Embed Size (px)
Citation preview
sustainability report 2014
About Primero ........................................................................... 3
About This Report ....................................................................4
Letter from the CEO ................................................................8
Ethical, Transparent Governance ........................................ 11
Materiality and Our Key Stakeholders ..............................15
Building Primero Value ..........................................................17
All currency is in United States dollars (USD) unless otherwise noted.
Committed to Our People .....................................................21
Committed to Our Communities .......................................29
Protecting the Environment .................................................33
In Closing .................................................................................40
GRI Index ................................................................................. 42
Corporate Directory ............................................................ IBC
recreationalfacilities for tayoltita
PRIMERO 1 CSR 2014
Cover photo: Taken at the first softball game ever to be played in Tayoltita on a softball field.
Credit: Jorge Ortega, Head of civil service and construction.
In 2014, Primero, together with Silver Wheaton, built three recreational
facilities in the town of Tayoltita, the home of most of San Dimas employees.
For the first time, in this town of more than 5,000 people there are
playgrounds, outdoor fitness facilities for adults, youth softball and
soccer fields and a multipurpose court for basketball and volleyball.
These facilities promote health and well-being and encourage positive
interactions among families and friends within the community.
PRIMERO 2 CSR 2014
Primero is a Canadian-based precious metals producer with operations in Canada and Mexico. The Company is focused on becoming an intermediate gold producer by building a portfolio of high quality, low cost precious metals assets in the Americas.
PRIMERO 3 CSR 2014
Primero currently has two producing properties, the San Dimas Mine,
located near the town of Tayoltita on the border of Durango and
Sinaloa states and the Black Fox Complex which is located near the
town of Matheson in Ontario, Canada. In addition, Primero has two
development stage projects, Cerro del Gallo in Guanajuato, Mexico
and Grey Fox, adjacent to the Black Fox mine in Ontario, Canada.
Primero also has an exploration property in Mexico (Ventanas, located
in Durango, Mexico) and exploration properties associated with the
Black Fox Complex (the Pike River and the Stock Mill properties).
2014 was a year of transition during which the Company began
the process of integrating its second producing mine - the Black
Fox mine. This involved strategic decisions to optimize operations,
increase efficiency, minimize risk and improve safety.
Operating results for the year were record-breaking, despite the
volatile gold market. Primero met production and cost guidance, and
produced a record 225,100 gold equivalent ounces, a 57% increase
over 2013. Cost controls are important for Primero and the cash cost
remained below industry average at $687 per gold equivalent ounce.
Through the year and into 2015, Primero has been engaged in standardizing
corporate-wide policies and procedures and making significant progress
in its plans for Corporate Social Responsibility, to ensure consistency
in goals and measurement as the Company moves forward.
about primero
PRIMERO 4 CSR 2014
We are proud to present our fourth annual Sustainability Report, which highlights our achievements and challenges in 2014. As Primero has grown, we have remained committed to continuous improvement in environmental performance and workplace health and safety, and in sharing the benefits of mining throughout our host communities.
This report covers the period of January 1 through December 31, 2014. Its content is guided by common principles in sustainability reporting in our industry and by the findings of a company-wide internal materiality assessment that was started in 2013. As a result of the materiality assessment, we have adjusted our data collection and reporting emphasis, while maintaining the requirements of a Global Reporting Initiative-compliant report. The materiality assessment, its findings and effects on our data collection and reporting, are discussed in this report. In the future, we plan to engage in further dialogue, including external assessments, to refine our definition of stakeholders and to survey their reporting needs and priorities.
Economic performance is not emphasized in this report. As a public company, our financial results are audited annually and reported on a regular basis, and our Annual Reports, Financial Reports and Regulatory Filings are posted on our website. Nonetheless, key economic drivers are discussed in the Delivering Primero Values section of this report.
This report is based on data collected in 2014, with comparative data from previous years. 2014 began with the acquisition of the Black Fox Complex (consisting of the Black Fox mine and mill, the Grey Fox development project
and associated exploration properties). While this report is primarily based on data collected at and around the San Dimas mine, it does include a general discussion and some data from of our first ten months of operations at Black Fox. Our other properties are not discussed. The environmental and broader sustainability impact of our offices in Toronto, Vancouver and Mexico City had little effect on our overall impact and the offices’ energy consumption data are not included in the environmental data.
Apart from the newly acquired Black Fox Complex, there are no significant changes from previous reporting periods in the scope, boundary or measurement methods applied.
For any questions regarding this report or its contents, please contact us at [email protected].
GRI DeclarationThis report is based on the report framework of the Global Reporting Initiative (GRI), and is Primero’s third Sustainability Report to attain a GRI level C standard of sustainability reporting. The GRI is an independent institution that has developed voluntary guidelines for sustainability reporting. The mining and metals sector supplement of the GRI reporting guidelines have been considered and relevant and available data is included in this report. We believe that the GRI reporting guidelines help us to maintain a high standard of transparency, clarity and comparability, and demonstrate our commitment to transparent reporting.
The GRI Index can be found at the back of this report.
about this report
“We are taking a comprehensive, inclusive approach to assessing material issues for sustainability reporting. It is a long term process and we are committed to it.” Ernest Mast, President and Chief Operating Officer
PRIMERO 5 CSR 2014
At Primero, we believe that sustainability is fundamental to our success. At the corporate level and in our relationships with our host communities, our prosperity depends on good corporate governance and building a solid framework for economic, community and environmental sustainability.
Our four-step approach to sustainability begins with creating and nurturing a corporate culture based on a vision of environmental stewardship, social progress, economic achievement and ethical, transparent governance.
The first step is to translate vision into values that inform decision-making and that, ultimately, guide our behaviours as a company and as individuals.
The second step is to apply that vision and those values to developing policies and procedures that support sustainability with consistency and rigour, through standardized company-wide systems.
In the third step, our sustainability practices must focus on materiality: those aspects of our corporate behaviours that most concern our stakeholders. If we engage our stakeholders and ascertain their priorities - and then focus our efforts on those concerns - we are better positioned to manage risk. An internal materiality assessment began in 2013 and the results have been applied to refine our Corporate Responsibility Strategy. We regularly revisit materiality issues and in the future plan to expand our materiality assessment to include surveying external stakeholders’ needs and consider Primero’s most significant economic, environmental and social impacts. Later in this report, our approach to materiality is discussed at length.
The fourth step is ongoing engagement. Only by engaging with our stakeholders and including our host communities, can we build strong relationships, develop alliances and maintain a long-term, balanced approach to sustainability. As Primero has grown to become a multi-mine company with international operations, we are undergoing a thorough sustainability policy renewal process.
Visit our website for more: www.primeromining.com.
management’s approach to sustainability
1
2
3
4
PRIMERO 6 CSR 2014
Primero ValueBy maximizing earnings and reducing operating costs, we produce results for our shareholders while also contributing to the economic and social development of our host communities. Only by creating value for our shareholders and host communities can we sustain our company over the long term.
Protecting the EnvironmentAt all times, we seek to operate in a responsible manner and to mitigate the impact our operations may cause to the environment. We operate with an awareness of a mine’s life cycle and practice the progressive rehabilitation of areas affected by our activities.
Committed to Community EngagementIn the communities surrounding our operations, we actively engage in meaningful dialogue with local residents, community leaders and organizations in order to identify opportunities and priorities for economic improvement, training and social development. We support schools, health care and infrastructure and continually seek development opportunities that will contribute to a sustainable local economy.
In March 2015 - for the fourth consecutive year - Primero was awarded the “Empresa Socialmente Responsable” (ESR) or “Socially Responsible Company” designation. This prestigious award, from CEMEFI, the Mexican Center for Philanthropy, is the result of a thorough independent assessment of Primero’s corporate and social responsibility framework. It recognizes our commitment to sustainable economic, social and environmental operations in all areas of corporate life, including business ethics, employee health and safety, involvement with the community, and preservation of the environment.
