date of this Agreement and as of the Effective Date as if made on and as of such date (except to the extent such representations and warranties speak as of a specified date which is earlier than the date of this Agreement, in which event such representations and warranties shall be true and correct in all material respects as of such earlier specified date, or except as affected by transactions contemplated or permitted by this Agreement or otherwise consented to by First Majestic), except where any failure or failures of such representations and warranties referenced in this clause (ii) to be so true and correct would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect on Primero, and First Majestic shall have received a certificate of Primero addressed to First Majestic and dated the Effective Date, signed on behalf of Primero by two directors or senior executive officers of Primero, confirming the same as at the Effective Date;	
 	 	 	
 	(c)	between the date hereof and the Effective Date, there shall not have occurred a Material Adverse Change to Primero;	
 	 	 	
 	(d)	holders of more than 10% of the issued and outstanding Primero Shares shall not have exercised the Dissent Rights in respect of the Arrangement;	
 	 	 	
 	(e)	there shall not be pending or threatened any suit, action or proceeding by any Governmental Entity, in each case that has a reasonable likelihood of success:	

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 	(i)	seeking to restrain or prohibit the consummation of the Plan of Arrangement or any of the transactions contemplated by this Agreement or seeking to obtain from any of the Parties any damages that are material in relation to Primero;	
 	 	 	
 	(ii)	seeking to prohibit or materially limit the ownership or operation by First Majestic or any of the First Majestic Material Subsidiaries of any material portion of the business or assets of Primero or any Primero Subsidiary or to compel First Majestic or any of the First Majestic Material Subsidiaries to dispose of or hold separate any material portion of the business or assets of Primero or any Primero Subsidiary;	
 	 	 	
 	(iii)	seeking to impose limitations on the ability of First Majestic to acquire or hold or exercise full rights of ownership of any Primero Shares, including the right to vote the Primero Shares on all matters properly presented to the shareholders of Primero; or	
 	 	 	
 	(iv)	which otherwise is reasonably likely to have a Material Adverse Effect on Primero or First Majestic, except as referred to in Schedule 5.2 of the Primero Disclosure Letter;	

 	(f)	all consents, approvals, authorizations and waivers set forth in Schedule 5.2 of the Primero Disclosure Letter, shall have been obtained or received on terms which are acceptable to First Majestic, acting reasonably; and	
 	 	 	
 	(g)	Primero shall have provided to First Majestic, on or before the Effective Date, written resignations and mutual releases effective as of the Effective Time, from all directors and officers of Primero and such directors and officers of the Primero Subsidiaries as First Majestic may request.	
First Majestic may not rely on the failure to satisfy any of the above conditions precedent as a basis for non-compliance by it with its obligations under this Agreement if the condition precedent would have been satisfied but for a material failure by First Majestic in complying with its obligations hereunder.

5.3	Additional Conditions Precedent to the Obligations of Primero.	
The obligations of Primero to complete the transactions contemplated by this Agreement shall also be subject to the satisfaction, on or before the Effective Date, of each of the following conditions precedent (each of which is for the exclusive benefit of Primero and may be waived by Primero):

 	(a)	all covenants and agreements of First Majestic under this Agreement to be performed or observed on or before the Effective Date shall have been duly performed by First Majestic in all material respects and Primero shall have received a certificate of First Majestic addressed to Primero and dated the Effective Date, signed on behalf of First Majestic by two senior executive officers of First Majestic confirming the same as at the Effective Date;	

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 	(b)	(i) the representations and warranties of First Majestic in Sections 3.2.1, 3.2.2, 3.2.3 and 3.2.4 shall be true and correct in all material respects as of the date of this Agreement and as of the Effective Date as if made on and as of such date (except to the extent such representations and warranties speak as of a specified date which is earlier than the date of this Agreement, in which event such representations and warranties shall be true and correct in all material respects as of such earlier specified date, or except as affected by transactions contemplated or permitted by this Agreement or otherwise consented to by Primero); and (ii) the representations and warranties of First Majestic set forth in Section 3.2 (other than those references in clause (i) above) shall be true and correct in all material respects (it being understood that, for the purposes of determining the accuracy of such representations and warranties, all “Material Adverse Effect” qualifications and other materiality qualifications contained in such representations and warranties shall be disregarded) as of the date of this Agreement and as of Effective Date as if made on and as of such date (except to the extent such representations and warranties speak as of a specified date which is earlier than the date of this Agreement, in which event such representations and warranties shall be true and correct in all material respects as of such earlier specified date, or except as affected by transactions contemplated or permitted by this Agreement), except where any failure or failures of such representations and warranties referenced in this clause (ii) to be so true and correct would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect on First Majestic, and Primero shall have received a certificate of First Majestic addressed to Primero and dated the Effective Date, signed on behalf of First Majestic by two senior executive officers of First Majestic confirming the same as at the Effective Date; and	
 	 	 	
 	(c)	between the date hereof and the Effective Date, there shall not have occurred a Material Adverse Change to First Majestic.	
Primero may not rely on the failure to satisfy any of the above conditions precedent as a basis for non-compliance by Primero with its obligations under this Agreement if the condition precedent would have been satisfied but for a material failure by Primero in complying with its obligations hereunder.

5.4	Notice and Cure Provisions .	
Each Party will give prompt notice to the other of the occurrence, or failure to occur, at any time from the date hereof until the Effective Date, of any event or state of facts which occurrence or failure would, or would be reasonably likely to:

 	(a)	cause any of the representations or warranties of such Party contained herein to be untrue or inaccurate in any material respect between the date hereof and the Effective Date;	
 	 	 	
 	(b)	result in the failure to comply with or satisfy any covenant or agreement to be complied with or satisfied by such Party hereunder prior to the Effective Date; or	

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 	(c)	result in the failure to satisfy any of the conditions precedent in favour of the other Party hereto contained in Section 5.1, 5.2 and 5.3, as the case may be.	
Subject as herein provided, a Party may elect not to complete the transactions contemplated hereby pursuant to the conditions precedent contained in Sections 5.1, 5.2 and 5.3 in favour of such Party, or exercise any termination right arising therefrom, if forthwith, and in any event prior to the Effective Date, such Party has delivered a written notice to the other specifying in reasonable detail all breaches of covenants, representations and warranties or other matters which the Party delivering such notice is asserting as the basis for the non-fulfillment of the applicable condition precedent or the exercise of the termination right, as the case may be. If any such notice is delivered and the Party receiving such notice is proceeding diligently to cure such matter, if such matter is susceptible to being cured, the Party delivering such notice may not terminate this Agreement until the earlier of the Outside Date and the expiration of a period of ten Business Days from such notice. If such notice has been delivered prior to the date of the Primero Shareholder Meeting, such meeting shall be postponed until the expiry of such period. If such notice has been delivered prior to the making of the application for the Final Order, such application shall be postponed until the expiry of such period. For greater certainty, in the event that such matter is cured within the time period referred to herein, this Agreement may not be terminated as a result of such matter.

5.5	Satisfaction of Conditions .	
The conditions precedent set out in Sections 5.1, 5.2 and 5.3 shall be conclusively deemed to have been satisfied, waived or released when, with the approval of First Majestic and Primero, the Arrangement is completed.
ARTICLE 6
 AMENDMENT AND TERMINATION

6.1	Amendment .	
This Agreement may, at any time and from time to time before or after the holding of the Primero Shareholder Meeting but not later than the Effective Date, be amended by mutual written agreement of the Parties hereto provided, however, that any such change, waiver or modification does not invalidate any required approval of the Primero Shareholders to the Arrangement.

6.2	Termination.	

 	(a)	This Agreement may, at any time before or after the holding of the Primero Shareholder Meeting but not later than the Effective Date:	

 	(i)	be terminated by the mutual agreement of Primero and First Majestic;	
 	 	 	
 	(ii)	be terminated by either Primero or First Majestic, if:	

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 	(A)	the Primero Shareholder Meeting is held and the Arrangement Resolution is not approved by the Primero Shareholders in accordance with applicable Laws and the Interim Order;	
 	 	 	
 	(B)	there shall be passed any Law that makes consummation of the transactions contemplated by this Agreement illegal or otherwise prohibited or if any Governmental Entity shall have issued any injunction, order, decree or ruling enjoining First Majestic or Primero from consummating the transactions contemplated by this Agreement and such injunction, order, decree or ruling shall become final and non-appealable;	
 	 	 	
 	(C)	subject to Section 5.4, the other Party is in default of a covenant or obligation hereunder such that the conditions contained in Section 5.2(a) or 5.3(a), as applicable, would be incapable of satisfaction, provided the Party seeking to terminate this Agreement is not then in breach of this Agreement so as to cause any condition in favour of all Parties or in favour of the other Party not to be satisfied;	
 	 	 	
 	(D)	subject to Section 5.4, any representation or warranty of the other Party under this Agreement is untrue or incorrect and shall have become untrue or incorrect such that the condition contained in Section 5.2(b) or 5.3(b), as applicable, would be incapable of satisfaction, provided that the Party seeking to terminate this Agreement is not then in breach of this Agreement so as to cause any condition in favour of both Parties or in favour of the other Party not to be satisfied; or	
 	 	 	
 	(E)	the Effective Time does not occur on or prior to the Outside Date, provided that a Party may not terminate this Agreement pursuant to this Section 6.2(a)(ii)(E) if the failure of the Effective Time to so occur has been principally caused by, or is a result of, a breach by such Party of any of its representations or warranties or the failure of such Party to perform any of its covenants or agreements under this Agreement;	

 	(iii)	be terminated by First Majestic if:	

 	(A)	Primero shall have effected a Change of Recommendation;	
 	 	 	
 	(B)	Primero breaches any of the provisions of Section 4.3 or Section 4.4; or	
 	 	 	
 	(C)	a Material Adverse Effect has occurred with respect to Primero; or	

 	(iv)	be terminated by Primero:	

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 	(A)	in order to enter into a definitive written agreement with respect to a Superior Proposal, subject to compliance with Section 4.3 and Section 4.4 and the payment of the fee required to be paid pursuant to Section 6.3(a); or	
 	 	 	
 	(B)	if a Material Adverse Change has occurred with respect to First Majestic.	

 	(b)	If this Agreement is terminated in accordance with the foregoing provisions of this Section 6.2, no Party shall have any further liability to perform its obligations hereunder, except as provided for in Section 6.3, which shall survive the termination of this Agreement or as otherwise contemplated hereby, and provided that, subject to Section 6.5 and 6.6, neither the termination of this Agreement nor anything contained in this Section 6.2(b) shall relieve any Party from any liability for any breach by it of this Agreement, including from any inaccuracy in its representations and warranties and any non-performance by it of its covenants made herein.	

6.3	Termination Payment.	

 	(a)	If:	

 	(i)	Primero shall terminate this Agreement pursuant to Section 6.2(a)(iv)(A) in order to enter into a definitive agreement with respect to a Superior Proposal;	
 	 	 	
 	(ii)	First Majestic shall terminate this Agreement pursuant to Section 6.2(a)(iii)(A); or	
 	 	 	
 	(iii)	either Primero or First Majestic shall terminate this Agreement pursuant to Section 6.2(a)(ii)(A) or Section 6.2(a)(ii)(E), or First Majestic shall terminate this Agreement pursuant to Section 6.2(a)(iii)(B), provided that, in any of the foregoing circumstances, (A) an Acquisition Proposal is publicly announced or made to the Primero Shareholders and is not publicly withdrawn prior to the earlier of the date of the Primero Shareholder Meeting and the date of such termination; and (B) an Acquisition Proposal is consummated within 12 months of such termination;	
then in any such case Primero shall pay to First Majestic by wire transfer the Termination Payment in immediately available funds to an account designated by First Majestic. Such payment shall be due and payable:

 	(iv)	in the case of a termination specified in clause (i), concurrent with the termination of this Agreement;	
 	 	 	
 	(v)	in the case of a termination specified in clause (ii), within three Business Days after written notice of termination by First Majestic; or	

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 	(vi)	in the case of a termination specified in clause (iii), concurrent with the consummation of any Acquisition Proposal.	
For the purposes of this section, the term “Acquisition Proposal” shall have the meaning assigned to such term in Section 1.1, except that references to “20%” shall be deemed to be references to “50%”.

 	(b)	For greater certainty, Primero shall not be obligated to make more than one payment pursuant to Section 6.3(a).	
 	 	 	
 	(c)	If First Majestic shall terminate this Agreement pursuant to Section 6.2(a)(ii)(D) provided that First Majestic is not in default of a covenant or obligation hereunder so as to cause any condition in favour of both Parties or in favour of Primero not to be satisfied, then Primero shall pay to First Majestic an expense reimbursement fee of $2,000,000 within five Business Days after written notice of termination by First Majestic.	
 	 	 	
 	(d)	If Primero shall terminate this Agreement pursuant to Section 6.2(a)(ii)(D) provided that Primero is not in default of a covenant or obligation hereunder so as to cause any condition in favour of both Parties or in favour of First Majestic not to be satisfied, then First Majestic shall pay to Primero an expense reimbursement fee of $2,000,000 within five Business Days after written notice of termination by Primero.	

6.4	Liquidated Damages .	
Primero and First Majestic acknowledge that the damages set forth in this Article 6 are a genuine pre-estimate of the damages, including opportunity costs, the other Party will suffer or incur as a result of the event giving rise to those damages and are not penalties. Each of the Parties irrevocably waives any right it may have to raise as a defence in any proceedings that any such damages are excessive or punitive.

6.5	Remedies .	
Subject to Section 6.6, the Parties hereto acknowledge and agree that an award of money damages would be inadequate for any breach of this Agreement by any Party or its Representatives and any such breach would cause the non-breaching Party irreparable harm. Accordingly, the Parties hereto agree that, in the event of any breach or threatened breach of this Agreement by one of the Parties, the non-breaching Party will also be entitled, without the requirement of posting a bond or other security, to equitable relief, including injunctive relief and specific performance. Such remedies will not be the exclusive remedies for any breach of this Agreement but will be in addition to all other remedies available at law or equity to the Parties.

6.6	Effects of Termination Payment or Expense Reimbursement .	
For greater certainty, the Parties agree that the payment of the amount pursuant to Section 6.3 is the sole monetary remedy as a result of the occurrence of any of the events referred to in Section 6.3. Subject to the immediately preceding sentence, nothing in this Agreement shall preclude a Party from seeking damages in respect of losses incurred or suffered by such Party as a result of any breach of this Agreement by the other Party, seeking injunctive relief to restrain any breach or threatened breach of the covenants or agreements set forth in this Agreement or the Confidentiality Agreement or otherwise, or seeking specific performance of any of such covenants or agreements, without the necessity of posting bond or security in connection therewith.

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ARTICLE 7
GENERAL

7.1	Privacy.	
Each Party shall comply with applicable privacy Laws in the course of collecting, using and disclosing personal information about an identifiable individual (the “Transaction Personal Information” ). No Party shall disclose Transaction Personal Information to any Person other than to its advisors who are evaluating and advising on the transactions contemplated by this Agreement. If the Arrangement is consummated, no Party shall, following the Effective Date, without the consent of the individuals to whom such Transaction Personal Information relates or as permitted or required by applicable Laws, use or disclose Transaction Personal Information:

 	(a)	for purposes other than those for which such Transaction Personal Information was collected prior to the Effective Date;	
 	 	 	
 	(b)	which does not relate directly to the carrying on of the business of such Party or to the carrying out of the purposes for which the transactions contemplated by this Agreement were implemented; and	
 	 	 	
 	(c)	as otherwise required by Law.	
Each Party shall protect and safeguard the Transaction Personal Information against unauthorized collection, use or disclosure. Each Party shall cause its Representatives to observe the terms of this Section 7.1 and to protect and safeguard Transaction Personal Information in their possession. If this Agreement shall be terminated, each Party shall promptly deliver to the other Parties all Transaction Personal Information relating to such other Party or its Representatives in such Party’s possession or in the possession of any of such Party’s Representatives, including all copies, reproductions, summaries or extracts thereof.

7.2	Notices .	
All notices and other communications which may or are required to be given pursuant to any provision of this Agreement shall be given or made in writing and shall be deemed to be validly given if served personally or by email, in each case addressed to the particular party at:

 	(a)	If to First Majestic:	

 	First Majestic Silver Corp.	
 	1800 – 925 West Georgia St.	
 	Vancouver, British Columbia V6C 3L2	

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 	Attention:	Keith Neumeyer and Connie Lillico	
 	Email:	keith@firstmajestic.com and	
 	connie@firstmajestic.com	
with a copy to:

 	McCullough O’Connor Irwin LLP	
 	2600 – 1066 West Hastings Street	
 	Vancouver, British Columbia V6E 3X1	

 	Attention:	James D. Beeby	
 	Email:	jbeeby@moisolicitors.com	

 	(b)	If to Primero:	

 	Primero Mining Corp.	
 	79 Wellington Street West	
 	TD South Tower, Suite 2100 P.O. Box 139	
 	Toronto, Ontario M5K 1H1	

 	Attention:	Joseph F. Conway / Maura Lendon	
 	Email:	jconway@primeromining.com /	
 	mlendon@primeromining.com	
with a copy to:

 	Stikeman Elliot LLP	
 	5300 Commerce Court West	
 	199 Bay Street	 	
 	Toronto, Ontario M5L 1B9	
 	 	 	
 	Attention:	Elizabeth Breen	
 	Email:	ebreen@stikeman.com	
or at such other address of which any party may, from time to time, advise the other parties by notice in writing given in accordance with the foregoing. The date of receipt of any such notice shall be deemed to be the date of delivery or telecopying thereof.

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7.3	Assignment .	
Neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned by any Party without the prior written consent of the other Party.

7.4	Binding Effect .	
This Agreement and the Arrangement shall be binding upon and shall enure to the benefit of the Parties hereto and their respective successors.

7.5	Time of Essence .	
Time is of the essence of this Agreement.

7.6	Waiver and Modification .	
Each of the Parties may waive or consent to the modification of, in whole or in part, any inaccuracy of any representation or warranty made to them hereunder or in any document to be delivered pursuant hereto and may waive or consent to the modification of any of the covenants herein contained for their respective benefit or waiver or consent to the modification of any of the obligations of the other Party hereto. Any waiver or consent to the modification of any of the provisions of this Agreement, to be effective, must be in writing executed by the Party granting such waiver or consent.

7.7	Third Party Beneficiaries .	
Except as provided in Section 4.7 which, without limiting its terms, is intended as stipulations for the benefit of the third parties mentioned in such provisions (such third parties referred to in this Section 7.7 as the “Covered Persons” ) and except for the rights of the Primero Shareholders to receive the Consideration following the Effective Time pursuant to the Arrangement, the Parties intend that this Agreement will not benefit or create any right or cause of action in favour of any Person, other than the Parties and that no Person, other than the Parties, shall be entitled to rely on the provisions of this Agreement in any action, suit, proceeding, hearing or other forum. Despite the foregoing, First Majestic acknowledges to each of the Covered Persons their direct rights against it under Section 4.7 of this Agreement, which are intended for the benefit of, and shall be enforceable by, each Covered Person, his or her heirs and his or her legal representatives, and for such purpose, Primero confirms that it is acting as trustee on their behalf, and agrees to enforce such provisions on their behalf.

7.8	Severability .	
If any provision of this Agreement is determined by any court of competent jurisdiction to be illegal or unenforceable, that provision will be severed from this Agreement and the remaining provisions will continue in full force and effect so long as the economic or legal substance of the transactions contemplated herein is not affected in any material manner or would prevent or significantly impede or materially delay the completion of the Arrangement.

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7.9	Mutual Interest .	
Notwithstanding the fact that any part of this Agreement has been drafted or prepared by or on behalf of one of the Parties, all Parties confirm that they and their respective counsel have reviewed and negotiated this Agreement and that the Parties have adopted this Agreement as the joint agreement and understanding of the Parties, and the language used in this Agreement will be deemed to be the language chosen by the Parties to express their mutual intent, and the Parties waive the application of any Laws or rule of construction providing that ambiguities in any agreement or other document will be construed against the Party drafting such agreement or other document and agree that no rule of construction providing that a provision is to be interpreted in favour of the Person who contracted the obligation and against the Person who stipulated it will be applied against any Party.

7.10	Further Assurances .	
Each Party hereto shall, from time to time, and at all times hereafter, at the request of the other Party hereto, but without further consideration, do all such further acts and things and execute and deliver all such further documents and instruments as shall be reasonably required in order to fully perform and carry out the terms and intent of this Agreement and, in the event the Arrangement becomes effective, to document or evidence any of the transactions or events set out in the Plan of Arrangement.

7.11	Injunctive Relief .	
The Parties agree that irreparable harm would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached for which money damages would not be an adequate remedy at law. It is accordingly agreed that the Parties will be entitled to an injunction or injunctions and other equitable relief to prevent breaches of this Agreement, any requirement for the securing or posting of any bond in connection with the obtaining of any such injunctive or other equitable relief hereby being waived.

7.12	No Personal Liability .	
No director, officer or employee of First Majestic will have any personal liability to Primero under this Agreement or any other document delivered in connection with this Agreement or the Arrangement on behalf of First Majestic. No director, officer or employee of Primero will have any personal liability to First Majestic under this Agreement or any other document delivered in connection with this Agreement or the Arrangement on behalf of Primero.

7.13	Expenses .	
Except as provided in Section 6.3 and the Plan of Arrangement, each Party will pay its respective legal and accounting costs, fees and expenses incurred in connection with the preparation, execution and delivery of this Agreement and all documents and instruments executed pursuant to this Agreement and any other costs, fees and expenses whatsoever and howsoever incurred.

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7.14	Governing Law; Attornment; Service of Process .	
This Agreement shall be governed, including as to validity, interpretation and effect, by the laws of the Province of British Columbia and the laws of Canada applicable therein. Each of the Parties hereby irrevocably attorns to the non-exclusive jurisdiction of the courts of the Province of British Columbia in respect of all matters arising under and in relation to this Agreement or the Arrangement and waives, to the fullest extent possible, the defence of an inconvenient forum or any similar defence to the maintenance of proceedings in such courts.

7.15	Counterparts .	
This Agreement may be executed in one or more counterparts and by facsimile or other electronic means, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.
[Remainder of page has been left intentionally blank]

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IN WITNESS WHEREOF the Parties hereto have executed this Agreement as of the date first written above.

FIRST MAJESTIC SILVER CORP.	

(signed) “ Keith Neumeyer ”	
Authorized Signatory	
Name: Keith Neumeyer	

PRIMERO MINING CORP.	

(signed) “ Joseph F. Conway ”	
Authorized Signatory	
Name: Joseph F. Conway	

EXHIBIT A	
TO THE ARRANGEMENT AGREEMENT DATED AS OF JANUARY 11, 2018	
BETWEEN FIRST MAJESTIC SILVER CORP. AND PRIMERO MINING CORP.	
 	
PLAN OF ARRANGEMENT UNDER THE PROVISIONS OF DIVISION 5 OF PART 9	
OF THE	
BUSINESS CORPORATIONS ACT (BRITISH COLUMBIA)	
 	
ARTICLE 1	
INTERPRETATION	
1.1                                     Definitions. In this Plan of Arrangement, unless there is something in the subject matter or context inconsistent therewith, the following terms shall have the respective meanings set out below and grammatical variations of such terms shall have corresponding meanings:

 	(a)	“Arrangement” means an arrangement under the provisions of Division 5 of Part 9 of the Business Corporations Act, on the terms set forth in this Plan of Arrangement, subject to any amendment or supplement thereto in accordance with the Arrangement Agreement and this Plan of Arrangement or made at the direction of the Court in the Final Order;	
 	 	 	
 	(b)	“Arrangement Agreement” means the arrangement agreement dated January 11, 2018 between First Majestic and Primero;	
 	 	 	
 	(c)	“Arrangement Resolution” means the special resolution approving the Arrangement, to be in substantially the form of Exhibit B to the Arrangement Agreement, to be considered, and if deemed advisable, passed with or without variation, by the Primero Shareholders at the Primero Meeting;	
 	 	 	
 	(d)	“Business Corporations Act” means the Business Corporations Act (British Columbia);	
 	 	 	
 	(e)	“Business Day” means any day other than Saturday, Sunday or any day on which major banks are closed for business in Vancouver, British Columbia or in Toronto, Ontario;	
 	 	 	
 	(f)	“Consideration” means the consideration to be received pursuant to the Plan of Arrangement in respect of each Primero Share that is issued and outstanding immediately prior to the Effective Time, consisting of such number of First Majestic Shares as is equal to the Exchange Ratio;	
 	 	 	
 	(g)	“Court” means the British Columbia Supreme Court;	
 	 	 	
 	(h)	“Depositary” means Computershare Investor Services Inc., at such offices as will be set out in the Letter of Transmittal;	
 	 	 	
 	(i)	“Dissent Procedures” has the meaning set out in Section 3.1;	

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 	(j)	“Dissent Rights” has the meaning set out in Section 3.1;	
 	 	 	
 	(k)	“Dissenting Shareholder” means a registered holder of Primero Shares who dissents in respect of the Arrangement in strict compliance with the Dissent Procedures;	
 	 	 	
 	(l)	“Effective Date” means the date the Arrangement completes, as determined in accordance with the Arrangement Agreement;	
 	 	 	
 	(m)	“Effective Time” means the time when the transactions contemplated herein will be deemed to have been completed, which shall be 12:01 a.m. (Vancouver time) on the Effective Date;	
 	 	 	
 	(n)	“Exchange Ratio” means 0.03325;	
 	 	 	
 	(o)	“Final Order” means the final order of the Court approving the Arrangement as such order may be amended at any time prior to the Effective Date or, if appealed, then, unless such appeal is abandoned or denied, as affirmed;	
 	 	 	
 	(p)	“First Majestic” means First Majestic Silver Corp., a company existing under the laws of British Columbia;	
 	 	 	
 	(q)	“First Majestic Shares” means the common shares in the capital of First Majestic;	
 	 	 	
 	(r)	“Holder” when used with reference to any securities of Primero, means the holder of such securities shown from time to time in the register maintained by or on behalf of Primero in respect of such securities;	
 	 	 	
 	(s)	“In-The-Money Amount” in respect of a stock option means the amount, if any, by which the aggregate fair market value at that time of the securities subject to the option exceeds the aggregate exercise price of the option;	
 	 	 	
 	(t)	“Interim Order” means the interim order of the Court made in connection with the process for obtaining shareholder approval of the Arrangement and related matters, as such order may be amended, supplemented or varied by the Court;	
 	 	 	
 	(u)	“ITA” means the Income Tax Act (Canada);	
 	 	 	
 	(v)	“Letter of Transmittal” means the letter of transmittal forwarded by Primero to Primero Shareholders for use in connection with the Plan of Arrangement or such other equivalent form of letter of transmittal acceptable to First Majestic acting reasonably;	
 	 	 	
 	(w)	“Meeting Date” means the date of the Primero Meeting;	
 	 	 	
 	(x)	“Parties” means First Majestic and Primero and “Party” means any one of them;	

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 	(y)	“Person” includes any individual, firm, partnership, joint venture, venture capital fund, association, trust, trustee, executor, administrator, legal personal representative, estate, group, body corporate, corporation, company, unincorporated association or organization, governmental entity, syndicate or other entity, whether or not having legal status;	
 	 	 	
 	(z)	“Plan of Arrangement” means this plan of arrangement and any amendment or variation hereto made in accordance with Article 5 hereto or the Arrangement Agreement or upon the direction of the Court in the Final Order;	
 	 	 	
 	(aa)	“Primero” means Primero Mining Corp., a company existing under the laws of British Columbia;	
 	 	 	
 	(bb)	“Primero DSU” means a deferred share unit issued pursuant to the Primero DSU Plan;	
 	 	 	
 	(cc)	“Primero DSU Plan” means Primero’s Deferred Share Unit Plan dated March 23, 2015;	
 	 	 	
 	(dd)	“Primero Meeting” means the special meeting of Primero Shareholders including any adjournment or adjournments thereof, to be called and held in accordance with the Interim Order for the purpose of considering and, if thought fit, approving the Arrangement Resolution;	
 	 	 	
 	(ee)	“Primero Option” means an option to purchase Primero Shares issued pursuant to the Primero Option Plan;	
 	 	 	
 	(ff)	“Primero Option Plan” means Primero’s Stock Option Plan dated May 4, 2016;	
 	 	 	
 	(gg)	“Primero Optionholder” means a holder of Primero Options;	
 	 	 	
 	(hh)	“Primero PSU” means a phantom share unit issued pursuant to the Primero PSU Plan;	
 	 	 	
 	(ii)	“Primero PSU Plan” means Primero’s 2013 Phantom Share Unit Plan dated April 18, 2016;	
 	 	 	
 	(jj)	“Primero Securities” means the Primero Shares, Primero Options, Primero Warrants, Primer DSUs and Primero PSUs;	
 	 	 	
 	(kk)	“Primero Share” means a common share in the authorized share structure of Primero;	
 	 	 	
 	(ll)	“Primero Shareholder” means a holder of Primero Shares;	
 	 	 	
 	(mm)	“Primero Warrant” means a common share purchase warrant of Primero governed by the Primero Warrant Indenture;	

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 	(nn)	“Primero Warrant Indenture” means the common share purchase warrant indenture dated June 24, 2016 entered into between Primero and Computershare Trust Company of Canada;	
 	 	 	
 	(oo)	“Primero Warrantholder” means a holder of Primero Warrants;	
 	 	 	
 	(pp)	“Replacement Option” has the meaning set out in Section 2.3(c); and	
 	 	 	
 	(qq)	“TSX” means the Toronto Stock Exchange.	
1.2                                     Interpretation Not Affected by Headings, etc. The division of this Plan of Arrangement into sections and other portions and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation hereof. Unless otherwise indicated, all references in this Plan of Arrangement to a “Section” followed by a number and/or a letter refer to the specified section of this Plan of Arrangement. Unless otherwise indicated, the terms “this Plan of Arrangement”, “hereof”, “herein”, “hereunder” and “hereby” and similar expressions refer to this Plan of Arrangement as amended or supplemented from time to time pursuant to the applicable provisions hereof, and not to any particular section or other portion hereof.
1.3                                     Currency. All sums of money referred to in this Plan of Arrangement are expressed in lawful money of Canada.
1.4                                     Number, etc. Unless the context otherwise requires, words importing the singular shall include the plural and vice versa and words importing any gender shall include all genders.

1.5	Construction. In this Plan of Arrangement unless otherwise indicated :	

 	(a)	the words “include”, “including” or “in particular”, when following any general term or statement, shall not be construed as limiting the general term or statement to the specific items or matters set forth or to similar items or matters, but rather as permitting the general term or statement to refer to all other items or matters that could reasonably fall within the broadest possible scope of the general term or statement;	
 	 	 	
 	(b)	a reference to a statute means that statute, as amended and in effect as of the date of this Plan of Arrangement, and includes each and every regulation and rule made thereunder and in effect as of the date hereof;	
 	 	 	
 	(c)	where a word, term or phrase is defined, its derivatives or other grammatical forms have a corresponding meaning; and	
 	 	 	
 	(d)	time is of the essence.	

