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San Jose Mine, Mexico
JUNE 2012www.fortunasilver.com
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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 estimation 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.
Thomas I. Vehrs, Ph.D., Vice President of Exploration and Founding Registered Member of The Society for Mining, Metallurgy, and Exploration, Inc. (SME Registered Member Number 3323430RM) and Edgar Vilela, Corporate Manager of Technical Services of Fortuna, are the Qualified Persons for Fortuna Silver Mines Inc. as defined by National Instrument 43-101. Dr. Vehrs is responsible for ensuring that the geological and scientific information contained in this presentation are an accurate summary of the original reports and data provided to or developed by Fortuna Silver Mines. Mr. Vilela is responsible for ensuring that the information on reserves, production and costs contained in this presentation are an accurate summary of the original reports and data provided to or developed by Fortuna Silver Mines.
Regulatory Disclaimer
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To be valued by our workers, the community and our shareholders as a leading silver mining company in Latin America
To be valued by our workers, the community and our shareholders as a leading silver mining company in Latin America
Caylloma Mine,Peru
VisionVision
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Core AssetsOperating and Exploring in the Americas
Production San Jose Mine, Mexico Caylloma Mine, Peru
Exploration Exploring in Mexico and Peru; two
largest silver producing countries in the world
44,000 meter drill program for 2012
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Company Snapshot
FVI.TO vs. Ag (June 2011 – June 2012)
Share Structure Outstanding: 125.2 million Fully diluted: 131.0 million
Strong Balance Sheet US$54 million in cash (end Q1 2012) US$20 million credit facility No long term debt No hedging
Exchanges
Frankfurt: F4S.F
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Financial Snapshot
Revenue US$ [´000s]
Strong Revenue and Margin Growth
Operating Income US$ [´000s]
2012E estimated using Ag = US$30/oz, Au = US$1,660/oz, Pb = US$2,300/t and Zn = US$2,000/t
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Financial SnapshotRevenue by Metal
Copper
Gold
Zinc
Lead
Silver
2012E estimated using Ag = US$30/oz, Au = US$1,660/oz, Pb = US$2,300/t and Zn = US$2,000/t
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Commissioning of 1,500 tpd
plant expansion
Commissioning of dore plant
Plant expansion to 1,500 tpd at
San Jose
Off-site dore plant
construction at San Jose
Shares begin trading on
NYSE
Commenced commercial
production at San Jose, on time and on
budget
Shares begin trading on TSX
Reported positive
pre-feasibility study at San Jose
Started construction of San Jose
Mine
Increased silver
production by 13%
Acquired 100% interest in
San Jose
Received EIS approval and permits for
San Jose
Increased silver
production by 96%
Shares begin trading on BVL
Increased silver
production by 85%
Successful drilling at San Jose
significantly increased
Ag Eq resources
Commenced production at Caylloma on time and on
budget
Acquired stake in
San Jose
Company established
Shares trade on the TSX.V
Acquired Caylloma Mine
Key MilestonesFoundations of a Leading Silver Mining Company
2005 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 2013
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Investment Highlights
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22
33
55
44
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Emergence of a Leading Silver Mining CompanySustainable Mineral Reserve and Resource Growth
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Emergence of a Leading Silver Mining CompanyIncreasing Exposure to Precious Metals
• 2012 base metal revenue estimate = US$26M; Pb = US$2,300/t & Zn = US$2,000/t
Ag Production
Au ProductionProduction forecast
Production forecast
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Proven Mine Builders and OperatorsSenior Management
Manuel Ruiz-ConejoVice President,
Operations
Dr. Thomas I. VehrsVice President,
Exploration
Cesar PeraVice President,
Human & Organizational Development
Luis Dario GanozaChief Financial Officer
Jorge A. GanozaPresident,
CEO and Director
Co-founder of Fortuna. Peruvian geological engineer. Identified and negotiated purchase of Caylloma, built the Fortuna team. Jorge also serves as Chairman of the Board of Atico Mining Corporation, a TSX.V listed company.
Over 35 years experience managing exploration programs in the Americas. Tom also serves as an independent director for AQM Copper Inc.
Over 25 years experience in organizational development and change in Latin American companies.
Over 15 years experience in the operations and financial management of public mining companies. Luis also serves as a Director of Atico Mining Corporation, a TSX.V listed company.
Over 25 years experience in the execution of multi-million dollar mining projects and the implementation of community relations programs.
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Proven Mine Builders and OperatorsBoard of Directors
Simon RidgwayChairman of the Board
Co-founder of Fortuna. Vancouver-based mining financier. Also founded Focus Ventures, Radius Gold, Mar West Resources and Northland Resources.
Robert R. Gilmore
30 years of experience working with resource companies and currently serves as Chairman of the Board for Eldorado Gold Corporation and as a Director for Layne Christensen Company.
Mario Szotlender
Jorge A. GanozaPresident and CEO
Co-founder of Fortuna. Financier, businessman and Director of Radius Gold, Endeavour Silver, Magellan, Focus Ventures and Iron Creek.
Tomas Guerrero
Thomas Kelly Michael Iverson
36 years of experience in mine production, minerals industry consulting and corporate management in various Latin American countries; currently serves as CEO of Apurimac Ferrum, a private company developing iron ore assets in Peru.
Chief Executive Officer of Fortuna from 1998 to January 2005. President and Director of Niogold Mining Corp. since 1998.
Geological engineer with over 30 years experience. Served as Director of Explorations for the Hochschild Group.
