Primero Announces Positive Advance Tax Ruling
TORONTO, ONTARIO--(Marketwire - Oct. 5, 2012) - Primero Mining Corp. ("Primero" or the "Company") (TSX:P)(NYSE: PPP) announced today that the Company's Mexican subsidiary has received a positive ruling from the Mexican tax authorities (Servicio de Administracion Tributaria) on its Advance Pricing Agreement ("APA") filing made in October 2011. The ruling confirms that the Company's Mexican subsidiary appropriately records revenue and taxes from sales under the silver purchase agreement(1) at realized prices rather than spot prices effective from August 6, 2010.
Under Mexican tax law, an APA ruling is generally applicable for up to a five year period. For Primero this applies to the fiscal years 2010 to 2014. Assuming the Company continues to sell its silver from its San Dimas mine on the same terms and there are no changes in the application of Mexican tax laws relative to the APA ruling, the Company expects to pay taxes on realized prices for the life of the San Dimas mine.
(1) According to the silver purchase agreement between the Company and
Silver Wheaton Corp. ("Silver Wheaton"), until August 6, 2014 Primero
will deliver to Silver Wheaton a per annum amount equal to the first
3.5 million ounces of silver produced at San Dimas and 50% of any
excess at US$4.08 per ounce (increasing by 1% per year).Thereafter
Primero will deliver to Silver Wheaton a per annum amount equal to the
first 6.0 million ounces of silver produced at San Dimas and 50% of
any excess at US$4.20 per ounce (increasing by 1% per year).The
Company will receive silver spot prices only after the annual
threshold amount has been delivered.
Primero Mining Corp. is a Canadian-based precious metals producer and owns 100% of the San Dimas gold-silver mine in Mexico. Primero is focused on delivering superior, sustainable value for all stakeholders with low-risk exposure to gold. The Company has intentions to become an intermediate gold producer by building a portfolio of high quality, low cost precious metals assets in the Americas.
Primero's website is www.primeromining.com.
CAUTIONARY NOTE ON FORWARD-LOOKING INFORMATION
This news release contains "forward-looking statements", within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation, concerning the business and operations of Primero. All statements, other than statements of historical fact, are forward-looking statements. Generally, forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "potential", "expects", "is expected", "promising", "budget", "scheduled", "targeted", "is targeting", "estimates", "forecasts", "intends", "anticipates", "believes", "if realized", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will continue", "occur" or "be achieved" or the negative connotation thereof.
Forward-looking statements in this news release include, but are not limited to, statements regarding the Company's expectation to pay taxes on realized prices for the life of the San Dimas mine; and the Company's intentions to become an intermediate gold producer.
The assumptions made by the Company in preparing the forward-looking information contained in this news release, which may prove to be incorrect, include, but are not limited to, the assumptions set forth herein and in the management's discussion and analysis and the Company's registration statement on Form 40-F on file with the U.S. Securities and Exchange Commission and its most recent Annual Information Form on file with the Canadian provincial securities regulatory authorities, as well as the expectations and beliefs of management, and the Company continues to sell its silver from San Dimas on the same terms; and there are no changes in the application of Mexican tax laws relative to the APA ruling; and that there are no material variations in the current tax and regulatory environment and the administration thereof, or the tax positions taken by the Company.
Forward-looking statements are subject to known and unknown risks, uncertainties and other important factors that may cause the actual results, performance or achievements of Primero to be materially different from those expressed or implied by such forward-looking statements, including the risks that the Company may not be able to achieve planned production levels; that the Company will not continue to pay taxes on silver sold under the silver purchase agreement at realized prices; the Company may not be able to become an intermediate gold producer by building a portfolio of high quality, low cost precious metals assets in the Americas. Certain of these factors are discussed in greater detail in Primero's registration statement on Form 40-F on file with the U.S. Securities and Exchange Commission, its most recent Annual Information Form on file with the Canadian provincial securities regulatory authorities, and its management's discussion and analysis, which are all available at www.sedar.com.
Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements. In addition, although Primero has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.
Forward-looking statements are made as of the date hereof and accordingly are subject to change after such date. Forward-looking statements are provided for the purpose of providing information about management's current expectations and plans and allowing investors and others to get a better understanding of our operating environment. Primero does not undertake to update any forward-looking statements that are included in this document, except in accordance with applicable securities laws.