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      ARTICLE 2
ARRANGEMENT
2.1                                     Arrangement Agreement. This Plan of Arrangement is made pursuant to, is subject to the provisions of and forms a part of the Arrangement Agreement, except in respect of the sequence of the steps comprising the Arrangement, which shall occur in the order set forth herein.
2.2                                     Binding Effect. This Plan of Arrangement will become effective at, and be binding at and after, the Effective Time on:

 	(a)	Primero and its applicable subsidiaries;	
 	 	 	
 	(b)	the Primero Shareholders;	
 	 	 	
 	(c)	the Primero Optionholders;	
 	 	 	
 	(d)	the Primero Warrantholders;	
 	 	 	
 	(e)	All persons who were immediately prior to the Effective Time holders or beneficial owners of Primero PSUs or Primero DSUs;	
 	 	 	
 	(f)	First Majestic; and	
 	 	 	
 	(g)	the Depositary.	
2.3                                     Arrangement. Commencing at the Effective Time, the following shall occur and shall be deemed to occur in the following sequence, in each case effective as at one minute intervals starting at the Effective Time, without any further act or formality:

 	(a)	each Primero Share held by a Dissenting Shareholder in respect of which the Primero Shareholder has validly exercised his, her or its Dissent Rights shall be deemed to be transferred and assigned by such Dissenting Shareholder, without any further act or formality on its part, to First Majestic (free and clear of any liens, charges and encumbrances of any nature whatsoever) in accordance with, and for the consideration set forth in, Section 3.1;	
 	 	 	
 	(b)	each Primero Share (other than any Primero Share held by any Dissenting Shareholder) will, without further act or formality and by or on behalf of a holder of Primero Shares, be irrevocably assigned and transferred by the holder thereof to First Majestic (free and clear of any liens, charges and encumbrances of any nature whatsoever) in exchange for such number of First Majestic Shares as is equal to the Exchange Ratio for each Primero Share held;	
 	 	 	
 	(c)	with respect to each Primero Share transferred and assigned in accordance with Section 2.3(a) or Section 2.3(b):	

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 	(i)	the registered holder thereof shall cease to be the registered holder of such Primero Share and the name of such registered holder shall be removed from the register of Primero Shareholders as of the Effective Time;	
 	 	 	
 	(ii)	the registered holder thereof shall be deemed to have executed and delivered all consents, releases, assignments and waivers, statutory or otherwise, required to transfer and assign such Primero Share; and	
 	 	 	
 	(iii)	First Majestic will be the holder of all of the outstanding Primero Shares and the register of Primero Shareholders shall be revised accordingly;	

 	(d)	each Primero Option which is outstanding and has not been duly exercised prior to the Effective Time (whether vested or unvested), notwithstanding the terms of the Primero Option Plan, shall be deemed to be unconditionally vested and exercisable in full, and such Primero Option will be exchanged for an option (each, a “Replacement Option” ) to purchase from First Majestic such number of First Majestic Shares as is equal to the Exchange Ratio (and when aggregated with the other similar Replacement Options of a holder of such options resulting in a fraction of a First Majestic Share, they shall all be rounded down to the nearest whole number of First Majestic Shares). Each Replacement Option shall provide for an exercise price per First Majestic Share (rounded up to the nearest whole cent) equal to the exercise price per Primero Share that would otherwise be payable pursuant to the Primero Option it replaces, divided by the Exchange Ratio. All other terms and conditions of the Replacement Options, including the term to expiry, conditions to and manner of exercising, will remain the same and shall be governed by the terms of the Primero Option Plan and any certificate or option agreement previously evidencing the Primero Option shall thereafter evidence and be deemed to evidence such Replacement Option. It is intended that subsection 7(1.4) of the ITA apply to such exchange of options. Accordingly, and notwithstanding the foregoing, if required, the exercise price of a Replacement Option will be increased such that the In The Money Amount of the Replacement Option immediately after the exchange does not exceed the In The Money Amount of the Primero Option immediately before the exchange;	
 	 	 	
 	(e)	in accordance with the terms of the Primero Warrant Indenture:	

 	(i)	each holder of a Primero Warrant outstanding immediately prior to the Effective Time shall receive (and such holder shall accept), upon the exercise of such holder’s Primero Warrant, in lieu of each Primero Share to which such holder was theretofore entitled, such number of First Majestic Shares as is equal to the Exchange Ratio (and when aggregated with an exercise of other similar Primero Warrants resulting in a fraction of a First Majestic Share, they all shall be rounded down to nearest whole number of First Majestic Shares) provided, however, the exercise price per First Majestic Share shall be equal to the current exercise price per Primero Share divided by the Exchange Ratio; and	

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 	(ii)	each Primero Warrant shall continue to be governed by and be subject to the terms of the Primero Warrant Indenture and any applicable supplemental indenture executed thereunder;	

 	(f)	notwithstanding any vesting or other provisions to which a Primero PSU or Primero DSU might otherwise be subject (whether by contract, the conditions of a grant, applicable laws or the terms of the Primero PSU Plan or Primero DSU Plan):	

 	(i)	each Primero PSU and Primero DSU that is issued and outstanding at the Effective Time shall, without any further action by or on behalf of any holder of such Primero PSU or Primero DSU, as applicable, be deemed to be fully vested and will be deemed to be payable in full and Primero shall deliver to the holder thereof for each Primero PSU or Primero DSU held by such holder a cash payment in an amount equal to C$0.30, which amount shall in each case be paid pursuant to and in accordance with Article 4;	
 	 	 	
 	(ii)	each Primero PSU and Primero DSU shall immediately be cancelled and all notices or agreements related thereto shall be terminated and the holder thereof shall thereafter have only the right to receive the consideration to which such holder is entitled to pursuant to this Section 2.3(f) in the manner specified in Article 4;	

 	(g)	the Primero PSU Plan and Primero DSU Plan shall be terminated (and all rights issued thereunder shall expire) and shall be of no further force or effect; and	
 	 	 	
 	(h)	the exchanges, cancellations and other steps provided for in this Section 2.3 will be deemed to occur on the Effective Date, notwithstanding that certain of the procedures related thereto are not completed until after the Effective Date.	

2.4	Post-Effective Time Procedures.	

 	(a)	Following receipt of the Final Order and prior to the Effective Date, First Majestic shall deliver or arrange to be delivered to the Depositary the Consideration, including certificates representing the First Majestic Shares in accordance with Section 2.3 hereof, which certificates shall be held by the Depositary as agent and nominee for the former Primero Shareholders for distribution to the former Primero Shareholders in accordance with the provisions of Article 4 hereof.	
 	 	 	
 	(b)	Subject to the provisions of Article 4 hereof, and upon return of a properly completed Letter of Transmittal by a registered former Primero Shareholder together with certificates, if any, which, immediately prior to the Effective Date, represented Primero Shares and such other documents as the Depositary may require, former Primero Shareholders shall be entitled to receive delivery of the certificates representing the First Majestic Shares and cheques representing the cash to which they are entitled pursuant to Section 2.3(a).	

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2.5                                     No Fractional Shares. In no event shall any holder of Primero Shares be entitled to a fractional First Majestic Share. Where the aggregate number of First Majestic Shares to be issued to a former Primero Shareholder as consideration under this Arrangement would result in a fraction of a First Majestic Share being issuable, the number of First Majestic Shares to be received by such Primero Shareholder shall be rounded down to the nearest whole First Majestic Share and no Person will be entitled to any compensation in respect of a fractional First Majestic Share.
2.6                                     Adjustments to Exchange Ratio. The Exchange Ratio shall be adjusted to reflect fully the effect of any stock split, reverse split, stock dividend (including any dividend or distribution of securities convertible into First Majestic Shares or Primero Shares, other than stock dividends paid in lieu of ordinary course dividends), consolidation, reorganization, recapitalization or other like change with respect to First Majestic Shares or the Primero Shares occurring after the date of the Arrangement Agreement and prior to the Effective Time.
ARTICLE 3
RIGHTS OF DISSENT

3.1	Rights of Dissent.	

 	(a)	Registered holders of Primero Shares may exercise rights of dissent (“Dissent Rights”) with respect to such shares pursuant to and in the manner set forth in section 237 to 247 of the Business Corporations Act and this Section 3.1 (the “Dissent Procedures” ) in connection with the Arrangement; provided that, notwithstanding subsection 242(a) of the Business Corporations Act, the written objection to the Arrangement Resolution referred to in subsection 242(a) of the Business Corporations Act must be received by Primero not later than 5:00 p.m. (Vancouver time) on the Business Day that is two Business Days before the Meeting Date or any date to which the Primero Meeting may be postponed or adjourned and provided further that Dissenting Shareholders who:	

 	(i)	are ultimately entitled to be paid fair value for their Primero Shares, notwithstanding anything to the contrary contained in section 245 of the Business Corporations Act, shall be deemed to have transferred such Primero Shares to First Majestic as of the Effective Time without any further act or formality and free and clear of all liens, claims and encumbrances, in consideration for the payment by First Majestic of the fair value thereof, in cash; or	
 	 	 	
 	(ii)	are ultimately not entitled, for any reason, to be paid fair value for their Primero Shares shall be deemed to have participated in the Arrangement on the same basis as a non-dissenting holder of Primero Shares and shall be entitled to receive only the consideration contemplated in Sections 2.3(a) that such holder would have received pursuant to the Arrangement if such holder had not exercised Dissent Rights;	

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but in no case shall First Majestic, Primer or any other Person be required to recognize such Persons as holders of Primero Shares after the Effective Time, and the names of such Persons shall be deleted from the registers of holders of Primero Shares at the Effective Time.

 	(b)	In addition to any other restrictions set forth in the Business Corporations Act, none of the following shall be entitled to exercise Dissent Rights:	

 	(i)	Primero Shareholders who vote, or who have instructed a proxyholder to vote, in favour of the Arrangement Resolution;	
 	 	 	
 	(ii)	Primero Optionholders;	
 	 	 	
 	(iii)	Primero Warrantholders;	
 	 	 	
 	(iv)	All persons who were immediately prior to the Effective Time holders or beneficial owners of Primero PSUs or Primero DSUs.	

ARTICLE 4	
DELIVERY OF CONSIDERATION	

4.1	Delivery of Consideration.	

 	(a)	Upon surrender to the Depositary for cancellation of a certificate that immediately before the Effective Time represented one or more outstanding Primero Shares that were exchanged for the Consideration in accordance with Section 2.3 hereof together with such other documents and instruments as would have been required to effect the transfer of the Primero Shares formerly represented by such certificate under the Business Corporations Act and the articles of Primero and such additional documents and instruments as the Depositary may reasonably require, the holder of such surrendered certificate shall be entitled to receive in exchange therefor, and the Depositary shall deliver to such holder following the Effective Time, a certificate representing the First Majestic Shares that such holder is entitled to receive in accordance with Section 2.3(b) hereof.	
 	 	 	
 	(b)	After the Effective Time and until surrendered for cancellation as contemplated by Section 4.1(a) hereof, each certificate that immediately prior to the Effective Time represented one or more Primero Shares shall be deemed at all times to represent only the right to receive in exchange therefor a certificate representing the First Majestic Shares that such holder is entitled to receive in accordance with Section 2.3(b) hereof.	
 	 	 	
 	(c)	As soon as practicable following the Effective Date, the Depositary shall deliver to each person who immediately before the Effective Time was a holder of Primero DSUs or Primero PSUs as reflected on the register or accounts maintained by or on behalf of Primero in respect of Primero DSUs or Primero PSUs, as applicable, as provided to the Depositary and who is entitled to a payment hereunder pursuant to Section 2.3(f), a cheque representing the cash that such holder is entitled to receive in accordance with Section 2.3(f) hereof.	

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4.2                                     Distributions with Respect to Unsurrendered Certificates. No dividends or other distributions declared or made after the Effective Time with respect to First Majestic Shares with a record date after the Effective Time shall be paid to the holder of any unsurrendered certificate which, immediately prior to the Effective Time, represented outstanding Primero Shares that were exchanged pursuant to Section 2.3 unless and until the holder of record of such certificate shall surrender such certificate in accordance with Section 4.1. Subject to applicable law and to Section 4.5, at the time of such surrender of any such certificate (or in the case of clause (ii) below, at the appropriate payment date), there shall be paid to the holder of record of the certificates formerly representing whole Primero Shares, without interest, (i) the amount of dividends or other distributions with a record date after the Effective Time theretofore paid with respect to such whole First Majestic Share and (ii) on the appropriate payment date, the amount of dividends or other distributions with a record date after the Effective Time but prior to surrender and a payment date subsequent to surrender payable with respect to such whole First Majestic Share.
4.3                                     Lost Certificates. In the event any certificate which immediately prior to the Effective Time represented one or more outstanding Primero Shares that were exchanged pursuant to Section 2.3 shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such certificate to be lost, stolen or destroyed, the Depositary shall issue in exchange for such lost, stolen or destroyed certificate, one or more certificates representing one or more First Majestic Shares (and any dividends or distributions with respect thereto) deliverable in accordance with such holder’s Letter of Transmittal. When authorizing such payment in exchange for any lost, stolen or destroyed certificate, the Person to whom certificates representing First Majestic Shares are to be issued shall, as a condition precedent to the issuance thereof, give a bond satisfactory to First Majestic and the Depositary in such sum as First Majestic may direct, or otherwise indemnify First Majestic and the Depositary in a manner satisfactory to First Majestic and the Depositary against any claim that may be made against First Majestic or the Depositary with respect to the certificate alleged to have been lost, stolen or destroyed.
4.4                                     Extinction of Rights. Any certificate which immediately prior to the Effective Time represented outstanding Primero Shares that were exchanged pursuant to Section 2.3 and not deposited, with all other instruments required by Section 4.1 on or prior to the third anniversary of the Effective Date shall cease to represent a claim or interest of any kind or nature as a shareholder of First Majestic. On such date, the First Majestic Shares to which the former registered holder of the certificate referred to in the preceding sentence was ultimately entitled shall be deemed to have been surrendered to First Majestic, together with all respective entitlements to dividends, distributions and interest thereon held for such former registered holder. None of First Majestic, Primero or the Depositary shall be liable to any person in respect of any First Majestic Shares (or dividends, distributions and interest in respect thereof) delivered to a public official pursuant to any applicable abandoned property, escheat or similar law.

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4.5                                     Withholding and Sale Rights. Any of the Parties and the Depositary shall be entitled to deduct and withhold from (i) any consideration issuable or payable pursuant to this Plan of Arrangement to any holder of Primero Securities, or (ii) any dividend or consideration otherwise payable to any holder of First Majestic Shares such amounts as First Majestic or the Depositary, respectively, is required to deduct and withhold with respect to such issuance or payment, as the case may be, under the ITA, the U.S. Internal Revenue Code or any provision of provincial, state, local or foreign tax law, in each case as amended. If any amount is required to be deducted or withheld from the First Majestic Shares otherwise issuable , each of First Majestic and the Depositary is hereby authorized to sell or otherwise dispose of, at such times and at such prices as it determines, in its sole discretion, such portion of the First Majestic Shares, otherwise issuable or payable to such holder as is necessary to provide sufficient funds to First Majestic or the Depositary, as the case may be, to enable it to comply with such deduction or withholding requirement, and shall notify the holder thereof and remit to such holder any unapplied balance of the net proceeds of such sale or disposition (after deducting applicable sale commissions and any other reasonable expenses relating thereto) in lieu of the First Majestic Shares or other consideration so sold or disposed of. To the extent that amounts are so withheld or First Majestic Shares or other consideration are so sold or disposed of, such withheld amounts, or shares or other consideration so sold or disposed of, shall be treated for all purposes as having been paid to the holder of the shares in respect of which such deduction, withholding, sale or disposition was made, provided that such withheld amounts, or the net proceeds of such sale or disposition, as the case may be, are actually remitted to the appropriate taxing authority. Neither of First Majestic nor the Depositary shall be obligated to seek or obtain a minimum price for any of the First Majestic Shares or other consideration sold or disposed of by it hereunder, nor shall any of them be liable for any loss arising out of any such sale or disposition.

4.6	Paramountcy. From and after the Effective Time:	

 	(a)	this Plan of Arrangement shall take precedence and priority over any and all Primero Securities issued prior to the Effective Time; and	
 	 	 	
 	(b)	the rights and obligations of the Primero Securities shall be solely as provided in this Plan of Arrangement; and	
 	 	 	
 	(c)	all actions, causes of action, claims or proceedings (actual or contingent and whether or not previously asserted) based on or in any way relating to any Primero Securities shall be deemed to have been settled, compromised, released and determined without liability except as set forth in this Plan of Arrangement.	
ARTICLE 5
AMENDMENTS
5.1                                     The Parties may amend, modify and/or supplement this Plan of Arrangement at any time and from time to time prior to the Effective Date, provided that each such amendment, modification and/or supplement must be: (i) set out in writing, (ii) agreed to in writing by the Parties, (iii) filed with the Court and, if made following the Meeting, approved by the Court, and (iv) communicated to Primero Shareholders if and as required by the Court.
5.2                                     Any amendment, modification or supplement to this Plan of Arrangement may be proposed by the Parties at any time prior to the Primero Meeting (provided that the other party shall have consented thereto) with or without any other prior notice or communication, and if so proposed and accepted by the Persons voting at the Primero Meeting (other than as may be required under the Interim Order), shall become part of this Plan of Arrangement for all purposes.

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5.3                                     Any amendment, modification or supplement to this Plan of Arrangement that is approved by the Court following the Primero Meeting shall be effective only if (i) it is consented to in writing by each of the Parties (in each case, acting reasonably), (ii) it is filed with the Court (other than amendments contemplated in Section 5.4, which shall not require such filing) and (iii) if required by the Court, it is consented to by holders of the Primero Shares voting in the manner directed by the Court.
5.4                                     Any amendment, modification or supplement to this Plan of Arrangement may be made following the Effective Date unilaterally by First Majestic, provided that it concerns a matter which, in the reasonable opinion of First Majestic, is of an administrative nature required to better give effect to the implementation of this Plan of Arrangement and is not adverse to the financial or economic interests of any former Primero Shareholder.
ARTICLE 6
FURTHER ASSURANCES
6.1                                     Notwithstanding that the transactions and events set out herein shall occur and be deemed to occur in the order set out in this Plan of Arrangement without any further act or formality, each of the Parties shall make, do and execute, or cause to be made, done or executed, all such further acts, deeds, agreements, transfers, assurances, instruments or documents as may reasonably be required by any of them in order further to document or evidence any of the transactions or events set out herein.

EXHIBIT B
 TO THE ARRANGEMENT AGREEMENT DATED AS OF JANUARY 11, 2018
BETWEEN FIRST MAJESTIC SILVER CORP. AND PRIMERO MINING CORP.
ARRANGEMENT RESOLUTION
BE IT RESOLVED AS A SPECIAL RESOLUTION THAT:

1.	The arrangement (the “Arrangement” ) under Part 9, Division 5 of the Business Corporations Act (British Columbia) (as the Arrangement may be modified or amended), as more particularly described and set forth in the information circular (the “Circular” ) of Primero Mining Corp. (“Primero”) dated , 2018, is hereby authorized, approved and adopted.	
 	 	
2.	The plan of arrangement (the “Plan of Arrangement” ), the full text of which is set out as Exhibit A to the arrangement agreement dated January 11, 2018 between Primero and First Majestic Silver Corp. (the “Arrangement Agreement” ) and all transactions contemplated thereby, is hereby approved and adopted.	
 	 	
3.	The Arrangement Agreement, the actions of the directors of Primero in approving the Arrangement Agreement and the actions of the directors and officers of Primero in executing and delivering the Arrangement Agreement and any amendments thereto in accordance with its terms are hereby ratified and approved.	
 	 	
4.	Notwithstanding that this resolution has been passed (and the Arrangement adopted) by the shareholders of Primero or that the Arrangement has been approved by the Supreme Court of British Columbia, the directors of Primero are hereby authorized and empowered (i) to amend the Arrangement Agreement or the Plan of Arrangement to the extent permitted by the Arrangement Agreement or the Plan of Arrangement, and (ii) not to proceed with the Arrangement at any time prior to the Effective Time (as defined in the Arrangement Agreement).	
 	 	
5.	Any officer or director of Primero is hereby authorized and directed for and on behalf of Primero to execute or cause to be executed, under the seal of Primero or otherwise, and to deliver or cause to be delivered, all such documents and instruments and to perform or cause to be performed all such other acts and things as in such person’s opinion may be necessary or desirable to give full effect to the foregoing resolution and the matters authorized thereby, such authorization to be conclusively evidenced by the execution and delivery of such document, agreement or instrument or the doing of any such act or thing.	

EXHIBIT C
 TO THE ARRANGEMENT AGREEMENT DATED AS OF JANUARY 11, 2018
BETWEEN FIRST MAJESTIC SILVER CORP. AND PRIMERO MINING CORP.
DEBENTUREHOLDERS’ RESOLUTION
BE IT RESOLVED AS AN EXTRAORDINARY RESOLUTION THAT, pursuant to Section 13.11(c) of the Trust Indenture dated as of February 9, 2015 between Primero Mining Corp. and Computershare Trust Company of Canada (the “Indenture” ):

1.	Section 1.1(ggg) of the Indenture is hereby deleted in its entirety and replaced with the following:	
““Maturity Date” means, in respect of the Initial Debentures, the earlier of February 28, 2020 and the first Business Day following the effective date of the proposed arrangement (the “Arrangement” ) under Part 9, Division 5 of the Business Corporations Act (British Columbia) (as the same may be modified or amended) as more particularly described and set forth in the information circular (the “Circular” ) of the Corporation dated •, 2018 and distributed to the Debentureholders;”

2.	The Debenture Trustee (as defined in the Indenture) is authorized to execute any supplemental indenture or other document required to give effect to the amendment set out in paragraph 1 above.	
 	 	
3.	The Debenture Trustee is hereby authorized and directed for and on behalf of the Debentureholders to execute or cause to be executed, under the seal of Primero or otherwise, and to deliver or cause to be delivered, all such documents and instruments and to perform or cause to be performed all such other acts and things as in such person’s opinion may be necessary or desirable to give full effect to the foregoing resolution and the matters authorized thereby, such authorization to be conclusively evidenced by the execution and delivery of such document, agreement or instrument or the doing of any such act or thing.	

EXECUTION COPY
ASSET PURCHASE AGREEMENT
-BETWEEN-
MCEWEN MINING INC.
-AND-
PRIMERO MINING CORP.
___________________________________

AUGUST 25, 2017

TABLE OF CONTENTS

ARTICLE 1 INTERPRETATION	1	
 	 	
1.1	Defined Terms	1	
1.2	Certain Rules of Interpretation	12	
 	 	 	
ARTICLE 2 PURCHASED ASSETS AND PURCHASE PRICE	14	
 	 	
2.1	Purchase and Sale of Assets	14	
2.2	Excluded Assets	14	
2.3	Assumed Liabilities	14	
2.4	Excluded Liabilities	15	
2.5	Purchase Price	16	
2.6	Allocation of Purchase Price	16	
2.7	Assignment of Rights to the Purchased Assets	17	
2.8	Amounts Received Post-Closing	17	
2.9	Purchase Price Adjustment	17	
 	 	 	
ARTICLE 3 REPRESENTATIONS AND WARRANTIES	18	
 	 	
3.1	Representations and Warranties of Primero	18	
3.2	Representations and Warranties of McEwen	18	
 	 	 	
ARTICLE 4 COVENANTS	18	
 	 	
4.1	Conduct of Business of the Purchased Assets Prior to the Closing	18	
4.2	Covenants of Primero Relating to the Transaction	19	
4.3	Covenants of McEwen Relating to the Transaction	20	
4.4	Required Consents and Approvals	21	
4.5	Access to Information and Access for Due Diligence	22	
4.6	Public Communications	22	
4.7	Surety Arrangements	22	
4.8	Tax Matters	23	
4.9	Employment Matters	24	
4.10	Assistance with Financial Statements	25	
4.11	Transition Services Agreement	26	
4.12	Schedules to this Agreement	26	
 	 	 	
ARTICLE 5 NON-SOLICITATION	26	
 	 	
5.1	Non-Solicitation	26	
 	 	 	
ARTICLE 6 CONDITIONS	27	
 	 	
6.1	Mutual Conditions Precedent	27	
6.2	Additional Conditions Precedent to the Obligations of McEwen	27	
6.3	Additional Conditions Precedent to the Obligations of Primero	29	
 	 	 	
ARTICLE 7 TERM AND TERMINATION	30	
 	 	
7.1	Termination	30	
7.2	Effect of Termination	31	
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ARTICLE 8 CLOSING	31	
 	 	
8.1	Date, Time and Place of Closing	31	
 	 	 	
ARTICLE 9 INDEMNIFICATION	31	
 	 	
9.1	Survival	31	
9.2	Indemnification By Primero	32	
9.3	Indemnification By McEwen	32	
9.4	Certain Limitations	33	
9.5	Indemnification Procedures	33	
9.6	Payments	35	
9.7	Tax Treatment of Indemnification Payments	36	
9.8	One Recovery	36	
9.9	Duty to Mitigate	36	
9.10	Effect of Investigation	36	
9.11	Exclusive Remedies	36	
9.12	Trusts	36	
 	 	 	
ARTICLE 10 GENERAL PROVISIONS	37	
 	 	
10.1	Amendments	37	
10.2	Expenses	37	
10.3	Injunctive Relief and Remedies	37	
10.4	Privacy Matters	37	
10.5	Further Assurances	38	
10.6	Notices	39	
10.7	Time of the Essence	40	
10.8	Third Party Beneficiaries	40	
10.9	Brokerage and Finder's Fees	40	
10.10	Waiver	40	
10.11	Entire Agreement	40	
10.12	Successors and Assigns	40	
10.13	Severability	41	
10.14	Governing Law	41	
10.15	Rules of Construction	41	
10.16	Counterparts	41	

SCHEDULES	DESCRIPTION	
 	 	
Schedule "A"	Assumed Contracts	
Schedule "B"	Acquired Equipment	
Schedule "C"	Excluded Assets	
Schedule "D"	Acquired Fixed Assets	
Schedule "E"	Acquired Intellectual Property	
Schedule "F"	Acquired Properties	
Schedule "G"	Acquired Royalties	
Schedule "H"	Required Consents and Approvals	
Schedule "I"	Representations and Warranties of Primero	
Schedule "J"	Representations and Warranties of McEwen	
Schedule "K"	Permitted Encumbrances	
Exhibit A	Form of Bill of Sale	
-ii-

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ASSET PURCHASE AGREEMENT
THIS AGREEMENT is made as of August 25, 2017,
BETWEEN:
MCEWEN MINING INC. , a corporation existing under the laws the State of Colorado
(" McEwen ")
- and -
PRIMERO MINING CORP. , a corporation existing under the laws of the Province of British Columbia
(" Primero ")
WHEREAS Primero is the beneficial and registered owner of the Purchased Assets (as defined herein);
AND WHEREAS Primero desires to sell and assign or transfer, and McEwen desires to purchase and assume, the Purchased Assets and the Assumed Liabilities (as defined herein) upon and subject to the terms and conditions set out in this Agreement;
NOW THEREFORE , in consideration of the covenants and agreements herein contained and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the Parties (as defined herein) agree as follows:
ARTICLE 1
INTERPRETATION

1.1	Defined Terms	
As used in this Agreement, the following terms have the following meanings:
" Aboriginal Claims " means any and all claims, whether proven or unproven, by any person to or in respect of: (i) rights, title or interests of any Aboriginal Group by virtue of its status as an Aboriginal Group; (ii) treaty rights; (iii) Métis rights, title or interests; or (iv) specific or comprehensive claims being considered by the Government of Canada; and includes any alleged or proven failure of the Crown to satisfy any of its duties to any claimant of any of the foregoing, whether such failure is in respect of matters before, on or after the Closing Date;
" Aboriginal Group " means any First Nation, Métis, Inuit, community, aboriginal group or person, Indian Act band, tribal council, band council or other aboriginal organization in Canada;
" Acquired Equipment " means the equipment of Primero described in Schedule "B";
" Acquired Fixed Assets " means the fixed assets of Primero described in Schedule "D";
" Acquired Intellectual Property " means: all Intellectual Property and IP Licenses, including that Intellectual Property described in Schedule "E", together with: (i) all copies and tangible embodiments of the foregoing (in whatever form or medium); and (ii) all improvements, modifications, translations, adaptations, refinements, derivations, and combinations thereof acquired, created, developed or conceived by or on behalf of Primero as of the Closing Date;

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" Acquired Properties " means, collectively, the Black Fox Complex and the Grey Fox Property, each as described in Schedule "F", and " Acquired Property " means either one of them;
" Action " means any claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit, notice of violation, proceeding, litigation, citation, summons, subpoena or investigation of any nature, civil, criminal, administrative, regulatory or otherwise, whether at law or in equity;
" Adjustment Date " means September 30, 2017, or such other date as is agreed upon in writing by the Parties that is not more than five (5) Business Days prior to the Closing Date;
" affiliate " has the meaning specified in National Instrument 45-106 – Prospectus Exemptions ;
" Agreement " means this asset purchase agreement, including the schedules attached hereto;
" Assignee Purchaser " has the meaning ascribed thereto in Section 4.8(a);
" Assumed Contracts " means the Contracts listed in Schedule "A";
" Assumed Liabilities " has the meaning ascribed thereto in Section 2.3(b);
" Authorization " means, with respect to any Person, any order, permit, Environmental Permit, approval, certificate, grant, agreement, classification, restriction, consent, waiver, licence, registration or similar authorization of, from or required by any Governmental Entity having jurisdiction over the Person;
" Basket " has the meaning ascribed thereto in Section 9.4;
" Black Fox Complex " means the mine, mill, mining operations, group of mining claims and permits and related assets located in the Township of Black River - Matheson, Ontario and owned and operated by Primero, as more particularly described in Schedule "F";
" BMO " means the Bank of Montreal;
" BMO Credit Agreement " means the credit agreement dated as of May 23, 2014 between, inter alia , Primero as borrower, BMO as the administrative agent and the lenders party thereto, as amended by a first amending agreement dated as of December 22, 2014, a second amending agreement dated as of February 5, 2014, a third amending agreement dated as of December 31, 2015, a fourth amending agreement dated as of December 28, 2016, a fifth amending agreement dated as of March 30, 2017, and as further amended, restated, modified or supplemented from time to time;
" Books and Records " means all information in any form primarily relating to the Purchased Assets and the Assumed Liabilities, including books of account, personnel records, sales and purchase records, customer and supplier lists, lists of potential customers, referral sources, research and development reports and records, production reports and records, business reports, plans and projections, marketing and advertising materials, corporate seals, equipment logs, operating guides and manuals, business reports, plans and projections and all other documents, files, correspondence, e-mails, Authorizations, environmental management systems (including data collected for the purpose of compliance with Environmental Laws and the preparation of reports to Governmental Entities), all geological, geophysical, geochemical and test data and all other information (including internal and external studies, analyses and other work products) in relation to the Acquired Properties acquired, proved, gained or developed heretofore in the possession or under the control of Primero; (in each case, whether in written, printed, electronic or computer printout form, or stored on computer discs or other data and software storage and media devices);

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" Business Day " means any day of the year, other than a Saturday, Sunday or any day on which major banks are closed for business in Toronto, Ontario;
" CDE " means Canadian development expense or cumulative Canadian development expense, as the context requires, as defined in the Tax Act;
" CEE " means Canadian exploration expense or cumulative Canadian exploration expense, as the context requires, as defined in the Tax Act;
" Closing " means the consummation of the Transaction;
" Closing Date " means October 2, 2017, or such other date as the Parties may agree in writing;
" Closing Date Assets " means, in relation to the Purchased Assets: (i) any prepaid expenses; (ii) any receivables of Primero; and (iii) such other assets that were acquired and paid for by Primero prior to the Adjustment Date and that will be for the benefit of McEwen after the Closing Date; in each case that exist as at the Adjustment Date and that are agreed upon by Primero and McEwen in accordance with Section 2.9(b);
" Closing Date Liabilities " means, in relation to the Purchased Assets: (i) any realty taxes and local improvement rates; (ii) any utility and water charges; (iii) any assessment rates; (iv) any mining rents and mining taxes; and (v) trade payables and accruals related to the conversion of ore into Mineral Product that is an Excluded Asset or that provides Primero economic benefit as the Parties may reasonably agree; in each case that are accrued and unpaid as at the Adjustment Date and that are agreed upon by Primero and McEwen in accordance with Section 2.9(b);
" Closing Time " means 12:01 a.m. or such other time as the Parties may agree in writing on the Closing Date;
" Closure Plans " means the following certified closure plans that have been approved by the MNDM pursuant to the Mining Act in connection with the Purchased Assets: (i) Mine Closure Plan Amendment Plan (Apollo Gold Corporation) for the Black Fox Mining Site dated June, 2010 and approved by the MNDM on October 5, 2010; (ii) the Closure Plan Amendment prepared for the Black Fox Milling Site (Apollo Gold Corporation) dated November, 2008 and approved by the MNDM in November, 2008, as amended by the Closure Plan Amendment for the Black Fox Milling Site (Apollo Gold Corporation) dated March, 2010 and approved by the MNDM on July 7, 2010; and (iii) the Advanced Exploration Closure Plan (Brigus Gold Corporation) for the Grey Fox Project dated March 27, 2013 and approved by the MNDM on June 14, 2013;
" Competing Transaction " has the meaning ascribed thereto in Section 5.1;
" Completed Schedules " has the meaning ascribed thereto in Section 4.12;
" Contract " means any written agreement, commitment, engagement, contract, franchise, licence, lease, obligation, undertaking or joint venture relating to the Purchased Assets and to which Primero is a party or by which Primero is bound or affected;
" Data Room Materials " means the materials contained in the virtual data room (established by Primero) as at 12:01 a.m. on August 25, 2017 and listed or described on the index thereof to be attached to the Disclosure Letter on or before the Schedule Delivery Deadline;
" Direct Claim " has the meaning ascribed thereto in Section 9.5(c);

