* working capital of $0.12 per share with no LT debt
* multiple light oil well drilling locations in Viewfield, SK
* carried interests with no drilling costs
* natural gas at Pembina – 10-12 additional locations identified
FVI.to +.07 to C$2.73 first day on TSX. Fortuna is an excellent way to play the precious metals. Quality mgmt, new mine coming online in 2011-12 and minimal or no dilution coming. They already have 35 million in cash and are throwing off enough cashflow to internally finance the new mine. The 20 million credit line is insurance.
Press Release Source: Fortuna Silver Mines Inc. On Monday January 18, 2010, 8:30 am EST
VANCOUVER, Jan. 18 /CNW/ - Fortuna Silver Mines Inc. (TSX: FVI/Lima Exchange: FVI) is pleased to report that the 2009 production performance figures for the Caylloma mine in Peru confirm the 3rd successive year of silver production growth for the Company. Production of all key metals increased substantially over 2008 as mine output, mill throughput and silver grades increased, and recoveries improved. A full table of metal production by quarter is attached at the end of this release. Full year production highlights include:
- In 2009 Caylloma produced 1,685,026 ounces of silver, a year-on-
year increase of 96% over 2008 production (861,176 oz Ag).
- Production of zinc at 28.4M lbs and lead at 25.1M lbs increased
22% and 52% respectively over 2008.
- Unaudited financial results indicate gross revenues in excess of
US$50m for the full year 2009, an increase of at least 90% on
2008's revenue of $26.3m.
Mr. Jorge Ganoza, CEO of the Company, commented: "The Caylloma Mine is a
success story for Fortuna. It has delivered three consecutive years of silver
production expansion and unit cost reduction. We expect to maintain production
of all commodities at close to current levels during 2010 with the exception
of copper, which should ramp up to 1M pounds. Future growth will come from the
development of our San Jose Project in Mexico. We have all the required
permits in place for San Jose and a strong treasury, which will enable us to
launch the construction of Fortuna's second mine in the first quarter of
2010."
San Jose Project Update
With the recent granting of the Change of Land Use permit (see Fortuna news release dated December 14, 2009), Fortuna now has all of the key permits necessary to start construction at San Jose. The Company expects to publish a pre-feasibility and start construction activities during the first quarter of 2010. The Company looks forward to commissioning San Jose in 2011, which will drive further growth in Fortuna's silver production.
Fortuna has also signed a commitment letter to enter into a $20-million (U.S.) senior secured revolving credit facility with the Bank of Nova Scotia. The proceeds of the facility, which complement Fortuna's strong cash position, are intended in part for the development of the San Jose project in Mexico.
Important developments for the San Jose project during the second half of
2009 include:
- On October 23rd, the Environmental Impact Study was approved by
the SEMARNAT (Mexican Environmental Agency) which allows for the
construction of a 1,500 tpd underground operation with a
processing plant that will use conventional flotation for
production of high grade silver and gold concentrates.
- Metallurgical tests run by Metcon Research yield over 90%
recoveries for both silver and gold without the use of cyanide.
- On October 26th, a new NI 43 - 101 compliant resource estimate was
disclosed where the Indicated Resources increased by 112%.
Currently, Indicated Resources are 37.6 million ounces of silver
equivalent and Inferred Resources are 30.4 million of ounces of
silver equivalent.
Production Guidance for 2010
Management is pleased to provide a 2010 production guidance for Caylloma. The Company expects to sustain silver production at 1,700,000 ounces, with base metal production also remaining level at current rates.
A Technical Report on Reserves and Resources for the Caylloma Mine is
available on the Company's website at www.fortunasilver.com.
Qualified Person
Mr. Miroslav Kalinaj, P. Geo., is the Company's Qualified Person as defined by National Instrument 43-101 and is responsible for the accuracy of the technical information in this news release.
Fortuna Silver Mines Inc.
Fortuna is a growth oriented, silver and base metal producer focused on mining opportunities in Latin America. Our primary assets are the Caylloma Silver Mine in southern Peru and the San Jose Silver-Gold Project in Mexico. The Company is selectively pursuing additional acquisition opportunities. For more information, please visit our website at www.fortunasilver.com.
