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)

"Fortuna Silver is a junior silver producer that is on track to more than triple its annual silver equivalent production through the development of its San Jose silver-gold project in Mexico. Fortuna has all required permits in place to begin development of the San Jose project. The company has indicated that the project should require capex of US$45 million and is expected to begin production in 2011. With US$35 million in the bank and a US$20 million untapped credit facility, Fortuna should have sufficient funds to finance the development of San Jose, particularly with ongoing free cash flows generated by its Caylloma mine in Peru. We estimate that the company is trading at 3.2x 2012E CFPS. For comparison, Fortuna's peers are trading at an average P/CF multiple of 8.8x 2011E CFPS. Fully financed, with organic growth and a strong management team focused on high-grade underground operations, we expect Fortuna to be a top performer in 2010 as investors recognize the organic growth profile through the development of San Jose."
    -   Junior Mining Weekly (02/02/10)

"Fortuna Silver shares soared yesterday on stronger silver prices, a bullish analyst report and news that it was selling off a non-core asset. Fortuna is selling its 100% in the Predilecta property, located in Oaxaca, Mexico for a nominal sum. The Predilecta property consists of the La Predilecta II and La Crus claims and the mining rights to the La Predilecta and La Cascada claims, owned by Don Miguel Cormick.
Fortuna is a junior silver producer with interests in the Caylloma silver-lead-zinc mine in Peru and the San Jose silver-gold project in Mexico. Canaccord Adams Mining Analyst Nicholas Campbell forecasts that through the development of the San Jose project, silver production of 1.7 million ounces of silver in 2010 will grow to 5.5 million ounces of silver equivalent by 2012. Fortuna is Campbell's top pick for several reasons including: 1) its organic growth profile; 2) solid balance sheet and consistent cash flows'; and 3) attractive valuation. Given the growth profile and balance sheet, he expects this company to gain broader investor attention, which should lead to a revaluation in line with other junior precious metal producer. His bullish sentiment was mirrored last week by an investment writer who highlighted that his 'confidence in the company increased after it received a mining permit for its high-grade San Jose silver-gold project in Mexico' and that the permit 'pretty much puts the fear of political risk to rest.'"
    -   Morning Coffee, Canaccord Capital (02/02/10)

"Fortuna Silver Mines Inc. is a growing silver producer with a strong base metal by-product credit, possessing two key assets located in Latin America. Its wholly-owned Caylloma mine located in Peru is currently producing at an estimated 1.76M payable silver-equivalent ounces annually, while its 100%-owned San Jose project in Mexico is expected to begin construction in Q1 2010 and reach full commercial production within two years.

Production Growth: Fortuna has recently received all of the essential permits to begin construction at San Jose. We believe its current cash balance, recently implemented credit facility, as well as cash flow from operations, will likely allow the company to proceed with a decision to develop the San Jose project. Once the company commences production at San Jose (we estimate Q1 2012), the company's production increases substantially to approximately 4.3 million ounces of payable silver equivalents in 2012.

Valuation: We arrive at our target price based on a 2.1x multiple to mining assets, and subsequently add back non-mining assets at face value. Using this methodology, we derive a 12-month target price of Cdn$3.60 per share. Given the more than 55% return to our target price from current levels, coupled with our continued bullish near-term outlook for precious metals, we initiate coverage on Fortuna Silver with a BUY recommendation."
    -HAYTHAM HODALY,   SALMAN PARTNERS INC. (02/01/10)

"FVI reported 2009 production of 1,685,000 ounces of silver, 28.4 million pounds of zinc and 25.1 million pounds of lead, in line with our expectations. For 2010, the company is guiding for production of 1.7 million ounces of silver, 28.4 million pounds of zinc and 25.2 million pounds of lead and 1.0 million pounds of copper. While the company's expected silver production from Caylloma is in line with our expectations, zinc, lead and copper production are 7%, 33% and 11% higher, respectively, than our previous forecasts. In 2010, we had expected to see base metal grades drop off at Caylloma, resulting in lower zinc and lead byproduct production from the mine. We note that FVI is trading at 3.8x 2012E CFPS and 0.74x P/NAV (5%, spot) while its peer group averages 10.3x to 2011E CFPS and 1.10x P/NAV (5%, spot).

We have adjusted our model to reflect higher zinc and lead byproduct production in 2010 from the Caylloma mine. The net result is an increase in our 2010E CFPS to US$0.38, up from US$0.28 previously, and a marginally positive impact to our estimate of NAVPS. We continue to value the shares of FVI based on a 1.0x multiple to our peak silver and gold price NAVPS (US$21.50/oz Ag and US$1300/oz Au) of C$4.77. We maintain our SPECULATIVE BUY recommendation of Fortuna Silver with a target price of C$4.75 per share."
    -NICHOLAS CAMPBELL,   CANACCORD ADAMS (01/19/10)

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