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" Disclosing Party " has the meaning ascribed thereto in Section 10.4(g);
" Disclosure Letter " means the disclosure letter dated the date of this Agreement and delivered by Primero to McEwen with this Agreement;
" Employee Obligations " means all accrued wages, salaries, commissions, vacation pay, overtime pay, incentive compensation, expenses, sick leave benefits, obligations under stock option plans, other employee benefits and all premiums for employment insurance, employer health tax, worker’s compensation, and Canada Pension Plan;
" Employees " means the employees who are presently employed by Primero whose employment relates primarily to the Purchased Assets, including contract employees and employees currently on sick leave, disability, maternity leave, workers' compensation leave or any other authorized leave of absence or layoff;
" Encumbrance " means any encumbrance of any kind whatsoever on property, including any privilege, mortgage, hypothec, lien, charge, pledge, security interest, lease, sublease, adverse claim, right of first offer or refusal, right of way, royalty, easement, encroachment or any other option, right or claim of others of any kind whatever, whether contractual, statutory or otherwise, arising;
" Environmental Laws " means all Laws imposing obligations, responsibilities, liabilities or standards of conduct for or relating to the protection of the environment and mine site operation, closure or Reclamation, and includes: (i) the regulation or control of pollution, contamination, activities, materials, substances or wastes in connection with or for the protection of the environment or natural resources (including climate, air, surface water, groundwater, wetlands, land surface, subsurface strata, wildlife, aquatic species and vegetation); or (ii) the use, generation, disposal, treatment, processing, recycling, handling, transport, distribution, destruction, transfer, import, export or sale of Hazardous Substances; and (iii) Environmental Permits;
" Environmental Liabilities " means all liabilities, obligations, responsibilities, losses, damages, costs (including control, remedial and removal costs, investigation costs, capital costs, operation and maintenance costs), expenses, fines, penalties and sanctions whether or not a proceeding is commenced, a judgment obtained or order issued, incurred as a result of, arising under or related to any: (i) Release or presence of a Hazardous Substance; (ii) use, generation, disposal, treatment, processing, recycling, handling, transport, transfer, import, export or sale of a Hazardous Substance; (iii) environmental cleanup, Reclamation, remediation or closure obligations resulting from the operations or activities conducted in connection with the Purchased Assets ; and (iv) non-compliance with Environmental Law;
" Environmental Permits " means all permits, certificates, approvals, consents, authorizations, registrations, licenses or program participation requirements with or from any Governmental Entity under any Environmental Laws;
" Excluded Assets " has the meaning ascribed thereto in Section 2.2;
" Excluded Liabilities " has the meaning ascribed thereto in Section 2.4;
" Financial Assurance " means bonds, letters of credit, guarantees and other instruments or arrangements securing or guarantying performance of obligations with respect to the operation, closure, Reclamation or remediation of the Acquired Properties;
" Fundamental Representations " means the representations and warranties set forth in Sections (1) Organization and Qualification , (2) Authority Relative to this Agreement and (8)(a), (g) and (k) Acquired Properties and Mineral Rights of Schedule "I" and Sections (1) Organization and Qualification, (2) Authority Relative to this Agreement of Schedule "J" and (4) Financing ;

-5-
" Governmental Entity " means: (i) any international, multinational, national, federal, provincial, territorial, state, regional, municipal, local or other government, governmental or public department, central bank, court, tribunal, arbitral body, commission, board, bureau, ministry, agency or instrumentality, whether domestic or foreign; (ii) any subdivision or authority of any of the above; (iii) any quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing; or (iv) any stock exchange;
" Governmental Order " means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Entity;
" Grey Fox Property " means the exploration property owned by Primero and located approximately four (4) kilometers south-east of the Black Fox Complex, as more particularly described in Schedule "F";
" Hazardous Substance " means any pollutant, contaminant, waste or chemical or any toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous or deleterious substance, waste or material, including cyanide, sulphuric acid, hydrogen sulphide, arsenic, cadmium, copper, lead, mercury, petroleum substance, polychlorinated biphenyls, asbestos and urea-formaldehyde insulation, and any other material, substance, pollutant or contaminant regulated or defined pursuant to, or that could result in liability under, any Environmental Law, and includes any tailings and waste rock;
" IFRS " means generally accepted accounting principles as set out in the CPA Canada Handbook – Accounting for an entity that prepares its financial statements in accordance with International Financial Reporting Standards, at the relevant time, applied on a consistent basis with past practice as they relate to the Purchased Assets, Assumed Liabilities, Excluded Assets and Excluded Liabilities; 
" Inactive Employees " has the meaning ascribed thereto in Section 4.9(c);
" Indemnified Party " has the meaning ascribed thereto in Section 9.5;
" Indemnifying Party " has the meaning ascribed thereto in Section 9.5;
" Intellectual Property " means any and all industrial or intellectual property and any right or protection associated therewith (whether foreign or domestic, registered or unregistered) owned by Primero and used exclusively in the operation, conduct or maintenance of the Purchased Assets, as it is currently and has historically been operated, conducted or maintained, including: (i) all inventions (whether patentable or unpatentable and whether or not reduced to practice), and all patents, patent applications and patent disclosures, together with all reissuances, continuations, divisions, continuations-in-part, revisions, extensions and re-examinations thereof; (ii) all trade names, trade dress and all goodwill associated therewith in connection with the Acquired Properties; (iii) all copyrightable works, all copyrights and all applications, registrations and renewals in connection therewith; (iv) all industrial designs and all applications, registrations and renewals in connection therewith; (v) all computer software (including all source code, object code and related documentation), all comments and notes, flow charts, diagrams, tools, development environments, utilities and any other materials necessary or useful for the modification, support and/or maintenance of such software; (vi) any and all rights in respect of any industrial or intellectual property rights obtained and used by Primero exclusively in connection with the Purchased Assets under any consents, licenses, permissions or authorizations of any third parties;
" Inventory " means ore stockpiles, ore on leach pads or in leach circuits, loaded carbon on site or other minerals in process, but not including Mineral Products;

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“ IP Licenses ” means all consents, licenses, permissions and authorizations in favour of Primero for the use of any intellectual property of third parties by Primero exclusively in the operation, conduct or maintenance of the Purchased Assets;
" Law " means, with respect to any Person, any and all applicable law (statutory, common law or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement, whether domestic or foreign, enacted, adopted, promulgated or applied by a Governmental Entity that is binding upon or applicable to such Person or its business, undertaking, property or securities, and to the extent that they have the force of law, policies, guidelines, notices and protocols of any Governmental Entity, as amended unless expressly specified otherwise;
" Liabilities " means liabilities, obligations or commitments of any nature whatsoever, asserted or unasserted, known or unknown, absolute or contingent, accrued or unaccrued, matured or unmatured or otherwise;
" Losses " means losses, damages, Liabilities, deficiencies, Actions, judgments, interest, awards, penalties, fines, costs or expenses of whatever kind, including reasonable attorneys' fees and the cost of enforcing any right to indemnification hereunder and the cost of pursuing any insurance providers; provided, however, that " Losses " shall not include any special, indirect, consequential, punitive or aggravated damages, except in the case of fraud, criminal activity or willful misconduct or to the extent actually awarded in respect of a Third Party Claim;
" Material Contract " means any Contract (or amendment thereto) that: (i) is material to the operational activities relating to the Purchased Assets; (ii) if terminated by the other party, would reasonably be expected to result in a Primero Material Adverse Effect; (iii) that contains any non-competition obligations restricting in any material way the business conducted on the Acquired Properties or using the Purchased Assets; or (iv) where the amount to be paid and/or the amount to be received by Primero exceeds $350,000;
" McEwen " means McEwen Mining Inc., a corporation existing under the laws of the State of Colorado;
" McEwen Board " means the board of directors of McEwen;
" McEwen Financial Assurance " has the meaning ascribed thereto in Section 4.7;
" McEwen Indemnitees " has the meaning ascribed thereto in Section 9.2;
" McEwen Material Adverse Effect " means any event, occurrence, fact, condition or change that is, or could reasonably be expected to be, individually or in the aggregate, materially adverse to: (i) the business, results of operations, condition (financial or otherwise) or assets related to or associated with McEwen; or (ii) the ability of McEwen to consummate the Transaction by the Outside Date; provided, however, that any event, occurrence, fact, condition or change that is primarily caused by (A) conditions affecting the Canadian, United States, Mexican or Argentinian economy generally (except to the extent any such event, occurrence, fact, condition or change has a disproportionate adverse impact on McEwen relative to other gold mining companies of similar size in the relevant jurisdiction), (B) conditions affecting the mining industry or gold mining industry generally (except to the extent any such event, occurrence, fact, condition or change has a disproportionate adverse impact on McEwen relative to other gold mining companies of similar size in the relevant jurisdiction), (C) the execution, announcement, pendency or performance of this Agreement or the consummation of the Transaction or any public statements made by third parties in response to the announcement, pendency or performance of the Transaction, (D) any act of terrorism, war (whether or not declared), armed hostilities, riots, insurrection, civil disorder, military conflicts, political instability or other armed conflict, national calamity, national crisis or national emergency, or any governmental response to any of the foregoing, (E) any climatic or other natural events or conditions (including any natural disaster), (F) any change or proposed change in law or accounting rules or the interpretation thereof applicable to the industry or markets in which Primero or McEwen operates (and any changes resulting therefrom), (G) any change, effect, event or development generally affecting the industry or markets in which Primero or McEwen operates, (H) the failure of McEwen to meet any internal, published or public projections, forecasts, guidance or estimates, including in relation to production, revenues, earnings or cash flows (it being understood that the causes underlying such failure may be taken into account in determining whether a McEwen Material Adverse Effect has occurred), (I) any change in the market price or trading volume of any securities of McEwen (it being understood that the causes underlying such change in market price or trading volume may be taken into account in determining whether a McEwen Material Adverse Effect has occurred), or (J) the failure of McEwen to complete a financing to raise sufficient funds to cover the Purchase Price; in the case of each of (A) to (J), inclusive, above shall not be deemed to constitute a McEwen Material Adverse Effect;

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" McEwen Severance Obligations " means all severance and termination payment obligations owing by McEwen to Transferred Employees as a result of the termination of such Transferred Employees’ employment, including notice of termination, termination pay, severance pay, damages for wrongful dismissal and other obligations and Liabilities arising from the cessation of employment, whether arising in respect of such employment prior to or after the Closing Time;
" Mineral Products " means all gold doré, refined gold and bullion derived from operating any Acquired Property;
" Mineral Rights " means the rights to prospect and explore for, to develop and to mine minerals on, in or under any lands comprising the Acquired Properties;
" Mining Act " means the Mining Act (Ontario);
" MNDM " means the Ontario Ministry of Northern Development and Mines or any successor department or agency;
" Money Laundering Laws " has the meaning ascribed thereto in Section (23) of Schedule "I";
" NI 43-101 " means National Instrument 43-101 – Standards of Disclosure for Mineral Projects ;
" NYSE " means the New York Stock Exchange;
" officer " has the meaning ascribed thereto in the Securities Act;
" Ordinary Course " means, with respect to an action taken by Primero, that such action is consistent with the past practices of Primero, is taken in the ordinary course of the normal day-to-day operations of the business of Primero and is in the ordinary course of the mining business, consistent with industry standards and not in violation of applicable Laws, including Environmental Laws;
" Outside Date " means October 31, 2017;
" Parties " means McEwen and Primero and " Party " means either of them;
" Permitted Encumbrance " means, in respect of the Purchased Assets:

 	(a)	the reservations, limitations, provisos and conditions expressed in any original grant from a Governmental Entity and any statutory exceptions to title;	

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 	(b)	agreements with any Governmental Entity and any public utilities or private suppliers of services that are identified in the Disclosure Letter or that in each case do not materially detract from the value or materially interfere with the use of the real or immovable property subject thereto;	
 	 	 	
 	(c)	any Aboriginal Claims;	
 	 	 	
 	(d)	Encumbrances for Taxes that are inchoate or not delinquent;	
 	 	 	
 	(e)	the royalties set out in Schedule "G"; and	
 	 	 	
 	(f)	all Encumbrances described in Schedule "K";	
" Person " includes any individual, partnership, association, body corporate, organization, trust, estate, trustee, executor, administrator, legal representative, government (including Governmental Entity), syndicate or other entity, whether or not having legal status;
" Prime Rate " means the annual rate of interest announced by BMO (or its successor), or any other Canadian chartered bank agreed to by the Parties, from time to time as its reference rate then in effect for determining interest rates on Canadian dollar commercial loans made by it in Canada;
" Primero " means Primero Mining Corp., a corporation existing under the laws of the Province of British Columbia;
" Primero Benefit Plans " means any pension plans or other employee compensation, or benefit plans, agreements, policies, programs, arrangements or practices, whether written or oral, which are maintained by or binding upon Primero or for which Primero could have any liability and which relate to Employees;
" Primero Board " means the board of directors of Primero;
" Primero Cash Collateral " means any cash collateral in relation to the Primero Financial Assurance;
" Primero Financial Assurance " means, collectively: (i) the closure plan performance bond #BDTO-430011-015 dated March 27, 2015, issued by Liberty Mutual Insurance Company in an amount equal to C$15,090,108 in favour of MNDM; (ii) the closure plan performance bond #BDTO-430010-015 dated March 27, 2015, issued by Liberty Mutual Insurance Company in an amount equal to C$5,179,100 in favour of MNDM; (iii) the closure plan performance bond #BDTO-430012-015 dated March 27, 2015, issued by Liberty Mutual Insurance Company in an amount equal to C$215,675 in favour of MNDM;
" Primero Indemnitees " has the meaning ascribed thereto in Section 9.3;
" Primero Licensed Software ” means licenses by third parties to Primero in respect of software used generally by Primero for corporate and operational purposes, including but not exclusively for the benefit of the Purchased Assets, including Deswik mine planning, CAE EPS and CAE Datamine;
" Primero Material Adverse Effect " means any event, occurrence, fact, condition or change that is, or could reasonably be expected to be, individually or in the aggregate, materially adverse to: (i) the business, results of operations, condition (financial or otherwise) or assets related to or associated with the Purchased Assets; (ii) the value of the Purchased Assets; or (iii) the ability of Primero to consummate the Transaction by the Outside Date; provided, however, that any event, occurrence, fact, condition or change that is primarily caused by (A) conditions affecting the Canadian or United States economy generally (except to the extent any such event, occurrence, fact, condition or change has a disproportionate adverse impact on the Purchased Assets relative to other similarly situated gold exploration, development or production projects), (B) conditions affecting the mining industry or gold mining industry generally (except to the extent any such event, occurrence, fact, condition or change has a disproportionate adverse impact on the Purchased Assets relative to other similarly situated gold exploration, development or production projects), (C) the execution, announcement, pendency or performance of this Agreement or consummation of the Transaction or any public statements made by third parties in response to the announcement, pendency or performance of the Transaction, (D) any act of terrorism, war (whether or not declared), armed hostilities, riots, insurrection, civil disorder, military conflicts, political instability or other armed conflict, national calamity, national crisis or national emergency, or any governmental response to any of the foregoing, (E) any climatic or other natural events or conditions (including any natural disaster), (F) any change or proposed change in law or accounting rules or the interpretation thereof applicable to the industry or markets in which Primero or McEwen operates (and any changes resulting therefrom), (G) any change, effect, event or development generally affecting the industry or markets in which Primero or McEwen operates, (H) the failure of Primero to meet any internal, published or public projections, forecasts, guidance or estimates, including in relation to production, revenues, earnings or cash flows (it being understood that the causes underlying such failure may be taken into account in determining whether a Primero Material Adverse Effect has occurred), (I) any change in the market price or trading volume of any securities of Primero (it being understood that the causes underlying such change in market price or trading volume may be taken into account in determining whether a Primero Material Adverse Effect has occurred), (J) any action taken (or omitted to be taken) by Primero or any of its subsidiaries which is required to be taken (or omitted to be taken) pursuant to this Agreement or that is requested or consented to by McEwen in writing, (K) any matter which has been disclosed by Primero in the Disclosure Letter, or (L) the delisting of the common shares of Primero from the NYSE; in the case of each of (A) to (L), inclusive, above shall not be deemed to constitute a Primero Material Adverse Effect;

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" Primero Public Documents " means all documents or information filed on SEDAR or EDGAR by Primero under applicable Securities Laws since and including January 1, 2015 to and including the date hereof;
" Primero Severance Obligations " means all severance and termination payment obligations owing by Primero to Employees, other than Transferred Employees, as a result of the termination of such Employees’ employment, including notice of termination, termination pay, severance pay, damages for wrongful dismissal and other obligations and Liabilities arising from the cessation of employment;
" Prospective Employees " has the meaning ascribed thereto in Section 4.9(c);
" Purchase Price " has the meaning ascribed thereto in Section 2.5;
" Purchased Assets " means all of Primero's rights, title and interest in, to and under all of the assets, properties and rights of every kind and nature, whether real, personal or mixed, tangible or intangible (including goodwill), wherever located and whether now existing or hereafter acquired (other than the Excluded Assets), in each case which relate to, or are used or held for use in connection with, the Acquired Properties as of the Closing Time, including the following:

 	(a)	the Acquired Properties;	
 	 	 	
 	(b)	all Authorizations which are held by Primero and required for the conduct of the Acquired Properties as currently conducted or for the ownership and use of the Purchased Assets that are transferrable under Law;	
 	 	 	
 	(c)	all improvements, buildings, mill sites, mill, facilities, plant, offices, laboratories, fixtures, tunnels, adits, drifts, power lines, roads and other similar facilities;	

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 	(d)	all Tangible Property;	
 	 	 	
 	(e)	the Acquired Equipment;	
 	 	 	
 	(f)	the Acquired Fixed Assets;	
 	 	 	
 	(g)	all tailings, dams and similar property and structures on the Acquired Properties;	
 	 	 	
 	(h)	the Acquired Intellectual Property;	
 	 	 	
 	(i)	any and all goodwill and any other intangibles associated with the business and operations relating to the Purchased Assets;	
 	 	 	
 	(j)	all Closing Date Assets;	
 	 	 	
 	(k)	all Inventory derived from the exploitation and mining of the Acquired Properties;	
 	 	 	
 	(l)	all rights, benefits and entitlements of Primero under the Assumed Contracts;	
 	 	 	
 	(m)	all prepaid expenses, credits, advance payments, claims, security, refunds, rights of recovery, rights of set-off, rights of recoupment, deposits, charges, sums and fees, rights under warranties, indemnities and similar rights against third parties, in each case, to the extent that such assets are not Excluded Assets or the Purchaser did not assume the Liabilities relating thereto;	
 	 	 	
 	(n)	all proceeds of insurance received by, or payable to, Primero on account of loss of or damage to the Purchased Assets occurring during the period commencing on July 14, 2017 and ending on the Closing Date, to the extent that such proceeds are not included in any adjustments to the Purchase Price made pursuant to the Statement of Adjustments; and	
 	 	 	
 	(o)	the Books and Records;	
" Recipient " has the meaning ascribed thereto in Section 10.4(g);
" Reclamation " means the reclamation, restoration or closure of any facility or land after it has been utilized in any exploration, mining or processing operation required by any Law or any franchises, approvals, authorizations, permits, licenses, easements, registrations, qualifications, leases, variances and similar rights obtained from any Governmental Authority, including those required under Environmental Laws, including the Mining Act;
" Release " means any release, spill, emission, leaking, pumping, pouring, emitting, emptying, escape, injection, deposit, disposal, discharge, dispersal, dumping, leaching or migration of any Hazardous Substance in the natural environment, including the movement of Hazardous Substance through or in the air, soil, surface water, ground water or property;
" Representatives " means the officers, directors, employees, representatives and agents of a Party or any of its affiliates;
" Required Consents and Approvals " means those consents and approvals listed in Schedule "H";
" Sandstorm " means Sandstorm Resources Ltd.;

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" Sandstorm Gold Stream Agreement " means the gold stream agreement dated November 9, 2010 between Brigus Gold Corp. and Sandstorm;
" Schedule Delivery Deadline " means August 31, 2017;
" Securities Act " means the Securities Act (Ontario);
" Securities Laws " means the Securities Act and all rules, regulations, published notices and instruments thereunder, and all comparable securities Laws in each of the provinces of Canada and in the United States of America;
" Statement of Adjustments " means the statement of adjustments to be delivered by Primero to McEwen in accordance with Section 2.9(b);
" Subsidiary " means, with respect to any Person, any body corporate of which more than 50% of the outstanding shares ordinarily entitled to elect a majority of the board of directors thereof (whether or not shares of any other class shall or might be entitled to vote upon the happening of any event or contingency) are at the time owned directly or indirectly by such Person and shall include any body corporate, partnership, joint venture or other entity over which it exercises direction or control or which it is in a relationship like a subsidiary;
" Tangible Property " means all equipment and machinery (whether mobile or otherwise), drill samples and drill cores, rolling stock, materials, consumables, supplies and warehouse inventory, maintenance supplies, furniture, fixtures, improvements, tooling, office equipment, computers and other tangible property owned by Primero located on and used for purposes of the business of the Acquired Properties, excluding Inventory;
" Tax Act " means the Income Tax Act (Canada);
" Tax Returns " means any and all returns, reports, declarations, elections, notices, forms, designations, filings and statements (including estimated tax returns and reports, withholding tax returns and reports, and information returns and reports) filed or required to be filed in respect of Taxes;
" Taxes " means: (i) any and all taxes, duties, fees, excises, premiums, assessments, imposts, levies and other charges or assessments of any kind whatsoever imposed by any Governmental Entity, whether computed on a separate, consolidated, unitary, combined or other basis, including those levied on, or measured by, or described with respect to, income, gross receipts, profits, gains, windfalls, capital, capital stock, production, recapture, transfer, land transfer, license, gift, occupation, wealth, environment, net worth, indebtedness, surplus, sales, goods and services, harmonized sales, use, value-added, excise, special assessment, stamp, withholding, business, franchising, real or personal property, health, employee health, payroll, workers' compensation, employment or unemployment, severance, social services, social security, education, utility, surtaxes, customs, unclaimed property, import or export, and including all license and registration fees and all employment insurance, health insurance and government pension plan premiums or contributions; (ii) all interest, penalties, fines, additions to tax or other additional amounts imposed by any Governmental Entity on or in respect of or in lieu of amounts of the type described in clause (i) above or this clause (ii); and (iii) any liability for the payment of any amounts of the type described in clauses (i) or (ii) above as a result of being a member of an affiliated, consolidated, combined or unitary group for any period;
“ Termination Date ” means the date on which this Agreement is terminated in accordance with Section 7.1.
" Third Party Claim " has the meaning ascribed thereto in Section 9.5(a);

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" Title Insurance Policy " means the title insurance policy relating to the properties comprising the Purchased Assets provided by First Canadian Title that is in form and substance acceptable to McEwen, acting reasonably;
" Title Opinion " has the meaning ascribed thereto in Section 6.2(f);
" Transaction " means, collectively, the transactions contemplated by this Agreement, including the purchase of the Purchased Assets by McEwen and the sale of the Purchased Assets by Primero as contemplated herein but excluding any transaction relating to any Excluded Asset;
" Transaction Documents " means this Agreement and the agreements, instruments and documents required to be delivered at the Closing;
" Transaction Personal Information " has the meaning ascribed thereto in Section 10.4(g);
" Transferred Employees " has the meaning ascribed thereto in Section 4.9(c);
" Transferred Tax Pools " means the CDE and CEE balances of Primero that will be transferred by Primero to McEwen as described in Section 4.8; and
" Transition Services Agreement " means a transition services agreement (with costing included therein) to be executed by Primero and McEwen pursuant to Section 4.11 with a minimum three (3) month term or such other longer term as McEwen may reasonably require with the consent of Primero, each acting reasonably, relating to the provision of certain transition services by Primero or its affiliates to McEwen, with a view to assisting McEwen with the integration of the operations and administration of the Purchased Assets, including: (i) accounting, administration and information technology; (ii) the terms on which the Primero Financial Assurance may remain in place after the Closing Date (including the replacement or the prompt release of the Primero Cash Collateral); and (iii) transitional support in connection with the Primero Licensed Software to enable McEwen to secure replacement software for its own purposes;
" Wheaton " means Wheaton Precious Metals Corp.;
" Wilful Breach " means a breach of this Agreement that is a consequence of an act undertaken by the breaching Party with the actual knowledge that the taking of such act would, or would be reasonably expected to, cause a breach of this Agreement; and
" WSIB " has the meaning ascribed thereto in Section 6.2(g)(xiii) .

1.2	Certain Rules of Interpretation	
In this Agreement, unless otherwise specified:

 	(a)	Headings, etc. The provision of a Table of Contents, the division of this Agreement into Articles, Sections, Schedules and an Exhibit and the insertion of headings are for convenient reference only and do not affect the construction or interpretation of this Agreement.	
 	 	 	
 	(b)	Currency. All references to dollars or to $ are references to United States dollars, unless specified otherwise.	
 	 	 	
 	(c)	Gender and Number. Any reference to gender includes all genders. Words importing the singular number only include the plural and vice versa .	

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 	(d)	Certain Phrases, etc. The words: (i) "including", "includes" and "include" mean "including (or includes or include) without limitation"; (ii) "the aggregate of", "the total of", "the sum of" or a phrase of similar meaning means "the aggregate (or total or sum), without duplication, of"; and (iii) unless stated otherwise, "Article", "Section", and "Schedule" followed by a number or letter mean and refer to the specified Article or Section of or Schedule to this Agreement. The term "made available" means: (i) copies of the subject materials were included in the Data Room Materials; or (ii) the subject materials were listed in the Disclosure Letter and copies were provided to McEwen by Primero.	
 	 	 	
 	(e)	Capitalized Terms. Unless expressly indicated otherwise, all capitalized terms used in any Schedule or in the Disclosure Letter have the meanings ascribed to them in this Agreement.	
 	 	 	
 	(f)	Knowledge. For purposes of this Agreement or any representation or warranty, where a statement is expressly qualified by reference to the knowledge of Primero, it is deemed to refer to the actual knowledge of Joseph Conway or Kevin Jennings. For purposes of this Agreement or where any representation or warranty, where a statement is expressly qualified by reference to the knowledge of McEwen, it is deemed to refer to the actual knowledge of Robert R. McEwen or Andrew Elinesky.	
 	 	 	
 	(g)	Accounting Terms. All accounting terms are to be interpreted in accordance with IFRS and all determinations of an accounting nature in respect of Primero required to be made shall be made in a manner consistent with IFRS.	
 	 	 	
 	(h)	Statutes. Any reference to a statute refers to such statute and all rules, resolutions and regulations made under it, as it or they may have been or may from time to time be amended, restated or re-enacted, unless stated otherwise.	
 	 	 	
 	(i)	Computation of Time. A period of time is to be computed as beginning on the day following the event that began the period and ending at 4:30 p.m. on the last day of the period if the last day of the period is a Business Day, or at 4:30 p.m. on the next Business Day if the last day of the period is not a Business Day.	
 	 	 	
 	(j)	Time References. References to time are to local time in Toronto, Ontario.	
 	 	 	
 	(k)	Approvals and Consents. If any provision requires approval or consent of a Person and such approval or consent is not delivered within the specified time limit, the Person whose consent or approval is required shall be conclusively deemed to have withheld its approval or consent.	
 	 	 	
 	(l)	Schedules and Exhibits. The following schedules and exhibits are attached to this Agreement and form an integral part of this Agreement for all purposes of it:	

 	SCHEDULES	DESCRIPTION	
 	 	 	
 	Schedule "A"	Assumed Contracts	
 	Schedule "B"	Acquired Equipment	
 	Schedule "C"	Excluded Assets	
 	Schedule "D"	Acquired Fixed Assets	
 	Schedule "E"	Acquired Intellectual Property	
 	Schedule "F"	Acquired Properties	
 	Schedule "G"	Acquired Royalties	

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 	SCHEDULES	DESCRIPTION	
 	 	 	
 	Schedule "H"	Required Consents and Approvals	
 	Schedule "I"	Representations and Warranties of Primero	
 	Schedule "J"	Representations and Warranties of McEwen	
 	Schedule "K"	Permitted Encumbrances	
 	Exhibit A	Form of Bill of Sale	
ARTICLE 2
 PURCHASED ASSETS AND PURCHASE PRICE

2.1	Purchase and Sale of Assets	
On and subject to the terms and conditions of this Agreement, including the representations, warranties and covenants contained herein, Primero agrees to sell, assign, transfer and convey to McEwen, and McEwen agrees to purchase from Primero, the Purchased Assets free and clear of all Encumbrances, other than Permitted Encumbrances.

2.2	Excluded Assets	
Other than the Purchased Assets, McEwen expressly acknowledges and agrees that it is not purchasing or acquiring, and Primero and its affiliates are not selling or assigning, any other assets or properties of Primero or its affiliates, or of any third parties which may, from time to time be located on or at the Acquired Properties, and all such other assets and properties shall be excluded from the Purchased Assets (collectively, the " Excluded Assets "). For greater certainty, Excluded Assets include the following assets and properties:

 	(a)	all cash and cash equivalents, bank accounts and securities of Primero, including any Primero Cash Collateral;	
 	 	 	
 	(b)	all Mineral Products produced on or before the Adjustment Date and shipped prior to the Closing Date;	
 	 	 	
 	(c)	all Primero Benefit Plans and trusts or other assets attributable thereto;	
 	 	 	
 	(d)	the corporate seals, organizational documents, minute books, Tax Returns, Books and Records having to do with the corporate organization of Primero;	
 	 	 	
 	(e)	the assets, properties and rights specifically set forth in Schedule "C";	
 	 	 	
 	(f)	the rights that accrue or will accrue to Primero under the Transaction Documents; and	
 	 	 	
 	(g)	all other assets, property and undertakings of Primero that do not relate to the Acquired Properties.	

2.3	Assumed Liabilities	
On and subject to the terms and conditions of this Agreement, McEwen shall assume and agree to pay, perform and discharge all Liabilities, other than Excluded Liabilities (collectively, the “ Assumed Liabilities ”), consisting of:

 	(a)	all Reclamation obligations relating to the Acquired Properties, whether arising before or after the Closing Time;	

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 	(b)	all Liabilities in respect of the streams and royalties set forth in Schedule "G" due or accruing due or arising after the Adjustment Date in all cases;	
 	 	 	
 	(c)	all Liabilities relating to the Purchased Assets (including Assumed Contracts) due or accruing due or arising after the Adjustment Date in all cases;	
 	 	 	
 	(d)	all Employee Obligations relating to the Transferred Employees due or accruing due or arising on or after the Adjustment Date and all McEwen Severance Obligations in all cases;	
 	 	 	
 	(e)	all Closing Date Liabilities;	
 	 	 	
 	(f)	any Liabilities of McEwen arising or incurred in connection with the negotiation, preparation, investigation and performance of the Transaction Documents, including fees and expenses of counsel, accountants, consultants, advisers and others; and	
 	 	 	
 	(g)	all other Liabilities relating to the Purchased Assets or Transferred Employees that are not Excluded Liabilities.	
For greater certainty, any Liability for:

 	(a)	corporate income Taxes of McEwen (or any affiliate of McEwen); or	
 	 	 	
 	(b)	Taxes that arise out of the Closing that are the responsibility of McEwen under applicable Law, except as otherwise set forth in this Agreement,	
shall be the sole responsibility of McEwen.

2.4	Excluded Liabilities	
Notwithstanding any other provision in this Agreement to the contrary, neither McEwen nor any of its affiliates shall assume or be responsible to pay, perform or discharge the following Liabilities (the " Excluded Liabilities "):

 	(a)	any Liabilities of Primero arising or incurred in connection with the negotiation, preparation, investigation and performance of the Transaction Documents, including fees and expenses of counsel, accountants, consultants, advisers and others;	
 	 	 	
 	(b)	any Liability for: (i) corporate income Taxes of Primero (or any affiliate of Primero); or (ii) Taxes that arise out of the Closing that are the responsibility of Primero under applicable Law, except as otherwise set forth in this Agreement;	
 	 	 	
 	(c)	any Liabilities relating to or arising out of the Excluded Assets;	
 	 	 	
 	(d)	any Liabilities in respect of any pending or threatened Action arising out of, relating to or otherwise in respect of the acquisition, ownership or operation of the Purchased Assets to the extent such Action relates to such acquisition, ownership or operation on or prior to the Closing;	
 	 	 	
 	(e)	any Liabilities of Primero arising under or in connection with any Primero Benefit Plans;	
 	 	 	
 	(f)	any Environmental Liabilities relating to the Purchased Assets, but only to the extent arising out of or relating to facts, circumstances or conditions existing on or prior to the Closing Time (other than with respect to Reclamation obligations relating to the Purchased Assets);	

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 	(g)	any Liabilities of Primero or its affiliates not relating to the Purchased Assets;	
 	 	 	
 	(h)	any Liabilities to indemnify, reimburse or advance amounts to any present or former officer, director, retiree, employee, independent contractor or consultant of Primero existing on or prior to the Closing Time (including with respect to any breach of fiduciary obligations by any of such Persons), except for any indemnification of any Primero Indemnitees pursuant to Article 9;	
 	 	 	
 	(i)	all Employee Obligations due or accruing due prior to the Adjustment Date that are not included in the Statement of Adjustments and all Primero Severance Obligations;	
 	 	 	
 	(j)	any Liabilities under any Contracts: (i) which are not capable of being assigned to McEwen for any reason; or (ii) to the extent such Liabilities arise out of or relate to a breach by Primero of such Contracts prior to the Closing Time;	
 	 	 	
 	(k)	any fees, expenses or other payments incurred or owed by or on behalf of Primero or any of its affiliates to any brokers, financial advisors or comparable other Persons;	
 	 	 	
 	(l)	any Liabilities associated with debt, loans or credit facilities of Primero owing to any Person; and	
 	 	 	
 	(m)	any Liabilities arising out of, in respect of or in connection with the failure by Primero or any of its affiliates to comply with any Law, including any Environmental Law, or Governmental Order.	
For greater certainty, any and all Liabilities that arise after the Adjustment Date that are not set forth in the preceding clauses (a) through (m) shall not be Excluded Liabilities, and shall be Liabilities of McEwen after the Closing Time. Primero shall, and shall cause each of its affiliates to, pay and satisfy in due course all Excluded Liabilities that Primero and its affiliates are obligated to pay and satisfy.