Forward-Looking Statements
Certain statements in this presentation constitute forward-looking statements and as such are based on an assumed set of economic conditions and courses of action. These include estimates of future production levels, expectations regarding mine production costs, expected trends in mineral prices and statements that describe Fortuna's future plans, objectives or goals. There is a significant risk that actual results will vary, perhaps materially, from results projected depending on such factors as changes in general economic conditions and financial markets, changes in prices for silver and other metals, technological and operational hazards in Fortuna's mining and mine development activities, risks inherent in mineral exploration, uncertainties inherent in the calculation of mineral reserves, mineral resources, and metal recoveries, the timing and availability of financing, governmental and other approvals, political unrest or instability in countries where Fortuna is active, labor relations and other risk factors.
ON BEHALF OF THE BOARD
Jorge Ganoza
President, CEO and Director
Fortuna Silver Mines Inc.
Symbol: TSX: FVI/Lima Exchange: FVI
2009 Production Performance Figures for Fortuna's Caylloma Mine.
-------------------------------------------------------------------------
Q I - Q II - Q III - Q IV -
2009 2009 2009 2009 2009
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Head grade
-------------------------------------------------------------------------
Ag (g/t) 147.81 160.42 146.54 165.05 154.96
-------------------------------------------------------------------------
Zn (%) 3.83 3.82 3.58 3.42 3.66
-------------------------------------------------------------------------
Pb (%) 3.11 3.20 2.95 3.14 3.10
-------------------------------------------------------------------------
Cu (%) 0.23 0.26 0.26 0.24 0.25
-------------------------------------------------------------------------
Recovery(%)
-------------------------------------------------------------------------
Ag(1) 84.6 86.5 84.2 86.4 85.4
-------------------------------------------------------------------------
Zn 90.0 88.5 88.6 89.1 89.1
-------------------------------------------------------------------------
Pb 93.0 92.5 93.2 93.3 93.0
-------------------------------------------------------------------------
Cu(2) - - - - -
-------------------------------------------------------------------------
Metal produced
-------------------------------------------------------------------------
Ag (oz)(3) 367,986 450,020 417,571 449,449 1,685,026
-------------------------------------------------------------------------
Zn (lb) 6,948,967 7,527,015 7,365,674 6,597,229 28,438,884
-------------------------------------------------------------------------
Pb (lb) 5,831,316 6,587,799 6,391,655 6,322,356 25,133,125
-------------------------------------------------------------------------
Cu (lb) - 49,865 44,848 94,227 188,940
-------------------------------------------------------------------------
(1) Silver recovery in lead and copper concentrate
(2) Copper recovery not reported as circuit was fully commissioned in
December 2009
(3) Silver production in lead and copper concentrates
For further information
Investor Relations: Lima office: Carlos Baca, Tel: 51.1.616.6060
Vancouver office: Erin Ostrom, Tel: (604) 484-4085
Bobwins
Posted: Wed Jan 6 14:52:48 2010
This is very positive for a couple of reasons. Fortuna has arranged for a decent sized line of credit. This credit plus cash of over 30million should enable Fortuna to build their next mine at San Jose. The credit line will minimize dilution while providing the necessary cash to build the mine and dramatically increase production and cashflow for Fortuna.
FORTUNA SIGNS COMMITMENT LETTER FOR US $20 MILLION CREDIT FACILITY
VANCOUVER, Jan. 6 /CNW/ - Fortuna Silver Mines Inc. (TSX.V: FVI / Lima Exchange: FVI) is pleased to announce that the Company has signed a commitment letter to enter into a US $20 million senior secured revolving credit facility with The Bank of Nova Scotia. The facility will have a 2.5 year maturity. The proceeds of the facility may be used for general corporate purposes, including the development of the San Jose Project in Mexico.