Our StakeholdersThis report is written for Primero stakeholders, including:
employees and their families
our host communities
legislators and government officials
shareholders, investors and members of the financial community
civic, special-interest and non-governmental advocacy organizations (NGOs)
These groups are generally accepted as key stakeholders for sustainability reporting, and we engage with them through our Annual General Meeting of shareholders, community meetings, website and a dedicated email address. Our ongoing assessments of materiality may, in the future, refine our definition of stakeholders.
Feedback and ComplaintsWe maintain open channels through which complaints, concerns and suggestions can be received and addressed. In 2014, four complaints were received at San Dimas. In each case, community members were concerned about blasting, traffic dust and water issues. All issues were addressed.
In 2015 we will work with stakeholders to establish formal channels for concerns and standardize the protocols for receiving, recording and responding to feedback or grievances in the manner most suitable to our stakeholders.
We invite sustainability-related comments and suggestions at our dedicated email address: [email protected].
PRIMERO 7 CSR 2014
“To create more value, in terms of efficiency and optimization, we began by consulting experts. But to change a company’s culture, we knew we had to empower the individuals - the people on the job - with that expert knowledge, so they embody their learning and take ownership.
In effect, we’re giving them the responsibility for their success. It’s the ownership that makes it stick.”James Mallory, VP, Corporate Responsibility
PRIMERO 8 CSR 2014
We at Primero are proud to present our first Sustainability Report as a multi-national company, with mines and development projects in Mexico and Canada.
While 2014 was a difficult year for the mining industry, it was a year of record-breaking performance for Primero. Production increased by 57% over 2013 and we achieved or exceeded all our operational objectives, while maintaining strict controls on costs.
2014 was a year of transition and expansion. We acquired the Black Fox Complex expanding our workforce significantly and we worked to integrate our people and operations into a single, unified Primero. The Black Fox
mine maintains strong relationships with its communities and the Wahgoshig First Nation and we look forward to a long future built on mutual respect and collaboration.
Our primary goal is to always ensure the health and safety of our people. In 2014, our safety performance improved significantly: accident frequency reduced by 36% - an impressive statistic in a year of acquisition and expanded production. But while accidents were down, I regret to report a fatality at San Dimas. For 2015, our focus is on building safety awareness across the organization. Our objective is to become a zero harm operation, because no ounce of gold is worth risking a life.
We recognize the impacts of mining on surrounding regions. These can be positive, with new infrastructure, employment opportunities and far-reaching economic benefits, but there are also issues of concern to local communities. Accordingly, we are committed to improving our transparency in communication. Materiality in reporting was one of this year’s initiatives. In 2013, a company-wide process identified the issues that are most important for our sustainability strategy and reporting. This year’s report reflects these findings. Of course, we understand that assessing materiality is an ongoing process. As our industry and the issues surrounding it evolve, so do our stakeholders’ concerns.
“Our primary goal is to always ensure the health and safety of our people. “Joseph F. Conway, CEO
letter from the ceo
PRIMERO 9 CSR 2014
I would like to note some of the recognition that we have received: in March 2015, for the fourth consecutive year, we were named a “Socially Responsible Business” by the Mexican Center for Philanthropy, in recognition of our commitment to sustainable economic, social and environmental operations. We’re committed to renewing our two-year “Clean Industry” certification again in 2015 (the previous certification was received in 2013).
To improve our economic sustainability in today’s market conditions, we began a company-wide analysis of our value-generating activities - essentially a gap analysis of processes, asset usage and maintenance, and our local supply chain relationships. This business-focused exercise was, I feel, instrumental in this year’s cost
Joseph F. Conway Chief Executive Officer
reductions and will continue to have ripple effects on our sustainability, and the sustainability of our suppliers and local communities.
After such a good year, I look forward to an even stronger 2015. I would like to thank the people of Primero and the communities in which we live and work. Our accomplishments would have not been possible without their dedication and support.
Primero Management (from left to right): Tamara Brown, VP, Investor Relations, David Sandison, VP, Corporate Development,
H. Maura Lendon, Chief General Counsel and Corporate Secretary, Louis Toner, VP, Project Development and Construction,
Joseph F. Conway, Chief Executive Officer, Ernest Mast, President and Chief Operating Officer, Wendy Kaufman, Chief Financial Officer, James Mallory, VP, Corporate Responsibility, Gabriel Voicu, VP, Geology and Exploration
Not Pictured: Maria-Luisa Sinclair, VP, Human Resources
PRIMERO 10 CSR 2014
PRIMERO 11 CSR 2014
Social responsibility and sustainable development are integral to Primero’s company-wide strategy. Our corporate sustainability program guides our policy and decision-making regarding environmental protection, the health and safety of our people, and the socio-economic development of our host communities. Our goal is to continuously improve workplace health and safety and environmental performance, and to share the benefits of mining with local communities.
Code of Business Conduct and EthicsOur operating practices are governed by our corporate Code of Business Conduct and Ethics. The Code is applicable to all directors, officers and employees. It defines the commitment of Primero and our subsidiaries to conduct business in accordance with all applicable laws, rules and regulations and the highest ethical standards. The complete Code of Business Conduct and Ethics is available in the Corporate Governance section of the Primero website (www.primeromining.com).
Corporate Responsibility CommitteePrimero’s sustainability practices are governed by the principles set out in our Health and Safety Policy, Environment and Social Responsibility Policy and Code of Business Conduct and Ethics. The Board’s Corporate Responsibility Committee (CRC) provides oversight in occupational health and safety, community relations, and environmental management.
The purpose of the CRC is to review and recommend corporate policies and programs and monitor activities as they relate to health, safety, environment and social matters. The CRC reports to the Board. Weekly and quarterly internal reporting tracks key performance indicators in Corporate Responsibility. Two of the CRC’s
three members are independent members of the Board. The complete CRC guidelines are available on the Primero website (www.primeromining.com).
In 2014 the CRC reviewed Primero’s processes for materiality in sustainability reporting, and ongoing policy implementation in Health and Safety, environmental practices and corporate social responsibility. In addition to its regular meetings, the CRC met twice in 2014 to assess overall sustainability performance.
We invite CRC-related recommendations or direction from shareholders, employees or other stakeholders at our dedicated email address: [email protected].
Human RightsPrimero respects internationally proclaimed human rights, and strives to ensure that we are not complicit in human rights abuses. There have been no incidents of discrimination, nor have there been any incidents of violations involving the rights of indigenous peoples, at any mine or project under Primero’s management.
Collective Bargaining and Freedom of AssociationAll Primero workers enjoy the right to freedom of association as provided by applicable labour law. Approximately 53% of San Dimas employees are unionized (there is one union at the mine, two locals). At San Dimas there have been no strikes since March 2011 (a 32-day strike), and the Company recently negotiated a two-year agreement that will be in effect until 2017. There is no union at the Black Fox mine. We do not believe that the right to exercise freedom of association and collective bargaining is at risk at any Primero location.
ethical, transparent governance
PRIMERO 12 CSR 2014
Whistleblower PolicyOur corporate Whistleblower Policy incorporates leading ethical practices, and has been delivered to all employees. It allows any employee to communicate a concern or complaint regarding ethical behaviour confidentially and anonymously, with the expectation of a timely response and the assurance that there will be no retribution or negative consequences. Employees have three options to communicate concerns securely and anonymously. All employees have been informed of these channels and they are also visibly posted in several areas at all operations and offices and posted on our website.
Conflict-Free GoldThe Conflict-Free Gold Standard is an industry-led approach to combat the potential misuse of mined gold to fund armed conflict (www.gold.org). Primero supports the World Gold Council in its efforts to eliminate unethical gold production and to increase transparency of gold mining companies. The gold that we produce is in conformance with the Conflict-Free Gold Standard: it has been extracted in a manner that does not cause, support or benefit unlawful armed conflict, nor does it contribute to serious human rights abuses or breaches of international humanitarian law.