Co-founder of Fortuna. Peruvian geological engineer. Identified and negotiated purchase of Caylloma, built the Fortuna team. Jorge also serves as Chairman of the Board of Atico Mining Corporation, a TSX.V listed company.
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Commodities Silver, gold, zinc, leadOperation 1,300 tpd underground mine
Reserve Life 8 YearsLocation Arequipa, Peru
Ownership 100%
Deposit type Intermediate-sulfidation epithermal deposit
2012 Cash Cost Estimate US$85.00/t
Caylloma Mine, PeruOverview
2012 Development Projects Phase 2 of new tailings facility Upgrading of the processing plant Mine development Mine camp improvements
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Caylloma Mine, Peru Solid Reserve and Resource Base
Classification Tonnes (000)
Ag(g/t)
Au(g/t)
Pb(%)
Zn(%)
Contained Metal
Ag (Moz)
Au(koz)
Proven & Probable Reserves 4,642 135 0.33 1.33 1.93 20.2 49.5
Measured & Indicated Resources 2,258 123 0.30 0.85 1.28 8.9 21.8
Inferred Resources 3,258 112 0.36 0.99 1.50 11.8 37.9
Notes to Mineral Reserve and Mineral Resource tables prepared in accordance with NI 43 - 101: Mineral Reserves and Mineral Resources are as defined by the CIM Definition Standards on Mineral Resources
and Mineral Reserves Mineral Resources are exclusive of Mineral Reserves Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability Caylloma Mineral Resources and Mineral Reserves are estimated as of June 30, 2011 and reported as of
December 31, 2011 Refer to www.fortunasilver.com for full disclosure
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San Jose Mine, MexicoOverview
2012 Development Projects Processing plant and mine
expansion to 1,500 tpd Construction of new off-site dore
plant Tailings dam expansion
Commodities Silver, gold
Operation 1,000 tpd underground mine Reserve Life 9 Years
Location Taviche Mining District, Oaxaca, Mexico
Ownership 100%Deposit type High-grade, low sulphidation
epithermal vein deposit2012 Cash Cost Estimate US$75.00/t
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San Jose Mine, MexicoSolid Reserve and Resource Base
Classification Tonnes (000)
Ag(g/t)
Au(g/t)
Contained Metal
Ag (Moz)
Au(koz)
Probable Reserves 3,600 204 1.59 23.6 183.7
Indicated Resources 376 243 2.12 2.9 25.6
Inferred Resources 3,072 223 1.80 22.0 178.1
Notes to Mineral Reserve and Mineral Resource tables prepared in accordance with NI 43 - 101: Mineral Reserves and Mineral Resources are as defined by the CIM Definition Standards on Mineral Resources
and Mineral Reserves Mineral Resources are exclusive of Mineral Reserves Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability Mineral Reserves and Mineral Resources reported as of December 31 st, 2011 Refer to www.fortunasilver.com for full disclosure
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San Jose Mine, MexicoProven Mine Builders: Discovery to Production 2007- Resource expansion 2010- Positive pre-feasibility study 2011- Commissioning on-time and on-budget
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San Jose Mine, MexicoUnderground Mine Design
Indicated Resources
Inferred Resources
Projected Ramp
Projected Level
LEGEND
Production block
L 1400L 1400Auxiliary Ramp
Ore Pass
Ventilation Raise
Main Levels
L 1300L 1300
L 1200L 1200
L 1100L 1100
Waste Pass
Service Raise
L 1540L 1540
L 1360L 1360
SouthSouthNorthNorth
Main Ramp
Auxiliary Branch
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San Jose Mine, MexicoSilver and Gold Production Forecast
Ag Production
Au Production
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Brownfields Upside, CayllomaProlific Mining District
Source: INGEMMET
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11,000 ha concession package Expand resource base through
exploration of veins with potential for high-grade silver mineralization
US$7.1 M brownfields exploration program
Brownfields Upside, CayllomaExploration Success Fueling Growth
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Brownfields Upside, San JoseUnder-Explored Mining District
Source: Mexican Geological Society
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Brownfields Upside, San JoseCommanding Land Position 58,000 ha concession package
Soil and stream sediment sampling identified multiple geochemical gold anomalies
Significant resource growth potential within trucking distance to processing plant
US$5.8 M brownfields exploration program
Stream Sediment Results
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Community Relations ProgramForging Strategic Partnerships Programs are based on respect for ethno-cultural diversity, open communication
and effective interaction with all stakeholders We work with communities towards self-development of economically sustainable
activities to improve their quality of life
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Growth StrategyThree-Pronged Approach to Create Shareholder Value
Execute on production ramp-up at San Jose by 4Q 2013 Focus on operational efficiencies to reduce cash costs Off-site Ag - Au concentrate leaching facility at San Jose
Maximize production, profitability and cash flow of current mines
44,000 meter exploration program between Peru and Mexico Two crews evaluating multiple Ag - Au anomalies at San Jose Commanding land packages in Peru and Mexico
Capitalize on brownfields exploration
opportunities
Post discovery, pre-development opportunities in the Americas Silver contribution of >50% of revenue Below industry median for cash cost
Pursue selectiveM&A opportunities
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Proven operators and mine builders in the Americas Organic growth potential Consistent cash generation
Caylloma MinePeru
Management Head OfficeCarlos BacaT: +51.1.616.6060, ext. 0
Corporate OfficeHolly HendershotT (Toronto): +1.647.725.0813T (Vancouver): +1.604.484.4085
JUNE 2012www.fortunasilver.com