The facility is intended to complement Fortuna's strong cash position and provide additional financing flexibility during the construction stage at San Jose. On December 14, 2009 the Company announced it had obtained all the required construction and environmental permits for the operation of a 1500 tonne per day underground mine. The San Jose pre-feasibility study is scheduled to be completed in the first quarter of 2010, with construction activities to commence shortly thereafter.
Fortuna Silver Mines Inc.
Fortuna is a growth oriented, silver and base metal producer focused on mining opportunities in Latin America. Our primary assets are the Caylloma Silver Mine in southern Peru and the San Jose Silver-Gold Project in Mexico. The Company is selectively pursuing additional acquisition opportunities. For more information, please visit our website at www.fortunasilver.com.
Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release.
ON BEHALF OF THE BOARD
Jorge Ganoza
President, CEO and Director
Fortuna Silver Mines Inc.
Symbol: TSX.V: FVI / Lima Exchange: FVI
Bobwins
Posted: Tue Jan 5 12:28:13 2010
FVI.v +.11 to C$2.45 Fortuna has been recommended by Casey's International Speculator newsletter, causing price jumps and heavier volume than normal. Apparently he dumped FVI from his recommended list last year but likes it now.
FVI has gained 18.5% since the recommend so Casey still has plenty of followers and power.
I think it's a little premature, given that production will be only slightly bigger this year. Real increase won't come until their second mine is built. That won't add to production until late 2011 or more likely 2012. But I'm still very happy to have picked FVI.v as my favorite silver stock from the 9/09 Silver show I attended.
Bobwins
Posted: Mon Dec 14 7:17:00 2009
Fortuna receives final permit for the construction and operation of the San Jose Project, Mexico
VANCOUVER, Dec 14, 2009 /PRNewswire-FirstCall via COMTEX News Network/ --
Fortuna Silver Mines Inc. (TSX.V: FVI / Lima Exchange: FVI) is pleased to announce that the "Secretaria de Medio Ambiente y Recursos Naturales" (Mexican Environmental Agency) has approved the Company's application for a change of land use from agricultural to industrial for the San Jose silver-gold project, located in the southern State of Oaxaca, Mexico.
This is the final permit required to commence construction activities and complements the Environmental Impact Study, which was approved in late October 2009. The initiation of construction activities is now within Fortuna's sole discretion and is planned for the first quarter of 2010.
A pre-feasibility study covering all pre-construction engineering projects for the mine, processing plant and supporting infrastructure is scheduled to be completed by January 2010.
Fortuna Silver Mines Inc.
Fortuna is a growth oriented, silver and base metal producer focused on mining opportunities in Latin America. Our primary assets are the Caylloma Silver Mine in southern Peru and the San Jose Silver-Gold Project in Mexico. The Company is selectively pursuing additional acquisition opportunities. For more information, please visit our website at www.fortunasilver.com.
Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release.
ON BEHALF OF THE BOARD
Jorge Ganoza President, CEO and Director Fortuna Silver Mines Inc. Symbol: TSX.V: FVI / Lima Exchange: FVI
SOURCE Fortuna Silver Mines Inc.
Copyright (C) 2009 PR Newswire. All rights reserved
Bobwins
Posted: Tue Dec 1 12:24:17 2009
Fortuna, FVI.v +.12 to C$2.17 has been on a roll. Today Canaccord issued a buy recommend for both Fortuna and Alexco, AXU.to/AXR
Alexco Resource* (AXR : TSX : $2.85), Net Change: 0.05, % Change: 1.79%, Volume: 126,375
Fortuna Silver Mines* (FVI : TSX-V : $2.05), Net Change: 0.07, % Change: 3.54%, Volume: 360,578
Silver lining...Canaccord Adams initiated coverage on two exciting junior silver companies Monday. Canaccord Adams Senior Mining Analyst Eric Zaunscherb started coverage on Alexco Resource - whose primary asset is the wholly-owned Keno Hill Silver District in Yukon. Zaunscherb highlights that the Keno Hill Silver District is one of the premier high-grade silver districts globally. From 1913 to 1989, the district yielded 217 million ounces of silver from 35 mines at an average grade of approximately 1,388 g/t silver plus significant lead and zinc by-products. Alexco is bringing the high-grade Bellekeno mine back into production for calendar Q3/10 and there is an extraordinary exploration pipeline beyond Bellekeno. One of the best times to invest in a junior exploration company is in advance of the successful commencement of production.
