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    Fortuna corporate presentation Fortuna corporate presentation Presentation Transcript

    • March 2014 NYSE: FSM | TSX: FVI | BVL: FVI | Frankfurt: F4S.F | fortunasilver.com BUILDING A LEADING SILVER MINER
    • NYSE: FSM | TSX: FVI | BVL: FVI | Frankfurt: F4S.F | fortunasilver.comBUILDING A LEADING SILVER MINER Regulatory Disclaimer 2 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, is the Qualified Person for Fortuna Silver Mines Inc. as defined by National Instrument 43-101. Dr. Vehrs is a Founding Registered Member of The Society for Mining, Metallurgy, and Exploration, Inc. (SME Registered Member Number 3323430RM) and is responsible for ensuring that the technical information contained in this presentation is an accurate summary of the original reports and data provided to or developed by Fortuna Silver Mines Inc.
    • NYSE: FSM | TSX: FVI | BVL: FVI | Frankfurt: F4S.F | fortunasilver.comBUILDING A LEADING SILVER MINER San Jose Mine, Mexico Our Vision 3 To be valued by our workers, the community and our shareholders as a leading silver mining company in Latin America
    • NYSE: FSM | TSX: FVI | BVL: FVI | Frankfurt: F4S.F | fortunasilver.comBUILDING A LEADING SILVER MINER Core Assets 4 Proven mine builders and strong operators in the Americas Production • Increasing silver-gold production profile • Low cost silver producer • 2014E consolidated AISCC*: US$17.14/oz Ag Exploration • Trinidad North high-grade silver-gold discovery at the San Jose Mine • Step out drilling has confirmed continuation of robust mineralized system (*) AISCC = All-In Sustaining Cash Cost; net of by-product credits and based on the guidelines from the World Gold Council Corporate Office Vancouver, Canada Management Head Office Lima, Peru MEXICO SAN JOSE MINE Silver, Gold Oaxaca, Mexico PERU CAYLLOMA MINE Silver, Lead, Zinc Arequipa, Peru
    • NYSE: FSM | TSX: FVI | BVL: FVI | Frankfurt: F4S.F | fortunasilver.comBUILDING A LEADING SILVER MINER -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% Jul-2 Jul-16 Jul-30 Aug-13 Aug-27 Sep-10 Sep-24 Oct-8 Oct-22 Nov-5 Nov-19 Dec-3 Dec-17 Dec-31 Jan-14 Jan-28 Feb-11 FVI.T Equity XAU Index SILV - London Fix Capital structure and share performance 5 Solid balance sheet to support organic growth strategy Strong Balance Sheet • US$49 million in cash (end 4Q13) • US$40 million untapped credit facility • No long term debt • No hedging Share Structure (as of MAR14) Outstanding: 126.0 million Fully diluted: 132.4 million Exchanges NYSE: FSM TSX: FVI BVL: FVI Frankfurt: F4S.F Performance(%) +50.9% +8.9% +17.3% Source: Thomson One and London Bullion Market Association (for London Fix) Relative Performance of FVI.T (1JUL13 –18FEB14)
    • NYSE: FSM | TSX: FVI | BVL: FVI | Frankfurt: F4S.F | fortunasilver.comBUILDING A LEADING SILVER MINER Key Milestones 6 Foundations of a leading silver mining company • Fortuna Silver Mines Inc. established • Commenced production at the Caylloma Mine, Peru • Acquired 100 % interest in the San Jose project, Mexico • Construction and commercial production at the San Jose Mine • Trinidad North high-grade silver-gold discovery at the San Jose Mine • San Jose Mine mill expansion to 2,000 tpd by 2Q14 2005-2007 2009-2011 2013-2014
    • NYSE: FSM | TSX: FVI | BVL: FVI | Frankfurt: F4S.F | fortunasilver.comBUILDING A LEADING SILVER MINER 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 ContainedMetal-AgEq(Moz)* Proven & Probable Reserves Measured & Indicated Resources Inferred Resources Growing Reserve and Resource Base 7 Net growth in Inferred Resources * Ag Eq for Resources and Reserves calculated using Au = US$1,200/oz and Ag = US$20/oz