In 2014, we conducted our second assessment and process review to ensure our compliance with the Conflict-Free Gold Standard. Our internal assessment and processes were then reviewed by Ernst and Young LLP (EY), who carried out a limited assurance engagement on Primero’s Conflict-Free Gold Report for the San Dimas and Black Fox mines. The complete report, Conflict-Free Gold Report for Primero Mining Corp, along with EY’s limited assurance statement, are available on the Primero website (www.primeromining.com).
Workplace Diversity, Non-Discrimination and EquityAt Primero, we do not discriminate on the basis of race, religion, ethnicity, national origin, colour, gender, age, sexual orientation, citizenship, veteran status, marital status or disability. Harassment, including sexual, physical and verbal, is prohibited. We do not allow forced or compulsory labour.
We do not allow child labour, as defined by the International Finance Corporation (IFC). Primero will not knowingly employ a person who is under the legal age of employment, or where that employment would contravene the IFC definition of child labour. There were no incidents of child labour reported to the company in 2014, nor were any operations considered to have significant risk for incidents of child labour.
Compliance with Laws and RegulationsIn 2014, there were no legal actions taken against the company for anti-competitive behaviour, and no form of non-monetary sanctions were taken against either of our mines.
In 2014, the Black Fox mill reported two non-compliance events regarding mill effluent discharge. On two occasions, samples taken at the final effluent discharge exceeded the Environmental Compliance Approval daily concentration for nickel (1.0 mg/l). These also caused the monthly average limit (0.5 mg/l) to be exceeded. In February 2015, The Ontario Ministry of the Environment and Climate Change (MOECC) delivered a Notice of Intention to issue an environmental penalty in the amount of CDN $4,140.
PRIMERO 13 CSR 2014
PRIMERO 14 CSR 2014
Table 1 Material issues froM the 2013 assessMent considered in this report
environMental stewardship
stakeholder engageMent and social progress
econoMic achieveMent
governance
Energy use p. 35 Community trust and social license to operate p. 28 Local procurement p. 19 Ethical
business practices p. 11
GHG emissions p. 36 Community wellness p. 28 Value creation p. 18 Regulatory compliance p. 12
Tailing management p. 39
Diversity and inclusiveness p. 12, 18
Water management p. 34 Education and training p. 31
Employee training and career development p. 27
Health and safety p. 22
Infrastructure and services p. 1
Supplier development p. 18
In a Sustainability Report, it is essential to identify the material topics - those economic, environmental, social and governance topics of greatest importance to our stakeholders and to the company - and the threshold at which aspects become relevant enough that they should be reported. While all issues are important, it is valuable to establish the material topics and their priority for our business and our stakeholders.
In 2013, we initiated a series of internal assessments of materiality, based on independent guidelines and standards that follow GRI guidance and best practices for sustainability reporting. Many potentially material issues were identified, and their importance was discussed. The exercise resulted in an initial ranking of material issues and their priorities for Primero’s business. The list was further refined using the Primero Enterprise Risk Management (ERM) process to plot issues and assess their potential risks.
In 2014 we repeated the exercises with Black Fox personnel. The initial results were consistent with the list of material issues that had been identified previously at San Dimas and the process is still ongoing.
The material issues identified, in order of priority, were as follows:
Health & Safety
Community Trust and Social License to Operate
Value Creation and Wealth Distribution
Regulatory Compliance
Water Management
See Table 1 for the complete list.
Through 2014, we brought the results to staff and stakeholders in a number of workshops and presentations that included discussions and the 2013 Sustainability Report (in print and online). Primero management and staff, union leaders, state agencies, industry associations and the Wahgoshig First Nations representatives near the Black Fox mine participated in these events.
Special note must be made of tailings management, which is an issue of growing concern throughout the industry. Several stakeholders raised the issue in discussions during 2014 and we will be increasing our transparency in reporting tailings matters, especially as we review our tailings management plans at Black Fox.
We are pleased with the results of the year’s discussions and are committed to proceeding, recognizing that this is a long-term exercise.
PRIMERO 15 CSR 2014
materiality and our Key staKeholders
Water ManageMent
PAGE 34
5
1HealtH
and Safety
PAGE 22
CoMMunity truSt and SoCial liCenSe
to operate
PAGE 28
2
Value Creation and WealtH diStribution
PAGE 18
3regulatory CoMplianCe
PAGE 12
4
57%
$687$74 million
37%PRODUCTIONIncrease Over 2013
REVENUEIncrease Over 2013
CASH COST PER OUNCE
OPERATING CASH FLOWBefore Changes in Working Capital
San Dimas Mine
Black Fox Mine Grey Fox Project
Cerro del Gallo Project
Toronto Corporate Office
PRIMERO 17 CSR 2014
* Gold equivalent ounces include silver produced and converted to a gold equivalent, based on average commodity prices received in the period. Our products are sold to refineries or smelters, and then into worldwide precious metals markets. We do not sell directly to the public.
Primero is a Canadian-based company headquartered in Toronto, Canada. 2014 was a year of transition and expansion: when the year began the Company operated one mine, the San Dimas mine in Mexico, and owned one development project, Cerro del Gallo in Mexico and one exploration property, the Ventanas project in Mexico. In March 2014, the Company acquired the Black Fox Complex, which comprises the Black Fox mine and mill, an operating open pit and underground gold mine and Grey Fox, an adjacent development project plus associated exploration properties, in northern Ontario, Canada.
Because we operated the San Dimas mine for all of 2014 and the Black Fox mine for only ten months of the year,
most of the data in this report relates to San Dimas,
but data from Black Fox is also included where available
and relevant.
Due to the limited fieldwork on the Cerro del Gallo
property, its performance data is not covered in this
report. We are developing good relationships with
the communities around the Cerro del Gallo property,
including engaging with local schools and residents.
Through 2014, stakeholder mapping continued and a
more comprehensive mapping exercise and community
profiling has already occurred at the time of the writing of
this report (early 2015).
building primero value
table 2 PRIMERO OPERATIONS OVERVIEW
OPERATING MINESSan Dimas Mine 100% Ownership
Black Fox Mine 100% Ownership
LOCATIONSan Dimas Mine State of Durango (central west Mexico), approximately
150 km west of Durango, 125 km northeast of Mazatlán
Black Fox Mine Near Timmins, Ontario 600 km north of Toronto, Canada
DESCRIPTION
San Dimas Mine Gold-silver deposit. Underground mine, using mechanized cut-and-fill and long-hole mining methods
Black Fox Mine
Gold deposit. Open pit and underground mine. Open pit mining is conducted 24 hours a day seven days a week. Underground ore is mined using long-hole, mechanized cut-and-fill, and narrow vein mining methods.
PRODUCTION220,067 Gold equivalent* ounces185,286 Gold ounces5.94 million silver ounces
STAFF 1,817 Employees169 Contractors
PRIMERO 18 CSR 2014
Adding Value by Increasing Operational EfficiencyIn 2014 we began a comprehensive initiative to analyze our business processes and identify opportunities for improvement to productivity and economic performance. We explored all aspects of the San Dimas and Black Fox operations, from organizational structure and production processes to asset management and relationships with our key suppliers. The results had an immediate effect: both operations saw cost savings, employees are more highly engaged and motivated and work teams are better trained and higher performing on the job.
At Black Fox, consultants and employees participated in analysis of equipment maintenance, goods and services supplies and underground mine operations. Through analysis and process improvements, they eliminated a number of non-value-added activities in drilling procedures, and optimized the performance of various contract crews in different drilling scenarios (drilling in soft, medium and hard ground).
At San Dimas, mine operations’ staff sought to increase the tonnes of ore produced per day from an average of
2,480 tonnes per day (tpd) to in excess of 3,000 tpd. Through a program of optimization, and gradual execution of changes in blasting, mucking, shift changes, and other mining operations, as well as improvements to the plant’s ore crusher, the objective was achieved - in fact, during the fourth quarter the mine reached 2,846 tpd, which is 14% above the mill’s nominal capacity.