Separately, Canaccord Adams Mining Analyst Nicholas Campbell initiated coverage on Fortuna Silver. The company holds interests in the Caylloma silver-lead-zinc mine in Peru and the San Jose silver-gold project in Mexico. Through the development of the San Jose project, Campbell forecast silver production of 1.7 million ounces of silver in 2010, growing to 5.5 million ounces of silver equivalent by 2012. Campbell has a bullish view for the following reasons: i) Organic growth profile: By advancing the San Jose mine through to production by mid-2011, Campbell forecasts the company’s production will grow to 5.5 million ounces of
silver in 2012; ii) Solid balance sheet and consistent cash flows: Fortuna has US$33.7 million in cash and equivalents and only US$1.5 million in long-term obligations. Campbell forecasts operating cash flow of US$26.6 million in 2010, growing to US$43.2 million in 2011. With the company likely to establish a revolving credit facility, the company should have sufficient funds to finance the development of the San Jose project; and iii) Attractive valuation: Fortuna is trading at 4.5x 20011E CFPS, a discount to the average for other junior precious metal producers and it is trading at 0.56x our estimate of NAV (5%, spot), compared with an average of 1.00x NAV (5%, spot) for junior precious metal producers. Given the growth profile and balance
sheet, Campbell expects this company to gain broader investor attention, which should lead to a revaluation in line with other junior precious metal producers.
Bobwins
Posted: Mon Nov 16 13:51:46 2009
fvi.v +.23 to C$1.98
Fortuna got a nice pop from the rise in silver today. Also had an earnings conference call. Apparently fairly close to startup of San Juan mine in Mexico. Just need one more permit. Has well over $30 million in cash to start project.
New mine should be producing in 2011 and boost production to over 5 million oz from current 1.6.
Bobwins
Posted: Mon Oct 26 7:40:40 2009
Fortuna Silver is my newest long term silver play. They have done an excellent job of improving their mining operations at their existing mine and are currently producing around 1.6 million oz/yr at a profit. They have 31 million in cash and have good long term mgmt in place. The company is growing organically and has applied for permits to build a second mine in Mexico at San Jose. This mine, when in full operation, will allow FVI to reach 5 million oz annual production in 2012. Should be able to build the mine without much share dilution. Company is debt free and has negative cash costs, due to base metal byproduct credits at their existing mine. Share count is 92million with about 9 million warrants and options for FD share count of 101.5million.
VANCOUVER, Oct. 26 /PRNewswire-FirstCall/ - Fortuna Silver Mines Inc. (TSX.V: FVI / Lima Exchange: FVI) - is pleased to announce an updated NI 43-101 compliant mineral resource estimate for the San Jose Project located in southern Mexico. Indicated Resources have increased 83% to 2.69 million tonnes with contained silver equivalent ounces increasing 112% to 37.6 million. Silver and gold grades in the Indicated Resource category have increased by 12% to 295 g/t and 4% to 2.27 g/t, respectively. The new resource estimate will serve as the basis for pre-feasibility level engineering studies projected for completion by year end.
Related Quotes
Symbol Price Change
FVI.V 1.72 +0.08
{"s" : "fvi.v","k" : "c10,l10,p20,t10","o" : "","j" : ""} At a cut-off grade of 150 g/t Ag Equivalent, the Indicated and Inferred Mineral Resources for the Trinidad Zone at San Jose are estimated at:
Indicated Mineral Resource: 2.69 million tonnes grading 295 g/t Ag and
2.27 g/t Au containing 37.6 million Ag
Equivalent(1) ounces
Inferred Mineral Resource: 2.41 million tonnes grading 262 g/t Ag and
2.11 g/t Au containing 30.4 million Ag
Equivalent(1) ounces
(1) Silver equivalency estimates were derived using metal prices of US
$13.75/oz for silver and US$856.16/oz for gold (36-month average + 24
month future metal prices as of July 31, 2009). Metallurgical recoveries
were estimated at 92.5% for silver and 91.5% for gold based on
metallurgical testing completed by Metcon Research of Tucson, Arizona.