2.5	Purchase Price	
The purchase price payable by McEwen to Primero for the Purchased Assets shall be fully paid and satisfied by the payment by McEwen of an amount in cash equal to $35 million less the amount of the Primero Cash Collateral (the " Purchase Price "), subject to adjustment in accordance with Section 2.9, and the assumption of the Assumed Liabilities, which Purchase Price shall be paid on the Closing Date by wire transfer in immediately available United States funds, in accordance with wire payment instructions to be provided by Primero to McEwen at least five (5) Business Days prior to the Closing Date.

2.6	Allocation of Purchase Price	
McEwen shall prepare and deliver to Primero, on or before the day that is ten (10) Business Days prior to the Adjustment Date, a draft statement of the Purchase Price allocation, and McEwen and Primero shall work in good faith to finally settle such allocation of the Purchase Price (including the amount of the Assumed Liabilities) at least five (5) Business Days prior to the Adjustment Date. The allocation of the Purchase Price (including the Assumed Liabilities) shall be final and binding upon the Parties for all purposes, including the filing of all Tax or other returns and the preparation of all financial statements and other documents and records, unless changes to such allocation are required by the Canada Revenue Agency.

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2.7	Assignment of Rights to the Purchased Assets	
Upon receipt by Primero of the Purchase Price, all right, title and interest in and to the Purchased Assets shall, as between the Parties, be deemed to be transferred to, and held by, or on behalf of, McEwen notwithstanding that further actions may be taken by the Parties to effectively transfer title to McEwen after the Closing Time.

2.8	Amounts Received Post-Closing	

 	(a)	Unless otherwise expressly agreed in this Agreement, if, following the Closing, Primero receives any monies or other amounts under or in respect of the Purchased Assets (for greater certainty, excluding any amounts received from McEwen in accordance with this Agreement) that relate to the period commencing at the Closing Time, Primero shall promptly provide McEwen with: (i) a statement of all such amounts received; (ii) a wire transfer of immediately available funds equal to such amounts; and (iii) a certificate signed by an officer or equivalent of Primero certifying that Primero has complied with the provisions of this Section 2.8(a).	
 	 	 	
 	(b)	Unless otherwise expressly agreed in this Agreement, if, following the Closing, McEwen receives any monies or other amounts under or in respect of Excluded Assets or Excluded Liabilities, or that relate to the Purchased Assets prior to the Closing Time, McEwen shall promptly provide Primero with: (i) a statement of all such amounts received; (ii) a wire transfer of immediately available funds equal to such amounts; and (iii) a certificate signed by an officer or director of McEwen certifying that McEwen has complied with this Section 2.8(b).	
 	 	 	
 	(c)	In the event of any dispute between McEwen or Primero with respect to any such amounts arising under this Section 2.8, each shall provide the other reasonable access to its books and records relating to such amounts and shall endeavour in good faith to resolve such dispute.	
 	 	 	
 	(d)	Neither Party is required to compensate the other Party in respect of any amount to the extent that such amount was previously reflected by an adjustment in the Statement of Adjustments in favour of such other Party.	

2.9	Purchase Price Adjustment	

 	(a)	Adjustments shall be made to the Purchase Price on the Closing for all Closing Date Liabilities and Closing Date Assets by: (i) reducing the amount of the Purchase Price by the amount of the Closing Date Liabilities; and (ii) increasing the amount of the Purchase Price by the amount of the Closing Date Assets.	
 	 	 	
 	(b)	No later than five (5) Business Days prior to the Adjustment Date, Primero and McEwen, acting reasonably, shall jointly prepare a statement of adjustments setting out the Closing Date Assets and the Closing Date Liabilities, itemizing the balance of each component of the Closing Date Assets and the Closing Date Liabilities included in such statement and allocating such amounts between the Parties, as appropriate (the “ Statement of Adjustments ”).	

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ARTICLE 3
REPRESENTATIONS AND WARRANTIES

3.1	Representations and Warranties of Primero	
Except as set forth in the Disclosure Letter (it being expressly understood and agreed that the disclosure of any fact or item in the Disclosure Letter shall also be deemed to be an exception to (or, as applicable, disclosure for the purposes of) all applicable representations and warranties of Primero), Primero represents and warrants to McEwen as set forth in Schedule "I" and acknowledges and agrees that McEwen is relying upon such representations and warranties in connection with the entering into of this Agreement.

3.2	Representations and Warranties of McEwen	
McEwen represents and warrants to Primero as set forth in Schedule "J" and acknowledges and agrees that Primero is relying upon such representations and warranties in connection with the entering into of this Agreement.
ARTICLE 4
COVENANTS

4.1	Conduct of Business of the Purchased Assets Prior to the Closing	
From the date hereof until the Closing, except as otherwise provided in this Agreement or consented to in writing by McEwen (which consent shall not be unreasonably withheld or delayed), Primero shall: (i) conduct the business and operations relating to the Purchased Assets in the Ordinary Course; and (ii) use commercially reasonable efforts to maintain and preserve intact its current organization relating to the Purchased Assets, operations and franchise and to preserve the rights, franchises, goodwill and relationships of its employees, customers, lenders, suppliers, regulators and others having relationships with the Purchased Assets. Without limiting the foregoing, from the date hereof until the Closing, Primero shall:

 	(a)	preserve and maintain all Authorizations required for the conduct of the Acquired Properties or the ownership and use of the Purchased Assets in all material respects;	
 	 	 	
 	(b)	pay the Liabilities relating to the Purchased Assets when due in accordance with past practice;	
 	 	 	
 	(c)	maintain the Acquired Properties and other assets included in the Purchased Assets in the same condition, in all material respects, as they were on the date of this Agreement, subject to reasonable wear and tear;	
 	 	 	
 	(d)	continue in full force and effect without modification all insurance policies relating to the Purchased Assets, except as required by applicable Law;	
 	 	 	
 	(e)	defend and protect the properties and assets included in the Purchased Assets from infringement or usurpation;	
 	 	 	
 	(f)	maintain the Books and Records in accordance with past practice in all material respects;	
 	 	 	
 	(g)	comply in all material respects with all Laws applicable to the business and operations relating to the Purchased Assets or the ownership and use of the Purchased Assets;	

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 	(h)	not hedge any minerals produced from or located on the Acquired Properties; and	
 	 	 	
 	(i)	not take any action (or permit any action to be taken) or fail to take any action (or permit any action to fail to be taken) that would cause a material breach of any covenant in this Agreement, including any of the foregoing in (a) to (h), inclusive, above.	

4.2	Covenants of Primero Relating to the Transaction	

 	(a)	Primero shall perform all obligations required or desirable to be performed by Primero under this Agreement, co-operate with McEwen in connection therewith and do all such other acts and things as may be reasonably necessary or desirable in order to consummate and make effective the Transaction and, without limiting the generality of the foregoing, Primero shall:	

 	(i)	use commercially reasonable efforts to satisfy all conditions precedent in this Agreement and comply promptly with all requirements imposed by Law on it with respect to this Agreement or the Transaction;	
 	 	 	
 	(ii)	use commercially reasonable efforts to obtain on terms acceptable to Primero and McEwen, each acting reasonably, and maintain, all third party consents (including from Governmental Entities), waivers, Authorizations, exemptions, orders, approvals, agreements, amendments or confirmations, including the Required Consents and Approvals, that are (A) necessary in connection with the Transaction, (B) required to be obtained in relation to any of the Purchased Assets, or (C) required in order to maintain any Assumed Contracts, leases, Authorizations, licenses or other authorizations in respect of the Purchased Assets in full force and effect immediately following the Closing, in each case, on terms that are reasonably satisfactory to McEwen, and without committing McEwen or Primero to pay any additional consideration or incur any additional Liability other than the existing Liabilities relating to such Purchased Assets or make the Purchased Assets subject to any additional Liability as a condition precedent to the granting of any such consent, authorization, exemption, order, approval, agreement, amendment or confirmation, in each case without the prior written consent of McEwen or Primero, as the case may be. For greater certainty, Primero shall: (A) prior to the Closing, prepare all requisite notification letters (and provide copies to McEwen) to be submitted to each applicable Governmental Entity, including to the Ministry of the Environment and Climate Change (Ontario), confirming the Transaction and, where applicable, requesting approval for the transfer to McEwen or issuance, as applicable of all transferrable Authorizations relating to the Purchased Assets; and (B) provide McEwen with all material correspondence made by Primero or received by Primero with respect to the Required Consents and Approvals, other than as relating to any Required Consent and Approval to be obtained from BMO or Wheaton;	
 	 	 	
 	(iii)	use commercially reasonable efforts to effect all necessary registrations, filings and submissions of information required by Governmental Entities prior to the Closing in respect of Primero or the Purchased Assets and coordinating and cooperating with McEwen with respect thereto;	
 	 	 	
 	(iv)	use commercially reasonable efforts to oppose, lift or rescind any injunction, restraining or other order, decree or ruling seeking to restrain, enjoin or otherwise prohibit or adversely affect the Closing and defend, or cause to be defended, any proceedings to which it is a party or brought against it or its directors or officers challenging the Transaction or this Agreement;	

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 	(v)	use commercially reasonable efforts to obtain, at the sole expense of McEwen, the reliance letters for the technical reports, closure plans and site conditions requested by McEwen, acting reasonably, which reliance letters shall be in form and substance acceptable to McEwen, acting reasonably, and consistent with industry practice; and	
 	 	 	
 	(vi)	not take any action, or refrain from taking any commercially reasonable action, or permitting any action to be taken or not taken, which is inconsistent with this Agreement or which would reasonably be expected to prevent, delay or otherwise impede the Closing.	

 	(b)	Primero shall promptly notify McEwen (and, if it becomes aware, McEwen shall promptly notify Primero) in writing of:	

 	(i)	any Primero Material Adverse Effect, or any fact or state of facts, circumstance, change, effect, occurrence or event which could reasonably be expected to have a Primero Material Adverse Effect;	
 	 	 	
 	(ii)	any notice or other communications from any Person alleging that the consent (or waiver, permit, exemption, order, approval, agreement, amendment or confirmation) of such Person (or another Person) is or may be required in connection with this Agreement or the Transaction;	
 	 	 	
 	(iii)	any notice or other communication from any Governmental Entity in connection with this Agreement or the Transaction (and contemporaneously provide a copy of any such notice or communication to McEwen); or	
 	 	 	
 	(iv)	any filing, action, suit, claim, investigation or proceeding commenced or, to its knowledge, threatened against, relating to or involving or otherwise materially affecting Primero, the Purchased Assets or that relate to this Agreement or the Transaction.	

4.3	Covenants of McEwen Relating to the Transaction	

 	(a)	McEwen shall perform all obligations required or desirable to be performed by McEwen under this Agreement, co-operate with Primero in connection therewith and do all such other acts and things as may be reasonably necessary or desirable in order to consummate and make effective the Transaction and, without limiting the generality of the foregoing, McEwen shall:	

 	(i)	use commercially reasonable efforts to satisfy all conditions precedent in this Agreement and comply promptly with all requirements imposed by Law on it with respect to this Agreement or the Transaction;	
 	 	 	
 	(ii)	use commercially reasonable efforts to obtain, on terms acceptable to McEwen and Primero, each acting reasonably, and maintain, all third party consents (including from Governmental Entities), waivers, Authorizations, exemptions, orders, approvals, agreements, amendments or confirmations, including the Required Consents and Approvals, that are (A) necessary in connection with the Transaction, (B) required to be obtained in relation to any of the Purchased Assets, or (C) required in order to maintain any Assumed Contracts, leases, Authorizations, licenses or other authorizations in respect of the Purchased Assets in full force and effect immediately following the Closing, in each case, without committing McEwen or Primero to pay any additional consideration or incur any additional Liability other than the existing Liabilities relating to such Purchased Assets, or make the Purchased Assets subject to any additional Liability, in each case without the prior written consent of Primero or McEwen, as the case may be;	

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 	(iii)	use commercially reasonable efforts to effect all necessary registrations, filings and submissions of information required by Governmental Entities prior to the Closing in respect of the Transaction or McEwen and cooperating with Primero with respect thereto;	
 	 	 	
 	(iv)	use commercially reasonable efforts to oppose, lift or rescind any injunction, restraining or other order, decree or ruling seeking to restrain, enjoin or otherwise prohibit or adversely affect the Closing and defend, or cause to be defended, any proceedings to which it is a party or brought against it or its directors or officers challenging the Transaction or this Agreement;	
 	 	 	
 	(v)	reimburse Primero for all fees paid by Primero in connection with the assignment by Primero to McEwen of any Authorizations; and	
 	 	 	
 	(vi)	not take any action, or refrain from taking any commercially reasonable action, or permitting any action to be taken or not taken, which is inconsistent with this Agreement or which would reasonably be expected to prevent, delay or otherwise impede the Closing.	

 	(b)	McEwen shall promptly notify Primero (and, if it becomes aware, Primero shall promptly notify McEwen) in writing of:	

 	(i)	any McEwen Material Adverse Effect, or any fact or state of facts, circumstance, change, effect, occurrence or event which could reasonably be expected to have a McEwen Material Adverse Effect;	
 	 	 	
 	(ii)	any notice or other communications from any Person alleging that the consent (or waiver, permit, exemption, order, approval, agreement, amendment or confirmation) of such Person (or another Person) is or may be required in connection with this Agreement or the Transaction;	
 	 	 	
 	(iii)	any notice or other communication from any Governmental Entity in connection with this Agreement or the Transaction (and contemporaneously provide a copy of any such notice or communication to Primero); or	
 	 	 	
 	(iv)	any filing, action, suit, claim, investigation or proceeding commenced or, to its knowledge, threatened against, relating to or involving or otherwise materially affecting McEwen, the Purchased Assets or that relate to this Agreement or the Transaction.	

4.4	Required Consents and Approvals	
To the extent applicable, on and after the Closing Date, until such time as the Required Consents and Approvals have been obtained, to the extent permitted by Law, Primero shall hold any Assumed Contract, Authorization or Closure Plan which relates to the Required Consents and Approvals in trust for the benefit of McEwen and the covenants and obligations thereunder shall be fully performed by Primero at the sole expense of McEwen (and Primero shall not terminate or amend any such Assumed Contract, Authorization or Closure Plan or grant a waiver of any breach of such Assumed Contract or fail to enforce same without the prior written consent of McEwen) and all, from and after the Closing Time, benefits and obligations existing thereunder shall be for the account of McEwen and all costs (if any) in respect thereof shall also be for the account of McEwen.

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4.5	Access to Information and Access for Due Diligence	
From the date hereof, unless this Agreement is terminated in accordance with its terms, subject to Law, Primero shall, and shall cause its officers, directors, employees, auditors, advisors and agents to, in respect of the business, operations, assets, properties and related rights comprising and relating solely to the Purchased Assets, afford McEwen and the officers, employees, agents and representatives of McEwen or any of its affiliates such access as McEwen may reasonably request, without disrupting the business and operations of Primero, during regular business hours of Primero, including for the purpose of confirmatory due diligence, Transition Services Agreement development, environmental site assessments, environmental compliance audits and health and safety audits, facilitating post-closing business planning and indemnification purposes, to the officers, employees, agents, properties, Books and Records and Contracts of Primero, and shall make available to McEwen all data and information as McEwen may reasonably request with respect thereto. Without limiting the foregoing, Primero shall, upon McEwen's reasonable request, facilitate discussions between McEwen and any Person from whom a Required Consent and Approval must be obtained; provided that McEwen shall not contact, directly or indirectly, BMO or Wheaton without the prior written consent of Primero, which may be withheld in its sole discretion.

4.6	Public Communications	
Primero and McEwen shall agree on the text of any press releases by which Primero and/or McEwen will announce: (i) the execution of this Agreement; and (ii) the Closing. A Party must not issue any press release or make any other public statement or disclosure with respect to this Agreement or the Transaction without the prior consent of the other Party (which consent shall not be unreasonably withheld or delayed), and Primero must not make any filing with any Governmental Entity with respect to this Agreement or the Transaction without the prior written consent of McEwen (which consent shall not be unreasonably withheld or delayed); provided that any Party that, in the opinion of its outside legal counsel, is required to make disclosure by Law shall use its commercially reasonable efforts to give the other Party prior oral or written notice and a reasonable opportunity to review or comment on the disclosure, and if such prior notice is not possible, shall give such notice immediately following the making of such disclosure. The Party making such disclosure shall give reasonable consideration to any comments made by the other Party or its legal counsel.

4.7	Surety Arrangements	

 	(a)	McEwen will assume responsibility for providing financial assurance for the Closure Plans with regard to the Acquired Properties from and after the Closing Time.	
 	 	 	
 	(b)	McEwen shall secure substitute Financial Assurance to replace the Primero Financial Assurance (the " McEwen Financial Assurance ") at the Closing Time; provided that, if the MNDM has not provided the Required Consent and Approval to the replacement of the Primero Financial Assurance with the McEwen Financial Assurance at the Closing Time, the Primero Financial Assurance shall continue after the Closing Time at the sole expense of McEwen and subject to the terms of the Transition Services Agreement, until such Required Consent and Approval from the MNDM is obtained.	

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4.8	Tax Matters	

 	(a)	The Parties agree and acknowledge that the acquisition of the Purchased Assets hereunder involves the acquisition by McEwen of all or substantially all of the Canadian resource properties of Primero. McEwen and Primero covenant and agree to execute and file a joint election in the prescribed form contemplated under paragraph 66.7(7)(e) of the Tax Act, within the time limits prescribed by the Tax Act, in respect of the transfer of the Purchased Assets in order to have the "successor corporation" rules in the Tax Act apply in a manner that transfers from Primero to McEwen the maximum amount of Transferred Tax Pools allowable for such purposes. Primero shall prepare and execute such election and provide a copy of such election for McEwen's review at least 15 Business Days prior to the filing deadline. Primero shall accept any reasonable comments from McEwen in respect of such election prior to filing.	
 	 	 	
 	(b)	If McEwen assigns its rights and obligations under this Agreement to a direct or indirect subsidiary (the " Assignee Purchaser ") pursuant to Section 10.12, Primero represents that it is, and McEwen represents (on its own behalf and on behalf of the Assignee Purchaser, if any) that the Assignee Purchaser will be duly registered under subdivision (d) of Division V of Part IX of the Excise Tax Act (Canada) and shall provide its registration number to the other Party promptly upon request by such other Party. Primero and McEwen (on its own behalf and on behalf of any Assignee Purchaser) acknowledge and agree that Primero is selling, and McEwen or the Assignee Purchaser, as applicable, is acquiring, all or substantially all of the assets used in the business currently being conducted by Primero with respect to the Purchased Assets and, if McEwen assigns its rights and obligations under this Agreement to an Assignee Purchaser pursuant to Section 10.12, Primero and McEwen (on behalf of the Assignee Purchaser) each agree to jointly prepare and execute an election pursuant to section 167 of the Excise Tax Act (Canada). McEwen represents (on its own behalf and on behalf of the Assignee Purchaser) that it shall file such election in prescribed form and within the time limits contained in the Excise Tax Act (Canada) with the appropriate Governmental Entity. Any goods and services tax, harmonized sales tax and/or any other sales or similar tax incurred in connection with the Transaction, including, for greater certainty, where an election pursuant to section 167 of the Excise Tax Act (Canada) is not or cannot be validly made in respect of the Purchased Assets, shall be borne by McEwen or the Assignee Purchaser, as the case may be. McEwen shall indemnify Primero from any and all claims, liabilities, actions, proceedings, demands, losses, costs, penalties, goods and services taxes payable, fines, damages, interest and expenses suffered by or sustained by Primero pertaining to such election pursuant to section 167 of the Excise Tax Act (Canada), including in the event that such election is not accepted by the Canada Revenue Agency. For greater certainty, the Parties agree that, if McEwen assigns its rights and obligations under this Agreement to an Assignee Purchaser, Primero will not charge or collect any amount from the Assignee Purchaser on Closing on account of goods and services tax or harmonized sales tax on the basis that the Parties have covenanted in this Section 4.8 to complete and timely file an election under section 167 of the Excise Tax Act (Canada).	
 	 	 	
 	(c)	McEwen shall pay (and indemnify Primero for) any and all land transfer taxes, levies and other Taxes which are paid by Primero in connection with the purchase and sale of the Purchased Assets.	
 	 	 	
 	(d)	Primero and McEwen (on its own behalf or on behalf of any Assignee Purchaser) will jointly elect, within the prescribed time and manner, under subsection 20(24) of the Tax Act with respect to any obligations of Primero assumed by McEwen .	

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4.9	Employment Matters	

 	(a)	Prior to the Closing Time, Primero shall continue to employ all of the Employees on the same terms and conditions as are in effect on the date hereof and shall not make any changes to such terms and conditions except for normal salary and wage increases made in the Ordinary Course, and will not hire other individuals whose base salary exceeds $80,000 to be Employees (except as are required to replace departed Employees) without McEwen's prior written consent, except for any Employees who prior to the Closing Time: (i) are terminated for cause in the Ordinary Course; (ii) are terminated with McEwen's consent, which consent shall not be unreasonably withheld; (iii) voluntarily resign; or (iv) retire.	
 	 	 	
 	(b)	Not less than 15 days prior to the Closing, Primero agrees to provide McEwen with an updated listing of all Employees as of such date specifying, on an individual basis, the Employee's age, length of service, remuneration, position (including full-time, part-time, temporary, casual, seasonal or co -op student), and specifying if the Employee is on leave, the type of leave and the Employee's anticipated return to work date, which update describes the changes that have occurred from the date of this Agreement.	
 	 	 	
 	(c)	Within five (5) days after receipt of the Employee list delivered pursuant to Section 4.9(b), McEwen shall offer employment to each Employee (each, a " Prospective Employee ") and shall make each such offer of employment, effective as of the Closing Time, to each Prospective Employee in accordance with Section 4.9(d) . McEwen will provide notice to Primero on the Closing Date of the names of those Prospective Employees who accept employment with McEwen (such Prospective Employees, together with all Inactive Employees, who commence employment with McEwen are collectively referred to herein as the " Transferred Employees "). Notwithstanding the foregoing, if any Prospective Employee to whom McEwen is required to make an offer of employment pursuant to this Section 4.9(c) is on an approved leave of absence from work with Primero at the time offers of employment by McEwen are to be made (each, an " Inactive Employee "), McEwen shall offer employment to such Inactive Employee on the earliest practicable date following the return of such Inactive Employee to work with Primero and otherwise on terms and conditions consistent with this Section 4.9(c) and Section 4.9(d), provided that such Inactive Employee returns to active employment within eighteen (18) months following the Closing Date or such later time as required by applicable Law. Primero shall promptly notify McEwen of the occurrence and end of any such leave of absence. Any Inactive Employee who accepts the offer of employment by McEwen upon the end of any leave of absence shall be a Transferred Employee, and all references in this Agreement to: (i) the Closing Date shall be deemed to be references to the date on which such individual becomes a Transferred Employee; and (ii) the Closing Time shall be deemed to be references to 12:01 a.m. local time on the date such individual becomes a Transferred Employee. For greater certainty, McEwen shall not be liable for any Employee Obligations paid by Primero to an Inactive Employee prior to the date upon which the Inactive Employee becomes a Transferred Employee.	
 	 	 	
 	(d)	The offer letters to be delivered to Prospective Employees and Inactive Employees, as applicable, by McEwen under Section 4.9(c) shall be on the basis of the following terms and conditions:	

 	(i)	the base compensation and bonus plan entitlements shall be substantially identical to such Prospective Employees’ entitlements immediately prior to the Closing or, in the case of any Inactive Employee, immediately prior to the date on which such Inactive Employee’s leave of absence commenced, subject to any accommodation required or permitted under applicable employment Law if such Inactive Employee returns to a different or modified role, in which case such Inactive Employee’s base compensation and bonus pay entitlements shall be commensurate with the different or modified role;	

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 	(ii)	shall exclude any stock option plan or other equity based incentive plan compensation to which the Prospective Employees or Inactive Employees were entitled immediately prior to the Closing;	
 	 	 	
 	(iii)	the benefit entitlements shall be comparable to such Prospective Employees’ entitlements immediately prior to the Closing or, in the case of any Inactive Employee, immediately prior to the date on which such Inactive Employee’s leave of absence commenced; and	
 	 	 	
 	(iv)	the written employment agreements to be entered into between McEwen and each Prospective Employee or Inactive Employee, as applicable, shall give full recognition for such Prospective Employee's or Inactive Employee’s length of service with Primero prior to the Closing Date, and otherwise shall define, at McEwen's discretion, the termination entitlement owed to such Prospective Employee or Inactive Employee, as applicable, if such Prospective Employee's or Inactive Employee’s employment with McEwen is terminated following such Prospective Employee's or Inactive Employee’s acceptance of the offer of employment by McEwen.	

 	(e)	McEwen shall deliver to Primero the form of offer letters referred to in Section 4.9(d) for Prospective Employees, upon receipt by McEwen of the Employee list referred to in Section 4.9(b) and, with respect to any Inactive Employee, upon receipt of notice that such Inactive Employee has returned to work with Primero.	
 	 	 	
 	(f)	Primero shall be solely responsible for all Employee Obligations and Primero Severance Obligations relating to all Employees, including Inactive Employees, who are not Transferred Employees.	
 	 	 	
 	(g)	In respect of Transferred Employees:	

 	(i)	Primero shall be solely responsible for all Employee Obligations which are payable to, receivable by or accrued in favour of the Transferred Employees prior to the Adjustment Date even if not then due and payable, except in respect of Employee Obligations that are included in the Statement of Adjustments, and for all Primero Severance Obligations; and	
 	 	 	
 	(ii)	McEwen shall assume all Employee Obligations relating to the Transferred Employees that arise on or after the Adjustment Date and all McEwen Severance Obligations.	

 	(h)	McEwen will have all obligations and liabilities with respect to any Governmental Entity for any Taxes which are payable to, receivable by or accrued on or after the Adjustment Date.	

4.10	Assistance with Financial Statements	

 	(a)	Prior to the Closing and as soon as reasonably practicable after the date hereof, Primero shall cause to be prepared in accordance with IFRS, at the sole expense of McEwen, all unaudited carve-out financial statements relating to the Purchased Assets as may be reasonably required by McEwen pursuant to applicable Securities Laws. In addition, Primero shall use reasonable commercial efforts to cause to be prepared in accordance with IFRS, at the sole expense of McEwen, as soon as reasonably practicable after the date hereof, all audited carve-out financial statements relating to the Purchased Assets as may be reasonably required by McEwen in accordance with applicable Securities Laws in connection with the Transaction.	

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 	(b)	This Section 4.10 shall survive the Closing for a period of 90 days.	

4.11	Transition Services Agreement	
Primero and McEwen agree to use their commercially reasonable efforts to negotiate and settle the Transition Services Agreement on terms that are acceptable to each of the Parties, each acting reasonably.

4.12	Schedules to this Agreement	
On or before the Schedule Delivery Deadline, Primero may make non-material adjustments to the Schedules identified below and Primero shall provide to McEwen completed copies (the “ Completed Schedules ”) of the following schedules, in form and substance acceptable to McEwen, acting reasonably, which Completed Schedules shall form an integral part of this Agreement:

SCHEDULE	DESCRIPTION	
 	 	
Schedule "A"	Assumed Contracts	
Schedule "B"	Acquired Equipment	
Schedule "C"	Excluded Assets	
Schedule "D"	Acquired Fixed Assets	
Schedule "E"	Acquired Intellectual Property	
Schedule "F"	Acquired Properties	
Schedule "G"	Acquired Royalties	
Schedule "K"	Permitted Encumbrances	
ARTICLE 5
NON-SOLICITATION

5.1	Non-Solicitation	
Commencing on the date hereof and until 5:00 p.m. on the earliest of the Closing Date, the Termination Date and the Outside Date: (i) Primero shall not, directly or indirectly, and shall not permit any of its affiliates or any of the Representatives of Primero to (A) encourage, solicit, initiate discussions with or engage in negotiations with any Person (whether such negotiations are initiated by a Representative or otherwise), other than McEwen, relating in any way to the acquisition of all or any portion of the Purchased Assets (a " Competing Transaction "), (B) enter into any letter of intent, contract or other agreement with any person or entity, other than McEwen, providing for any Competing Transaction, or (C) encourage, solicit or initiate discussions with any Person, other than McEwen, relating in any way to a Competing Transaction; (ii) Primero shall, and shall cause the Representatives to, suspend all discussions with third parties regarding any Competing Transaction; and (iii) to the extent permissible under applicable laws, Primero shall, and shall cause the Representatives to, promptly notify McEwen, within 24 hours of receipt of a proposal, inquiry or other written communication relating in any way to a Competing Transaction, of the terms and conditions thereof, and the identity of the Person or Persons making such proposal, inquiry or other written communication. For greater certainty, any receipt by Primero of a proposal in respect of a Competing Transaction shall not affect McEwen’s rights under this Agreement or relieve Primero of its obligations to complete the Transaction. None of the foregoing shall apply to any Excluded Asset or any other assets of Primero other than the Purchased Assets.

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ARTICLE 6
CONDITIONS

6.1	Mutual Conditions Precedent	
The Parties are not required to complete the Transaction unless each of the following conditions is satisfied on or as of the Closing Date, which conditions may only be waived, in whole or in part, by the mutual consent of each of the Parties:

 	(a)	Illegality. No Law is in effect that makes the Closing illegal or otherwise prohibits or enjoins Primero or McEwen from completing the Closing;	
 	 	 	
 	(b)	Governmental Approvals. Each of McEwen and Primero shall have received all Authorizations required for the Closing; and	
 	 	 	
 	(c)	Required Consents and Approvals . The Required Consents and Approvals shall have been obtained in form and substance satisfactory to the Parties, acting reasonably.	

6.2	Additional Conditions Precedent to the Obligations of McEwen	
McEwen is not required to complete the Transaction unless each of the following conditions is satisfied on or as of the Closing Date, which conditions are for the exclusive benefit of McEwen and may only be waived, in whole or in part, by McEwen in its sole discretion:

 	(a)	Representations and Warranties. (i) The representations and warranties of Primero set forth in this Agreement that are qualified by materiality or Primero Material Adverse Effect qualifications shall be true and correct in all respects and all other representations and warranties of Primero set forth in this Agreement shall be true and correct in all material respects, in each case, as of the Closing Date as if made on and as of such date except to the extent that such representations and warranties speak as of an earlier date, in which event such representations and warranties shall be accordingly true and correct as of such earlier date; and (ii) Primero shall have delivered a certificate confirming paragraph (i) above to McEwen, executed by a senior officer of Primero (without personal liability), addressed to McEwen and dated the Closing Date.	
 	 	 	
 	(b)	Performance of Covenants. (i) Primero shall have fulfilled or complied in all material respects with each of the covenants and obligations of Primero contained in this Agreement to be fulfilled or complied with by Primero on or prior to the Closing Date; and (ii) Primero shall have delivered a certificate confirming paragraph (i) above to McEwen, executed by a senior officer of Primero (without personal liability), addressed to McEwen and dated the Closing Date.	
 	 	 	
 	(c)	No Material Adverse Effect. (i) There shall not have occurred a Primero Material Adverse Effect on or prior to the Closing Time; and (ii) Primero shall have delivered a certificate confirming paragraph (i) above to McEwen, executed by a senior officer of Primero (without personal liability), addressed to McEwen and dated the Closing Date.	
 	 	 	
 	(d)	No Legal Action. There is no action or proceeding pending to prohibit or restrict the Transaction or the Closing or to materially adversely affect the ownership or operation by McEwen of the Purchased Assets after the Closing Time.	

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 	(e)	Damage or Destruction. The Purchased Assets shall not in any material respect have been damaged or destroyed, in whole or in part, by fire, theft or any other hazard.	
 	 	 	
 	(f)	Title Insurance. Primero shall own and control all right, title and interest in and to the Purchased Assets, subject only to Permitted Encumbrances, as evidenced by the Title Insurance Policy (the “ Title Insurance Policy ”) and a favourable legal opinion from legal counsel for Primero in relation to the title to the mining claims included in the Acquired Properties to the extent such mining claims are not covered by the Title Insurance Policy (the " Title Opinion "), in each case, addressed to McEwen and which are delivered by Primero to McEwen, at Primero's expense, in form and substance acceptable to McEwen and McEwen's legal counsel, each acting reasonably.	
 	 	 	