In the fall of 2014, we began a comprehensive initiative to analyze aspects of the supply chains at both sites, with the objective of finding efficiencies, driving costs down, and comparing procurement options among local vendors. By engaging with key local suppliers and developing new systems and standards with our top local vendors, contracts and quotes were renegotiated, resulting in net savings of approximately $250,000 (in the last quarter of 2014 alone).
In 2015, productivity improvements will continue to be implemented and we will also continue to examine environmental and social performance requirements for suppliers and contractors at all of our operations, and continue to promote local entrepreneurship.
“When we talk about training and process improvement results, we review data. But there is a more personal contribution that also needs to be considered. During training we communicate how the individual can be part of the solution and how to take ownership of a given task. Consequently, the employee owns the results. When teams and individuals take ownership, those improvements will last. It is a lot of work, but is paying off. We’re seeing the results.”Fernando Ragone, Director of Finance, Primero Mining
PRIMERO 19 CSR 2014
Distribution of Goods and Services Purchased in 2014
San Dimas Mine Black Fox Mine
For more detail on company and mine revenues, production, customers and markets, please refer to Primero’s Annual Report, which is available at www.primeromining.com.
65.4%
1.9%
18.3%
14.4%47.9%
42.2%
7.3%
2.6%
Local (within 100 km from site) Regional (within province or state) National (rest of country) International
Local ProcurementWe are committed to supporting the development of sustainable local economies through local purchasing and small business development. At the San Dimas Mine, we have established trucking contracts with a number of entrepreneurs from local eijidos. (“eijido” is defined as land owned and farmed communally under a system supported by the state government).
At Black Fox, we continue to identify new business and joint venture opportunities with the Wahgoshig First Nation. The Matheson Chamber of Commerce recently recognized Black Fox Mine for their contributions to local economy. Black Fox also works closely with goods and service providers from the city of Timmins, a regional service and distribution centre with a long history of supporting resource industries and a reliable local source for goods and services to the mine.
table 3 DIRECT ECONOMIC VALUE GENERATED (IN ‘000 US DOLLARS)
2012 2013 2014
a) Revenues 182,939 200,326 274,612
ECONOMIC VALUE DISTRIBUTED
b) Operating costs (goods and services) 38,570 47,354 91,411
c) Employee wages and benefits 28,683 37,549 64,716
d) Payments to providers of capital 19 14,843 63,974
e) Payments to governments 592 728 11,377
f) Community investments 826 836 1,760
PRIMERO 20 CSR 2014
PRIMERO 21 CSR 2014
As we have grown into a multi-mine company with international operations,
we have not lost sight of the value of our core asset, our people. Our first
priority is the well-being of our employees: their safety on the job, their human
rights and their professional growth and development.
Our VisionTo be the most respected precious metals producer in the Americas, admired for the excellence of its people,
its values and its delivery on commitments.
We value the diversity of our employees and other stakeholders and treat each
other with dignity and honesty.
We have the courage to take bold steps to excel and we apply a disciplined
approach to deliver on our objectives.
We have the courage to take bold steps to excel and we apply a disciplined
approach to deliver on our objectives.
We work together and recognize that each person contributes and makes a difference.
We are uncompromising and consistent in our commitment to transparent, responsible actions.
We are uncompromising and consistent in our commitment to transparent, responsible actions.
FOCUSEDFocused INTEGRITY
TEAMWORK
RESPECT
Our Values
committed to our people
PRIMERO 22 CSR 2014
Health and SafetyAt every Primero operation and project, we strive to protect the health, safety and welfare of our people and their communities.
We focus on safety leadership and fostering a safety-first work culture through programs like our Zero Harm program and our Circles of Prevention. The Zero Harm program at San Dimas focuses on 10 critical tasks - such as rock scaling, driver accreditation, and explosives handling - to ensure that employees performing those tasks have the prior training and, if appropriate, the accreditation.
Our results: in 2014, our overall Total Reportable Injury Frequency Rate (TRIFR) declined by a remarkable 36%. While this is a major improvement, of which we are proud, we must report a workplace fatality at the San Dimas mine involving a contractor. It reinforces the challenges that we in the mining industry face, and the need for a relentless emphasis on safety. We will continue to learn
from our successes and to improve our training and risk-identification, with the continuing objective of Zero Harm.
Health and Safety GovernanceThe key to building and maintaining a safety-first culture is employee participation. We operate a variety of safety-focused committees and groups. At San Dimas, 214 employees - or more than 16% of the mine’s workforce - participated in safety committees or continuous improvement teams in 2014. At Black Fox, 50 employees or 13% of the workforce participated in safety initiatives.
At both Primero mines, Joint Health and Safety Committees (JHSC) provide forums for employees from the workforce and management through which they can identify workplace hazards and make recommendations for employee safety and/or to prevent equipment or property damage. JHSC members also participate in Operational Procedure reviews and take part in Accident Investigations that relate to their scope of work.
Health and Safety System Model (San Dimas)*
“Our number one priority, at all times, is ensuring that our people return home to their families at the end of their shift, healthy and safe.”Guillermo Adrian, General Manager, San Dimas
CENTRAL COMMITTEE OF
SAFETY AND HEALTH
ACCIDENTS INVESTIGATION
SYSTEMATIC SCALING
GOOD WORKING CONDITIONS
ENERGY ISOLATING
KNOWLEDGEABLE DRIVING
SAFE WORKING AT HEIGHTS
WRITTEN PERMISSION FOR NON-ROUTINE WORK
AUTHORIZATION TO WORK WITH HOT MATERIALS
CORRECT WEIGHT HOISTING
PROPER USE OF EXPLOSIVES
KNOWLEDGE OF EMERGENCY PROCEDURES
PREVENTIVE OBSERVATION CIRCLES
OF PREVENTION
OPERATION PROGRAM
ZERO HARM
DOCUMENTARY SYSTEM
PRIMERO 23 CSR 2014
Key Performance Indicators for Health and SafetyWe have developed a number of Key Performance Indicators (KPIs) for Health and Safety that have helped us target the greatest risk factors, and focus on early corrective measures. As a result of emphasizing these KPIs in our safety programs, safety statistics markedly improved - in many KPIs, the improvement is more than 100% over 2013.
San Dimas has instituted daily planned observation checklists of each KPI. At Black Fox, employees use 10-point “Safety Cards”. The cards provide safety messages and allow workers and supervisors to report injuries or near misses, or to take note of any damage or substandard conditions that are observed. The cards are collected and documented so any situation can be acted on by management and employees.
At Black Fox, employees use 10-point “Safety Cards”. The cards provide safety messages and allow workers and supervisors to report injuries or near misses, or to take note of any damage or substandard conditions that are observed.
Compliance with Safety StandardsNo examples of non-compliance were identified at either Primero mine in 2014. At Black Fox, the Ontario Ministry of Labour Regulator visited the mine six times,
and the mill twice. No noncompliance issues were identified and minor work orders were corrected. At San Dimas, state regulators made four visits. One was a follow-up to a previous visit to San Dimas operations, while the other three visits were to different contractors working in the mine.
Health and Safety PerformanceWe at Primero recognize the dangers inherent in the type of work we do. Accordingly, we place enormous
emphasis on building and maintaining a strong safety culture. Our efforts have resulted in a steady year-on-year decline in overall accident frequency.
In 2014, our Total Reportable Injury Frequency was down significantly over 2013: a 40% drop at San Dimas, and a 31% drop at Black Fox. At San Dimas, this is the ninth consecutive year of reductions in Total Reportable Injury Frequency rates and the fifth consecutive year as a Primero mine. San Dimas received special recognition for its safety performance from the Durango State Secretary of Labour and Social Welfare. In June 2014, Black Fox celebrated more than one year without any lost time injury - a significant achievement in the mining industry.