A detailed table of the estimated mineral resources by resource category and by silver equivalent cut-off grade is included below under the heading "San Jose Resource Estimate".
The resource estimate incorporates data from 196 core drill holes totaling 64,204 meters and 908 underground channel samples. Previously reported NI 43-101 compliant resources for San Jose were estimated at 1.47 million tonnes grading 263 g/t Ag and 2.19 g/t Au in the Indicated category and 3.9 million tonnes grading 261 g/t Ag and 2.57 g/t Au in the Inferred category (see March 31, 2007 Technical Report available on the company website (www.fortunasilver.com) and on SEDAR).
Mr. Jorge Ganoza, CEO and Director of the Company commented: "Although the resource estimation process suffered delays, the wait has been worthwhile. Our staff and consultants have delivered good news with overall improvements to the quality of the San Jose resource. We look forward to the granting of environmental approvals and construction permits in the coming weeks as the next milestones for the project."
San Jose Resource Estimate
The updated mineral resource estimate for San Jose was prepared by Michael J. Lechner of Resource Modeling Inc. and by Donald F. Earnest of Resource Evaluation Inc. Mr. Lechner and Mr. Earnest have acted as independent qualified persons as defined by the Canadian National Instrument 43-101. The Mineral Resources reported herein were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards on Mineral Resources and Reserves. This resource estimate is based on all data available through June 30, 2009.
-------------------------------------------------------------------------
Inferred Mineral Resources
-------------------------------------------------------------------------
Contained Metal
Ag Eq ----------------------------
Cutoff Tonnes Ag Eq Ag Eq Ozs Ag Ozs Au Ozs
(g/t) (000) (g/t) Ag (g/t) Au (g/t) (000) (000) (000)
-------------------------------------------------------------------------
50 4,020 272 181 1.48 35,199 23,389 192
-------------------------------------------------------------------------
75 3,497 304 202 1.65 34,151 22,735 185
-------------------------------------------------------------------------
100 3,074 334 222 1.80 32,963 21,988 178
-------------------------------------------------------------------------
125 2,681 366 244 1.97 31,545 21,061 170
-------------------------------------------------------------------------
150 2,411 392 262 2.11 30,357 20,293 164
-------------------------------------------------------------------------
175 2,137 421 282 2.26 28,922 19,351 155
-------------------------------------------------------------------------
200 1,883 452 304 2.41 27,393 18,379 146
-------------------------------------------------------------------------
225 1,696 479 321 2.56 26,113 17,522 140
-------------------------------------------------------------------------
250 1,545 503 337 2.69 24,958 16,747 133
-------------------------------------------------------------------------
[/pre]
*Estimates of contained metal may vary due to rounding errors.
Resource Estimation Methodology
Three-dimensional wireframe envelopes were constructed for each vein in the San Jose deposit based on a combination of lithology and silver equivalent grades. Block grades were estimated inside of the three-dimensional wireframes by inverse distance interpolation methods using two-meter-long composites of drill hole and underground channel samples. Voids created by historic underground mining of the deposit were also modeled with three-dimensional wireframes where cavity survey data were available and these voids were deleted from the resource model. Above the 1450m elevation level, all material within the vein wireframes was excluded from the resource model due to incomplete coverage of the cavity survey data in areas with inaccessible mine workings. MineSight® software was used to construct the block model which consists of blocks with a dimension of 2 meters along each side. The percentage of each block contained inside of each wireframe was stored for computing tonnage. A dynamic anisotropy search ellipse method which matched drill hole composite and block centroid distances from the hanging wall surfaces was used for the primary veins (Bonanza, Trinidad, Paloma, and Fortuna). These four veins represent 86% of the total San Jose wireframe volume. A single pass inverse distance-cubed method was used to estimate block grades for the secondary veins. A bulk density factor of 2.61 g/cm(3) based on systematic density determinations was used to tabulate resource tonnage. Mineral resources were classified into Indicated and Inferred categories using the distance to composite sample data and the number of drill holes containing the composites used to estimate each block. Blocks with three holes within 33m, two holes within 23m or one hole within 13 meters were classified as Indicated Resources with Indicated Resources being further restricted to the Bonanza, Trinidad, Paloma, and Fortuna vein structures. All other blocks within the wireframes were classified as Inferred Resources. Resources were tabulated using silver equivalent cutoff grades.
