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San Jose Mine,                                    Mexicowww.fortunasilver.com   JUNE 2012
Regulatory DisclaimerCertain statements in this presentation constitute forward-looking statements and as such are based o...
Vision           To be valued by our workers, the community and ourshareholders as a leading silver mining company in Lati...
Core AssetsOperating and Exploring in the AmericasProduction San Jose Mine, Mexico Caylloma Mine, PeruExploration Explo...
Company SnapshotStrong Balance Sheet                      Share Structure                  Exchanges   US$54 million in c...
Financial SnapshotStrong Revenue and Margin Growth           Revenue US$ [´000s]                                     Opera...
Financial SnapshotRevenue by Metal                                                                                      Co...
Key Milestones   Foundations of a Leading Silver Mining Company                                                           ...
Investment Highlights   1   2   3   4   5                        9
Emergence of a Leading Silver Mining CompanySustainable Mineral Reserve and Resource Growth                               ...
Emergence of a Leading Silver Mining CompanyIncreasing Exposure to Precious Metals                                      Ag...
Proven Mine Builders and Operators  Senior ManagementJorge A. Ganoza            Dr. Thomas I. Vehrs         Cesar Pera    ...
Proven Mine Builders and Operators Board of Directors  Simon RidgwayChairman of the Board            Robert R. Gilmore    ...
Caylloma Mine, PeruOverview          Commodities     Silver, gold, zinc, lead             Operation    1,300 tpd undergrou...
Caylloma Mine, PeruSolid Reserve and Resource Base                                                                        ...
San Jose Mine, MexicoOverview          Commodities     Silver, gold             Operation    1,000 tpd underground mine   ...
San Jose Mine, MexicoSolid Reserve and Resource Base                                                                      ...
San Jose Mine, MexicoProven Mine Builders: Discovery to Production 2007- Resource expansion 2010- Positive pre-feasibili...
San Jose Mine, MexicoUnderground Mine Design        North                                            South                ...
San Jose Mine, MexicoSilver and Gold Production Forecast                         Ag Production                         Au ...
Brownfields Upside, CayllomaProlific Mining District                               Source: INGEMMET                       ...
Brownfields Upside, CayllomaExploration Success Fueling Growth 11,000 ha concession package Expand resource base through...
Brownfields Upside, San JoseUnder-Explored Mining District                                 Source: Mexican Geological Soci...
Brownfields Upside, San JoseCommanding Land Position 58,000 ha concession package Soil and stream sediment sampling  ide...
Community Relations ProgramForging Strategic Partnerships Programs are based on respect for ethno-cultural diversity, ope...
Growth StrategyThree-Pronged Approach to Create Shareholder ValueMaximize production,      Execute on production ramp-up ...
 Proven operators and mine builders in the Americas Organic growth potential Consistent cash generation                ...
Management Head OfficeCarlos BacaT: +51.1.616.6060, ext. 0Corporate OfficeHolly HendershotT (Toronto): +1.647.725.0813T (V...
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Fortuna Silver Mines June 2012 Investor Presentation

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  • SCRIPT: Enter notes here CLIENT NOTES: Enter notes here PRODUCER NOTES: Enter notes here DESIGNER NOTES: Enter notes here CLIENT NOTES: Enter notes here PRODUCER NOTES: Enter notes here DESIGNER NOTES: Enter notes here SUPPORT FILES:
  • SCRIPT: Enter notes here CLIENT NOTES: Enter notes here PRODUCER NOTES: Enter notes here DESIGNER NOTES: Enter notes here CLIENT NOTES: Enter notes here PRODUCER NOTES: Enter notes here DESIGNER NOTES: Enter notes here SUPPORT FILES:
  • Transcript of "Fortuna Silver Mines June 2012 Investor Presentation"

    1. 1. San Jose Mine, Mexicowww.fortunasilver.com JUNE 2012
    2. 2. Regulatory DisclaimerCertain statements in this presentation constitute forward-looking statements and as such are based on anassumed set of economic conditions and courses of action. These include estimates of future productionlevels, expectations regarding mine production costs, expected trends in mineral prices and statements thatdescribe 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 economicconditions and financial markets, changes in prices for silver and other metals, technological and operationalhazards 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, thetiming and availability of financing, governmental and other approvals, political unrest or instability incountries 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 forMining, 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 andscientific information contained in this presentation are an accurate summary of the original reports anddata provided to or developed by Fortuna Silver Mines. Mr. Vilela is responsible for ensuring that theinformation on reserves, production and costs contained in this presentation are an accurate summary ofthe original reports and data provided to or developed by Fortuna Silver Mines. 2
    3. 3. Vision To be valued by our workers, the community and ourshareholders as a leading silver mining company in Latin America Caylloma Mine, Peru 3
    4. 4. Core AssetsOperating and Exploring in the AmericasProduction San Jose Mine, Mexico Caylloma Mine, PeruExploration Exploring in Mexico and Peru; two largest silver producing countries in the world 44,000 meter drill program for 2012 4