For 2015, our goal is an overall reduction of 15% in our All Injury Frequency Rate.
table 4 SAFETy SySTEM KEy PERFORMANCE INDICATORS
SAN DIMAS KPIs% OF COMPLETION
2013 2014
Health and Safety Committee Meetings
82% 82%
Supervisor Safety Meetings
68% 107%
Scheduled Inspections 75% 100%
Planned Hazard Observations
33% 105%
Corrective Actions Closed
75% 79%
PRIMERO 24 CSR 2014
“The Mine Rescue Team members from Black Fox were very pleased to have won the “First Aid Trophy” in the Ontario Mine District Competition in Timmins in 2014. Emergency training is an imperative part of our jobs and we were especially proud considering it was only our second year competing.” Graham Reid, HSE & Security Manager, Black Fox
PRIMERO 25 CSR 2014
San Dimas and its two unions receive special recognition for Primero Health and Safety Policies from the Secretary of Labor and Social Welfare (STPS)
Black Fox wins the “First Aid Trophy” in the Ontario Mine District Competition in Timmins
Bringing Home the Gold
LTIFR is the number of lost-time injuries per 200,000 hours worked. LTIFR = (Lost-Time Injuries x 200,000 hours) ÷ Total Hours Worked.
TRIFR is the number of reportable injuries per 200,000 hours worked.
2014 (Mar-Dec)BLACK FOx
0
0
3
13
0.0
1.08
table 5 INJURy FREqUENCy
INJURy TyPE 2011SAN DIMAS
2012SAN DIMAS
2013SAN DIMAS
2014 SAN DIMAS
Fatalities 1 1 0 1
Lost-time injuries 3 6 3 4
Total reportable injuries 27 20 17 13
Significant potential incidents 65 42 29 10
LTIFR (lost-time injury frequency rate) 0.18 0.36 0.17 0.26
TOTAL REPORTABLE INJURy FREqUENCy RATE 0.67
PRIMERO 26 CSR 2014
Health Protection and TrainingPrimero’s Safety System goes far beyond injury prevention. It seeks to improve the health and welfare of our workers, their families and the surrounding communities. Through ongoing monitoring and check-ups, we identify and prevent sickness. Checkups include:
Preventive programs for disease detection
Epidemiological disease-detection programs for all employees exposed to noise, dust, hazardous chemical substances, etc.
Biological & environmental monitoring
Annual medical exams
Anti-doping and alcohol tests for workers
The San Dimas mine maintains on-site hospital facilities, with x-ray, ultrasound, a surgery room and clinical lab, which are available for all employees and contractors. To the best of the company’s knowledge, there were no workers with a high incidence or high risk of specific diseases.
table 6 STAFF BREAKDOWN – December 31, 2014
LOCATIONFULL-TIME
EMPLOyEESUNION CONTRACTORS WOMEN MEN TOTAL
Toronto Office 29 0 2 14 15 31
Vancouver Office 6 0 0 3 3 6
San Dimas Mine 534 694 92 94 1,134 1,320
Cerro del Gallo Project 17 0 2 5 12 19
Mexico City 12 0 0 5 7 12
Black Fox Mine 356 0 73 50 306 429
TOTAL 954 694 169 171 1,477 1,817
PRIMERO 27 CSR 2014
Ongoing, monthly safety campaigns focus on specific topics. The campaigns include awareness talks, training courses and revision of standards. Topics have included among others: lock out/tag out, defensive driving, safety in work at heights and safe handling of sodium cyanide.
Management Approach to Labour PracticesThroughout Primero, we foster a culture of inclusivity and acceptance of gender, race, cultural background, age, religion and disability. We are committed to fair and equitable labour practices in every operation and office.
Everywhere we operate, we seek to be recognized as an employer of choice by offering competitive wages, above-average benefits, by preferentially hiring locally and recognizing and rewarding employee performance.
Health and Safety AgreementsHealth and safety agreements apply to all employees and include:
Personal protective equipment
Joint management-employee health and safety committees
Participation of worker representatives in health and safety inspections, audits, and accident investigations
Training and education
Right to refuse unsafe work
Periodic inspections
Worker and Management TrainingPrimero runs an annual training program for superintendents, area managers, supervisors and hourly workers. The training is developed for each on the area, based on the needs of each department.
At San Dimas in 2014, training was up 31% over last year, with 27,088 hours dedicated to theoretical and practical training, with topics including:
Safety leadership
Underground heavy-equipment operations
Explosives handling
First aid and mine rescue training
Rock mechanics
Environmental awareness in the workplace
Computer training
Project management
English classes
Distribution of Employee Training (San Dimas)
51% 3%
46%
Management and staff
Operators and labour workforce
Contractor development
table 7 GENDER DISTRIBUTION
Female 171 (10%)
Male 1,477 (90%)
TOTAL 1,648
PRIMERO 28 CSR 2014
In 2014 the Secretariat of Labour and Social Welfare presented the San Dimas Mine with the “Family-Responsible Company” award, in recognition of alignment of policies and practices to the need for balance in personal, family and professional life.
PRIMERO 29 CSR 2014
* Donations for infrastructure and provision of services, provided primarily as a public service, from which Primero does not seek to gain direct economic benefit.
At Primero, we are committed to maintaining vibrant, economically diverse
communities around our mining operations. The presence of the San Dimas
mine has brought significant infrastructure upgrades to the community in
the form of improvements to roads, electrical and communication systems,
medical facilities and recreational facilities.
Although these initiatives were initially developed to serve the mining operations, they are shared by the entire community. In addition to these benefits, we actively contribute to a broad range of social and community initiatives, often in collaboration with local and regional authorities.
The town of Tayoltita, Mexico, which the majority of our San Dimas employees call home, previously lacked recreational facilities for families and youth. Primero, in collaboration with Silver Wheaton Corp., has improved the situation by building much-needed sports and recreation infrastructure.
Following a comprehensive community survey conducted in 2011, three sites were selected. In 2014, construction began. We built a softball field for local youth, a family-focused playground with fitness facilities, a children’s soccer field and a multi-use recreation court for basketball, volleyball, badminton and more.
The playground, soccer field, and recreation space were opened in 2014, and the softball field was completed in early 2015. The Tayoltita community was engaged throughout the process, and plays an ongoing role in managing these extremely popular facilities.
Sports and recreation centres are about far more than fitness. They are valuable social tools for improving quality of life, building community spirit and providing local youth with positive activities. Through projects like these, we at Primero are proud to contribute in material ways to the health and well-being of our employees and their families and to the social fabric of their communities.
Now that these facilities are complete, we are following up with another community survey, to be completed this year, to identify the community’s next priorities.
The Black Fox mine is located in an established mining region of northern Canada. Relationships between the mine and one of our neighbours, the Wahgoshig First Nation, were already strong - an Impact Benefit Agreement (IBA) has been in place since 2011 - and Primero is committed to building on that foundation to ensure long-term mutual benefits. A Wahgoshig Community Liaison is on full-time staff at site and a joint Implementation Committee acts as a forum for communication and cooperation to address the provisions of the IBA that relate to employment, training and workplace conditions, as well as business and contracting opportunities that will contribute to a sustainable local economy. The IBA provides a framework for how the parties work together during any construction, development and operations at the Black Fox Complex.
committed to our communities
table 8 PUBLIC INFRASTRUCTURE/COMMUNITy CONTRIBUTIONS*
2014 PRIMERO CONTRIBUTIONS (USD)
Direct contributions: (Money or in-kind benefits provided directly to community or organizations for specified purposes.)
$1,214,508
Indirect contributions: (Money or in-kind benefits or provisions specified in land use, Impact–benefit or reciprocity agreements.)
$545,235
PRIMERO 30 CSR 2014
PRIMERO 31 CSR 2014
Environmental AwarenessRaising environmental awareness in the community is always a priority. In 2014, we continued our annual environmental awareness campaigns. In San Dimas, this year’s program surpassed the previous year’s by 50%, reaching a total of 1,500 students from pre-school through high school levels. Topics included the recycling and management of domestic waste, educational videos on environmental protection, dissemination of information on Global Environmental Day and introductions to regional flora and wildlife.