A full NI 43-101 compliant report authored by M. Lechner of Resource Modeling Inc. and D. Earnest of Resource Evaluation Inc. will be available on www.sedar.com within 45 days of this news release.
Fortuna Silver Mines Inc.
Fortuna is a growth oriented, silver and base metal producer focused on mining opportunities in Latin America. Our primary assets are the Caylloma Silver Mine in southern Peru and the San Jose Silver-Gold Project in Mexico. The Company is selectively pursuing additional acquisition opportunities. For more information, please visit our website at www.fortunasilver.com .
Qualified Persons
Michael J. Lechner of Resource Modeling Inc. and Donald F. Earnest of Resource Evaluation Inc. are the Qualified Persons as defined by National Instrument 43-101 and are responsible for the accuracy of the technical information in this news release.
+.10 to C$1.74 on this news.
VANCOUVER, Oct. 26 /PRNewswire-FirstCall/ - Fortuna Silver Mines Inc. (TSX.V: FVI / Lima Exchange: FVI) - is pleased to announce an updated NI 43-101 compliant mineral resource estimate for the San Jose Project located in southern Mexico. Indicated Resources have increased 83% to 2.69 million tonnes with contained silver equivalent ounces increasing 112% to 37.6 million. Silver and gold grades in the Indicated Resource category have increased by 12% to 295 g/t and 4% to 2.27 g/t, respectively. The new resource estimate will serve as the basis for pre-feasibility level engineering studies projected for completion by year end.
Related Quotes
Symbol Price Change
FVI.V 1.72 +0.08
{"s" : "fvi.v","k" : "c10,l10,p20,t10","o" : "","j" : ""} At a cut-off grade of 150 g/t Ag Equivalent, the Indicated and Inferred Mineral Resources for the Trinidad Zone at San Jose are estimated at:
Indicated Mineral Resource: 2.69 million tonnes grading 295 g/t Ag and
2.27 g/t Au containing 37.6 million Ag
Equivalent(1) ounces
Inferred Mineral Resource: 2.41 million tonnes grading 262 g/t Ag and
2.11 g/t Au containing 30.4 million Ag
Equivalent(1) ounces
(1) Silver equivalency estimates were derived using metal prices of US
$13.75/oz for silver and US$856.16/oz for gold (36-month average + 24
month future metal prices as of July 31, 2009). Metallurgical recoveries
were estimated at 92.5% for silver and 91.5% for gold based on
metallurgical testing completed by Metcon Research of Tucson, Arizona.
A detailed table of the estimated mineral resources by resource category and by silver equivalent cut-off grade is included below under the heading "San Jose Resource Estimate".
The resource estimate incorporates data from 196 core drill holes totaling 64,204 meters and 908 underground channel samples. Previously reported NI 43-101 compliant resources for San Jose were estimated at 1.47 million tonnes grading 263 g/t Ag and 2.19 g/t Au in the Indicated category and 3.9 million tonnes grading 261 g/t Ag and 2.57 g/t Au in the Inferred category (see March 31, 2007 Technical Report available on the company website (www.fortunasilver.com) and on SEDAR).
Mr. Jorge Ganoza, CEO and Director of the Company commented: "Although the resource estimation process suffered delays, the wait has been worthwhile. Our staff and consultants have delivered good news with overall improvements to the quality of the San Jose resource. We look forward to the granting of environmental approvals and construction permits in the coming weeks as the next milestones for the project."