 	(g)	Deliveries. Primero shall deliver or cause to be delivered to McEwen the following in form and substance satisfactory to McEwen, acting reasonably:	

 	(i)	the certificates referred to in Section 6.2(a), Section 6.2(b) and Section 6.2(c);	
 	 	 	
 	(ii)	certified copies of: (i) the articles of Primero; and (ii) the resolutions of Primero Board approving the entering into of this Agreement and the Transaction;	
 	 	 	
 	(iii)	a certificate of status, compliance, good standing or like certificate with respect to Primero issued by an appropriate Governmental Entity of its jurisdiction of incorporation or formation;	
 	 	 	
 	(iv)	a direction to McEwen regarding the payment of the Purchase Price;	
 	 	 	
 	(v)	a bill of sale, assignment and assumption, substantially in the form of Exhibit B, executed by Primero;	
 	 	 	
 	(vi)	the Transition Services Agreement, executed by Primero;	
 	 	 	
 	(vii)	all conveyances, transfers, assignments, consents and other documents as may be required to convey to McEwen the Purchased Assets with good and marketable title, free and clear of all Encumbrances, other than the Permitted Encumbrances;	
 	 	 	
 	(viii)	the Title Insurance Policy;	
 	 	 	
 	(ix)	the Title Opinion;	
 	 	 	
 	(x)	an opinion dated the Closing Date from legal counsel for Primero, in a form customarily provided in transactions of this nature, including in respect of the due authorization, execution, delivery and enforceability of this Agreement;	
 	 	 	
 	(xi)	evidence of discharge of any security granted pursuant to the BMO Credit Agreement with respect to the Purchased Assets, and a consent from the Administrative Agent and the Lenders (each as defined in the BMO Credit Agreement);	
 	 	 	
 	(xii)	a consent from Sandstorm pursuant to the Sandstorm Gold Stream Agreement;	
 	 	 	
 	(xiii)	a valid Workers Compensation and Insurance Board (" WSIB ") Purchase Certificate verifying that there are no outstanding debts on Primero's WSIB account;	

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 	(xiv)	a draft copy of the tax election under section 167 of the Excise Tax Act (Canada), described in Section 4.8 of this Agreement;	
 	 	 	
 	(xv)	all documents as may be required to discharge and remove from title any Encumbrance that is not a Permitted Encumbrance;	
 	 	 	
 	(xvi)	reliance letters provided pursuant to Section 4.2(a)(v); and	
 	 	 	
 	(xvii)	copies or originals of such other documents, instruments, agreements or certificates necessary or advisable for the Closing or for the operation and use of the Purchased Assets by McEwen after the Closing, as McEwen shall reasonably request.	

6.3	Additional Conditions Precedent to the Obligations of Primero	
Primero is not required to complete the Transaction unless each of the following conditions is satisfied on or as of the Closing Date, which conditions are for the exclusive benefit of Primero and may only be waived, in whole or in part, by Primero in its sole discretion:

 	(a)	Representations and Warranties . (i) The representations and warranties of McEwen set forth in this Agreement that are qualified by materiality or McEwen Material Adverse Effect qualifications shall be true and correct in all respects and all other representations and warranties of McEwen set forth in this Agreement shall be true and correct in all material respects, in each case as of the Closing Date as if made on and as of such date except to the extent that such representations and warranties speak as of an earlier date, in which event such representations and warranties shall be accordingly true and correct as of such earlier date; and (ii) McEwen shall have delivered a certificate confirming paragraph (i) above to Primero, executed by a senior officer of McEwen (without personal liability), addressed to Primero and dated the Closing Date;	
 	 	 	
 	(b)	Performance of Covenants . (i) McEwen shall have fulfilled or complied in all respects with each of the covenants and obligations of McEwen contained in this Agreement to be fulfilled or complied with by McEwen on or prior to the Closing Date; and (ii) McEwen shall have delivered a certificate confirming paragraph (i) above to Primero, executed by a senior officer of McEwen (without personal liability), addressed to Primero and dated the Closing Date;	
 	 	 	
 	(c)	No Legal Action . There is no action or proceeding pending to prohibit or restrict the Transaction or the Closing;	
 	 	 	
 	(d)	Deliveries . McEwen shall deliver or cause to be delivered to Primero the following in form and substance satisfactory to Primero, acting reasonably:	

 	(i)	the certificates referred to in Section 6.3(a) and Section 6.3(b);	
 	 	 	
 	(ii)	certified copies of (i) the articles and by-laws of McEwen; and (ii) the resolutions of the McEwen Board approving the entering into of this Agreement and the Transaction;	
 	 	 	
 	(iii)	a certificate of status, compliance, good standing or like certificate with respect to McEwen issued by appropriate government officials of its jurisdiction of incorporation or formation;	

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 	(iv)	a wire transfer representing payment of the Purchase Price in accordance with Section 2.2, sent in accordance with the direction delivered by Primero to McEwen under Section 6.2(g)(iv);	
 	 	 	
 	(v)	a bill of sale, assignment and assumption, substantially in the form of Exhibit B, executed by McEwen;	
 	 	 	
 	(vi)	the Transition Services Agreement, executed by McEwen;	
 	 	 	
 	(vii)	an opinion dated the Closing Date from legal counsel for McEwen, in respect of the due authorization, execution, delivery and enforceability of this Agreement, in a form customarily provided in a transaction of this nature;	
 	 	 	
 	(viii)	subject to Section 4.7, evidence satisfactory to Primero, acting reasonably, that the Primero Financial Assurance has been replaced or will be replaced with the McEwen Financial Assurance on or after Closing;	
 	 	 	
 	(ix)	agreement by McEwen in writing with Newmont Canada Corporation to observe and be bound by the terms of the royalty in respect of the 2.5% NSR royalty pursuant to a royalty agreement dated March 25, 2009 between Apollo Gold Corporation, as grantor, and Newmont Canada Corporation, as royalty holder, relating to certain parcels comprising the Properties, accepted by Newmont Canada Corporation; and	
 	 	 	
 	(x)	copies or originals of such other documents, instruments, agreements or certificates necessary or advisable to consummate the Transaction, as Primero shall reasonably request.	
ARTICLE 7
TERM AND TERMINATION

7.1	Termination	

 	(a)	This Agreement may be terminated prior to the Closing Date:	

 	(i)	by the mutual written agreement of the Parties;	
 	 	 	
 	(ii)	by either Primero or McEwen if:	

 	(A)	the closing of the Transaction does not occur on or prior to the end of the day on the Outside Date; provided that a Party may not terminate this Agreement pursuant to this Section 7.1(a)(ii)(A) if the failure of the closing of the Transaction to so occur has been caused by, or is a result of, a breach by such Party of any of its representations or warranties or the failure of such Party to perform any of its covenants or obligations under this Agreement; or	
 	 	 	
 	(B)	after the date of this Agreement, any Law is enacted, made, enforced or amended, as applicable, that makes the Closing illegal or otherwise permanently prohibits or enjoins Primero or McEwen from completing the Closing, and such Law has, if applicable, become final and non- appealable, provided the Party seeking to terminate this Agreement pursuant to this Section 7.1(a)(ii)(B) has used its commercially reasonable efforts to appeal such Law (provided such Law is an order, injunction, judgment, decree or ruling) or otherwise have it lifted or rendered non-applicable in respect of the Transaction;	

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 	(iii)	by Primero if a breach of any representation or warranty or failure to perform any covenant on the part of McEwen under this Agreement occurs that would cause any condition in Section 6.3(a) or Section 6.3(b) not to be satisfied in any material respect, and such breach or failure is incapable of being cured or is not cured by the Outside Date, provided that any Wilful Breach shall be deemed to be incurable; or	
 	 	 	
 	(iv)	by McEwen:	

 	(A)	if a breach of any representation or warranty or failure to perform any covenant on the part of Primero under this Agreement occurs that would cause any condition in Section 6.2(a) or Section 6.2(b) not to be satisfied in any material respect, and such breach or failure is incapable of being cured or is not cured by the Outside Date; provided that any Wilful Breach shall be deemed to be incurable; or	
 	 	 	
 	(B)	after the date of this Agreement and prior to the Closing, there has occurred a Primero Material Adverse Effect.	

 	(b)	The Party desiring to terminate this Agreement pursuant to Section 7.1(a) shall give notice of such termination to the other Party, specifying in reasonable detail the basis for such Party's exercise of its termination right.	

7.2	Effect of Termination	
If this Agreement is terminated pursuant to Section 7.1, this Agreement shall become void and of no further force or effect without liability of either Party to the other Party to this Agreement, except that no Party shall be relieved of any liability for any Wilful Breach by it of this Agreement.
ARTICLE 8
CLOSING

8.1	Date, Time and Place of Closing	
The Closing will take place at the offices of Bennett Jones LLP, Suite 3400, One First Canadian Place, Toronto, Ontario, at 10:00 a.m. on the Closing Date or at such other place, on such other date and at such other time was may be agreed upon in writing between McEwen and Primero.
ARTICLE 9
INDEMNIFICATION

9.1	Survival	
Subject to the limitations and other provisions of this Agreement, the representations and warranties contained herein shall survive the Closing and shall remain in full force and effect until the date that is 24 months from the Closing Date; provided that: (i) the Fundamental Representations and the representations and warranties set forth in Section (19) Environmental of Schedule "I" shall survive the Closing and shall remain in full force and effect until the fifth (5 th ) anniversary following the Closing Date; and (ii) the representations and warranties set forth in Section (16) Tax of Schedule "I" shall survive for the full period of all applicable statutes of limitations (giving effect to any waiver, mitigation or extension thereof) plus 60 days. All covenants and agreements of the Parties contained herein shall survive the Closing indefinitely or for the period explicitly specified therein. Notwithstanding the foregoing, any claims asserted in good faith with reasonable specificity (to the extent known at such time) and in writing by notice from the non-breaching Party to the breaching Party prior to the expiration date of the applicable survival period shall not thereafter be barred by the expiration of the relevant representation or warranty and such claims shall survive until finally resolved.

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9.2	Indemnification By Primero	
Subject to the other terms and conditions of this Article 9, Primero shall indemnify and defend McEwen and its affiliates and their respective Representatives (collectively, the " McEwen Indemnitees ") against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses incurred or sustained by, or imposed upon, the McEwen Indemnitees based upon, arising out of, with respect to or by reason of:

 	(a)	any inaccuracy in or breach of: (i) any of the representations or warranties of Primero contained in this Agreement or in any Transaction Document delivered by or on behalf of Primero pursuant to this Agreement, as of the date such representation or warranty was made or as if such representation or warranty was made on and as of the Closing Date (except for representations and warranties that expressly relate to a specified date, the inaccuracy in or breach of which will be determined with reference to such specified date); or (ii) any certificate or instrument delivered by or on behalf of Primero pursuant to this Agreement;	
 	 	 	
 	(b)	any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Primero pursuant to this Agreement;	
 	 	 	
 	(c)	any Excluded Asset or any Excluded Liability; or	
 	 	 	
 	(d)	any Third Party Claim based upon, resulting from or arising out of the business, operations, properties, assets or obligations of Primero or any of its affiliates (other than the Purchased Assets or Assumed Liabilities) conducted, existing or arising on or prior to the Closing Date.	

9.3	Indemnification By McEwen	
Subject to the other terms and conditions of this Article 9, McEwen shall indemnify and defend Primero and its affiliates and their respective Representatives (collectively, the " Primero Indemnitees ") against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses incurred or sustained by, or imposed upon, the Primero Indemnitees based upon, arising out of, with respect to or by reason of:

 	(a)	any inaccuracy in or breach of: (i) any of the representations or warranties of McEwen contained in this Agreement or in any Transaction Document delivered by or on behalf of McEwen pursuant to this Agreement, as of the date such representation or warranty was made or as if such representation or warranty was made on and as of the Closing Date (except for representations and warranties that expressly relate to a specified date, the inaccuracy in or breach of which will be determined with reference to such specified date); or (ii) any certificate or instrument delivered by or on behalf of McEwen pursuant to this Agreement;	

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 	(b)	any breach or non-fulfillment of any covenant, agreement or obligation to be performed by McEwen pursuant to this Agreement; or	
 	 	 	
 	(c)	any Purchased Asset or any Assumed Liability.	

9.4	Certain Limitations	
The indemnifications provided for in Section 9.2 and Section 9.3 shall be subject to the following limitations:

 	(a)	Primero shall not be liable to the McEwen Indemnitees for indemnification under Section 9.2 until the aggregate amount of all Losses in respect of indemnification under Section 9.2 exceeds $350,000 (the " Basket "), in which event Primero shall be required to pay or be liable for all such Losses from the first dollar.	
 	 	 	
 	(b)	Primero shall not be liable to the McEwen Indemnitees for indemnification under Section 9.2 in an aggregate amount in excess of: (i) in respect of indemnification relating to an inaccuracy or breach by Primero of a Fundamental Representation, the Purchase Price; (ii) in respect of indemnification relating to an inaccuracy or breach by Primero of any other representation or warranty, 25% of the Purchase Price; and (iii) in respect of indemnification pursuant to Section 9.2(b), Section 9.2(c) or Section 9.2(d), the Purchase Price.	
 	 	 	
 	(c)	McEwen shall not be liable to the Primero Indemnitees for indemnification under Section 9.3 until the aggregate amount of all Losses in respect of indemnification under Section 9.3 exceeds the Basket, in which event McEwen shall be required to pay or be liable for all such Losses from the first dollar.	
 	 	 	
 	(d)	McEwen shall not be liable to the Primero Indemnitees for indemnification under Section 9.3 in an aggregate amount in excess of: (i) in respect of indemnification relating to an inaccuracy or breach by McEwen of a Fundamental Representation, the Purchase Price; (ii) in respect of indemnification relating to an inaccuracy or breach by McEwen of any other representation or warranty, 25% of the Purchase Price; and (iii) in respect of indemnification pursuant to Section 9.3(b) or Section 9.3(c), the Purchase Price.	
 	 	 	
 	(e)	Neither Primero nor McEwen has any liability or obligation with respect to any single claim for indemnification or otherwise with respect to the matters described in Section 9.2 or Section 9.3 unless the actual amount of the Losses suffered with respect to such claim is greater than $10,000. The amount of Losses with respect to any claim that is $10,000 or less shall be taken into account in determining whether or not the actual total amount of all Losses suffered exceeds the Basket.	
 	 	 	
 	(f)	Notwithstanding the foregoing, the limitations set forth in Section 9.4(a), Section 9.4(b), Section 9.4(c) and Section 9.4(d) shall not apply to Losses based upon, arising out of, with respect to or by reason of any inaccuracy in or breach of any Fundamental Representations or in respect of fraud, criminal activity or willful misconduct.	

9.5	Indemnification Procedures	
The Party making a claim under this Article 9 is referred to as the " Indemnified Party ", and the Party against whom such claims are asserted under this Article 9 is referred to as the " Indemnifying Party ."

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 	(a)	Third Party Claims. If any Indemnified Party receives notice of the assertion or commencement of any Action made or brought by any Person who is not a party to this Agreement or an affiliate of a Party or a Representative of the foregoing (a " Third Party Claim ") against such Indemnified Party with respect to which the Indemnifying Party is obligated to provide indemnification under this Agreement, the Indemnified Party shall give the Indemnifying Party prompt written notice thereof, but in any event not later than ten (10) calendar days after receipt of such notice of such Third Party Claim. The failure to give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses or is otherwise materially prejudiced by reason of such failure. Such notice by the Indemnified Party shall describe the Third Party Claim in reasonable detail, shall include copies of all material written evidence thereof (including any statement of claim or demand notice) and shall indicate the estimated amount, if reasonably practicable, of the Losses that have been or may be sustained by the Indemnified Party. The Indemnifying Party shall have the right to participate in, or by giving written notice to the Indemnified Party, to assume the defense of, any Third Party Claim at the Indemnifying Party's expense and by the Indemnifying Party's own legal counsel, and the Indemnified Party shall cooperate in good faith in such defense; provided, that the Indemnifying Party shall not have the right to defend or direct the defense of any such Third Party Claim that: (i) is asserted directly by or on behalf of a Person that is a supplier or customer relating to the Purchased Assets (if the Indemnifying Party is Primero); or (ii) seeks an injunction or other equitable relief against the Indemnified Party. In the event that the Indemnifying Party assumes the defense of any Third Party Claim, subject to Section 9.5(b), it shall have the right to take such action as it deems necessary to avoid, dispute, defend, appeal or make counterclaims pertaining to any such Third Party Claim in the name and on behalf of the Indemnified Party. The Indemnified Party shall have the right to participate in the defense of any Third Party Claim with legal counsel selected by it, subject to the Indemnifying Party's right to control the defense thereof. The fees and disbursements of such legal counsel shall be at the expense of the Indemnified Party; provided that, if in the reasonable opinion of legal counsel to the Indemnified Party, (A) there are legal defenses available to an Indemnified Party that are different from or additional to those available to the Indemnifying Party, or (B) there exists a conflict of interest between the Indemnifying Party and the Indemnified Party that cannot be waived, the Indemnifying Party shall be liable for the reasonable fees and expenses of legal counsel to the Indemnified Party in each jurisdiction in which the Indemnified Party determines legal counsel is required. If the Indemnifying Party elects not to compromise or defend such Third Party Claim, fails to promptly notify the Indemnified Party in writing of its election to defend as provided in this Agreement, or fails to diligently prosecute the defense of such Third Party Claim, the Indemnified Party may, subject to Section 9.5(b), pay, compromise (acting reasonably) or defend such Third Party Claim and seek indemnification for any and all Losses based upon, arising from or relating to such Third Party Claim. Primero and McEwen shall cooperate with each other in all reasonable respects in connection with the defense of any Third Party Claim, including making available records relating to such Third Party Claim and making available, without expense (other than reimbursement of actual out-of-pocket expenses) to the defending party, such then existing management employees of the non-defending party as may be reasonably necessary for the preparation of the defense of such Third Party Claim.	
 	 	 	
 	(b)	Settlement of Third Party Claims. Notwithstanding any other provision of this Agreement, the Indemnifying Party shall not enter into a settlement of any Third Party Claim without the prior written consent of the Indemnified Party, except as provided in this Section 9.5(b). If a firm offer is made to settle a Third Party Claim without leading to liability or the creation of a financial or other obligation on the part of the Indemnified Party and provides, in customary form, for the unconditional release of each Indemnified Party from all liabilities and obligations in connection with such Third Party Claim and the Indemnifying Party desires to accept and agree to such offer, the Indemnifying Party shall give written notice to that effect to the Indemnified Party. If the Indemnified Party fails to consent to such firm offer within ten (10) days after its receipt of such notice, the Indemnified Party may assume carriage of such matter, and continue to contest or defend such Third Party Claim and in such event, the maximum liability of the Indemnifying Party as to such Third Party Claim shall not exceed the amount of such settlement offer. If the Indemnified Party fails to consent to such firm offer and also fails to assume defense of such Third Party Claim, the Indemnifying Party may settle the Third Party Claim upon the terms set forth in such firm offer to settle such Third Party Claim. If the Indemnified Party has assumed the defense of the Third Party Claim pursuant to Section 9.5(a), it shall not agree to any settlement without the written consent of the Indemnifying Party (which consent shall not be unreasonably withheld or delayed).	

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 	(c)	Direct Claims. Any Action by an Indemnified Party on account of Losses that do not result from a Third Party Claim (a " Direct Claim ") shall be asserted by the Indemnified Party giving the Indemnifying Party prompt written notice thereof, but in any event not later than ten (10) days after the Indemnified Party becomes aware of such Direct Claim. The failure to give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses or is otherwise materially prejudiced by reason of such failure. Such notice by the Indemnified Party shall describe the Direct Claim in reasonable detail, shall include copies of all material written evidence thereof (including any statement of claim or demand notice) and shall indicate the estimated amount, if reasonably practicable, of the Losses that have been or may be sustained by the Indemnified Party. The Indemnifying Party shall have 30 days after its receipt of such notice to respond in writing to such Direct Claim. The Indemnified Party shall allow the Indemnifying Party and its legal counsel to investigate the matter or circumstance alleged to give rise to the Direct Claim, and whether and to what extent any amount is payable in respect of the Direct Claim and the Indemnified Party shall assist the Indemnifying Party's investigation by giving such information and assistance (including access to the Indemnified Party's premises and personnel and the right to examine and copy any accounts, documents or records) as the Indemnifying Party or its legal counsel may reasonably request. If the Indemnifying Party does not so respond within such 30 day period, the Indemnifying Party shall be deemed to have rejected such Direct Claim, in which case the Indemnified Party shall be free to pursue such remedies as may be available to the Indemnified Party on the terms and subject to the provisions of this Agreement.	

9.6	Payments	
Once any Losses are agreed to by the Indemnifying Party or finally adjudicated to be payable pursuant to this Article 9, the Indemnifying Party shall satisfy its obligations within fifteen (15) days of such final, non-appealable adjudication by wire transfer of immediately available funds. The Parties agree that should an Indemnifying Party not make full payment of any such obligations within such fifteen (15) day period, any amount payable shall accrue interest from and including the date of agreement of the Indemnifying Party or final, non-appealable adjudication to, but excluding, the date such payment has been made in full, at a rate per annum equal to the Prime Rate plus 5%. Such interest shall be calculated daily on the basis of a 365 day year and the actual number of days elapsed.

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9 .7	Tax Treatment of Indemnification Payments	
All indemnification payments made under this Agreement shall be treated by the Parties as an adjustment to the Purchase Price for Tax purposes, unless otherwise required by Law, and shall be allocated as among the Purchased Assets by the Parties, each acting reasonably.

9.8	One Recovery	
An Indemnified Party is not entitled to double recovery for any Losses even though they may have resulted from the breach, inaccuracy or failure to perform of more than one of the representations, warranties, covenants and obligations of the Indemnifying Party in this Agreement. No Party has any liability or obligation with respect to any Losses subject to indemnification under Section 9.2 or Section 9.3 to the extent that such Losses were reflected as an adjustment to the Purchase Price in Section 2.9.

9.9	Duty to Mitigate	
Nothing in this Agreement in any way restricts or limits the general obligation at Law of an Indemnified Party to mitigate any Losses which it may suffer or incur by reason of the breach, inaccuracy or failure to perform of any representation, warranty, covenant or obligation of the Indemnifying Party under this Agreement. If any Losses can be reduced by any recovery, settlement, payment or otherwise under or pursuant to any insurance coverage, or pursuant to any claim, recovery, settlement or payment by or against any other Person, the Indemnified Party shall take all appropriate steps to enforce such recovery, settlement or payment and the amount of any Losses of the Indemnified Party will be reduced by the amount of insurance proceeds actually recovered by the Indemnified Party.

9.10	Effect of Investigation	
A Party shall have no obligation or liability for indemnification under Section 9.2, Section 9.3 or otherwise with respect to any breach or inaccuracy of any representation or warranty in this Agreement or any failure to perform or fulfill any covenants or obligations, if the Party making the claim had knowledge of the breach, inaccuracy or failure to perform on or prior to the Closing.

9.11	Exclusive Remedies	
Subject to Section 10.3, the Parties acknowledge and agree that their sole and exclusive remedy with respect to any and all claims (other than claims arising from fraud, criminal activity or willful misconduct on the part of a Party in connection with the Transaction) for any breach of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise relating to the subject matter of this Agreement, shall be pursuant to the indemnification provisions set forth in this Article 9. In furtherance of the foregoing, each Party hereby waives, to the fullest extent permitted under Law, any and all rights, claims and causes of action for any breach of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise relating to the subject matter of this Agreement it may have against the other Party and its affiliates and each of their respective Representatives arising under or based upon any Law, except pursuant to the indemnification provisions set forth in this Article 9. Nothing in this Section 9.11 shall limit any Person's right to seek and obtain any equitable relief to which any Person shall be entitled or to seek any remedy on account of any party's fraudulent, criminal or intentional misconduct.

9.12	Trusts	
It is the intention of: (i) Primero to constitute McEwen as a trustee for McEwen Indemnitees that are not parties to this Agreement of the covenants of Primero contained in this Article 9 and McEwen agrees to accept such trust and to hold and enforce such covenants on behalf of each such McEwen Indemnitee; and (ii) McEwen to constitute Primero as a trustee for the Primero Indemnitees that are not parties to this Agreement of the covenants of McEwen contained in this Article 9 and Primero agrees to accept such trust and to hold and enforce such covenants on behalf of each such Primero Indemnitee.

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ARTICLE 10
GENERAL PROVISIONS

10.1	Amendments	
This Agreement may only be amended by mutual written agreement of the Parties.

10.2	Expenses	
Primero will be responsible for the costs relating to the Title Insurance Policy and the Title Opinion. Subject to the foregoing or as otherwise expressly agreed between the Parties, all out-of-pocket third party transaction expenses incurred in connection with this Agreement and the Transaction, including all costs, expenses and fees of Primero and McEwen incurred prior to or after the Closing Date in connection with, or incidental to, the Transaction, shall be paid by the Party incurring such expenses, whether or not the Transaction is completed, except as expressly provided in this Agreement.

10.3	Injunctive Relief and Remedies	
The Parties agree that irreparable harm would occur for which money damages would not be an adequate remedy at Law in the event that any of the provisions of this Agreement were not performed by Primero or McEwen in accordance with their specific terms or were otherwise breached. It is accordingly agreed that each Party shall be entitled to injunctive and other equitable relief to prevent breaches or threatened breaches of this Agreement by the other Party, and to enforce compliance with the terms of this Agreement by the other Party without any requirement for the securing or posting of any bond in connection with the obtaining of any such injunctive or other equitable relief, this being in addition to any other remedy to which a Party may be entitled at Law or in equity.

10.4	Privacy Matters	

 	(a)	The Disclosing Party acknowledges and confirms that the disclosure of Transaction Personal Information is necessary for the purposes of determining if the Parties will proceed with the Transaction, and that the disclosure of Transaction Personal Information relates solely to the carrying on of the business and the review of the Purchased Assets and the Closing.	
 	 	 	
 	(b)	The Disclosing Party covenants and agrees to, upon request, use reasonable efforts to advise the Recipient of all documented purposes for which the Transaction Personal Information was initially collected from or in respect of the individual to which such Transaction Personal Information relates and all additional documented purposes where the Disclosing Party has notified the individual of such additional purpose, and where required by Law, obtained the consent of such individual to such use or disclosure.	
 	 	 	
 	(c)	Prior to the Closing, the Recipient covenants and agrees to:	

 	(i)	collect, use and disclose the Transaction Personal Information solely for the purpose of reviewing and completing the Transaction, including for the purpose of determining whether to complete the Transaction; and	

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 	(ii)	not disclose the Transaction Personal Information to any person other than its Representatives who are evaluating and advising in relation to the Transaction; and	
 	 	 	
 	(iii)	to protect and safeguard the Transaction Personal Information as required by Law.	

 	(d)	After the Closing, the Recipient and the Disclosing Party each covenants and agrees to:	

 	(i)	use and disclose the Transaction Personal Information only for those purposes for which the Transaction Personal Information was initially collected from or in respect of the individual to which such Transaction Personal Information relates or for the Closing, unless (A) the Disclosing Party or the Recipient have first notified such individual of such additional purpose, and where required by Law, obtained the consent of such individual to such additional purpose, or (B) such use or disclosure is permitted or authorized by Law, without notice to, or consent from, such individual;	
 	 	 	
 	(ii)	to protect and safeguard the Transaction Personal Information as required by Law; and	
 	 	 	
 	(iii)	give effect to any withdrawal of consent made by an individual to whom the Transaction Personal Information relates.	

 	(e)	Where required by Law, the Disclosing Party agrees to promptly notify the individuals to whom the Transaction Personal Information relates that the Transaction has taken place and that the Transaction Personal Information has been disclosed to the Recipient.	
 	 	 	
 	(f)	If this Agreement is terminated prior to the Closing, the Recipient shall, at the Disclosing Party's election: (i) promptly deliver to the Disclosing Party all Transaction Personal Information in its possession or in the possession of any of its Representatives, including all copies, reproductions, summaries or extracts thereof; or (ii) promptly destroy all such Transaction Personal Information.	
 	 	 	
 	(g)	In this Agreement, " Transaction Personal Information " means personal information (namely, information about an identifiable individual other than their business contact information when used or disclosed for the purpose of contacting such individual as a representative of an organization and for no other purpose) to be disclosed or conveyed to one Party or any of its Representatives (a " Recipient ") by or on behalf of another Party (a " Disclosing Party ") as a result of or in conjunction with the Transaction, and includes all such personal information disclosed to the Recipient prior to the execution of this Agreement.	

10.5	Further Assurances	
From time to time after the Closing Date, a Party shall, at the request of the other Party, execute and deliver such additional conveyances, transfers and other assurances as may be reasonably required to effectively complete the Transaction and to carry out the intent of this Agreement. Without limiting the generality of the foregoing, to the extent that any Purchased Asset is not transferred to McEwen, upon the written request of McEwen, Primero shall use its best efforts to transfer, or to cause the transfer of, such asset to McEwen or take other appropriate steps to allow McEwen to enjoy the benefit of such Purchased Asset.

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10.6	Notices	
Any notice or other communication given regarding the matters contemplated by this Agreement must be in writing, sent by personal delivery, courier or electronic mail and addressed to:

 	(a)	McEwen at:	 	
 	 	 	 	
 	 	McEwen Mining Inc.	
 	 	150 King Street West	
 	 	Suite 2800	 	
 	 	Toronto, Ontario M5H 1J9	
 	 	 	 	
 	 	Attention:	Robert R. McEwen and Carmen Diges	
 	 	Email:	rob@mcewenmining.com and cdiges@mcewenmining.com	
 	 	 	 	
 	 	with a copy to:	 	
 	 	 	 	
 	 	Bennett Jones LLP	
 	 	3400 One First Canadian Place	
 	 	Toronto, ON M5X 1A4	
 	 	 	 	
 	 	Attention:	Michael N. Melanson	
 	 	Email:	melansonm@bennettjones.com	
 	 	 	 	
 	(b)	Primero at:	 	
 	 	 	 	
 	 	Primero Mining Corp.	
 	 	79 Wellington St. West, Suite 2100	
 	 	Toronto, ON M5K 1H1	
 	 	 	 	
 	 	Attention:	Joseph Conway and H. Maura Lendon	
 	 	Email:	jconway@primeromining.com and mlendon@primeromining.com	
 	 	 	 	
 	 	with a copy to:	 	
 	 	 	 	
 	 	Stikeman Elliott LLP	
 	 	5300 Commerce Court West	
 	 	199 Bay Street	 	
 	 	Toronto, ON M5L 1B9	
 	 	 	 	
 	 	Attention:	Elizabeth Breen	
 	 	Email:	ebreen@stikeman.com	
Any notice or other communication is deemed to be given and received: (i) if sent by personal delivery or same day courier, on the date of delivery if it is a Business Day and the delivery was made prior to 4:00 p.m. and otherwise on the next Business Day; (ii) if sent by overnight courier, on the next Business Day; or (iii) if sent by electronic mail, on the next Business Day. Sending a copy of a notice or other communication to a Party's legal counsel as contemplated above is for information purposes only and does not constitute delivery of the notice or other communication to that Party. The failure to send a copy of a notice or other communication to legal counsel does not invalidate delivery of that notice or other communication to a Party.

-40-

10.7	Time of the Essence	
Time is of the essence in this Agreement.

10.8	Third Party Beneficiaries	
The Parties intend that this Agreement will not benefit or create any right or cause of action in favour of any other Person, other than the Parties and, except as provided in Article 9, that no Person, other than the Parties, shall be entitled to rely on the provisions of this Agreement in any action, suit, proceeding, hearing or other forum.

10.9	Brokerage and Finder's Fees	
It is understood and agreed that, other than Scotia Capital Inc., no broker, agent or other intermediary acted for either Primero or McEwen in connection with the sale or purchase of the Purchased Assets and: (i) Primero agrees to indemnify McEwen and hold it harmless in respect of any claim for brokerage or other commissions relating to this Agreement or the Transaction which is caused by any action of Primero or any of its affiliates; and (ii) McEwen agrees to indemnify Primero and hold it harmless in respect of any claim for brokerage or other commissions relating to this Agreement or to the Transaction which is caused by any action of McEwen or any of its affiliates.

10.10	Waiver	
No waiver of any of the provisions of this Agreement will constitute a waiver of any other provision (whether or not similar). No waiver will be binding unless executed in writing by the Party to be bound by the waiver. A Party's failure or delay in exercising any right under this Agreement will not operate as a waiver of that right. A single or partial exercise of any right will not preclude a Party from any other or further exercise of that right or the exercise of any other right.

10.11	Entire Agreement	
This Agreement constitutes the entire agreement between the Parties with respect to the Transaction and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the Parties. There are no representations, warranties, covenants, conditions or other agreements, express or implied, collateral, statutory or otherwise, between the Parties in connection with the subject matter of this Agreement, except as specifically set forth in this Agreement. The Parties have not relied and are not relying on any other information, discussion or understanding in entering into and completing the Transaction.

10.12	Successors and Assigns	

 	(a)	This Agreement becomes effective only when executed by Primero and McEwen. After that time, it will be binding upon and enure to the benefit of Primero and McEwen and their respective successors and permitted assigns.	
 	 	 	
 	(b)	Subject to Section 10.12(c), neither this Agreement nor any of the rights or obligations under this Agreement are assignable or transferable by any Party without the prior written consent of the other Party.	
 	 	 	
 	(c)	Notwithstanding Section 10.12(b), McEwen may assign all or any part of its rights and obligations under this Agreement to a wholly-owned direct or indirect subsidiary of McEwen without the consent of Primero, provided that McEwen shall provide Primero with no less than five (5) Business Days' prior written notice of such assignment.	

-41-

10.13	Severability	
If any provision of this Agreement is determined to be illegal, invalid or unenforceable by any court of competent jurisdiction, that provision will be severed from this Agreement and the remaining provisions shall remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to give effect the original intent of the Parties as closely as possible in an acceptable manner to allow the Transaction to be completed to the fullest extent possible.

10.14	Governing Law	

 	(a)	This Agreement will be governed by and interpreted and enforced in accordance with the Laws of the Province of Ontario and the federal Laws of Canada applicable therein.	
 	 	 	