In Tayoltita, in an effort to inspire community involvement and environmental awareness, 82 employee and student volunteers contributed to a municipal cleanup campaign, and cleaned up the riverside along sections of the Piaxtla River. The company provided logistical support and helped remove more than 6 tonnes of scrap and residue.
At the Cerro del Gallo project, we held two workshops, for students and parents in nearby rural schools, to introduce environmental issues to the community, and generate awareness and participation in waste classification and recycling.
Culture and RecreationAt San Dimas, and the community of Tayoltita, Primero is a strong force in communality culture and recreation. In 2014, we built three new recreation parks in Tayoltita and offered programs such as “Tayoltita Activa” and “Grandes Familias” to offer recreational, cultural and sporting activities.
These popular, well-attended activities, which are open to the entire community, promote sport and physical activity. Coaching is available from experienced trainers in a variety of sports and disciplines. More than 575 young athletes - most of them aged 9 to 15 - participated in seven different sports programs over the year-long program.
Community TrainingThe College of Professional Technical Education (CONALEP) trade school in Tayoltita was established in 2004 by the San Dimas mine in cooperation with the state government. There were 22 new graduates from this year’s program bringing the total to 178 over the last 8 years. We continue to provide logistical support for classroom operations for rural students.
The Black Fox mine together with the Wahgoshig First Nation and Timmins campus of Northern College, are finalizing an operator training program in underground mine equipment, which should become available in 2015. The training co-operative will include equipment use, and classroom-in-the-field training from qualified instructors.
Scholarships Awarded, 2014
8522
7
Employee scholarships
Family scholarships
Community scholarships
PRIMERO 32 CSR 2014
“At Primero we recognize that our most important asset is our people and we also continue to be committed to protecting the environment and contributing to the well-being of our communities.”Homero Valenzuela, Social Responsibility, Mexico
PRIMERO 33 CSR 2014
As our company grows, and our production increases, it is inevitable that our water consumption and waste numbers will rise. We are committed to minimizing our environmental footprint through improving process efficiency, recycling water and optimizing our operations wherever possible. We strive at all times to act with responsibility and transparency in our actions and in our reporting practices. In order to provide accurate comparisons of year-on-year environmental performance, we are including measurements of the intensity of our activity - in other words, our environmental impact per tonne of ore processed.
Management’s Approach to Environmental ResponsibilityOur mining, exploration and development activities are subject to the applicable environmental laws and regulations, which include planning for the eventual closure of the mine and reclaiming the mining properties after mining and processing has ceased. Our aim is to match or exceed the environmental standards of leading gold and silver producers.
At all times, we manage our operations in compliance with, or in excess of, all relevant environmental standards. Precautionary measures are taken to avoid damage to ecosystems wherever possible. When adverse impacts occur, integrated programs are implemented to promote the recovery of the affected ecosystems.
At San Dimas, the Environmental Management System (EMS) helps reduce or eliminate environmental impacts
We are committed to minimizing our environmental footprint through
improving process efficiency, recycling water and optimizing our operations
wherever possible.
through precautionary measures that mitigate damage and promote recovery and reclamation. Our Primero Risk Management Policy and processes are implemented and are effective in identifying and avoiding, reducing or eliminating the environmental impacts of mining and processing.
protecting the environment
“Clean Industry” CertificationIn 2013, the San Dimas mine was granted a two-year “Clean Industry” certification by PROFEPA, Mexico’s Federal Environmental Protection authority. The Clean Industry Initiative is a voluntary program that assesses regulatory compliance and best practices in environmental performance. Since 2013, San Dimas has been implementing the Risk Management Policy and improving its environmental aspect identification and management plans. In 2014, the mine underwent an internal audit process followed by an external review of our Clean Industry framework in preparation for recertification in 2015.
PRIMERO 34 CSR 2014
Water ManagementWater Management is a prime concern in the San Dimas region and at the Black Fox Mine. Water use intensity increased slightly at San Dimas with the increased production and a property wide water balance is being updated to better focus on reducing fresh water consumption and increase recycling and re-use opportunities.
We plan to continue to improve water efficiencies at both sites.
Water Use Intensity (m3 fresh water per tonne of ore processed)
0.488
2014 San Dimas
0.529
2014 Black Fox
0.449
2013 San Dimas
0.455
2012 San Dimas
The San Dimas mill uses a thickened tailing and belt filtration strategy keeping most of the process solutions within the plant. The belt filtration plant removes the final solutions which are recycled back to the plant.The Black Fox mill utilizes a sub aerial tailing deposition strategy which requires more solution for tailings transport and as a result, a higher recycle volume returned to the process plant.
2014 BLACK FOx
425,000 m3
0
1,476,000 m3
1,901,000 m3
77.6%
table 9 WATER USE
TOTAL WATER WITHDRAWAL By SOURCE 2012SAN DIMAS
2013SAN DIMAS
2014SAN DIMAS
Self-extracted water - water drawn from the environment via a facility or equipment controlled by the operation (e.g., bores, rivers, dams. etc.)
328,000 m3 344,000 m3 439,000 m3
Surface water - including water from wetlands, rivers, lakes, and oceans 0 0 0
Recycled water 282,000 m3 479,000 m3 472,000 m3
TOTAL WATER USED 610,000 m3 824,000 m3 911,000 m3
% Recycled water 46.1 % 58.1% 51.8%
PRIMERO 35 CSR 2014
Energy Use and Greenhouse Gas EmissionsMost of the electrical power for the San Dimas mine is provided by our own hydroelectric generation system, the Las Truchas dam and power plant. The Las Truchas hydroelectric power plant provides economical, reliable and clean power that supplied approximately 65% of the mine’s requirements in 2014. A 34 kVA power line runs 42 km from the dam to the San Dimas mine. The remainder of the mine’s requirements are supplied by the Federal Power Commission Supply System (FPCSS), and hydroelectric and back-up diesel generators, which are interconnected with the FPCSS.
In 2014 the Phase II expansion was completed, increasing capacity to approximately 75 GW per year. San Dimas is also implementing an energy management strategy, in which up to 100% of the power required during
peak periods is supplied from Las Truchas. This has eliminated unplanned brown-outs due to over demand on the public grid, and has generated significant cost savings by reducing peak demand on the public grid.
San Dimas is also implementing an energy management strategy, in which up to 100% of the power required during peak periods is supplied from Las Truchas.
table 10 ENERGy CONSUMPTION (GJ)
2011SAN DIMAS
2012SAN DIMAS
2013SAN DIMAS
2014 SAN DIMAS
2014 BLACK FOx
DIRECT
Diesel (stationary) 17,941 22,383 19,416 10,742 546
Diesel (transport) 90,593 89,134 84,117 98,413 292,638
Gasoline (transport) 3,764 2,047 3,781 5,177 5,590
Propane (heating) 36,969
INDIRECT
Electricity purchased: Las Truchas 142,366 123,847 154,930 180,997 n/a
Electricity purchased 66,438 98,482 85,626 95,796 201,589
PRIMERO 36 CSR 2014
Air quality MeasurementIn 2014, we engaged a third-party contractor (On-Site Analítica de México, S. A de C.V.) to carry out an atmospheric study of the San Dimas operation. We continue to do regular atmospheric studies and particulates concentration in air discharges from our mining processes have been in compliance with regulations.
In 2014, we have reported atmospheric emissions from both operations with conversion factors consistent with their respective jurisdictions.