    • NYSE: FSM | TSX: FVI | BVL: FVI | Frankfurt: F4S.F | fortunasilver.comBUILDING A LEADING SILVER MINER 0.6 0.9 1.9 2.1 2.1 2.2 2.2 2.1 2.1 2.2 0.8 3.0 3.7 5.8 6.3 6.5 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 2007 2008 2009 2010 2011 2012 2013 2014E 2015E 2016E AgEqMoz** Caylloma San Jose Consolidated Ag Eq Production 8 Trinidad North Discovery potential (*) CAGR = Compound Annual Growth Rate (**) Ag Eq calculated using Au = US$1,200/oz and Ag = US$20/oz; net of by-product lead and zinc Trinidad North Discovery potential contribution to consolidated Ag Eq production
    • NYSE: FSM | TSX: FVI | BVL: FVI | Frankfurt: F4S.F | fortunasilver.comBUILDING A LEADING SILVER MINER 0.4 0.8 1.7 1.9 2.0 2.0 2.1 2.0 2.0 2.0 0.5 1.9 2.5 4.0 4.3 4.5 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 2007 2008 2009 2010 2011 2012 2013 2014E 2015E 2016E Moz Caylloma San Jose 3,300 2,200 2,700 2,600 2,400 2,800 2,200 1,900 2,300 2,500 4,600 17,900 19,000 30,500 34,000 34,500 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 2007 2008 2009 2010 2011 2012 2013 2014E 2015E 2016E oz Caylloma San Jose Increasing Silver and Gold Production 9 Low cost organic growth Silver Production Gold Production (*) CAGR = Compound Annual Growth Rate
    • NYSE: FSM | TSX: FVI | BVL: FVI | Frankfurt: F4S.F | fortunasilver.comBUILDING A LEADING SILVER MINER 24.4 39.1 62.2 40.9 56.0 2010 2011 2012 2013 2014E* 51.4 74.1 110.0 161.0 137.4 179.5 2009 2010 2011 2012 2013 2014E* 0.13 0.05 0.06 0.09 Q1 2013 Q2 2013 Q3 2013 Q4 2013 0.06 0.00 0.00 0.02 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Financial Snapshot Maximizing margins through management of cost and capital Cash Flow from Operations (US$ M) Revenue (US$ M) * 2014E: Au = US$1,300/oz, Ag = US$22/oz, Pb = US$2,100/t and Zn = US$1,900/t ** Net of income tax 10 Cash Flow Per Share (US$) Adjusted Earnings Per Share** (US$)
    • NYSE: FSM | TSX: FVI | BVL: FVI | Frankfurt: F4S.F | fortunasilver.comBUILDING A LEADING SILVER MINER Caylloma Mine, Peru Snapshot Commodities Silver, zinc, lead Operation 1,300 tpd underground mine Reserve Life 8 Years Location Arequipa, Peru Ownership 100 % Deposit Type Intermediate sulphidation epithermal deposit 2014E AISCC*, net of by-products lead and zinc US$17.01/oz Ag Silver Production 11 2.0 2.0 2.1 2.0 2.0 2.0 1.5 1.6 1.7 1.8 1.9 2.0 2.1 2.2 2011 2012 2013 2014E 2015E 2016E Moz (*) AISCC = All-In Sustaining Cash Cost; net of by-product credits and based on the guidelines from the World Gold Council Caylloma Mine
    • NYSE: FSM | TSX: FVI | BVL: FVI | Frankfurt: F4S.F | fortunasilver.comBUILDING A LEADING SILVER MINER 4.6 17.9 19.0 30.4 34.1 34.5 4.0 8.0 12.0 16.0 20.0 24.0 28.0 32.0 36.0 2011 2012 2013 2014E 2015E 2016E San Jose Mine, Mexico 12 Snapshot Commodities Silver, gold Operation 1,800 tpd underground mine Reserve Life 6.3 Years Location Oaxaca, Mexico Ownership 100 % Deposit Type High-grade, low sulphidation epithermal deposit 2014E AISCC*, net of by-products Au US$14.43/oz Ag Silver Production Gold Production 0.5 1.9 2.5 4.0 4.3 4.4 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 2011 2012 2013 2014E 2015E 2016E Moz koz (*) AISCC =All-In Sustaining Cash Cost; net of by-product credits and based on the guidelines from the World Gold Council San Jose Mine
    • NYSE: FSM | TSX: FVI | BVL: FVI | Frankfurt: F4S.F | fortunasilver.comBUILDING A LEADING SILVER MINER San Jose Mine – Trinidad North Discovery 13 200 meter strike extension step-out drilling beyond existing resource boundary
    • NYSE: FSM | TSX: FVI | BVL: FVI | Frankfurt: F4S.F | fortunasilver.comBUILDING A LEADING SILVER MINER San Jose Mine – Trinidad North Discovery 14 4.4 kg/t Ag Eq over 3.7 meters true width in SJOM-335 • Contiguous with existing operation • Mineralization open at depth and to the north
    • NYSE: FSM | TSX: FVI | BVL: FVI | Frankfurt: F4S.F | fortunasilver.comBUILDING A LEADING SILVER MINER San Jose Mine – Trinidad North Discovery 15 Northernmost drilling– Section 1847600N • Robust mineralized system • High-grade, wide widths • Vertical extension of mineralized system exceeds 600 meters