 	(b)	Each Party irrevocably attorns and submits to the non-exclusive jurisdiction of the Ontario courts situated in the City of Toronto and waives objection to the venue of any proceeding in such court or that such court provides an inconvenient forum.	

10.15	Rules of Construction	
The Parties waive the application of any Law or rule of construction providing that ambiguities in any agreement or other document shall be construed against the Party drafting such agreement or other document.

10.16	Counterparts	
This Agreement may be executed in any number of counterparts (including counterparts by facsimile) and all such counterparts taken together shall be deemed to constitute one and the same instrument. The Parties shall be entitled to rely upon delivery of an executed facsimile or similar executed electronic copy of this Agreement, and such facsimile or similar executed electronic copy shall be legally effective to create a valid and binding agreement between the Parties.
[Remainder of page intentionally left blank. Signature page follows.]

IN WITNESS WHEREOF the Parties have executed this Agreement as of the date first written above.

 	MCEWEN MINING INC.	

 	By:	 	
 	 	Name	
 	 	Title:	

 	PRIMERO MINING CORP.	

 	By:	
 	 	        	
 	 	Name:     Joseph Conway	
	 	Title:       Interim President and Chief Executive Officer	

SCHEDULE "A"
ASSUMED CONTRACTS

1.	Custom Milling Agreement dated November 17, 2016 between Primero and Sage Gold Inc.	
 	 	
2.	Purchase Agreement dated November 9, 2010 between Brigus Gold Corp. and Sandstorm Resources Ltd.	
 	 	
3.	Crushing Agreement dated October 4, 2013 between 1685300 Ontario Inc. O/A LPL Contracting with Wahgoshig Limited Partnership; term expired on March 21, 2017. A new Crushing Agreement dated April 1, 2017 remains pending signatures. Services continue in the interim.	
 	 	
4.	Highway Ore Haul Transportation Agreement dated March 22, 2016 between Primero and 1685300 Ontario Inc. O/A LPL Contracting with Wahgoshig Limited Partnership.	
 	 	
5.	Impact and Benefit Agreement dated June 3, 2011 between Wahgoshig First Nation and Brigus Gold Corp.	
 	 	
6.	Lease agreement dated May 20, 2016 between Sandvik Canada, Inc. dba Sandvik Customer Finance Canada and Primero.	
 	 	
7.	Lease agreement dated December 10, 2015 between Sandvik Canada, Inc. dba Sandvik Customer Finance Canada and Primero.	
 	 	
8.	Refining Agreement No. BC-2015/09/18 dated December 31, 2015 between Asahi Refining Canada Ltd. And Primero Mining Corp.	
 	 	
9.	Supply of Goods and Services Agreement, dated May 7, 2015 between Fountain Tire (Timmins) Ltd., and Primero Mining Corp., and Wahgoshig First Nation.	
 	 	
10.	Product Supply Agreement, dated February 1, 2015 between Suncor Energy Products Partnership and Primero Mining Corp.	
 	 	
11.	Fuel Supply and Equipment Agreement, dated July 14, 2014, between Superior Propane, a division of Superior Plus LP and Primero Gold Canada Inc.	
 	 	
12.	Loaned Equipment Contract, dated February 15, 2015, between Petro-Canada Lubricants Inc., and Primero Mining Corp.	
 	 	
13.	Sales Contract, dated February 1, 2015, between Petro-Canada Lubricants Inc., and Primero Mining Corp.	
 	 	
14.	Outstanding Purchase Orders and Ordinary Course Terms and Conditions.	
A - 1

SCHEDULE "B"
 
ACQUIRED EQUIPMENT
(1)    Underground Equipment

Item	Supplier/Vendor	Serial/VIN	Asset#	
Bolter	
Maclean Bolter	Total Equipment	SN 1036148-928-138	334301	
(Remanufactured)	Services	 	 	
 	 	 	 	
Compressors	
UG Compressor	Comairco	201611280042	 	
 	 	 	 	
Comairco Sullair Screw	Comairco	SN 201505190083	 	
Compressor	 	 	 	
 	 	 	 	
Comairco Compressor	Comairco	 	 	
 	 	 	 	
Drills	
UG Drill - Long Hole Drill	Walden	T-18	 	
 	 	 	 	
UG Drill - Longhole Buggy	UPC	 	339905	
 	 	 	 	
UG Drill - Long Hole Drill	 	 	 	
 	 	 	 	
UG Drill - Blockholer Drill	RDH	SN 06-919	333105	
 	 	 	 	
UG Drill - Bazooka	Parts HeadQuarters	 	 	
 	Inc.	 	 	
Jumbo	
UG Drill - 1 Boom Jumbo -	Sandvik	SN 116D36416-1	334205	
DD211	 	 	 	
 	 	 	 	
UG Drill - DD420 40C - SN	Sandvik	SN 111D18816-1	334204	
111D18816- 1	 	 	 	
 	 	 	 	
UG Drill - 410 - SN	Sandvik	SN L110D613	330605	
L110D613	 	 	 	
 	 	 	 	
UG Drill - 1 Boom Jumbo -	Sandvik	SN L10D5246	334203	
DD310	 	 	 	
 	 	 	 	
UG Drill - 2 Boom Jumbo -	Sandvik	SN 108D14052-1	334202	
DD420-60C - 2	 	 	 	
 	 	 	 	
UG Drill - 2 Boom Jumbo -	Sandvik	SN 108D15693-1	334201	
DD420-60C - 1	 	 	 	
 	 	 	 	
Electrical	
B - 1

2.5MVA Electrical	 	 	 	
Transformer Move	 	 	 	
UG Fibre & Camera's	Noront	 	 	
 	Communication	 	 	
UG 3 Starters & Pressure	 	 	 	
switch	 	 	 	
Fuel Truck	
UG Fuel Lube Truck -	Getman	SN 024004	332203	
Sandvik	 	 	 	
Grader	
135H Cat Motor Grader	CAT	SN CBC00267	331605	
Lube Truck	
Lube Tech Truck - Toyota	Toyota	 	 	
Land Cruiser	 	 	 	
Pumps	
UG Dewatering Pump	 	SN PAC-PRJ13-0131-A-B	 	
UG METSO 100 HP pumps	Metso	 	 	
Winch and Pump	 	 	 	
Mill 10' Discharge Pump	 	 	 	
Scissorlift	
Scissorlift	Marcotte	SN M2351	333104	
Scissor Lift - SLX5000	Walden	SN 884199	333103	
Scissor Lift - SLX5000	Walden	SN 01350000DF	333102	
Scissor Lift - SLX5000	Walden	SN 0125000DR	333101	
Scoop Buckets	
Scoop Bucket - 6 YD -	Sandvik	7706	7706	
LH410	 	 	 	
Scoops	
Sccop - LH410	Sandvik	SN LS10D1010	 	
Scoop - LH410	Sandvik	SN L410D831	330606	
Scoop - LH410	Sandvik	SN L810D488	330614	
Scoop - 6 YD - LHD410	Sandvik	SN T0700U420	330613	

Nautilus Remote Control	 	 	 	
Systems for Wagner Scoops	 	 	 	
Scoop - 2 YD - Wagner ST	Wagner	SN NAN090095	330211	
2D - NAN090095	 	 	 	
Scoop - 2 YD - Wagner ST	Wagner	SN NAN1000689726	330210	
2D - NAN10000689726	 	 	 	
Scoop - 2 YD - Wagner ST	Wagner	SN AXA100094	330208	
2D - AXA100094	 	 	 	
UG Loader - LH307 - SN	Sandvik	SN L107D386	330412	
L107D386 - BUL 12	 	 	 	
UG Loader - LH307 - SN	Sandvik	SN L107D374	330407	
L107D374	 	 	 	
UG Loader - LH410	Sandvik	SN C110D627	330604	
Scoop - 8 YD - LHD514 -	Sandvik	SN L014D403	330803	
SN L014D403	 	 	 	
Support Equipment	
UG Drum Slushers - 30HP	 	 	 	
(2)	 	 	 	
UG Alimak C/W Rescue	CMAC	 	 	
Unit - 9 ft Platform	 	 	 	
UG Shotcrete Machine &	Kubota	SN 21226	 	
Robotic Arm - Minemaster	 	 	 	
R520S with shotcrete boom	 	 	 	
UG Kubota Backhoe -	Kubota	SN 21228	330528	
Minemaster 520S	 	 	 	
UG Marcotte Boom Truck -	Marcotte	SN 3046	332210	
SN 3046 - 2008	 	 	 	
UG Boom Truck - BTX5000	Walden	SN 1-06-528	332211	
UG Shotcrete Machine	 	Aliva 252	113003	
UG Getman Crane Truck	Getman	SN D21-010	332202	
UG Shotcrete Machine	KUBOTA	 	113002	
Support Equipment - Mancarriers	
UG Toyota Truck Cab &	Mobile Parts	MPI-1261	 	

Chassis	 	 	 	
UG Toyota Man Carrier -	Mobile Parts	SN JTEL871J50434265	337916	
Electrical	 	 	 	
UG Toyota Troop Carrier	Mobile Parts	SN MPI-1222	 	
UG Toyota Truck Cab &	Mobile Parts	SN MPI-1224	 	
Chassis	 	 	 	
UG Tractor - 7 Man	Minecat	SN IFIMC100F6467	337565	
Personnel Carrier MC100F	 	 	 	
7Man LPC RMB R/F	 	 	 	
UG Toyota Troop	Mobile Parts	SN MPI-1223	 	
Mancarrier	 	 	 	
UG Service Vehicle	Toyota	JTELB71J89708209	337904	
UG Service Vehicle	Toyota	JTELB71J49708541	337905	
UG Toyota Truck	Toyota	JTELB71J607103692	337909	
UG Toyota Land Cruiser -	Toyota	JTELB71J907100589	337910	
4WD	 	 	 	
UG Toyota Man Carrier	Toyota	SN JTELB71J197081833	337906	
UG Toyota Man Carrier	Toyota	SN JTELB71J197079329	337907	
UG GMC Man Carrier	GMC	SN 1GT322C83DF176144	222534	
UG Toyota Man Carrier -	Toyota	SN JTELB71J7876515	337911	
Engineering	 	 	 	
UG Ambulance	UPC	 	339913	
UG UPC - Man Carrier	UPC	 	337908	
UG Toyota Landcruiser - 1	Toyota	No longer in use – parts	337903	
TON - Man Carrier	 	only	 	
UG Toyota Jeeps - Access	Access	JTELB71J097077734	 	
(2)	 	 	 	
UG Toyota Jeeps - Access	Access	JTELB71J877066719	 	
(2)	 	 	 	
UG Tractor - Pickup -	UPC	Parked – not in use	 	
Universal (2)	 	 	 	
UG Tractor - Pickup -	UPC	 	 	

Universal (2)	 	 	 	
UG Mine Cat - UT99 Unit	Mine Cat	SN 1F1UT99B7324	337507	
7324	 	 	 	
UG Mine Cat - BUS61	Mine Cat	SN IFIMC100E6210	337561	
UG Mine Cat - BUS62	Mine Cat	SN IFIMC100E6200	337562	
Technical Equipment	
Wifi Camera System for	Fountain Tire	 	 	
Remote Scoops	 	 	 	
UG Tire Monitoring Systems	Fountain Tire	 	 	
UG Mine Scanner	 	 	 	
Transmixer	
UG Transmixer	Marcotte	SN B50-569	331901	
Trucks	
UG Truck Engine	Glencore	06RE133376	335002	
UG Truck - 50T - TH540	Sandvik	SN T440D545	334006	
UG Truck - 50T - TH540	Sandvik	SN T440D576	334007	
UG Truck - TH430	Sandvik	SN T230D033	333005	
UG Truck - 30T - 2	Sandvic	SN T130D013	333004	
UG Truck - 30T - 1	Sandvik	SN 4672	333003	
UG Truck - 50T -1	Sandvik	SN T9050406	335002	
UG Truck - 50T-2	Sandvik	SN T7050359	335001	
(2)    Surface Equipment

Pick-up Trucks	
2016 RAM 2500 - Single Cab	 	3C6MR5AL5GG319596	P-41	
- Electrical Dept.	 	 	 	
 	 	 	 	
2016 RAM 2500 - Crewcab	 	3C6UR5CL3GG310943	P-40	
 	 	 	 	
2005 GMC Sierra 15 - Blue -	 	2GTEK13T451139362	P-36	
Surface Pickup Truck	 	 	 	

 	 	 	 	
2006 Ford F150 - Blue -	 	1FTPW14576KB81135	P-30	
Surface Pickup Truck	 	 	 	
 	 	 	 	
2006 Ford F150 - Blue -	 	1FTRF14W56NB32600	P-14	
Driller Pickup Truck	 	 	 	
 	 	 	 	
2006 Ford F150 - Blue -	 	Parked	P-31	
Driller Pickup Truck	 	 	 	
 	 	 	 	
Ram 2500 - VIN 206384	 	3C6UD5CL9CG206384	P-32	
 	 	 	 	
Ram 2500 - VIN 217915	 	3C6UD5CL3CG217915	P-33	
 	 	 	 	
2013 GMC Sierra 4x4 - VIN	 	1GT02ZC8XDZ269852	P-35	
269852	 	 	 	
 	 	 	 	
Toyota Truck - UG	 	JTELB71J207113121	337912	
2007 Ford - F150 - FB71098	 	1FTPW14V77FB71098	P-37	
 	 	 	 	
2008 Ford - F150 - FC28447	 	1FTRW14W38FC28447	P-38	
 	 	 	 	
2010 Ford - F150 - White -	 	1FTFW1E81AFD34514	P-39	
Environmental Pickup Truck	 	 	 	
 	 	 	 	
2006 Chev Silverado - Grey -	 	2GCEK198361113366	P-12	
Shifter Pickup Truck	 	 	 	
Toyota Truck	 	JTGRB71JFX7020079	337914	
 	 	 	 	
777 Truck Boxes	
777 Truck Box	Toromont	No sn#	 	
777 Trucks	
777F truck (#01) - Toromont -	Toromont	SN	 	
SN CAT0777FKJRP01309	 	CAT0777FKJRP01309	 	
 	 	 	 	
777F truck (#05) - Toromont -	Toromont	CAT0777 …JRP02008	 	
CAT0777 …JRP02008	 	 	 	
 	 	 	 	
Compressors	
Comairco Portable	Comairco	 	 	
Compressor	 	 	 	
Critical Spares	
Surface Fan Critical Spare	 	 	 	
Dozers	
CAT Tracker - D6TLGP - 1	Caterpillar	CAT00D6TVKJL01104	605	
 	Financial	 	 	
Cat 9DT	Caterpillar	RJS00507	 	
 	Financial	 	 	
D8T Dozer - 01	 	1LPZ03058	601	

Excavators	
Doosan Excavator - DX340 -	Ready Quip	DHKHECC0V60005354	 	
Ready Quip	 	 	 	
320 CL Excavator -	 	CAT0320CKPAB02631	 	
Rockbreaker	 	 	 	
KOMATSU Excavator -	Digolot	A90445	405	
PC300 - Digolot - 2	 	 	 	
385CL CAT Excavator	 	EDA00507	400	
 	 	 	 	
385CL CAT Excavator -	 	DA00475	401	
DA00475	 	 	 	
Forklift	
 Warehouse Forklift	Caterpillar	SN#AT19C80763	 	
Gen Sets	
Trailer for Mitsubishi Gen Set	Canadian	 	 	
at Mine	Bearing Ltd	 	 	
Mitsubish Gen Set for Mine	Canadian	 	 	
 	Bearing Ltd	 	 	
Gen Set - Cat C27	 	CAT00C27JDWB01414	 	
Grader	
CAT Wheel Grader - 16H	 	ATS00306	 	
 	 	 	 	
Loaders	
Loader - CAT Wheel 930G	 	TWR01115	 	
 	 	 	 	
Loader - JD Skid Steer - 320	John Deere	 	 	
 	 	 	 	
Loader - Toromont Wheel 992	Toromont	SN	 	
- SN CAT0992KKH4C00358	 	CAT0992KKH4C00358	 	
 	 	 	 	
Loader - CAT 988 H - 02	 	SN BXY02588	 	
 	 	 	 	
Loader - Caterpillar IT28G	 	8CR03408	 	
 	 	 	 	
Loader - 320 JD Skid Steer #2	John Deere	 	 	
 	 	 	 	
Loader - Bobcat S70 Skid	 	SN A3W61384	 	
Loader	 	 	 	
Other Trucks	
28 Ton Boom Truck - Exact	 	SN 293147	 	
Crane - SN293147	 	 	 	
 	 	 	 	
Freightliner	Idaho-Excel	Welding truck	224405	
 	 	 	 	
KOMATSU Articulating	Digolot	 	A-1	
Truck - HM300-2 - Digolot	 	 	 	
 	 	 	 	
2000 Peterbilt - 357 Tandem	HAMILTON	VIN	 	
Axle PM Lube Truck - VIN	EQUIPMENT	1NPALAEX3YD523808	 	
1NPALAEX3YD523808	COMPANY	 	 	

 	 	 	 	
 2010 Kenworth - T370 -	 	SN	 	
Mechanics Truck - SN	 	2NKHHN7X5AM262398	 	
2NKHHN7X5AM262398	 	 	 	
 	 	 	 	
CAT Water Truck - 769C -	 	SN 01X2972	 	
Chassis - SN 01X2972	 	 	 	
 	 	 	 	
Freightliner - Dep	 	Fuel truck	224403	
Truck/Tractor - 1998	 	 	 	
 	 	 	 	
Surface Drills	
Atlas Copco CM785 Crawler	Atlas Copco	SN 78396	 	
Drill	 	 	 	
 	 	 	 	
Atlas Copco CM785 Surf Drill	Atlas Copco	 	 	

SCHEDULE "C"

EXCLUDED ASSETS

1.	Assets previously sold by Primero which remain at the Acquired Properties including:	

Items	Supplier	Serial/VIN	Asset#	
Scoop - 2 YD - Wagner ST	Wagner	SN NAN090161	330209	
2D - NAN090161	 	 	 	
 	 	 	 	
Komatsu PC2000	 	20177	 	
Excavator/Shovel	 	 	 	
Scoop - 3 YD - LHD203	Sandvik	SN L003D702	330201	

2.	Personal Property owned by suppliers or contractors and located at the Acquired Properties including:	

 	(a)	Norex Drilling: UG drills and vehicles (6 core rigs: 3 Atlas Copco, 2 Boyles, 1 Marcotte; 2 Toyota Landcruisers, 2 Mine Cat tractors, 1 Mine Cat man carrier, 1 Lift King fork lift)	
 	 	 	
 	(b)	LPL: crusher and its components, loaders, vehicles, tools, trailers, stacker, excavator, skid steer and boom	
 	 	 	
 	(c)	Custom Concrete: batch plant, trucks, tools and trailers	

3.	Primero Licensed Software	
 	 	
4.	Personal property of Employees, including those who may be tenants or periodically occupy buildings on the Acquired Properties	
C - 1

SCHEDULE "D"
ACQUIRED FIXED ASSETS
All buildings and fixed structures including installed ‘portables’ located on the Acquired Properties including:

 	•	Surface Buildings, Hydro Lines and Transformers and Storage	
 	•	Administration Complex and Mine Office Trailers including Mine Dry Trailers (2) and Wicket	
 	•	Mine Warehouse Huts	
 	•	Storage Building	
 	•	Mine Shop Complex including Truck Shop	
 	•	Vent Facilities including shaft, fan and all associated fittings	
 	•	Core Shed and Core Logging Building	
	•	Processing Plan buildings including Assay Lab, workshop and all related structures and installed equipment	
 	•	All ductwork, ventilation, pipeline systems in the UG	
 	•	All wells, holding ponds and related infrastructure	
 	•	Tailings pond and associated pumps and pipelines	
 	•	Water and waste management infrastructure and systems including all pumps and pump houses	
 	•	Tamarack Exploration Facilities	
Installed equipment in the buildings and other structures of the Acquired Properties including:

 	•	Dust collection and vacuum systems	
 	•	Air cannons and compressed air system in the processing plant and mine	
 	•	Fire Protection System including stench gas, UG workshop and fire water systems	
 	•	Monitoring and security systems including all cameras and remote sensor systems	
D - 1

SCHEDULE "E"
ACQUIRED INTELLECTUAL PROPERTY
IP Licenses

Third Party Software Licenses	# of Licences	Comments	
Microsoft Licensing	 	 	
Microsoft Office Enterprise 2007	1	 	
Microsoft Office Professional Hybrid 2007	1	 	
Microsoft Office Home and Business 2010	64	 	
Microsoft Office Standard 2010	0	 	
Microsoft Office Professional Plus 2010	1	 	
Microsoft Office Standard 2013	1	 	
Microsoft Office Home and Business 2013 - en-us	20	 	
Microsoft Office Home and Business 2016 - en-us	10	 	
Microsoft Office Professional 2016 - en-us	3	 	
Microsoft Office Project Professional 2007	1	 	
Microsoft Project Standard 2010	4	 	
Microsoft Project Professional 2010	1	 	
Microsoft Visio Premium 2010	0	 	
Microsoft Visio Standard 2010	2	 	
Microsoft Windows Server 2012 R2 Standard	4	 	
SQL Server Standard Core 2014	4	 	
Windows CAL'S	130	 	
Remote Desktop CAL'S	25	 	
Adobe Licensing

Adobe Acrobat DC	1	
Adobe Acrobat X Pro - English, FranÃ§ais, Deutsch	1	
Adobe Acrobat XI Standard	2	
Technical Services

Autocad	11	License server on site	
GEMCOM	20	License server on site	
Amine	1	Site License Unlimited users	
Cyber Security Suite

Proofpoint	115	email antispam/anti-
phishing - expires July
18	
E - 1

-2-

OpenDNS	95	web filtering - expires July 18	
Webroot	95	antivirus - expires Dec 17	
Enterprise Resource Planning (ERP) System

Sage AccPac 300 Premium 2016 ERP	15	Maintenance fee is paid monthly	
Other

Cisco Meraki Wireless Access Points Licenses	22	Expires September 16, 2019	
Fortinet Fortigaurd 100D	2	1 year - Mine Serial #
FG100D3G16816443
Expires Sept 21, 2018
Mill Serial #
FG100D3G16816059
Expires November 11,
2017	
Datto Cloud Backup	1	Expires April 2018	
VmWare	1	Expires June 16, 2018	

SCHEDULE "F"

ACQUIRED PROPERTIES
See attached.

SCHEDULE “F”
ACQUIRED PROPERTIES

Property
Rights	Pin #	Lease	Expiry	Hectares	Parcel	Lot & Concession	Address	Claim	Rights	Parcel Type	Twnp	Associated
Pins	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Surface	 	 	 	 	 	 	 	 	 	 	 	65363-	
Rights Only	65363-0026	 	 	32	12080	S1/2 Lot 7 con 1	 	 	SRO	Fee Simple	Stock	0204	

 Surface and	 	 	 	 	 	 	 	 	 	 	 	 	
Mining Rights	65363-0027	 	 	32	18786	Pt S1/2 Lot 7 con 1	 	 	SMR	Fee Simple	Stock	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Surface and	 	 	 	 	 	N 1/2 of N1/2 Lot 9	 	 	 	 	 	 	
Mining Rights	65363-0060	108205	February 28, 2029	30.35	270	con 1	 	L70548, L70549	SMR	Leasehold	Stock	 	

Surface and	 	 	 	 	 	 	 	L70550,	 	 	 	 	
Mining Rights	65363-0061	108204	February 28, 2029	56.65	271	N Pt Lot 8 con 1	 	L70551,	SMR	Leasehold	Stock	 	
 	 	 	 	 	 	 	 	L70552, L70553	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Surface and	65363-0062	 	 	32	5714	N 1/2 Lot 7 con 1	5300 Hwy 101 W	 	SMR	Fee Simple	Stock		
Mining Rights	 	 	 	 	 	 	 	 	 	 	 	 	

Surface and	 	 	 	 	 	 	 	L70554,	 	 	 	 	
Mining Rights	65363-0064	108203	February 28, 2029	61.92	272	N1/2 Lot 5 con 1	 	L70555,	SMR	Leasehold	Stock		
	 	 	 	 	 	 	 	L70556, L70557	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Surface and	 	 	 	 	 	 	 	 	 	 	 	 	
Mining Rights	65363-0065	 	 	32	7130	N 1/2 Lot 4 con 1	1495 Caribou Rd W	 	SMR	Fee Simple	Stock		

Surface and	 	 	 	 	 	 	 	L70542,	 	 	 	 	
Mining Rights	65363-0085	108208	February 28, 2029	68.8	269	S Pt Lot 6 con 2	 	L70543,	SMR	Leasehold	Stock		
	 	 	 	 	 	 	 	L70546, L70547	 	 	 	 	
 	 	 	 	 	 	 	 	L70540,	 	 	 	 	
Surface and	65363-0086	108206	February 28, 2029	67.58	268	S Pt Lot 7 con 2	 	L70541,	SMR	Leasehold	Stock		
Mining Rights	 	 	 	 	 	 	 	L70544, L70545	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Surface and	 	 	 	 	 	S1/2 S1/2 Lot 8 con	 	 	 	 	 	 	
Mining Rights	65363-0087	108207	February 28, 2029	30.76	267	2	 	L70538, L70539	SMR	Leasehold	Stock		

Surface and	 	 	 	 	 	S1/2 S1/2 Lot 9 con	 	 	 	 	 	 	
Mining Rights	65363-0088	108209	February 28, 2029	33.08	266	2  	 	L70536, L70537	SMR	Leasehold	Stock		

Surface	 	 	 	 	 	 	 	 	 	 	 	65363-	
Rights Only	65363-0091	 	 	64	14573	N Pt Lot 7 con 2	 	 	SRO	Fee Simple	Stock		
	 	 	 	 	 	 	 	 	 	 	 	0231	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Mining Rights	 	 	 	 	 	 	 	 	 	 	 	65363-	
Only	65363-0204	 	 	32	19217	S 1/2 Lot 7 con 1	 	 	MRO	Fee Simple	Stock		
	 	 	 	 	 	 	 	 	 	 	 	0026	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Mining Rights	 	 	 	 	 	 	 	 	 	 	 	65363-	
Only	65363-0210	 	 	64	14806	S Pt Lot 6 con 1	 	 	MRO	Fee Simple	Stock		
	 	 	 	 	 	 	 	 	 	 	 	0025	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Mining Rights	 	 	 	 	 	 	 	 	 	 	 	65363-	
Only	65363-0219	 	 	64	8458	S Pt Lot 8 con 1	 	 	MRO	Fee Simple	Stock		
	 	 	 	 	 	 	 	 	 	 	 	0028	
Mining Rights	 	 	 	 	 	S Pt Broken Lot 10	 	 	 	 	 	65363-	
Only	65363-0225	 	 	64	5183	con 1	 	 	MRO	Fee Simple	Stock		
	 	 	 	 	 	 	 	 	 	 	 	0030	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	Pt Lot 8 con 2 (N1/2	 	P1226419,	 	 	 	 	
 	 	 	 	 	 	& N1/2 of S1/2) & Pt	 	P1226420,	 	 	 	 	
 	 	 	 	 	 	Lot 8 con 3 (S1/2 of	 	P1226421,	 	 	 	 	
Surface and	 	 	 	 	 	S1/2) & Pt Lot 9 con	 	P1226656,	 	 	 	 	
Mining Rights	65363-0232	107376	October 31, 2022	257.08	1871	2 (N1/2 & N1/2 of	 	P1226657,	SMR	Leasehold	Stock		
	 	 	 	 	 	S1/2) & Lot 9 con 3	 	P1226658,	 	 	 	 	
 	 	 	 	 	 	(s1/2 of S1/2)	 	P1226659,	 	 	 	 	

SCHEDULE “F”
ACQUIRED PROPERTIES

Property
Rights	Pin #	Lease	Expiry	Hectares	Parcel	Lot & Concession	Address	Claim	Rights	Parcel Type	Twnp	Associated
Pins	
 	 	 	 	 	 	 	 	P1226661,	 	 	 	 	
 	 	 	 	 	 	 	 	P1226662,	 	 	 	 	
 	 	 	 	 	 	 	 	P1226663,	 	 	 	 	
 	 	 	 	 	 	 	 	P122664,	 	 	 	 	
 	 	 	 	 	 	 	 	P1226665,	 	 	 	 	
 	 	 	 	 	 	 	 	P1226666,	 	 	 	 	
 	 	 	 	 	 	 	 	P12266667	 	 	 	 	

Mining Rights	 	 	 	 	 	Pt Broken Lot 10	 	P525654,	 	 	 	65363-	
Only	65363-0233	109009	February 28, 2033	33.99	1657	con 1	 	P567927	MRO	Leasehold	Stock	0056-0057	
	 	 	 	 	 		 		 	 	 		
 	 	 	 	 	 	 	 	P516672,	 	 	 	 	
 	 	 	 	 	 	 	 	P516673,	 	 	 	 	
 	 	 	 	 	 	 	 	P522387,	 	 	 	 	
Mining Rights	 	 	 	 	 	 	 	P522388,	 	 	 	Land under	
Only	65363-0234	109008	February 28, 2033	109.72	1658	Pt Lot 11 con 1	 	P522389,	MRO	Leasehold	Stock	water	
	 	 	 	 	 	 	 	P522390,	 	 	 		
 	 	 	 	 	 	 	 	P522391,	 	 	 	 	
 	 	 	 	 	 	 	 	P522392	 	 	 	 	
 	 	 	 	 	 	 	 		 	 	 	 	
 	 	 	 	 	 	 	 	P354552,	 	 	 	 	
Mining Rights	 	 	 	 	 	 	 	P354553,	 	 	 	65363-	
Only	65363-0235	107319	July 31, 2021	139.82	1195	N Pt Lot 3 con 1	 	P354554,	MRO	Leasehold	Stock	0066	
	 	 	 	 	 	 	 	P354555	 	 	 		
 	 	 	 	 	 	 	 		 	 	 	 	
 	 	 	 	 	 	 	 	P354605,	 	 	 	 	
Mining Rights	 	 	 	 	 	 	 	P354606,	 	 	 	65363-	
Only	65363-0236	107319	July 31, 2021	 	1195	S Pt Lot 4 con 2	 	P354607,	MRO	Leasehold	Stock	0080	
	 	 	 	 	 	 	 	P354608	 	 	 		

Mining Rights	 	 	 	 	 	SE1/4 N1/2 Lot 9	 	 	 	 	 	65636-	
Only	65363-0237	107319	July 31, 2021	 	1195	 	 	P342351	MRO	Leasehold	Stock	0059	
	 	 	 	 	 	con 1	 	 	 	 	 		
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	L76082,	 	 	 	65363-	
Mining Rights	65363-0238	107198	February 28, 2019	64.75	1131	S1/2 Lot 5 con 2	 	L76083,	MRO	Leasehold	Stock	0084-0083-	
Only	 	 	 	 	 	 	 	L76084, L76087	 	 	 	0082-0081	

Mining Rights	 	 	 	 	 	Lot 10 con 1	 	 	 	 	 	Land under	
Only	65363-0239	109464	July 31, 2034	23.07	475	(Underwater)	 	L73709, L73710	MRO	Leasehold	Stock	water	

Mining Rights	 	 	 	 	 	SW1/4 of N1/2 Lot 9	 	 	 	 	 	65363-	
Only	65363-0240	108584	September 30, 2031	15.18	376	con 1	 	L76079	MRO	Leasehold	Stock	0059	
	 	 	 	 	 		 	 	 	 	 	 	
 	 	 	 	 	 	 	 	L76080,	 	 	 	 	
Mining Rights	 	 	 	 	 	 	 	L76081,	 	 	 	65363-	
Only	65363-0241	109389	May 31, 2034	64.75	471	N Pt Lot 6 con 1	 	L76085, L76086	MRO	Leasehold	Stock	0063	

Surface and	65366-0126	 	 	58.75	24577	S1/2 Lot 5 con 1	 	 	SMR	Fee Simple	Beatty	 	
Mining Rights	 	 	 	 	 	 	 	 	 	 	 	 	

Surface and	65366-0127	 	 	61.43	14572	Pt Lot 6 con 1	 	 	SMR	Fee Simple	Beatty	 	
Mining Rights	 	 	 	 	 	 	 	 	 	 	 	 	

Mining Rights	 	 	 	 	 	 	 	 	 	 	 	65366-	
Only	65366-0129	 	 	123.27	23874	Pt Lot 7 con 1	 	 	MRO	Fee Simple	Beatty	0128-0024- 0186	

SCHEDULE “F”
ACQUIRED PROPERTIES

Property
Rights	Pin #	Lease	Expiry	Hectares	Parcel	Lot & Concession	Address	Claim	Rights	Parcel Type	Twnp	Associated
Pins	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Surface and	65366-0143	 	 	63.18	4150	S Pt Lot 8 con 1	 	 	SMR	Fee Simple	Beatty	 	
Mining Rights	 	 	 	 	 	 	 	 	 	 	 	 	

Surface and	65366-0186	 	 	1.94	13005	S Pt Lot 7 con 1	2649 Hwy 101 E.	 	SMR	Fee Simple	Beatty	 	
Mining Rights	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	S Pt Broken Lot 7	 	 	 	 	 	65366-	
 	65366-0188	 	 	 	13006	Con 1	2617 Hwy 101 E.	 	SRO	Fee Simple	Beatty	0187	
 	 	 	 	 	 		 	 	 	 	 		