Average GHG Emission Intensity (Tonnes of CO2e per tonne of ore processed)
0.0261
2014San Dimas
0.0378
2014Black Fox
0.0329
2012San Dimas
0.0283
2013San Dimas
0.029
2011San Dimas
table 11 GREENHOUSE GAS EMISSIONS (AS TONNES OF CO2e)
2011SAN DIMAS
2012SAN DIMAS
2013SAN DIMAS
2014SAN DIMAS
2014 BLACK FOx
DIRECT
Diesel (stationary) 1,323 1,652 1,433 801 41
Diesel (transport) 6,525 6,714 6,336 7,298 21,770
Gasoline (transport) 272 147 271 361 396
Propane (heating) 2,245
Explosives (ANFO/Emulsion) 520
INDIRECT
Electricity 8,396 15,236 13,680 14,961 5,380
TOTAL 16,516 23,749 21,720 23,421 30,352
PRIMERO 37 CSR 2014
Waste ManagementIn any mining operation, waste materials are generated. These wastes are categorized as:
Non-hazardous process waste (mining waste), which includes waste rock and materials that are removed in order to access the mineralized ore and the tailings.
Non-hazardous general waste, which includes scrap steel, packaging and other non-hazardous discarded materials and domestic waste.
Hazardous wastes: materials that can pose a threat to health unless safely managed, such as used oil or grease, contaminated soil, chemical packaging, batteries, etc.
Black Fox mine operations are both open pit and underground generating higher waste rock volumes than those encountered at San Dimas, which is only an underground operation.
In 2014, we spent $3.6 million on capital projects related to environmental protection, in improvements to the tailings pipeline, construction of a new waste rock dump, installation of a potable water treatment system in San Dimas, and the construction of a hazardous waste storage warehouse in Durango.
Our Mining Waste Management Plan ensures that the areas where wastes will be stored comply with safety measures that ensure the stability of the deposit and prevent acid drainage, leachate and runoffs into the environment, including monitoring. All hazardous materials are collected, stored, transported and finally disposed in a manner consistent with the hazardous waste management plan for final disposal.
table 12 MINING WASTE
PROCESS WASTE 2011
SAN DIMAS2012
SAN DIMAS2013
SAN DIMAS2014
SAN DIMAS2014
BLACK FOx
Waste rock (000s tonnes) 1,038 950 831 1,292 5,846
Backfill % 76% 43% 32% 38% 1%
Waste rock storage % 24% 57% 68% 62% 99%
Tailings (000s tonnes) 663 721 767 899 804
At both sites the largest component of non-hazardous waste is scrap steel followed by domestic waste. The higher waste figure at Black Fox is the biological waste /biosolids hauled off site for treatment.The increase of hazardous wastes at San Dimas is attributed to used oil, industrial packaging and contaminated soils hauled off site for processing and disposal.
table 13 HAzARDOUS AND NON-HAzARDOUS WASTE
WASTE TyPE 2012
SAN DIMAS2013
SAN DIMAS2014
SAN DIMAS2014
BLACK FOx
Non-hazardous waste (tonnes) 268 250 284 868
Hazardous wastes (tonnes) 165 198 217 25
PRIMERO 38 CSR 2014
PRIMERO 39 CSR 2014
TailingsIn 2014, several stakeholders raised the issue of tailing management in our discussions of material issues. In the future, we will increase our transparency in reporting tailings matters, especially as we complete our assessments and review our tailings management plans at all our operations.
Black Fox utilizes a sub-aerial method of tailing deposition, with spigoting inside a perimeter dam that creates a ‘beach’ of tailing sands. A water management pond, or impoundment area, captures the supernatant and the precipitation and run-off is recycled back to the mill.
Tailings management at San Dimas is challenged by the district’s rugged terrain and steep canyons. San Dimas operates a dry stack tailing deposition facility producing a filtered “cake” that is deposited and compacted inside the tailing storage area.
In 2014, a technical review and risk assessment of the Cupias tailing storage facility at San Dimas was performed by Amec Foster Wheeler. The final assessment will be delivered in 2015.
Biodiversity and Aquatic MonitoringSince 2010, a third-party consultant has monitored water quality and aquatic life in the Piaxtla River near the San Dimas mine. In 2014, they monitored four sampling stations: located upstream, within and downstream of the area of influence of Tayoltita village and San Dimas activities. A new sampling station (station VA-08) has been added approximately 200 meters downstream from the newly completed Herradura waste rock storage project. In 2014 the habitat quality at all four stations were categorized as sub-optimal*. The new station (station VA-08) exhibited lower levels of richness and
abundance when compared to the other three sites and that may be attributed to the habitat modifications that occurred during the waste rock storage project.
Primero conducts ongoing Environmental Effects Monitoring Studies (EEM) in the receiving water bodies at both the Black Fox Mill and Black Fox Mine Sites. These studies are completed by third party consultants in accordance with Environment Canada requirements. The conclusion of the studies (2012 & 2014) was that the mine and mill effluents were not adversely affecting the aquatic ecosystems in neither the mine nor the mill receiving water bodies.
Mine Closure and ReclamationThe San Dimas mine has been in production for over 100 years, however, every mine has a finite life. At all our operations we continue to update our plans for the mine’s eventual closure. The Company reviews closure costs annually and has accrued a decommissioning liability consisting of reclamation and closure costs for the San Dimas and Black Fox mines and the historical San Antonio tailings and is reported in our financial statements. There was no progressive closure activity in 2014 and we expect to resume remediation of the historical San Antonio tailings in 2016.
“Where we’re creating value, in our management’s approach, is in empowering our people. It’s as much for the people on the job as it is for our shareholders—they all benefit when we see the gains.” James Mallory, VP, Corporate Responsibility
* Habitats are classified as Optimum, Sub-optimal, Marginal and Poor. The EPA characterizes “Sub-optimal” as adequate to maintain the populations of the epifauna and fish areas, while “Marginal” is less than desirable for their viability (EPA, 2002a).
PRIMERO 40 CSR 2014
As a young, rapidly-growing gold producer with a multinational presence,
we are justifiably proud of the recognition and awards that we have received
for our social, health and safety, and environmental performance. In 2015
and beyond, we intend to build on this track record as we develop and
improve company-wide standards for recording and reporting sustainability
information at every one of our mining operations and development projects.
As we proceed along our growth trajectory, we will maintain our culture
of continual improvement in sustainability, and continue to meet stringent
Global Reporting Initiative guidelines.
Primero did not seek assurance for this report, but consulted Ernst and Young
for input and advice.
