Fortuna Silver Mines Inc.

Fortuna is a growth-oriented, silver and base metal producer focused on mining opportunities in Latin America. The company owns a producing mine, a project in the advanced-development stage and has a strong cash position. Fortuna's primary assets are the 100%-owned Caylloma silver-lead-zinc mine in Peru and the 100%-owned San Jose silver-gold project in southern Mexico. The company is selectively pursuing additional acquisition opportunities.

Watch President, CEO & Director, Jorge Alberto Ganoza, being interviewed by Al Korelin and Jay Taylor about Fortuna Silver Mines Inc. (4/3/08)

"With the C$34.5-million equity financing now closed, Fortuna Silver has roughly US$65 million in the bank to advance the development of the San Jose project in Mexico. The financing also gives the company the flexibility to consider potential acquisitions to fill its development pipeline beyond the advancement of the San Jose project. In mid-December, the company received Mexican Environmental Agency approved the final permit required for the company to begin major construction of the San Jose project. With the approval in hand, the company is scheduled to begin major development activities at San Jose in Q1/10. A pre-feasibility study for the San Jose project is expected to be completed in January 2010.

Capex for the mine is expected to be roughly US$45 million with production expected to begin in mid-2011. Through the development of the San Jose project, Canaccord Adams Junior Mining Analyst Nicholas Campbell expects Fortuna's annual silver-equivalent production to increase to more than 5.5 million ounces by 2012. He is bullish on the stock based on its: 1) Organic growth profile; 2) Solid balance sheet and consistent cash flows; and 3) Attractive valuation. Based on Campbell's estimates, Fortuna is trading at around 3.8x 2012E CFPS (first full year of production from San Jose) and at 0.74x P/NAV (5%, spot). This compares with an average valuation of 11.2x 2011E CFPS and 1.16x P/NAV multiple (5%, spot) for junior precious metal producers. Given the growth profile and balance sheet, he expects his company to gain broader investor attention, which should lead to a revaluation in line with other junior precious metal producers. The next catalyst for Fortuna is expected to be the San Jose scoping study (Q1/10)."
    -   Morning Coffee, Canaccord Capital (03/05/10)

"As of March 2, we are initiating coverage of Fortuna Silver with a Sector Outperformer rating and a 12- to 18-month price target of C$3.75, which is based on a 2011E P/CF multiple of 10x and a P/NAV multiple of 1.7x. Our multiples reflect excellent growth tempered by the stature of the company.

We believe Fortuna has one of the best operations teams in the junior silver producer space, which is evident by unit cost control at Caylloma and the free cash flow generation over the past three years.

In 2010, we believe that production growth will trump almost all other valuations and that Fortuna will deliver this growth with the commissioning of the San Jose project, which is expected to be in commercial production in late 2011.

Flexibility and exploration upside at Caylloma, combined with additional precious metals revenue from San Jose, give Fortuna the ability to match production with prevailing metal prices and ensure high operating margins into the future."
    -BRIAN QUAST,   CIBC WORLD MARKETS INC. (03/02/10)

"Fortuna Silver announced that it has entered into a bought deal financing with a syndicate of underwriters co-led by CIBC and Canaccord Financial Ltd.

The company intends to issue 13.05 million common shares at a price of $2.30 per common share for gross proceeds. . .of approximately $30 million. The company intends to use the net proceeds from the offering to partially finance the construction of its 100%-owned San Jose project in the state of Oaxaca, Mexico, and for general corporate purposes.

Also, FVI has made some new high-grade discoveries at their mine in Peru.

Fortuna is in an enviable position to capitalize on higher metals prices and grow their company to the point where they will be taken out. Things seem to be falling in place for the company and I will be spending time with the management team in Toronto to get a more intricate understanding of what the latest news means.

This is a great story that is only going to get better with time, especially as the metals prices continue to move higher and higher.

FVI remains a STRONG BUY."
    -   Mining Speculator (02/28/10)

"Fortuna Silver Mines Inc. is another company with good assets in the ground and probably not a very
    -   The Gold Report Interview with David Morgan (02/26/10)

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