Surface and	 	 	 	 	 	 	 	 	 	 	 	 	
Mining Rights	65366-0199	108180	April 30, 2029	16.22	 	Pt Lot 6 con 1	 	L1115059	SMR	Leasehold	Beatty	 	

Surface and	 	 	 	 	 	 	 	 	 	 	 	 	
Mining	 	 	 	 	 	 	 	 	 	 	 	 	
Rights-	65380-0489	 	 	64.19	16262	N1/2 Lot 3 con 4	 	 	SMR	Schumacher	Hislop	 	
Schumacher	 	 	 	 	 	 	 	 	 	 	 	 	
Lease	 	 	 	 	 	 	 	 	 	 	 	 	

Surface and	 	 	 	 	 	 	 	 	 	 	 	 	
Mining	 	 	 	 	 	 	 	 	 	 	 	 	
Rights-	65380-0490	 	 	32.5	16265	NW Pt Lot 2 con 4	 	 	SMR	Schumacher	Hislop	 	
Schumacher	 	 	 	 	 	 	 	 	 	 	 	 	
Lease	 	 	 	 	 	 	 	 	 	 	 	 	

Surface and	 	 	 	 	 	 	 	 	 	 	 	 	
Mining	 	 	 	 	 	 	 	 	 	 	 	 	
Rights-	65380-0491	 	 	32.5	16266	NE Pt Lot 2 con 4	 	 	SMR	Schumacher	Hislop	 	
Schumacher	 	 	 	 	 	 	 	 	 	 	 	 	
Lease	 	 	 	 	 	 	 	 	 	 	 	 	

Surface and	 	 	 	 	 	S Pt Broken Lot 3	 	 	 	 	 	65380-	
Mining Rights	65380-0495	 	 	2.1	21256	con 5	 	 	SRO	Fee Simple	Hislop	0498	

Surface and	 	 	 	 	 	Pt S Pt Broken Lot 3	 	 	 	 	 	65380-	
Mining Rights	65380-0496	 	 	2.1	21255	con 5	1624 Tamarack Rd.	 	SRO	Fee Simple	Hislop	0498	

Surface and	 	 	 	 	 	 	 	 	 	 	 	65380-	
Mining Rights	65380-0497	 	 	2.2	21254	Pt S Pt Lot 3 con 5	1572 Tamarack Rd.	 	SRO	Fee Simple	Hislop	0498 	

Surface and	 	 	 	 	 	S Pt Broken Lot 3	 	 	 	 	 	65380-	
Mining Rights	65380-0498	 	 	58.08	3852	con 5	 	 	SMR	Fee Simple	Hislop	0497-0496-	
	 	 	 	 	 		 	 	 	 	 	0495	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Surface and	 	 	 	 	 	E1/2 of S1/2 Lot 4	 	 	 	 	 	65380-	
Mining Rights	65380-0499	 	 	32.1	11125	con 5	 	 	SRO	Fee Simple	Hislop	0636	

Surface and	 	 	 	 	 	W1/2 of N1/2 Lot 4	 	 	 	 	 	65380-	
Mining Rights	65380-0520	 	 	118.25	23687	con 5 	1169 Pine Rd.	 	SMR	Fee Simple	Hislop	0636	

Surface and	 	 	 	 	 	 	 	 	 	 	 	65380-	
Mining Rights	65380-0521	 	 	3.15	24023	N1/2 Lot 4 con 5	 	 	SRO	Fee Simple	Hislop	0636	

Surface and	 	 	 	 	 	Pt of N1/2 Lot 4 con	 	 	 	 	 	65380-	
Mining Rights	65380-0522	 	 	4.66	16736	5 	1093 Pine Rd.	 	SRO	Fee Simple	Hislop	0636	

Surface and	 	 	 	 	 	 	 	 	 	 	 	65380-	
Mining Rights	65380-0523	 	 	3.15	24024	Pt Lot 4 con 5	 	 	SRO	Fee Simple	Hislop	0636 	

SCHEDULE “F”
ACQUIRED PROPERTIES

Property
Rights	Pin #	Lease	Expiry	Hectares	Parcel	Lot & Concession	Address	Claim	Rights	Parcel Type	Twnp	Associated
Pins	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Surface and	 	 	 	 	 	 	 	 	 	 	 	65380-	
Mining Rights	65380-0524	 	 	0.68	19093	Pt Lot 4 con 5	1011 Pine Rd.	 	SRO	Fee Simple	Hislop	0636	

Surface and	 	 	 	 	 	N1/2 of N1/2 Lot 3	 	 	 	 	 	65380-	
Mining Rights	65380-0525	 	 	32.6	10255	con 5	 	 	SRO	Fee Simple	Hislop	0636 	

Surface and	65380-0526	 	 	65	2563	N 1/2 lot 2 con 5	 	 	SMR	Fee Simple	Hislop	 	
Mining Rights	 	 	 	 	 	 	 	 	 	 	 	 	

Surface and	65380-0530	 	 	65.81	3310	S 1/2 Lot 3 con 6	1296 Tamarack Rd.	 	SMR	Fee Simple	Hislop	 	
Mining Rights	 	 	 	 	 	 	 	 	 	 	 	 	

Surface and	 	 	 	 	 	 	 	 	 	 	 	 	
Mining Rights	65380-0531	 	 	68.04	10706	S 1/2 Lot 4 con 6	1074 Pine Rd.	 	SMR	Fee Simple	Hislop	 	

Surface and	 	 	 	 	 	 	 	 	 	 	 	 	
Mining Rights	65380-0532	 	 	32.6	6413	SW 1/4 Lot 6 con 6	 	 	SMR	Fee Simple	Hislop	 	

Surface and	 	 	 	 	 	Pt Broken Lot 7 con	 	 	 	 	 	 	
Mining Rights	65380-0534	 	 	59.33	388	6	1604 Pine Rd.	 	SMR	Fee Simple	Hislop	 	

Surface and	 	 	 	 	 	 	 	 	 	 	 	 	
Mining Rights	65380-0552	 	 	66.83	7745	N 1/2 Lot 8 con 6	 	 	SMR	Fee Simple	Hislop	 	

Surface and	 	 	 	 	 	 	 	 	 	 	 	 	
Mining Rights	65380-0553	 	 	18.63	4707	Pt N Pt Lot 7 con 6	 	 	SMR	Fee Simple	Hislop	 	

Surface and	 	 	 	 	 	 	 	 	 	 	 	65380-	
Mining Rights	65380-0555	 	 	39.95	15466	Pt N Lot 7 con 6	 	 	SRO	Fee Simple	Hislop	0556	
	 	 	 	 	 	 	 	 	 	 	 		
	 	 	 	 	 		 	 	 	 	 	65380-	
Surface and	 	 	 	 	 	N 1/2 Lot 6 con 6 &	 	 	 	 	 	0557 &	
Mining Rights	65380-0556	 	 	39.89	23876	Pt N Pt Broken Lot 7	 	 	MRO	Fee Simple	Hislop	65380-	
	 	 	 	 	 	con 6	 	 	 	 	 	0555	
 	 	 	 	 	 		 	 	 	 	 		
Surface and	 	 	 	 	 	 	 	 	 	 	 		
Mining Rights	65380-0557	 	 	62.95	2582	N1/2 Lot 6 con 6	2839 Hwy 101 E.	 	SRO	Fee Simple	Hislop	65380-	
	 	 	 	 	 	 	 	 	 	 	 	0556	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Surface and	 	 	 	 	 	Pt NE 1/4 Lot 5 con	 	 	 	 	 	 	
Mining Rights	65380-0558	 	 	32.62	11511	6 	 	 	SMR	Fee Simple	Hislop	 	

Surface and	65380-0559	 	 	62.87	3393	N1/2 Lot 4 con 6	 	 	SMR	Fee Simple	Hislop	 	
Mining Rights	 	 	 	 	 	 	 	 	 	 	 	 	

Surface and	65380-0566	 	 	64.6	23777	N 1/2 Lot 4 con 4	 	 	SMR	Fee Simple	Hislop	 	
Mining Rights	 	 	 	 	 	 	 	 	 	 	 	 	

 	 	 	 	 	 		 	 	 	 	 	65380-	
Mining Rights	 	 	 	 	 	N1/2 of N1/2 Lot 4	 	L512572,	 	 	 	0499-0520-	
Only	65380-0636	108420	November 30, 2030	32.4	1735	con 5 & E 1/2 of S	 	L512573	MRO	Leasehold	Hislop	0521-0522-	
	 	 	 	 	 	1/2 &	 		 	 	 	0523-0524-	
 	 	 	 	 	 		 	 	 	 	 	0525	

 	 	 	 	 	 	 	 	L512568,	 	 	 	 	
 	 	 	 	 	 	E1/2 of S1/2 Lot 4	 	L512569,	 	 	 	65380-	
Mining Rights	 	 	 	 	 	con 5 & S 1/2 of N	 	L512571,	 	 	 	0499-0520-	
Only	65380-0636	108421	November 30, 2030	129.6	1735	1/2 Lt 4 con 5 &	 	L512574,	MRO	Leasehold	Hislop	0521-0522-	
 	 	 	 	 	 	N1/2 Lot 3 con 5	 	L512575,	 	 	 	0523-0524-	
 	 	 	 	 	 		 	L512576,	 	 	 	0525	
 	 	 	 	 	 	 	 	L512577	 	 	 		

SCHEDULE “F”
ACQUIRED PROPERTIES

Property
Rights	Pin #	Lease	Expiry	Hectares	Parcel	Lot & Concession	Address	Claim	Rights	Parcel Type	Twnp	Associated
Pins	
	 	 	 	 	 		 		 	 	 	 	
Mining Rights	65380-0637	109227	May 31, 2033	33.76	1726	W1/2 of S1/2 Lot 5	 	L547989,	MRO	Leasehold	Hislop	Crown Land	
Only	 	 	 	 	 	con5	 	L547990	 	 	 	 	

Mining Rights	 	 	 	 	 	S1/2 Lot 5 con 6,	 	L531728,	 	 	 	65380-	
Only 	65380-0638	109227	May 31, 2033	84.68	1726	SE1/4 S 1/2 Lot 6	 	L531729,	MRO	Leasehold	Hislop	0681 	
	 	 	 	 	 	con 6	 	L531730,	 	 	 		
 	 	 	 	 	 		 	L531731	 	 	 	 	

Surface and	 	 	 	 	 	 	 	 	 	 	 	 	
Mining Rights	65380-0670	108179	April 30, 2029	33.26	 	Pt Lot 5 con 6	 	L1048334	SMR	Leasehold	Hislop	 	

Surface and	 	 	 	 	 	 	 	 	 	 	 	 	
Mining Rights	65380-0670	108179	April 30, 2029	 	 	Pt Lot 6 Con 6	 	L1048335	SMR	Leasehold	Hislop	 	

 	 	 	 	 	 	 	 	 	 	 	 	 	
Mining Rights	 	 	 	 	 	 	 	 	 	 	 	Land under	
Only	65380-0671	108181	April 30, 2029	9.85	 	Pt Lot 7 con 6	 	L1113087	MRO	Leasehold	Hislop	water	

Mining Rights	 	 	 	 	 	 	 	 	 	 	 	 	
Only	65380-0676	108264	September 30, 2029	16.89	 	Pt Lot 5 con 6	 	L1048333	SMR	Leasehold	Hislop	 	

 	 	 	 	 	 	S1/2 Lot 5 con 6,	 	L531728,	 	 	 	 	
Surface and	 	 	 	 	 	SE1/4 S 1/2 Lot 6	 	L531729,	 	 	 	65380-	
Mining Rights	65380-0681	109416	May 31, 2033	84.68	 	con 6	 	L531730,	SRO	Leasehold	Hislop	0638	
	 	 	 	 	 	 	 	L531731,	 	 	 		
 	 	 	 	 	 	 	 	L547915	 	 	 	 	

OTHER	 	 	 	 	 	Description	 	Claims	 	 	Twnp	 	
 	 	 	 	 	 	N1/2 LOT 9 CON 6      	 	 	 	 	 	 	
 	 	 	 	 	 	E1/2 OF N1/2 L-10    	 	 	 	 	 	 	
 	 	 	 	 	 	C-6	 	P 1206783	 	 	Bond	 	
 	 	 	 	 	 	ALL OF LOT 5, CON.	 	 	 	 	 	 	
 	 	 	 	 	 	VI	 	P 1207243	 	 	Bond	 	
 	 	 	 	 	 	N½ OF LOT 3, CON.  	 	 	 	 	 	 	
 	 	 	 	 	 	VI	 	P 1207249	 	 	Bond	 	
 	 	 	 	 	 	S½ OF LOT 4, CON.     	 	 	 	 	 	 	
 	 	 	 	 	 	VI	 	P 1207250	 	 	Bond	 	
 	 	 	 	 	 	S½ LOT 7 CON VI &    	 	 	 	 	 	 	
 	 	 	 	 	 	N½ OF N½, LOT 7,    	 	 	 	 	 	 	
 	 	 	 	 	 	CON V	 	P 1207251	 	 	Bond	 	
 	 	 	 	 	 	S½ OF LOTS 8 & 9,       	 	 	 	 	 	 	
 	 	 	 	 	 	CON. VI	 	P 1207254	 	 	Bond	 	
 	 	 	 	 	 	W1/2 OF S1/2 LOT 3	 	 	 	 	 	 	
 	 	 	 	 	 	CON 6	 	P 1227930	 	 	Bond	 	
 	 	 	 	 	 	S 1/2 Lot 6, Con 6	 	P 3003093	 	 	Bond	 	
 	 	 	 	 	 	n1/2 L6, C6	 	P 4240516	 	 	Bond	 	
 	 	 	 	 	 	NW1/2 of N1/2 Lot    	 	 	 	 	 	 	
 	 	 	 	 	 	5, Con 2	 	P 1213713	 	 	Stock	 	
 	 	 	 	 	 	ALL OF S1/2 LOT 5,    	 	 	 	 	 	 	
 	 	 	 	 	 	CON 1	 	P 1219102	 	 	Stock	 	

SCHEDULE “F”
ACQUIRED PROPERTIES

Property
Rights	Pin #	Lease	Expiry	Hectares	Parcel	Lot & Concession	Address	Claim	Rights	Parcel Type	Twnp	Associated
Pins	
 	 	 	 	 	 	SE 1/4 OF S1/2 LOT	 	 	 	 	 	 	
 	 	 	 	 	 	12 CON 2	 	P 1226669	 	 	 Stock		
 	 	 	 	 	 	SW1/4 OF S1/2 LOT	 	 	 	 	 	 	
 	 	 	 	 	 	11 CON 2	 	P 1226670	 	 	 Stock		
 	 	 	 	 	 	NW 1/4 of S 1/2 LOT	 	 	 	 	 	 	
 	 	 	 	 	 	11, CON. 2	 	P 1226677	 	 	 Stock		
 	 	 	 	 	 	NE 1/4 OF S1/2 LOT	 	 	 	 	 	 	
 	 	 	 	 	 	12 CON 2	 	P 1226678	 	 	 Stock		
       	 	 	 	 	 	NE1/4 OF S1/2 OF    	 	 	 	 	 	 	
 	 	 	 	 	 	LOT 11, CON II	 	P 1227487	 	 	 Stock		
 	 	 	 	 	 	NW1/4 OF S1/2 LOT	 	 	 	 	 	 	
 	 	 	 	 	 	10, CON II	 	P 1227488	 	 	 Stock		
        	 	 	 	 	 	NE1/4 OF S1/2 OF   	 	 	 	 	 	 	
 	 	 	 	 	 	LOT 10, CON II	 	P 1227489	 	 	 Stock		
        	 	 	 	 	 	SE1/4 OF S1/2 OF   	 	 	 	 	 	 	
 	 	 	 	 	 	LOT 11, CON II	 	P 1227493	 	 	 Stock		
 	 	 	 	 	 	SW1/4 S1/2 LOT 10	 	 	 	 	 	 	
 	 	 	 	 	 	CON 2	 	P 1227494	 	 	 Stock		
      	 	 	 	 	 	SE1/4 OF S1/2 OF   	 	 	 	 	 	 	
 	 	 	 	 	 	LOT 10, CON II	 	P 1227495	 	 	 Stock		
    	 	 	 	 	 	S1/2 L7, OPEN PT    	 	 	 	 	 	 	
       	 	 	 	 	 	 N1/2 L7, OPEN PT   	 	 	 	 	 	 	
 	 	 	 	 	 	L6, CON 4	 	L 4254503	 	 	 Beatty		
 	 	 	 	 	 	PT S1/2 LOT 5 & LOT	 	 	 	 	 	 	
 	 	 	 	 	 	4, CON 4	 	L 4254504	 	 	 Beatty		
        	 	 	 	 	 	N 1/2 OF LOT 5,   	 	 	 	 	 	 	
 	 	 	 	 	 	CON 3	 	L 4254528	 	 	 Beatty		
 	 	 	 	 	 	SW1/4 N1/2 L3 C3,	 	 	 	 	 	 	
       	 	 	 	 	 	S1/2 L3 C3, NE1/4    	 	 	 	 	 	 	
 	 	 	 	 	 	N1/2 L3 C2	 	L 4254532	 	 	Beatty  		
       	 	 	 	 	 	N1/2 LOT 7, E1/2    	 	 	 	 	 	 	
 	 	 	 	 	 	S1/2 LOT 7, LOT 6,	 	 	 	 	 	 	
 	 	 	 	 	 	CON 3	 	L 4254535	 	 	 Beatty		
 	 	 	 	 	 	S1/2 N1/2 L4, W1/2	 	 	 	 	 	 	
 	 	 	 	 	 	S1/2 L4, SE1/4 S1/2	 	 	 	 	 	 	
 	 	 	 	 	 	L4, CON 3	 	L 4254537	 	 	 Beatty		

SCHEDULE "G"
ACQUIRED ROYALTIES

Date	Description	Instrument
Number	Properties Affected	
Black Fox Royalties	
July 11,
2007	Net Smelter Royalty Agreement between Lisa Steinman (Royalty Holder) and Apollo Gold Corporation.	CB31855	65366 − 0143 LT	
March 25,
2009	Royalty Agreement between Apollo Gold Corporation and Newmont Canada Corporation.	CB56624	PIN 65380 − 0498 LT; 65380 − 0499 LT; 65380 − 0520 LT; 65380 − 0566 LT; 65380 − 0636 LT; 65380 − 0637 LT; 65380 − 0638 LT	
October 31,
1989	Agreements between A. Peter Ginn, G.E. Parsons Ltd., Goldpost Resources Inc. and Mining Corporation of Canada Limited	C390836	65380 – 0498 LT; 65380-0520 LT; 65380-0566 LT; 65380- 0636 LT; 65380-0637 LT; 65380-0638	
February 10,
2003	Net Smelter Royalty Agreement between Ray Durham (Royalty Holder) and Apollo Gold Corporation.	CB64500	65380 − 0553 LT	
September 20,
2011	Net Smelter Royalty Agreement among Thomas Macfarlane and Sheila Macfarlane (Collectively Royalty Holders) and Brigus Gold Corp.	CB64501	65380 − 0530 LT	
January 26,
2012	Net Smelter Royalty Agreement among David Ross Riehl, Helen Bernadette and Dale Richard Stere, Russel Rae Stere, Trevor Verle Stere (collectively Royalty Holders) and Brigus Gold Corp.	CB81771	65380 − 0526 LT	
August 24,
2004	Net Smelter Royalty Agreement among Apollo Gold Corporation and Timmins Forest Productions Ltd.	CB1793	65366-0126	
G - 1

-2-

September 14,
1998	Acknowledgment of Agreement between Shirley Alyman, Raphael Alyman (Owners) and Exall Resources Limited (Exall)	C488166	65380-0532 LT; 65380-0534 LT	
August 30,
2002	Royalty Agreement between Apollo Gold Corporation and Shirley Maud Alyman and Raphael Thomas Alyman	C524197	65380-0532 LT; 65380-0534 LT	
July 29,
2002	Assignment, Assumption and Consent Agreement between Apollo Gold Corporation (Assignee), Exall Resources Limited (Assignor), and Donald Plouffe (Plouffe)	C523971	65380-0552	
November 20,
2003	Net Smelter Royalty Agreement between Apollo Gold Corporation and Mildred Elizabeth Ewen		65380-0558; 65380-0559	
July 27,
2011	Purchase Agreement between 1074127 Ontario Ltd. (Guidoccio), and Brigus Gold Corp.		L4254503; L4254504; L454528; L42537; F4254532; L4254535	
Grey Fox Royalties	
November 6,
2007	Indenture between The Canada Trust Company as surviving Trustee of the Canadian Estate of Frederick William Schumacher (Lessor) and Apollo Gold Corporation as Lessee for a term of 20 years.	CB66026	65380-0489 LT; 65380-0490 LT; 65380-0491 LT	
September 25,
2012	Net Smelter Royalty Agreement among Brent George Gray and Tracy Edwin Gray (collectively Royalty Holders) and Brigus Gold Corp.	CB88555	65380 − 0498 LT	

-3-

August
1998	Royalty Agreement between Glimmer Resources Inc. and Joachim Joseph DeCarlo	C485344	Parcel 145722, in the Register for South East Cochrane, situate in the township of Beatty, in the district of Cochrane and Province of Ontario, namely: the South Part of Lot 6, in the First Concession of the said Township of Beatty, containing by admeasurement One Hundred and Fifty- One (151) Acres, more or less.	
MILL	
December
20, 2007	Assignment and Assumption Agreement between Newmont Canada Limited (Assignor) and Franco- Nevada Corporation (Assignee)	CB25242	65363-0062 LT	
January 20,
1997	Agreement between Ulysses Levinson and St. Andrew Goldfields Ltd.		65363-0210	
CLAIMS	
June 4,
1996	Agreement between George Fournier and St. Andrew Goldfields Ltd.		All of the North half of Lot 9, Concession 6 and all of the east half of the North half of Lot 10, Concession 6, Township of Bond	
February
28, 1997	Agreement between Patrick Gryba and St. Andrew Goldfields Ltd.		P-1213713
P-1219102	
June 8,
1998	Agreement between Mr. Jack Roberts, Mr. Mike Tremblay and St. Andrew Goldfields Ltd.		P-1227487 – NE 1/4, S1/2, Lot 11, Concession 2
P-1227488 – NW 1/4, S1/2, Lot 10, Concession 2
P-1227493 – SE 1/4, S1/2, Lot 11, Concession 2
P-1227494 – SW 1/4, S1/2, Lot 10, Concession 2
P-1227495 – SE 1/4, S1/2, Lot 10, Concession 2	
May 31,
1996	Agreement between Mike Caron, Robert Robitaille, Dennis Chevrefils and St. Andrew Goldfields Ltd.			
OTHER	
	Mr. Michael Crites		65363-0025 LT . Company pays Mr. Crites a nominal annual fee to run a pipe over his land.	

SCHEDULE "H"
REQUIRED CONSENTS AND APPROVALS

1.	Lenders' consent pursuant to the BMO Credit Agreement.	
 	 	
2.	Sandstorm's consent pursuant to the Sandstorm Gold Stream Agreement.	
 	 	
3.	Consent of the Minister of Northern Development and Mines (Ontario) in respect of the transfer of the mineral leases comprising the Acquired Properties.	
 	 	
4.	Consent of the Minister of Northern Development and Mines (Ontario) in respect of the assignment of the Closure Plans to McEwen.	
 	 	
5.	Issuance to McEwen of new Permits To Take Water to replace permit #6377-88UJE5 issued to Brigus Gold Corp. and permit #6824-9VCNXB issued to Primero.	
 	 	
6.	Estoppel letter from Goldcorp Inc. in relation to: (i) the PPSA registration in favour of Goldcorp Inc. against Primero and Primero Gold Canada Inc. in Ontario under PPSA reference file #695468052; (ii) the PPSA registration in favour of Goldcorp Inc. against Primero and Primero Gold Canada Inc. in British Columbia under PPSA base registration #688343F; and (iii) the PPSA registration in favour of Goldcorp Inc. against Primero and Primero Gold Canada Inc. in British Columbia under PPSA base registration #719870F, in each case, confirming that such registration does not encumber the Purchased Assets or that, if it does encumber the Purchased Assets, the Purchased Assets are released from the security delivered in connection with such registration so that such registration no longer encumbers the Purchased Assets.	
 	 	
7.	Estoppel letter from International Mineral Finance S.A.R.L. ("IMF") in relation to the PPSA registration in favour of IMF against Primero and Primero Gold Canada Inc. in British Columbia under PPSA base registration #689918F confirming that the registration does not encumber the Purchased Assets or that, if it does encumber the Purchased Assets, the Purchased Assets are released from the security delivered in connection with such registration so that such registration no longer encumbers the Purchased Assets.	
 	 	
8.	Estoppel letter from HSBC Bank Canada in relation to the PPSA registration in favour of HSBC Bank Canada against Primero Gold Canada Inc. in Ontario under PPSA reference file #677187783.	
 	 	
9.	Estoppel letter from the Canada Trust Company, as the surviving trustee without security of the Canadian Estate of Frederick William Schumacher (the “Landlord”) pursuant to the lease dated November 6, 2007 between Apollo Gold Corporation and the Landlord.	
 	 	
10.	Consent of Wheaton pursuant to a letter agreement between Primero and Wheaton dated March 30, 2017.	
 	 	
11.	Sandvik’s consent to assign Equipment Lease Agreements # 47200016 and 47200038 to McEwen.	
H - 1

SCHEDULE "I"
REPRESENTATIONS AND WARRANTIES OF PRIMERO
Except as set forth in the correspondingly numbered paragraph of the Disclosure Letter, Primero hereby makes the following representations and warranties to McEwen, and acknowledges and agrees that McEwen is relying upon such representations and warranties in connection with the entering into of this Agreement. The Parties agree that inclusion of an item in any schedule of the Disclosure Letter or in any Schedule attached hereto is deemed to be disclosure for all purposes for which disclosure is required under this Agreement, including in the following representations and warranties.

(1)	Organization and Qualification . Primero was duly continued and is validly existing and in good standing under the Business Corporations Act (British Columbia) and has full corporate power and authority to own, lease and operate its assets and conduct its business as now owned, leased, operated and conducted. Primero is duly qualified to carry on business and is in good standing in each jurisdiction in which the character of its properties or the nature of its activities makes such qualification necessary, except where the failure to be so qualified will not, individually or in the aggregate, have a Primero Material Adverse Effect. True and complete copies of the constating documents of Primero have been delivered or made available to McEwen, and Primero has not taken any action to amend or supersede such constating documents.	
 	 	
(2)	Authority Relative to this Agreement . Primero has the requisite power and authority to enter into this Agreement, to perform its obligations hereunder and to complete the Transaction. The execution and delivery of this Agreement by Primero and the completion of the Transaction have been duly authorized by the Primero Board, and no other corporate proceedings on the part of Primero, including any shareholder approval, are necessary to authorize this Agreement. This Agreement has been duly executed and delivered by Primero and constitutes a valid and binding obligation of Primero, enforceable by McEwen against Primero in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency and other applicable Laws affecting the enforcement of creditors' rights generally and subject to the qualification that equitable remedies may be granted only in the discretion of a court of competent jurisdiction.	
 	 	
(3)	No Conflict; Required Filings and Consent . The execution and delivery by Primero of this Agreement and the performance by it of its covenants hereunder and the completion of the Transaction will not violate, conflict with or result in a breach of any provision of the constating documents of Primero, and except for Required Consents and Approvals or as would not, individually or in the aggregate, have or reasonably be expected to have a Primero Material Adverse Effect will not: (i) violate, conflict with or result in a breach of (A) any agreement, contract, indenture, deed of trust, mortgage, bond, instrument, Authorization, licence or permit to which Primero is a party, or by which it is bound or (B) any Law to which Primero is subject or by which it is bound; (ii) give rise to any right of termination, or the acceleration of any indebtedness, under any such agreement, contract, indenture, Authorization, deed of trust, mortgage, bond, instrument, licence or permit that relates to any of the Purchased Assets; or (iii) give rise to any rights of first refusal or rights of first offer, trigger any change in control or influence provisions or any restriction or limitation under any such agreement, Contract, indenture, Authorization, deed of trust, mortgage, bond, instrument, licence or permit, or result in the imposition of any encumbrance, charge or lien upon any of the Purchased Assets. Other than Required Consents and Approvals disclosed in Schedule H, no Authorization, consent or approval of, or filing with, any Governmental Entity or other authority is necessary on the part of Primero for the completion by it of its obligations under this Agreement or for the completion of the Transaction that would cause or result in any loss of any rights or assets or any interest therein held by Primero, except for such Authorizations, consents, approvals and filings as to which the failure to obtain or make would not, individually or in the aggregate, prevent or materially delay completion of the Transaction.	
I - 1

(4)	Regulatory Filings . The Primero Public Documents relating to the Purchased Assets have complied in all material respects with Securities Laws. None of the Primero Public Documents, at the time filed or as subsequently amended, contained any misrepresentation relating to the Purchased Assets. Primero has not filed any confidential material change report relating to the Purchased Assets with any securities authority or Governmental Entity which at the date hereof remains confidential. There are no outstanding or unresolved comments in a comment letter from any securities authority or Governmental Entity with respect to any of Primero Public Documents that relate to the Purchased Assets and, to the knowledge of Primero, neither Primero nor any of the Primero Public Documents is subject to an ongoing audit, review, comment or investigation by any securities authority or Governmental Entity, the TSX or the NYSE.	
 	 	
(5)	Compliance with Laws .	

 	(a)	The operations of Primero in relation to the Purchased Assets have been and are now conducted in compliance with all Laws of each jurisdiction, the Laws of which have been and are now applicable to the Purchased Assets, and Primero has not received any notice of any alleged violation of any such Laws.	
 	 	 	
 	(b)	Primero is not in conflict with, or in default (including cross defaults) under or in violation of: (i) its constating documents or, as applicable, equivalent organizational documents; or (ii) any agreement or understanding to which Primero or by which any of the Purchased Assets is bound or affected.	

(6)	Company Authorizations . Primero has obtained all material Authorizations necessary for the ownership, operation, development, maintenance, or use of the Purchased Assets, and such authorizations are in full force and effect in all material respects. Primero has fully complied with, and is in compliance, in all material respects with all material Authorizations relating to the Purchased Assets. There is no action, investigation or proceeding pending or, to the knowledge of Primero, threatened regarding any of the material Authorizations relating to the Purchased Assets. Primero has not received any notice, whether written or oral, of revocation or non-renewal of any material Authorizations relating to the Purchased Assets, or of any intention of any Person to revoke or refuse to renew any of such Authorizations relating to the Purchased Assets, and to the knowledge of Primero, all such Authorizations relating to the Purchased Assets continue to be effective in order for Primero to continue to conduct its business relating to the Purchased Assets as currently conducted.	
 	 	
(7)	Financial Statements .	

 	(a)	The audited consolidated financial statements for Primero as at and for each of the fiscal years ended on December 31, 2016 and December 31, 2015, including the notes thereto and the reports by Primero's auditors thereon, have been, and all financial statements of Primero which are publicly disseminated by Primero in respect of any subsequent periods prior to the Closing Date will be, prepared in accordance with IFRS applied on a basis consistent with prior periods and all applicable Laws and present fairly, in all material respects, the financial position and results of operations relating to the Purchased Assets as of the respective dates thereof and their financial performance and their cash flows for the respective periods covered thereby (except as may be indicated expressly in the notes thereto).	
I - 2

 	(b)	Neither Primero nor any of its Subsidiaries is a party to, or has any commitment to become a party to, any joint venture, off-balance sheet partnership or any similar Contract (including any Contract relating to any transaction or relationship between or among Primero or any of its Subsidiaries and affiliates, on the one hand, and any unconsolidated affiliate, including any structure finance, special purpose or limited purpose entity or Person, on the other hand) where the result, purpose or effect of such contract is to avoid disclosure of any material transaction involving, or material liabilities of, Primero or any of its Subsidiaries and affiliates in relation to the Purchased Assets, in the published financial statements of Primero or the Primero Public Documents.	
 	 	 	
 	(c)	Since December 31, 2016, neither Primero nor any of its Subsidiaries nor, to Primero's knowledge, any director, officer, employee, auditor, accountant or representative of Primero or any of its Subsidiaries has received or otherwise had or obtained knowledge of any complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies, methods or internal accounting controls of Primero or any of its Subsidiaries, including any complaint, allegation, assertion or claim that Primero or any of its Subsidiaries has engaged in questionable accounting or auditing practices, which has not been resolved to the satisfaction of the audit committee of the Primero Board.	

(8)	Acquired Properties and Mineral Rights .	

 	(a)	Primero is the sole legal and beneficial owner of all right, title and interest in and to the Acquired Properties and the Mineral Rights and has good and marketable title thereto, free and clear of any Encumbrances other than Permitted Encumbrances.	
 	 	 	
 	(b)	All of the Acquired Properties and Mineral Rights have been properly located and recorded in compliance in all material respects with applicable Law and are comprised of valid and subsisting mineral claims.	
 	 	 	