in closing
“We’ve made great strides in reporting in materiality but realize that assessing materiality is an ongoing process. As our industry evolves, so do our stakeholders’ concerns and we will take great care to ensure we are always transparent and accountable to them. Only by sharing in the benefits of mining with our surrounding communities and protecting the environment that sustains us all, can we truly thrive.” Joseph F. Conway, CEO
PRIMERO 41 CSR 2014
PRIMERO 42 CSR 2014
1. STRATEGy AND ANALySIS SourCe page
1.1 Statement from the most senior decision maker of the organization about the relevance of sustainability to the organization and its strategy 8
1.2 Description of key impacts, risks and opportunities 8
2. ORGANIzATIONAL PROFILE SourCe page
2.1 Name of the organization 3
2.2 Primary brands, products, and/or services 3, 17
2.3 Operational structure of the organization, including main divisions, operating companies, subsidiaries, and joint ventures 3, 17
2.4 Location of organization's headquarters 17
2.5 Number and name of countries where the organization operates, with either major operations or that are specifically relevant to sustainability 17
2.7 Markets served including geographic, sectors and customers 17
2.8 Scale of the organization 17
2.9 Significant changes during the reporting period regarding size, structure, or ownership 4
2.10 Awards received in the reporting period 6, 9, 24, 28
3. REPORT PARAMETERS SourCe page
3.1 Reporting period (e.g., fiscal/calendar year) for information provided 4
3.2 Date of most recent report 4
3.3 Reporting cycle 4
3.4 Contact point for questions regarding the report or its contents 4
3.5 Process for defining report content 4, 14, 15
3.6 Boundary of the report (e.g., countries, divisions, subsidiaries, leased facilities, joint ventures, suppliers) 4
3.7 Any specific limitations on the scope or boundary of the report 4
3.10Explanation of the effect of any re-statements of information provided in earlier reports, and the reasons for such re-statement (e.g. mergers/acquisitions, change of base years/periods, nature of business, measurement methods)
4
3.11 Significant changes from previous reporting periods in the scope, boundary, or measurement methods applied in the report 4
3.12 Location of the Standard Disclosures in the report 4
3.13 Policy and practice relating to seeking external assurance 6, 12
4. GOVERNANCE, COMMITMENTS, AND ENGAGEMENT SourCe page
4.1 Governance structure of the organization, including committees under the highest governance body responsible for specific tasks AR, Website
4.4 Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body 6, 11
gri index
PRIMERO 43 CSR 2014
4.8Internally developed statements of mission or values, codes of conduct, and principles relevant to economic, environmental, and social performance and the status of their implementation
6, 11, 15, 21
4.12 Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or endorses 12, 21, 23, 33
4.14 Stakeholder engagement 6, 15, 39
4.15 Basis for identification and selection of stakeholders with whom to engage, 15
4.16 Approaches to stakeholder engagement, including frequency of engagement by type and stakeholder group 15
4.17Key topics and concerns that have been raised through stakeholder engagement, and how the organization has reported to those key topics and concerns, including through this report
14, 15, 39
ECONOMIC INDICATORS SourCe page
EC1Direct economic value generated and distributed, including revenues, operating costs, employee compensation, community investments and payments to capital providers and governments
19, 29, 31
EC6 Policy, practices, and proportion of spending on locally-based suppliers at significant locations of operation 19
ENVIRONMENTAL PERFORMANCE INDICATORS SourCe page
EN3 Direct energy consumption by primary energy source 35
EN4 Indirect energy consumption by primary energy source 35
EN6 Initiatives to provide energy efficient or renewable energy based products and services, and reductions in energy requirements as a result of these initiatives 35
EN7 Initiatives to reduce indirect energy consumption and reductions achieved 35
EN8 Total water withdrawal by source 34
EN10 Percentage and total volume of water recycled and reused 34
EN12 Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas 39
EN13 Habitat protected or restored 39
EN16 Total direct and indirect greenhouse gas emissions 36
EN22 Total weight of waste by type and disposal method 37
EN24Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III, and VIII, and percentage of transported waste shipped internationally
37
EN26 Initiatives to mitigate environmental impacts of products and services, and extent of impact 26, 33, 35, 37, 39
EN28 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations 12
PRIMERO 44 CSR 2014
LABOUR PRACTICES AND DECENT WORK PERFORMANCE INDICATORS SourCe page
LA1 Total workforce by employment type, employment contract, and region 17, 26
LA4 Percentage of employees covered by collective bargaining agreements 11, 26
LA6Percentage of total workforce represented in formal joint management worker health and safety committees that help monitor and advise on occupational health and safety programs
22
LA7 Rates of injury, occupational diseases, lost days, and absenteeism, and total number of work-related fatalities by region and by gender 25
LA8Education, training, counselling, prevention, and risk-control programs in place to assist workforce members, their families, or community members regarding serious diseases
22, 26
LA9 Health and safety topics covered in formal agreements with trade unions 23, 27
LA11 Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings 27, 31
HUMAN RIGHTS INDICATORS SourCe page
HR4 Total number of incidents of discrimination and actions taken 11
HR9 Total number of incidents of violations involving rights of Indigenous peoples and actions taken 11
SOCIETy PERFORMANCE INDICATORS SourCe page
SO7 Total number of legal actions for anticompetitive behaviour, anti-trust, and monopoly practices and their outcomes 12
SO8 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations 12
MINING SECTOR INDICATORS SourCe page
MM2The number and percentage of total sites identified as requiring biodiversity management plans according to stated criteria, and the number (percentage) of those sites with plans in place
39
MM3 Total amounts of overburden, rock, tailings and sludges and their associated risks. 37
MM4 Number of strikes and lock-outs exceeding one week’s duration, by country 11
Cautionary StatementThis report may contain “forward-looking” statements within the meaning of Canadian securities legislation and the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to future events or the anticipated performance of the Company and reflect management’s expectations or beliefs regarding such future events and anticipated performance. In certain cases, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, ”estimates”, ”forecasts”, ”intends”, ”anticipates” or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, ”could”, “would”, ”might”, or “will be taken”, “occur” or “be achieved”, or the negative of these words or comparable terminology. By their very nature forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual performance of the Company to be materially different from any anticipated performance expressed or implied by the forward-looking statements. Such factors include various risks related to the Company’s operations, including, without limitation, fluctuations in spot and forward markets for gold, silver and other metals, fluctuations in currency markets, changes in national and local governments in Mexico and the speculative nature of mineral exploration and development, risks associated with obtaining necessary exploitation and environmental licenses and permits, and the presence of laws that may impose restrictions on mining. A complete list of risk factors are described in the Company’s annual information form and will be detailed from time to time in the Company’s continuous disclosure, all of which are, or will be available, for review on SEDAR at www.sedar.com.
corporate directory
Directors
Wade NesmithChairman Vancouver, BC
Joseph F. ConwayChief Executive Officer, Primero Mining Corp. Toronto, ON
David Demers 2, 3, 4, 5
Chief Executive Officer, Westport Innovations Inc Vancouver, BC
Grant Edey 3, 5
President and Chief Executive Officer, Khan Resources Inc. Mississauga, ON
Rohan Hazelton 1
Vice President Strategy, Goldcorp Inc. Vancouver, BC
Eduardo Luna 1
Corporate Director Mexico City, Mexico
Brad Marchant 1
Chief Executive Officer, Enterra Feed Corporation Corporate Director Vancouver, BC
Robert A. quartermain 2, 3
President and Chief Executive Officer, Pretium Resources Inc. Vancouver, BC
Michael Riley 2, 5
Corporate Director Vancouver, BC
Board Committees
1 Member of the Corporate Responsibility Committee
2 Member of the Human Resources Committee
3 Member of the Governance and Nominating Committee
4 Lead Director until March 16, 2015
5 Member of the Audit Committee
Officers
Joseph F. ConwayChief Executive Officer
Ernest MastPresident and Chief Operating Officer
Tamara BrownVice President, Investor Relations
Wendy KaufmanChief Financial Officer
H. Maura LendonChief General Counsel and Corporate Secretary
James MalloryVice President, Corporate Responsibility
David SandisonVice President, Corporate Development
Maria-Luisa SinclairVice President, Human Resources
Louis TonerVice President, Project Development and Construction
Gabriel VoicuVice President, Geology and Exploration
Corporate Office
Toronto 79 Wellington Street West TD South Tower, Suite 2100 Toronto, ON, Canada M5K 1H1
T 416 814 3160 F 416 814 3170 TF 1 877 619 3160
Investor Inquiries
Tamara BrownVice President, Investor Relations
T 416 814 3168
Website
www.primeromining.com
We welcome feedback on this report or on any other aspect of sustainability at Primero. Please contact us at [email protected].
Corporate Responsibility
James MalloryVice President, Corporate Responsibility
T 416 814 3143 F 416 814 3170 E [email protected]
Tania ShawManager, Communication
T 416 814 3179 F 416 814 3170 E [email protected]
Primero Mining is a proud member of the World Gold Council.
Production Notes
Design and Production: Macrae CreativePrinting: RRDPrinted in Canada
This paper has been certified to meet the environmental and social standards of the Forest Stewardship Council® (FSC®) and comes from responsibly managed forests and/or verified recycled sources.
101537
www.primeromining.com
Primero is a Canadian-based gold mining company with mines in
Canada and Mexico, and a strong portfolio of development-stage
and exploration projects. After a year of production increases,
exploration success and management renewal, we look forward to
continuing to deliver disciplined growth and long-term value.
Through 2014, and into 2015, Primero has been engaged in
standardizing corporate-wide policies and procedures, and making
significant progress in its plans for Corporate Social Responsibility,
to ensure consistency in goals and measurement as the Company
moves forward.