    • NYSE: FSM | TSX: FVI | BVL: FVI | Frankfurt: F4S.F | fortunasilver.comBUILDING A LEADING SILVER MINER Meterage (m) Cost Estimate (US$ M) Main ramp 400 0.70 Auxiliary ramps 1,400 2.40 Cross-cuts 300 0.50 Chambers 100 0.15 Raises 800 1.10 Infrastructure and services 200 0.25 TOTAL (US$ M) 5.10 San Jose Mine – Trinidad North Discovery 16 Easy access with minimal CAPEX requirement • Aggressively advancing mine development and planned infrastructure for existing resources to level 1000 • Estimated CAPEX requirement :
    • NYSE: FSM | TSX: FVI | BVL: FVI | Frankfurt: F4S.F | fortunasilver.comBUILDING A LEADING SILVER MINER San Jose Mine – Trinidad North Discovery 17 Mine architecture and Trinidad North development milestones LL A‐1A‐1 MM KK OO HH GG WW VV FF EE II SS NN C‐1C‐1 D‐1D‐1 E‐1E‐1 XX B‐1B‐1 BB DD AA CC II PP JJ QQ RR UU TT ZZ YY Inferred Resources Reserves Trinidad North July 2014 1Q 2015
    • NYSE: FSM | TSX: FVI | BVL: FVI | Frankfurt: F4S.F | fortunasilver.comBUILDING A LEADING SILVER MINER Growth Strategy 18 Focused on organic growth, disciplined M&A Capitalize on Trinidad North silver-gold discovery • Inferred Resources estimated at 1.9 Mt averaging 269 g/t Ag and 1.67 g/t Au at 70 g/t Ag Eq cutoff • Robust mineralization with potential for further extension of the system, open in three directions • Initial contribution to production blend by 1Q15 with minimal CAPEX • San Jose mill expansion to 2,000 tpd by 2Q14 • 2014 budget to conduct engineering studies to define next production expansion at San Jose Maximize production, profitability and sustainable free cash flow generation
    • NYSE: FSM | TSX: FVI | BVL: FVI | Frankfurt: F4S.F | fortunasilver.comBUILDING A LEADING SILVER MINER 19 Proven mine developers and strong operators • Increasing silver – gold production profile • 2014E consolidated AISCC* = US$17.14/oz Ag Strong treasury • US$49 M in cash (end 4Q13) • US$40 M untapped credit facility • Sustainable free cash flow generation 2014 production guidance • 6.0 Moz silver • 32.3 koz gold • 22.6 Mlbs zinc • 16.6 Mlbs lead 1 2 A leading silver mining company in the Americas Investment Highlights (*) AISCC = All-In Sustaining Cash Cost; net of by-product credits and based on the guidelines from the World Gold Council 3
    • NYSE: FSM | TSX: FVI | BVL: FVI | Frankfurt: F4S.F | fortunasilver.comBUILDING A LEADING SILVER MINER 20 BUILDING A LEADING SILVER MINER Contact information: Carlos Baca, Investor Relations Manager T: +51.1.616.6060, ext. 0 info@fortunasilver.com
    • NYSE: FSM | TSX: FVI | BVL: FVI | Frankfurt: F4S.F | fortunasilver.comBUILDING A LEADING SILVER MINER Senior Management 21 APPENDIX Jorge A. Ganoza President, 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. Dr. Thomas I. Vehrs Vice President, Exploration Over 35 years experience managing exploration programs in the Americas. Tom also serves as an independent director for AQM Copper Inc. Cesar Pera Vice President, Human & Organizational Development Over 25 years experience in organizational development and change in Latin American companies. Luis Dario Ganoza Chief Financial Officer Over 15 years experience in the operations and financial management of public mining companies. Luis also serves as a Director of Atico Mining Corporation. Manuel Ruiz-Conejo Vice President, Operations Over 25 years experience in the execution of multi-million dollar mining projects and the implementation of community relations programs. Robert Brown Vice President, Corporate Development 20 years experience in exploration, project development and finance. Former CEO of Calibre Mining Corp. and senior manager at Barrick Gold in exploration and business development.
