HALIFAX, Aug. 27, 2013 /CNW/ - (NYSE MKT: BRD; TSX: BRD)

Dear Fellow Shareholders:

Given the recent volatility of the precious metals markets, I would like to share my perspective on what's occurred in the sector, while reviewing our progress at Brigus and outlining our strategy and outlook for the quarters ahead.

The second quarter saw a precipitous drop in precious metal prices, including gold's one day dip of ~9% in April. Lower gold prices led to reduced financial results for gold mining companies compared to the previous quarter, and a significant reduction in the valuation and equity prices for virtually all gold mining companies, including Brigus.

Since hitting a 46 month low of $1,179 on June 27^th, spot gold prices have now rebounded to the $1,400 level and equity prices are also beginning to recover. Investor sentiment for the sector, having reached extreme negative levels, is in the process of reverting to a more reasonable range.

Regardless of the short term volatility over the past few months, we at Brigus remain steadfast in our belief that gold will continue to play a very important role as a store of value for investors. We believe high quality gold mining companies will prove to be a worthwhile investment for years to come.

During a time when the world's major paper currencies are being systematically debased as a result of unprecedented central bank policies, gold will continue to be accumulated as a hard asset of choice by many of the world's smartest investors, and gold mining companies with a prudent strategy will be major beneficiaries.

At Brigus, our underlying fundamentals are strengthening, and we are intently focused on positioning the company to deliver strong operating results and positive shareholder returns in the current gold price environment.

Our corporate strategy is based on five key elements, as follows:

1. Increasing gold production
   • Brigus has delivered substantial increases in gold production over the past six quarters.
   • Record six month production of 49,620 ounces of gold year-to-date, despite the one-time suspension of milling activities in Q2.
   • In July, we increased our production guidance for 2013 from 90,000-100,000 to 95,000-105,000 ounces, and we are confident in our ability to deliver excellent results for the remainder of the year.
   • Both our open pit and underground mines are operating safely and strongly.
2. Reducing our cost structure and lowering production costs per ounce. 
   • At our Black Fox mine, all-in sustaining cash costs continue to decline. In July, we provided guidance that all-in sustaining costs will be approximately $1,100 for the remainder of the year, thus providing attractive margins in this reduced gold price environment.
   • In response to lower gold prices, we reduced capital spending by $7 million and implemented various cost-saving measures including personnel reductions and price concessions from key suppliers. We are doing more with less; these cost saving measures will not negatively impact gold production levels moving forward, in fact, we have increased our production guidance as stated.
   • Now that we have reached critical mass with underground mine and infrastructure development, capital spending and sustaining capital is forecasted to be between $20 million and $25 million for 2014, a 35-48 percent decrease from our spending levels for 2013.  This reduction will have a major impact on all-in sustaining cash costs moving forward, resulting in increased cash flows from our mining operations.
   • Last month Brigus adopted the guidelines recently provided by the World Gold Council when reporting various mining costs. These guidelines will provide valuable information for investors when comparing costs of one company relative to another.   When we reported our Q-2 financial results, we reported all-in sustaining cash costs for the first time and we will continue to do so.
   • Our cost structure at Brigus compares favorably to many of our peers in Canada and globally, and our costs on a per ounce basis continue to decline.
   • It's important to note that our Black Fox mine was in a ramp up and development phase during 2012 and the first half of 2013.  We have made the required investment to reach a production threshold of 100,000 ounces annually, and our capital requirements and cash outlays are now declining.
3. Balance sheet management, including debt reduction. 
   • Since Brigus was formed in June of 2010, the company raised both debt and equity from the capital markets to fund the development and expansion of our mine.
   • Now that the construction and major development phase of our Black Fox mine is complete, a key priority is to utilize a portion of the resulting cash flows to reduce long term debt levels.
   • In the first half of 2013, Brigus' long term debt decreased by $7.3 million and the Company is forecasting to make an additional $9.9 million Cdn of principal payments during the second half of the year, a trend that will continue in 2014.
4. Focused exploration to increase Brigus' inventory of gold ounces.
   • Over the past three years Brigus delivered excellent exploration results at the Black Fox mine and the newly discovered Grey Fox gold deposit.
   • Consistent high grade drilling results were delivered from both orebodies over the past year.  A recently published gold resource of 507,400 indicated ounces plus 228,600 inferred ounces was reported for Grey Fox on July 7^th, 2013, and the orebody remains open both laterally and at depth for expansion.
   • In December, we will publish a new reserve report for the Black Fox mine.
   • In 2014, we will publish a revised resource update for the growing Grey Fox gold deposit.
   • There is considerable potential to expand the Black Fox orebody and the Grey Fox property, and several attractive drill targets remain in the pipeline.
   • Our success with the drill bit reinforces our belief that we will be successfully mining these properties for many years to come.
   • We look forward to releasing a scoping study on Grey Fox in September with considerably lower initial capital requirements than originally anticipated.
5. A stable jurisdiction to achieve organic growth. 
   • All mining jurisdictions are not created equal, a factor that is often overlooked in the mining industry.
   • Canada is among the best mining jurisdictions in the world, and we see Timmins as a top-tier mining and exploration district.  Our region of operations is politically safe, with a stable fiscal and tax regime. We have access to top-notch technology and specialist services.

We are optimistic about the future of Brigus Gold.   I encourage you to review our company in detail and compare the fundamentals and strategy of Brigus to that of our peer group. Our cost profile is attractive, our growth prospects are compelling and our exploration strategy is working. Brigus' valuation is modest compared to many within our industry.

The team at Brigus is working hard to prudently manage your company, and we look forward to executing our strategy and delivering increased shareholder value moving forward.

As always, we welcome feedback from our shareholders and we would be pleased to respond to any inquiries.

Sincerely,

Wade K. Dawe
Chairman and CEO

Cautionary and Forward-Looking Statements
Statements contained in this news release, which are not historical facts, are forward-looking statements that involve risk, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. All statements regarding the ability of the Company to achieve its production, total cash costs, steady state annual production and mining rate estimates; estimated average gold grades for the open pit and underground operations; increase in gold production; increase in profitability; exploration drill results and resource additions, are forward-looking statements and estimates that involve various risks and uncertainties. This forward- looking statements include, or may be based upon, estimates, forecasts, and statements as to management's expectations with respect to, among other things, the outcome of legal proceedings, the issue of permits, the size and quality of the Company's mineral resources, progress in development of mineral properties, future production and sales volumes, capital and mine production costs, demand and market outlook for metals, future metal prices and treatment and refining charges, and the financial results of the Company.

Important factors that could cause actual results to differ materially from these forward-looking statements include environmental risks and other factors disclosed under the heading "Risk Factors" in Brigus' most recent Annual Information Form and Management Discussion and Analysis filed under the Company's name at www.sedar.com and annual report on Form 40F filed with the United States Securities and Exchange Commission at www.sec.gov as well as elsewhere in Brigus' documents filed from time to time with the Toronto Stock Exchange, the NYSE Amex Equities, the United States Securities and Exchange Commission and other regulatory authorities. All forward-looking statements included in this news release are based on information available to the Company on the date hereof. The Company assumes no obligation to update any forward-looking statements, except as required by applicable securities laws.

SOURCE Brigus Gold Corp.