San Jose Resource Estimate
The updated mineral resource estimate for San Jose was prepared by Michael J. Lechner of Resource Modeling Inc. and by Donald F. Earnest of Resource Evaluation Inc. Mr. Lechner and Mr. Earnest have acted as independent qualified persons as defined by the Canadian National Instrument 43-101. The Mineral Resources reported herein were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards on Mineral Resources and Reserves. This resource estimate is based on all data available through June 30, 2009.
-------------------------------------------------------------------------
Inferred Mineral Resources
-------------------------------------------------------------------------
Contained Metal
Ag Eq ----------------------------
Cutoff Tonnes Ag Eq Ag Eq Ozs Ag Ozs Au Ozs
(g/t) (000) (g/t) Ag (g/t) Au (g/t) (000) (000) (000)
-------------------------------------------------------------------------
50 4,020 272 181 1.48 35,199 23,389 192
-------------------------------------------------------------------------
75 3,497 304 202 1.65 34,151 22,735 185
-------------------------------------------------------------------------
100 3,074 334 222 1.80 32,963 21,988 178
-------------------------------------------------------------------------
125 2,681 366 244 1.97 31,545 21,061 170
-------------------------------------------------------------------------
150 2,411 392 262 2.11 30,357 20,293 164
-------------------------------------------------------------------------
175 2,137 421 282 2.26 28,922 19,351 155
-------------------------------------------------------------------------
200 1,883 452 304 2.41 27,393 18,379 146
-------------------------------------------------------------------------
225 1,696 479 321 2.56 26,113 17,522 140
-------------------------------------------------------------------------
250 1,545 503 337 2.69 24,958 16,747 133
-------------------------------------------------------------------------
[/pre]
*Estimates of contained metal may vary due to rounding errors.
Resource Estimation Methodology
Three-dimensional wireframe envelopes were constructed for each vein in the San Jose deposit based on a combination of lithology and silver equivalent grades. Block grades were estimated inside of the three-dimensional wireframes by inverse distance interpolation methods using two-meter-long composites of drill hole and underground channel samples. Voids created by historic underground mining of the deposit were also modeled with three-dimensional wireframes where cavity survey data were available and these voids were deleted from the resource model. Above the 1450m elevation level, all material within the vein wireframes was excluded from the resource model due to incomplete coverage of the cavity survey data in areas with inaccessible mine workings. MineSight® software was used to construct the block model which consists of blocks with a dimension of 2 meters along each side. The percentage of each block contained inside of each wireframe was stored for computing tonnage. A dynamic anisotropy search ellipse method which matched drill hole composite and block centroid distances from the hanging wall surfaces was used for the primary veins (Bonanza, Trinidad, Paloma, and Fortuna). These four veins represent 86% of the total San Jose wireframe volume. A single pass inverse distance-cubed method was used to estimate block grades for the secondary veins. A bulk density factor of 2.61 g/cm(3) based on systematic density determinations was used to tabulate resource tonnage. Mineral resources were classified into Indicated and Inferred categories using the distance to composite sample data and the number of drill holes containing the composites used to estimate each block. Blocks with three holes within 33m, two holes within 23m or one hole within 13 meters were classified as Indicated Resources with Indicated Resources being further restricted to the Bonanza, Trinidad, Paloma, and Fortuna vein structures. All other blocks within the wireframes were classified as Inferred Resources. Resources were tabulated using silver equivalent cutoff grades.
A full NI 43-101 compliant report authored by M. Lechner of Resource Modeling Inc. and D. Earnest of Resource Evaluation Inc. will be available on www.sedar.com within 45 days of this news release.
Fortuna Silver Mines Inc.
Fortuna is a growth oriented, silver and base metal producer focused on mining opportunities in Latin America. Our primary assets are the Caylloma Silver Mine in southern Peru and the San Jose Silver-Gold Project in Mexico. The Company is selectively pursuing additional acquisition opportunities. For more information, please visit our website at www.fortunasilver.com .
Qualified Persons
Michael J. Lechner of Resource Modeling Inc. and Donald F. Earnest of Resource Evaluation Inc. are the Qualified Persons as defined by National Instrument 43-101 and are responsible for the accuracy of the technical information in this news release.