    • NYSE: FSM | TSX: FVI | BVL: FVI | Frankfurt: F4S.F | fortunasilver.comBUILDING A LEADING SILVER MINER Board of Directors 22 APPENDIX Simon Ridgway, Chairman of the Board Co-founder of Fortuna. Vancouver-based mining financier. Also founded Focus Ventures, Radius Gold, Mar West Resources and Northland Resources. Jorge A. Ganoza, President and CEO 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. 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. David Farrell President of Davisa Consulting, a private consulting firm working with global mining companies. Successfully closed over US$25 billion in M&A transactions. Director of Northern Vertex Mining Corp. Tomas Guerrero Geological engineer with over 30 years experience. Served as Director of Explorations for the Hochschild Group. Michael Iverson Chief Executive Officer of Fortuna from 1998 to January 2005. President and Director of Niogold Mining Corp. since 1998. Thomas Kelly 36 years of experience in mine production, minerals industry consulting and corporate management in various Latin American countries. Currently serves as COO of Atico Mining Corporation. Mario Szotlender Co-founder of Fortuna. Financier, businessman and Director of Radius Gold, Endeavour Silver, Magellan, Focus Ventures and Iron Creek.
    • NYSE: FSM | TSX: FVI | BVL: FVI | Frankfurt: F4S.F | fortunasilver.comBUILDING A LEADING SILVER MINER Trinidad North discovery drilling highlights 23 APPENDIX • Average grade and widths in excess of those found in the San Jose Mine reserves and resources • Estimated true widths of up to 18.8 meters • Ag Eq values range to 4.4 kg/t (*) ETW = Estimated True Width (**) Ag Eq values calculated at Au:Ag ratio of 60 based on assumed metal prices of Au = US$1,200/oz and Ag = US$20/oz and metallurgical recoveries of 89 % for both gold and silver Hole_Id From (m) To (m) Interval (m) ETW* (m) Ag (g/t) Au (g/t) Ag Eq** (g/t) SJOM-329 271.60 273.45 1.85 1.0 1,509 7.77 1,975 305.50 314.50 9.00 5.3 904 8.60 1,420 329.15 342.10 12.95 7.5 402 3.42 607 SJOM-335 including 419.00 425.30 6.30 3.7 3,511 15.04 4,413 420.05 421.70 1.65 1.0 12,249 51.89 15,363 439.20 454.70 15.50 9.1 474 2.54 626 SJOM-337 296.10 313.00 16.90 11.7 219 1.38 302 314.90 324.35 9.45 6.5 498 3.03 680 SJOM-339 214.30 234.20 19.90 15.8 252 1.29 329 SJOM-340 Including 265.70 273.00 7.30 4.2 2,762 14.46 3,630 266.85 267.50 0.65 0.4 27,669 141 36,129 SJOM-343 248.40 253.60 5.20 3.6 298 1.27 374 272.00 286.95 14.95 10.2 1,190 8.45 1,697 SJOM-345 397.65 416.60 18.95 10.3 305 2.44 452 SJOM-346 293.50 303.50 10.00 6.5 1,503 7.76 1,969 340.50 368.00 27.50 18.8 600 4.20 852
    • NYSE: FSM | TSX: FVI | BVL: FVI | Frankfurt: F4S.F | fortunasilver.comBUILDING A LEADING SILVER MINER San Jose Mine NI 43 – 101 Reserves and Resources 24 APPENDIX Mineral Reserve and Mineral Resource estimates 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 • San Jose Mineral Resources & Mineral Reserves are reported as of December 31, 2013 • Refer to www.fortunasilver.com for full disclosure Classification Tonnes (000) Ag (g/t) Au (g/t) Contained Metal Ag (Moz) Au (koz) Proven & Probable Reserves 3,605 197 1.70 22.8 196.5 Measured & Indicated Resources 837 74 0.64 2.0 17.3 Inferred Resources 5,394 202 1.56 35.1 270.8
    • NYSE: FSM | TSX: FVI | BVL: FVI | Frankfurt: F4S.F | fortunasilver.comBUILDING A LEADING SILVER MINER Caylloma Mine NI 43 – 101 Reserves and Resources 25 APPENDIX Mineral Reserve and Mineral Resource estimates 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 reported as of December 31, 2013 • Refer to www.fortunasilver.com for full disclosure Classification Tonnes (000) Ag (g/t) Au (g/t) Pb (%) Zn (%) Contained Metal Ag (Moz) Au (koz) Proven & Probable Reserves 3,083 137 0.40 1.69 2.49 13.5 39.4 Measured & Indicated Resources 1,989 76 0.30 1.08 2.07 4.9 19.4 Inferred Resources 6,184 121 0.50 2.11 2.97 24.0 100.2