 	(c)	The Acquired Properties and the Mineral Rights are in good standing under applicable Law and, to the knowledge of Primero, all work required to be performed and filed in respect thereof has been performed and filed, all Taxes, rentals, fees, expenditures and other payments in respect thereof have been paid or incurred and all filings in respect thereof have been made, in each case in all material respects.	
 	 	 	
 	(d)	To the knowledge of Primero, there is no material adverse claim against or challenge to the title to or ownership of the Acquired Properties or any of the Mineral Rights.	
 	 	 	
 	(e)	Primero has the exclusive right to deal with the Acquired Properties and the Mineral Rights. Primero has the exclusive right to possess, use, occupy and dispose of the Acquired Properties and the Mineral Rights.	
 	 	 	
 	(f)	No Person other than Primero has any interest in the Acquired Properties or any of the Mineral Rights or the production or profits therefrom or any royalty in respect thereof or any right to acquire any such interest.	
I - 3

 	(g)	There are no back-in rights, earn-in rights, rights of first refusal or similar provisions or rights which would affect Primero's interest in the Acquired Properties or any of the Mineral Rights.	
 	 	 	
 	(h)	There are no material restrictions on the ability of Primero and its Subsidiaries and affiliates to use, transfer or exploit the Acquired Properties or any of the Mineral Rights, except pursuant to applicable Law.	
 	 	 	
 	(i)	Primero has not received any notice, whether written or oral, from any Governmental Entity of any revocation or intention to revoke any interest of Primero in any of the Acquired Properties or the Mineral Rights.	
 	 	 	
 	(j)	Primero has all surface rights, including fee simple estates, leases, easements, rights of way and permits or licences from landowners or Governmental Entities, permitting the use of land by Primero, and mineral interests that are required to exploit, develop or explore the Acquired Properties and the Mineral Rights as currently carried on, and no third party or group holds any such rights that would be required by Primero to explore, develop or exploit any of the Acquired Properties or the Mineral Rights.	
 	 	 	
 	(k)	There are no agreements, options or other rights pursuant to which Primero is, or may become, obligated to sell all or any portion of the Purchased Assets to any Person other than McEwen.	
 	 	 	
 	(l)	There are no outstanding work orders or notices advising of any defects in the construction or state of repair of the Purchased Assets, or any notice or directive requiring or recommending any alterations, repairs, improvements or other work to be done with respect to the Purchased Assets or relating to any non-compliance with any building permits, building restriction, by-law, requirement, agreement, regulation or ordinance from any Governmental Authority.	
 	 	 	
 	(m)	There are no construction liens registered against the Purchased Assets or any lien periods under the Construction Lien Act (Ontario) with respect to any repairs or construction work conducted on or in connection with the Purchased Assets have expired.	
 	 	 	
 	(n)	The buildings and improvements on the Purchased Assets, the operation, maintenance and management thereof, as now operated and maintained, comply with all applicable Laws. No portion of any such buildings or improvements encroach upon any land not owned by Primero. There are no restrictive covenants, municipal by-laws or other laws or regulations which restrict or prohibit in any material respect the use of any Purchased Asset for the purposes for which it is presently being used, other than the Permitted Encumbrances, and Primero has received no notice and is not aware of any proposed changes to any official plan or zoning by-laws which could materially and adversely affect or prohibit such uses.	

(9)	Mineral Reserves and Resources . The mineral reserves and mineral resources for the Acquired Properties and the Mineral Rights were prepared in all material respects in accordance with sound mining, engineering, geoscience and other applicable industry standards and practices, and in all material respects in accordance with all applicable Laws, including the requirements of NI 43- 101. There has been no material reduction in the aggregate amount of estimated mineral resources or mineral reserves in relation to the Purchased Assets, taken as a whole, from the most recent amounts disclosed in the Primero Public Documents, subject to Ordinary Course depletion due to mining activities.	
I - 4

(10)	Residential Leases . All leases of residential premises on the Acquired Properties are leased to employees of Primero and are exempt from application of the Residential Tenancies Act (Ontario) by virtue of section 5(h) of that Act.	
 	 	
(11)	Operational Matters . Except as would not, individually or in the aggregate, be reasonably expected to be material and adverse:	

 	(a)	all rentals, royalties, overriding royalty interests, production payments, net profits, interest burdens, payments and obligations due and payable, or performable, as the case may be, on or prior to the date hereof under, with respect to, or on account of, any of the Purchased Assets, have been: (i) duly paid; (ii) duly performed; or (iii) provided for in accordance with applicable Laws prior to the date hereof; and	
 	 	 	
 	(b)	all material costs, expenses, and Liabilities payable on or prior to the date hereof under the terms of any material contracts and agreements to which Primero or any of its Subsidiaries and affiliates is directly or indirectly bound and which relate to the Purchased Assets have been timely paid.	

(12)	Employment Matters .	

 	(a)	Except as disclosed in Schedule 12(a) of the Disclosure Letter, Primero has not entered into any written or oral agreement or understanding providing for severance or termination payments to any Employee in connection with the termination of his or her employment as a direct result of a change in control of the Purchased Assets (including as a result of the Transaction).	
 	 	 	
 	(b)	Primero: (i) is not a party to or bound by any collective bargaining agreement relating to any of the Employees; (ii) is not subject to any application by any trade union or employee bargaining agency for certification as the bargaining agent of any of the Employees; (iii) is not subject to any application to have Primero declared to be a related or successor employer with respect to any Employees pursuant to applicable labour Laws; and (iv) is not subject to, to the knowledge of Primero, threatened or apparent union- organizing campaigns with respect to any Employees.	
 	 	 	
 	(c)	All Employee Obligations have been paid by Primero when due, or, if not yet due, have been accrued by Primero in accordance with IFRS.	
 	 	 	
 	(d)	Current and complete copies of all written Primero Benefit Plans (other than those pertaining to equity-based compensation) relating to the Employees have been provided or made available to McEwen, and if any Primero Benefit Plan is oral, correct and complete written summaries of its material terms have been provided to McEwen.	
 	 	 	
 	(e)	Neither the execution of this Agreement nor the Closing will:	

 	(i)	result in any payment (including bonus, golden parachute, retirement, severance, retiring allowance or similar payment, or any other benefit or enhanced benefit) becoming due or payable to any Employee; or	
I - 5

 	(ii)	increase the rate of wages, salaries, commissions, bonuses, incentive compensation or other remuneration, severance entitlements, or benefits otherwise payable to any Employee.	

 	(f)	Primero does not currently sponsor, maintain, contribute to or have any liability under, nor has it ever sponsored, maintained, contributed to or incurred any liability under a "retirement compensation arrangement", each as defined under the Tax Act, a "pension plan" as defined under applicable pension benefits standards Laws, or any other plan organized and administered to provide pensions for Employees.	
 	 	 	
 	(g)	Schedule (12)(g) of the Disclosure Letter contains a correct and complete list of each Employee whether actively at work or not, showing without names or employee numbers, their: (i) job titles; (ii) annual remuneration, including a breakdown of (A) salary or wage rates, and (B) bonus or other incentive compensation; (iii) hire dates; (iv) status (including, full-time, part-time, temporary, casual, seasonal or co-op student); (v) age; (vi) other terms and conditions of employment, including benefit plan participation; (vii) whether they are on an approved or statutory leave of absence and, if so, the reason for such absence and the expected date of return, if known; and (viii) whether they are subject to a written employment agreement. True and complete copies of all written employment agreements to which Primero and any Employee are parties or bound have been provided or made available to McEwen. Except for these written employment agreements, Primero is not a party to or bound by any oral or written contract or commitment for the employment of any Employee, other than for contracts of indefinite hire terminable by Primero without cause on reasonable notice. The Data Room Materials include annual vacation entitlement in days (or a reference to the vacation policy of Primero applicable to each Employee) and his or her accrued and unused vacation days as of the date referenced therein.	
 	 	 	
 	(h)	Primero is in compliance in all material respects with all terms and conditions of any written employment agreement or consulting agreement with any Employee or any consultant, as the case may be, to which Primero is a party or bound, and is in material compliance with all Laws respecting labour and employment, including minimum employment standards, pay equity, wages, hours of work, overtime, human rights, occupational health and safety and workers compensation with respect to the Employees. Except as disclosed in Schedule (12)(h) of the Disclosure Letter, Primero is not subject to any outstanding or, to Primero's knowledge, threatened grievance, complaint, investigation, order, claim, litigation or other labour-related or employment-related dispute or proceeding under such Laws relating to labour and employment, with respect to any Employee or independent contractor or consultant providing services relating to the Purchased Assets. No event has occurred that, with the notice or lapse of time or both, would constitute a material breach, violation or default of such terms and conditions of any written employment agreement or consulting agreement with any Employee or consultant to which Primero is a party or bound. Primero does not have any prior convictions or pending charges under the Occupational Health and Safety Act (Ontario) or any other applicable occupational health and safety legislation.	

(13)	Intellectual Property	

 	(a)	Schedule "E" contains a complete list of all material Acquired Intellectual Property.	
I - 6

 	(b)	To the knowledge of Primero, all material Acquired Intellectual Property is valid and subsisting, and in good standing in all material respects, and enforceable against third parties.	
 	 	 	
 	(c)	Primero owns or licenses, as applicable, the Acquired Intellectual Property free and clear of any Encumbrances other than Permitted Encumbrances.	
 	 	 	
 	(d)	Primero has not received any notice, complaint, threat or claim alleging: (i) the material infringement, misappropriation, misuse or violation of any intellectual property rights of any third party; or (ii) that Primero does not own or is not entitled to use, as applicable, the material Acquired Intellectual Property.	

(14)	Absence of Certain Changes or Events . Since December 31, 2016:	

 	(a)	Primero has conducted its business relating to the Purchased Assets only in the Ordinary Course;	
 	 	 	
 	(b)	no liability or obligation of any nature (whether absolute, accrued, contingent or otherwise) which has had or is reasonably likely to have a Primero Material Adverse Effect has been incurred;	
 	 	 	
 	(c)	there has not been any event, circumstance or occurrence which has had or is reasonably likely to give rise to a Primero Material Adverse Effect;	
 	 	 	
 	(d)	there has not been any entering into, or an amendment of, any hedging arrangement in respect of any minerals produced from or located on the Acquired Properties;	
 	 	 	
 	(e)	there has not been any entering into, or an amendment of, any material Contract that relates to the Purchased Assets other than in the Ordinary Course; and	
 	 	 	
 	(f)	there has not been any satisfaction or settlement of any material claims or material liabilities relating to the Purchased Assets that were not reflected in Primero's audited financial statements covering as at and for the period ended December 31, 2016, other than the settlement of claims or liabilities incurred in the ordinary course of business consistent with past practice.	

(15)	Litigation . There is no claim, action, proceeding or investigation pending or, to the knowledge of Primero, threatened against or relating to the Purchased Assets, before or by any Governmental Entity which, if adversely determined, would have, or reasonably could be expected to have, a Primero Material Adverse Effect or prevent or materially delay the Closing, nor to the knowledge of Primero are there any events or circumstances which could reasonably be expected to give rise to any such claim, action, proceeding or investigation; provided that this representation and warranty shall not apply to any claims, actions, proceedings or investigations which may arise after the date of this Agreement and which do not have a reasonable prospect of succeeding or, if successful, would not give rise to, nor reasonably be expected to give rise to, a Primero Material Adverse Effect. Primero is not subject to any outstanding order, writ, injunction or decree which has had, or could reasonably be expected to have, a Primero Material Adverse Effect or which would prevent or materially delay the Closing.	
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(16)	Tax .	

 	(a)	No failure, if any, of Primero to duly and timely pay all Taxes, including all instalments on account of Taxes for the current year, that are due and payable will result in an Encumbrance on the Purchased Assets.	
 	 	 	
 	(b)	There are no Encumbrances (other than Permitted Encumbrances) with respect to Taxes upon any of the Purchased Assets.	
 	 	 	
 	(c)	Primero is not a non-resident of Canada within the meaning of the Tax Act.	

(17)	Books and Records . The Books and Records have been maintained in all material respects in accordance with all applicable Laws. The financial Books and Records have been maintained in all material respects in accordance with good business practices and in accordance with IFRS.	
 	 	
(18)	Insurance .	

 	(a)	Primero has in place reasonable and prudent insurance policies in respect of the Purchased Assets appropriate for their nature and stage of development. All premiums payable prior to the date hereof under such policies of insurance have been paid and Primero has not failed to make a claim thereunder on a timely basis.	
 	 	 	
 	(b)	Each of such policies and other forms of insurance is in full force and effect on the date hereof and Primero will use reasonable commercial efforts to keep them in full force and effect or renew them as appropriate through the Closing Date. No written (or to the knowledge of Primero other) notice of cancellation or termination has been received by Primero with respect to any such policy.	

(19)	Environmental .	

 	(a)	All facilities, equipment, improvements, properties and operations comprising the Purchased Assets are in material compliance with all Environmental Laws and Environmental Permits.	
 	 	 	
 	(b)	Primero is in possession of, and in compliance with, all Environmental Permits that are required to own, lease and operate the Purchased Assets, and to conduct its business as it is now being conducted. Schedule (19)(b) of the Disclosure Letter contains a complete list of all such material Environmental Permits, which to the knowledge of Primero, are valid and in full force and effect, and, except as noted therein to the knowledge of Primero, there are no proceedings in progress, pending, or threatened that may result in the cancellation, revocation, suspension, recession or amendment of any Environmental Permit.	
 	 	 	
 	(c)	To the knowledge of Primero, there are no known or reasonably anticipated Environmental Liabilities associated with the Purchased Assets as at the Closing Date that could reasonably be expected to have a Primero Material Adverse Effect.	
 	 	 	
 	(d)	To the knowledge of Primero, there are no polychlorinated byphenyls, asbestos, asbestos- containing materials, urea formaldehyde or underground storage tanks present in the Purchased Assets.	
I - 8

 	(e)	Primero has not received from any Person or Government Entity, and, other than with respect to environmental matters that are or have been subject to a closure plan, has no knowledge of any facts, conditions or circumstances that could reasonably be expected to result in, any notice, formal or informal, of any proceeding, application, order, demand, directive, claim or any other demand whatsoever, which relates to Environmental Laws or Environmental Liabilities, and which could reasonably be expected to have a Primero Material Adverse Effect.	
 	 	 	
 	(f)	Primero has made available to McEwen all audits, assessments, investigation reports, inspection reports, studies, plans, material regulatory correspondence and material information and data, in each case with respect to environmental matters relating to the Purchased Assets that are in the possession of Primero.	
 	 	 	
 	(g)	For greater certainty, Primero has made available to McEwen all communications, whether oral or written, received from any Person or Government Entity, which relate to the closure plan submitted by Primero to the MNDM on September 30, 2016 for the Black Fox Mine or any other closure plan submitted to the MNDM since the date of such Closure Plan.	
 	 	 	
 	(h)	The Primero Financial Assurance represents a complete list of all Financial Assurance that has been posted or provided by Primero to a Governmental Entity as required by Environmental Laws in connection with the Purchased Assets.	

(20)	Aboriginal Matters .	

 	(a)	Except as disclosed in Schedule (20) of the Disclosure Letter, Primero is not a party to any material arrangement or understanding with any Aboriginal Group in relation to the environment or the development of communities in the vicinity of, or in connection with, the Purchased Assets.	
 	 	 	
 	(b)	Primero is not currently engaged or involved in any disputes, discussions or negotiations with any Aboriginal Group or Governmental Entity in relation to Aboriginal Claims.	
 	 	 	
 	(c)	Primero is not aware of any existing, potential or threatened Aboriginal Claims which relate to any of the Purchased Assets.	

(21)	Restrictions on Conduct of Business . Primero is not a party to or bound by any non-competition agreement, any non-solicitation agreement, or any other agreement, obligation, judgment, injunction, order or decree which purports to limit in any material respect the manner or the localities in which all or any portion of the business or operations contemplated to be carried on in respect of the Purchased Assets may be conducted.	
 	 	
(22)	Material Contracts . Primero has performed in all material respects all obligations required to be performed by it to date under the Material Contracts. Primero is not in breach or default under any Material Contract to which it is a party or bound, nor does Primero have knowledge of any condition that with the passage of time or the giving of notice or both would result in such a breach or default, except in each case where any such breaches or defaults would not, individually or in the aggregate, reasonably be expected to result in, or result in, a Primero Material Adverse Effect. Primero does not know of and has not received written notice of, any breach or default under (or, to the knowledge of Primero, there does not exist any condition which with the passage of time or the giving of notice or both would result in such a breach or default under) any such Material Contract by any other party thereto except where any such violation or default would not, individually or in the aggregate, reasonably be expected to result in, or result in, a Primero Material Adverse Effect. Prior to the date hereof, Primero has made available to McEwen true and complete copies of all of the Material Contracts. All Material Contracts are legal, valid, binding and in full force and effect and are enforceable by Primero in accordance with their respective terms (subject to bankruptcy, insolvency and other applicable Laws affecting creditors' rights generally, and to general principles of equity).	
I - 9

(23)	Money Laundering Laws . The operations of Primero are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental authority (collectively, the " Money Laundering Laws ") and no action, suit or proceeding by or before any court or Governmental Authority or any arbitrator non- Governmental Authority involving Primero with respect to the Money Laundering Laws is pending or threatened.	
 	 	
(24)	Anti-Corruption . To the knowledge of Primero, Primero, directly or through its Representatives, directors, executives, officers or employees, has not: (i) used or is using any corporate funds for any illegal contributions, gifts, entertainment or other expenses relating to political activity that would be illegal; (ii) used or is using any corporate funds for any direct or indirect illegal payments to any foreign or domestic governmental officials or employees; (iii) violated or is violating any provision of the United States Foreign Corrupt Practices Act of 1977, the Corruption of Foreign Public Officials Act (Canada) or any applicable Law of similar effect; (iv) has established or maintained, or is maintaining, any illegal fund of corporate monies or other properties; or (v) made any bribe, illegal rebate, illegal payoff, influence payment, kickback or other illegal payment of any nature.	
 	 	
(25)	Relationships with Customers, Suppliers, Distributors and Sales Representatives . Primero has not received any written (or, to the knowledge of Primero, other) notice relating to the Purchased Assets that any customer, supplier, distributor or sales representative intends to cancel, terminate or otherwise modify or not renew its relationship with Primero, and, to the knowledge of Primero, no such action has been threatened, which, in either case, individually or in the aggregate, would reasonably be expected to have a Primero Material Adverse Effect.	
 	 	
(26)	No Expropriation . No property or asset among the Purchased Assets (including the Acquired Properties and the Mineral Rights) has been taken or expropriated by any Governmental Entity nor has any notice or proceeding in respect thereof been given or commenced nor, to the knowledge of Primero, is there any intent or proposal to give any such notice or to commence any such proceeding.	
 	 	
(27)	NGOs and Community Groups . No material dispute between Primero or any of its Subsidiaries and any non-governmental organization, community or community group exists or, to the best of Primero's knowledge, is threatened or imminent with respect to any the Acquired Properties or any exploration, development or production activities relating to the Purchased Assets.	
 	 	
(28)	Data Room Materials . Primero certifies that the Data Room Materials contain all materials that are reasonably necessary for McEwen to conduct a complete and accurate investigation in all material respects of the business, operations, assets, liabilities and financial condition relating to the Purchased Assets.	
I - 10

(29)	Breach, Non-Performance and Non-Compliance . Primero has not formulated the opinion as of the date hereof that any of the representations and warranties in Schedule "J" is incorrect in any material respect.	
I - 11

SCHEDULE "J"
REPRESENTATIONS AND WARRANTIES OF MCEWEN
McEwen hereby represents and warrants to Primero as follows, and acknowledges and agrees that Primero is relying upon such representations and warranties in connection with the entering into of this Agreement:

(1)	Organization and Qualification . McEwen was duly continued and is validly existing and in good standing under the Business Corporations Act (Colorado). True and complete copies of the constating documents of McEwen have been delivered or made available to Primero, and McEwen has not taken any action to amend or supersede such constating documents.	
 	 	
(2)	Authority Relative to this Agreement . McEwen has the requisite power and authority to enter into this Agreement, to perform its obligations hereunder and to complete the Transaction. The execution and delivery of this Agreement by McEwen and the completion of the Transaction have been duly authorized by the McEwen Board, and no other corporate proceedings on the part of McEwen are necessary to authorize this Agreement. This Agreement has been duly executed and delivered by McEwen and constitutes a valid and binding obligation of McEwen, enforceable by Primero against it in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency and other applicable Laws affecting the enforcement of creditors' rights generally and subject to the qualification that equitable remedies may be granted only in the discretion of a court of competent jurisdiction.	
 	 	
(3)	No Conflict; Required Filings and Consent . The execution and delivery by McEwen of this Agreement and the performance of its covenants hereunder and the completion of the Transaction will not violate, conflict with or result in a breach of any provision of the constating documents of McEwen, and except as would not, individually or in the aggregate, have or reasonably be expected to have a Material Adverse Effect with respect to McEwen, will not violate, conflict with or result in a breach of: (i) any agreement, contract, indenture, deed of trust, mortgage, bond, instrument, Authorization, licence or permit to which McEwen is a party, or by which it is bound; or (ii) any Law to which McEwen is subject or by which it is bound. No Authorization, consent or approval of, or filing with, any Governmental Entity or other authority is necessary on the part of McEwen for the completion of its obligations in connection with the Transaction under this Agreement, except for such Authorizations, consents, approvals and filings as to which the failure to obtain or make would not, individually or in the aggregate, prevent or materially delay completion of the Transaction.	
 	 	
(4)	Financing . McEwen will have at the Closing all funds on hand necessary to pay the Purchase Price.	
 	 	
(5)	Litigation . There is no claim, action, proceeding or investigation pending or, to the knowledge of McEwen, threatened, before or by any Governmental Entity which, if adversely determined, would have, or reasonably could be expected to have, a McEwen Material Adverse Effect or prevent or materially delay the Closing, nor to the knowledge of McEwen are there any events or circumstances which could reasonably be expected to give rise to any such claim, action, proceeding or investigation; provided that this representation and warranty shall not apply to any claims, actions, proceedings or investigations which may arise after the date of this Agreement and which do not have a reasonable prospect of succeeding or, if successful, would not give rise to, nor reasonably be expected to give rise to, a McEwen Material Adverse Effect. McEwen is not subject to any outstanding order, writ, injunction or decree which has had or could reasonably be expected to have, a McEwen Material Adverse Effect or which would prevent or materially delay the Closing.	
J - 1

(6)	Due Diligence by McEwen . McEwen acknowledges that it has conducted to its satisfaction an independent investigation of the business, operations, assets, liabilities and financial condition of the Purchased Assets in reliance on the Data Room Materials and, in making the determination to proceed with the transactions contemplated by this Agreement, has relied solely on the results of its own independent investigation and the representations and warranties in Schedule "I".	
 	 	
(7)	Breach, Non-Performance and Non-Compliance . McEwen has not formulated the opinion that any of the representations and warranties in Schedule "I" are incorrect in any material respect.	
J - 2

  SCHEDULE "K"
PERMITTED ENCUMBRANCES

1.	All Encumbrances disclosed in the Title Opinion and all Encumbrances disclosed in or covered by the Title Insurance Policy.	
 	 	
2.	Carriers’, warehousemen’s, landlords’, vendors’, mechanics’, materialmen’s, repairers’, craftsmen’s, workers’, builders’, contractors’ suppliers of materials’, architects’, engineers’ or subcontractors’ and other like Liens imposed by Law or relating to the construction or renovation of any property, provided that such Liens are related to obligations not due or delinquent, are not provided against title to any property and in respect of which adequate holdbacks are being maintained as required by applicable Law.	
 	 	
3.	The right reserved to or vested in any Governmental Entity by the terms of any lease, licence, franchise, grant or permit of Primero, to terminate any such lease, licence, franchise, grant or permit, or to require annual or other payments as a condition of their continuance.	
 	 	
4.	Easements, rights-of-way or other similar rights for the supply of utilities to the Acquired Properties.	
 	 	
5.	Title defects or irregularities which are of a minor nature and which do not reduce the value of the asset or property so affected or materially interfere with its use in the business and activities of the Acquired Properties.	
 	 	
6.	Applicable municipal and other governmental restrictions, including municipal by-laws and regulations, affecting the use of land or the nature of any structures which may be erected on the land, provided such restrictions have been complied with and do not in McEwen’s opinion, reduce the value of the asset or property so affected or materially interfere with its use in the business and activities of the Acquired Properties.	
K - 1

Exhibit A
FORM OF BILL OF SALE
BILL OF SALE
This Bill of Sale is made effective as of this [ • ] day of September, 2017,
BETWEEN:
PRIMERO MINING CORP. , a corporation existing under the laws of the Province of British Columbia (the " Vendor ")
- and -
MCEWEN MINING INC. , a corporation existing under the laws of the State of Colorado (the " Purchaser ")
WHEREAS pursuant to an asset purchase agreement dated August 25, 2017 (the " Asset Purchase Agreement ") between the Purchaser and the Vendor, the Vendor agreed to sell to the Purchaser, and the Purchaser agreed to purchase all right, title and interest of the Vendor in and to the assets set out in Schedule "A" hereto (collectively, the " Transferred Assets ");
NOW THEREFORE in consideration of the payment of the Purchase Price (as defined in the Asset Purchase Agreement) and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the Vendor and the Purchaser hereby agree and covenant as follows:

1.	Capitalized terms used in this Bill of Sale and not otherwise defined herein shall have the meanings ascribed thereto in the Asset Purchase Agreement.	
 	 	
2.	The Vendor hereby sells, assigns, transfers, conveys and delivers to the Purchaser, and the Purchaser hereby purchases and accepts, all of the right, title and interest of the Vendor in, and to the Transferred Assets, to have and to hold the same, together with all benefit and advantage to be derived therefrom, absolutely.	
 	 	
3.	This Bill of Sale is made pursuant and subject to the terms and conditions of the Asset Purchase Agreement and is not in derogation of any of the rights or obligations of the Vendor or the Purchaser under the Asset Purchase Agreement. In the event of any conflict or inconsistency between this Bill of Sale and the Asset Purchase Agreement, the Asset Purchase Agreement shall govern and prevail.	
 	 	
4.	Each of the Parties shall, from time to time, without any further consideration, do all such further acts and things and execute and deliver all such further transfers, assignments, conveyances, instruments and other documents as the other Party may reasonably request to carry out the intent of this Bill of Sale.	
 	 	
5.	This Bill of Sale shall enure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.	
 	 	
6.	This Bill of Sale shall be governed by and interpreted and enforced in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.	
 	 	
7.	This Bill of Sale may be executed in any number of counterparts and by each of the Parties on separate counterparts, each of which, when executed and delivered, shall constitute an original and all of which, when taken together, shall constitute one and the same instrument. Delivery of an executed counterpart of this Bill of Sale by facsimile, PDF or other electronic means shall constitute delivery of an executed counterpart of this instrument.	

2
[The remainder of this page intentionally left blank. Signature page follows.]

IN WITNESS WHEREOF the Parties have executed this Bill of Sale.

 	PRIMERO MINING CORP.	

 	Per:             ______________________________________	
 	                   Name:	
 	                   Title:	

 	MCEWEN MINING INC.	

 	Per:            _______________________________________	
 	                   Name:	
 	                   Title:	

SCHEDULE "A"
TRANSFERRED ASSETS
[Transferred Assets to be listed in the Bill of Sale delivered at Closing.]

EXHIBIT 8.1
LIST OF SUBSIDIARIES OF PRIMERO MINING CORP.

Name	 	Jurisdiction of Incorporation	
Primero Empresa	 	Mexico	
Silver Trading (Barbados) Limited	 	Barbados	
Primero Mining Luxembourg s.à.r.l.	 	Grand Duchy of Luxembourg	

EXHIBIT 12.1
CERTIFICATION
I, Joseph Conway, certify that:
(1) I have reviewed this Annual Report on Form 20-F of Primero Mining Corp. for the year ended December 31, 2017.
(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.
(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report.
(4) The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:
(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) disclosed in this report any change in the issuer’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting.
(5) The issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of the internal control over financial reporting, to the issuer’s independent registered public accounting firm and the audit committee of issuer’s board of directors (or persons performing the equivalent functions):
(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer’s ability to record, process, summarize and report financial information; and
(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer’s internal control over financial reporting.
Date: April 20, 2018

By:	/s/	
Name:	Joseph Conway	
Title:	Interim President and Chief Executive Officer	

EXHIBIT 12.2
CERTIFICATION
I, Ryan Snyder, certify that:
(1) I have reviewed this Annual Report on Form 20-F of Primero Mining Corp. for the year ended December 31, 2017.
(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.
(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report.
(4) The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:
(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) disclosed in this report any change in the issuer’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting.
(5) The issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of the internal control over financial reporting, to the issuer’s independent registered public accounting firm and the audit committee of issuer’s board of directors (or persons performing the equivalent functions):
(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer’s ability to record, process, summarize and report financial information; and
(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer’s internal control over financial reporting.
Date: April 20, 2018

By:	/s/	
Name:	Ryan Snyder	
Title:	Chief Financial Officer	

EXHIBIT 13.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE U.S. SARBANES-OXLEY ACT OF 2002
I, Joseph Conway, Interim President and Chief Executive Officer of Primero Mining Corp. (the “Company”), hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
(i) the Annual Report on Form 20-F of the Company for the fiscal year ended December 31, 2017 (the “Annual Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(ii) the information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: April 20, 2018

By:	/s/	
Name:	Joseph Conway	
Title:	Interim President and Chief Executive Officer	

EXHIBIT 13.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE U.S. SARBANES-OXLEY ACT OF 2002
I, Ryan Snyder, Chief Financial Officer of Primero Mining Corp. (the “Company”), hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
(i) the Annual Report on Form 20-F of the Company for the fiscal year ended December 31, 2017 (the “Annual Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(ii) the information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: April 20, 2018

By:	/s/	
Name:	Ryan Snyder	
Title:	Chief Financial Officer	

CONSENT OF EXPERT
In connection with the Annual Report on Form 20-F of Primero Mining Corp. (“Primero”) for the year ended December 31, 2017, and any amendments thereto (the “Form 20-F”), I, Dave Laudrum, P.Geo., hereby consent to the use of my name in connection with the references to and summaries of scientific and technical information relating to Primero’s mineral properties (collectively, the “Incorporated Information”) and to the inclusion of the Incorporated Information in the Annual Information Form filed as an exhibit to the Form 20-F and incorporated by reference therein.

Yours very truly,	
 	
/s/ Dave Laudrum	
 	
Dave Laudrum, P.Geo.	
 	
Dated: April 20, 2018	

CONSENT OF EXPERT
In connection with the Annual Report on Form 20-F of Primero Mining Corp. (“Primero”) for the year ended December 31, 2017, and any amendments thereto (the “Form 20-F”), I, Patrick McCann, P.Eng., hereby consent to the use of my name in connection with the references to and summaries of scientific and technical information relating to Primero’s mineral properties (collectively, the “Incorporated Information”) and to the inclusion of the Incorporated Information in the Annual Information Form filed as an exhibit to the Form 20-F and incorporated by reference therein.

Yours very truly,	
 	
/s/ Patrick McCann	
 	
Patrick McCann, P.Eng.	
 	
Dated: April 20, 2018	

CONSENT OF EXPERT
In connection with the Annual Report on Form 20-F of Primero Mining Corp. (“Primero”) for the year ended December 31, 2017, and any amendments thereto (the “Form 20-F”), I, John Morton Shannon, P.Geo., hereby consent to the use of my name in connection with the references to and summaries of scientific and technical information relating to Primero’s mineral properties (collectively, the “Incorporated Information”) and to the inclusion of the Incorporated Information in the Annual Information Form filed as an exhibit to the Form 20-F and incorporated by reference therein.

Yours very truly,	
 	
/s/ John Morton Shannon	
 	
John Morton Shannon, P.Geo.	
 	
Dated: April 20, 2018	

CONSENT OF EXPERT
In connection with the Annual Report on Form 20-F of Primero Mining Corp. (“Primero”) for the year ended December 31, 2017, and any amendments thereto (the “Form 20-F”), I, Gabriel Voicu, P.Geo., hereby consent to the use of my name in connection with the references to and summaries of scientific and technical information relating to Primero’s mineral properties (collectively, the “Incorporated Information”) and to the inclusion of the Incorporated Information in the Annual Information Form filed as an exhibit to the Form 20-F and incorporated by reference therein.

Yours very truly,	
 	
/s/ Gabriel Voicu	
 	
Gabriel Voicu, P.Geo.	
 	
Dated: April 20, 2018	

CONSENT OF EXPERT
In connection with the Annual Report on Form 20-F of Primero Mining Corp. (“Primero”) for the year ended December 31, 2017, and any amendments thereto (the “Form 20-F”), I, Rodney Webster, M.AIG, hereby consent to the use of my name in connection with the references to and summaries of scientific and technical information relating to Primero’s mineral properties (collectively, the “Incorporated Information”) and to the inclusion of the Incorporated Information in the Annual Information Form filed as an exhibit to the Form 20-F and incorporated by reference therein.

Yours very truly,	
 	
/s/ Rodney Webster	
 	
Rodney Webster, M.AIG	
 	
Dated: April 20, 2018