    5. 5. Company SnapshotStrong Balance Sheet Share Structure Exchanges US$54 million in cash (end Q1 2012)  Outstanding: 125.2 million US$20 million credit facility  Fully diluted: 131.0 million No long term debt No hedging Frankfurt: F4S.F FVI.TO vs. Ag (June 2011 – June 2012) 5
    6. 6. Financial SnapshotStrong Revenue and Margin Growth Revenue US$ [´000s] 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 6
    7. 7. 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 7
    8. 8. Key Milestones Foundations of a Leading Silver Mining Company Commissioning of 1,500 tpd Plant plant expansion to expansion Shares begin 1,500 tpd at trading on San Jose Shares begin Commissioning NYSE trading on TSX of dore plant Acquired 100% Off-site dore Commenced plant interest in Reported Shares begin commercial construction San Jose positive trading production at at San Jose Successful pre-feasibility San Jose, on on BVL Received EIS drilling at study at time and on Commenced approval and San Jose San Jose Increased budget production at permits for significantly silver San Jose Company Caylloma on Started increased production established time and on construction Ag Eq by 85% budget Increased of San Jose resourcesShares trade silver Mineon the TSX.V Acquired stake production in by 96% Increased Acquired San Jose silverCaylloma Mine production by 13% 2005 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 2013 8
    9. 9. Investment Highlights 1 2 3 4 5 9
    10. 10. Emergence of a Leading Silver Mining CompanySustainable Mineral Reserve and Resource Growth 10
    11. 11. Emergence of a Leading Silver Mining CompanyIncreasing Exposure to Precious Metals Ag Production Production forecast Au Production Production forecast • 2012 base metal revenue estimate = US$26M; Pb = US$2,300/t & Zn = US$2,000/t 11
    12. 12. Proven Mine Builders and Operators Senior ManagementJorge A. Ganoza Dr. Thomas I. Vehrs Cesar Pera Luis Dario Ganoza Manuel Ruiz-Conejo President, Vice President, Vice President, Chief Financial Officer Vice President,CEO and Director Exploration Human & Organizational Operations DevelopmentCo-founder of Fortuna. Over 35 years Over 25 years Over 15 years Over 25 yearsPeruvian geological experience managing experience in experience in the experience in theengineer. Identified and exploration programs organizational operations and execution of multi-negotiated purchase of in the Americas. Tom development and financial million dollar miningCaylloma, built the also serves as an change in Latin management of projectsFortuna team. Jorge independent director American companies. public mining and thealso serves as Chairman for AQM Copper Inc. companies. Luis also implementationof the Board of Atico serves as a Director of communityMining Corporation, a of Atico Mining relations programs.TSX.V listed company. Corporation, a TSX.V listed company. 12
    13. 13. Proven Mine Builders and Operators Board of Directors Simon RidgwayChairman of the Board Robert R. Gilmore Mario Szotlender Tomas Guerrero Co-founder of Fortuna. 30 years of experience working Co-founder of Fortuna. Geological engineer with Vancouver-based mining with resource companies and Financier, businessman and over 30 years experience. financier. Also founded Focus currently serves as Chairman of Director of Radius Gold, Served as Director of Ventures, Radius Gold, Mar the Board for Eldorado Gold Endeavour Silver, Magellan, Explorations for the West Resources and Corporation and as a Director for Focus Ventures and Iron Hochschild Group. Northland Resources. Layne Christensen Company. Creek. Jorge A. Ganoza President and CEO Thomas Kelly Michael Iverson Co-founder of Fortuna. 36 years of experience in mine Chief Executive Officer of Fortuna Peruvian geological engineer. production, minerals industry from 1998 to January 2005. Identified and negotiated consulting and corporate President and Director of Niogold purchase of Caylloma, built management in various Latin Mining Corp. since 1998. the Fortuna team. Jorge also American countries; currently serves as Chairman of the serves as CEO of Apurimac Ferrum, Board of Atico Mining a private company developing iron Corporation, a TSX.V listed ore assets in Peru. company. 13
    14. 14. Caylloma Mine, PeruOverview Commodities Silver, gold, zinc, lead Operation 1,300 tpd underground mine Reserve Life 8 Years Location Arequipa, Peru Ownership 100% Deposit type Intermediate-sulfidation epithermal deposit2012 Cash Cost Estimate US$85.00/t2012 Development Projects  Phase 2 of new tailings facility  Upgrading of the processing plant  Mine development  Mine camp improvements 14
    15. 15. Caylloma Mine, PeruSolid Reserve and Resource Base Contained Metal Tonnes Ag Au Pb Zn Classification (000) (g/t) (g/t) (%) (%) Ag Au (Moz) (koz)Proven & Probable Reserves 4,642 135 0.33 1.33 1.93 20.2 49.5Measured & Indicated Resources 2,258 123 0.30 0.85 1.28 8.9 21.8Inferred Resources 3,258 112 0.36 0.99 1.50 11.8 37.9Notes 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 15
    16. 16. San Jose Mine, MexicoOverview 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/t2012 Development Projects  Processing plant and mine expansion to 1,500 tpd  Construction of new off-site dore plant  Tailings dam expansion 16
    17. 17. San Jose Mine, MexicoSolid Reserve and Resource Base Contained Metal Tonnes Ag Au Classification (000) (g/t) (g/t) Ag Au (Moz) (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 31st, 2011  Refer to www.fortunasilver.com for full disclosure 17
    18. 18. San Jose Mine, MexicoProven Mine Builders: Discovery to Production 2007- Resource expansion 2010- Positive pre-feasibility study 2011- Commissioning on-time and on-budget 18
    19. 19. San Jose Mine, MexicoUnderground Mine Design North South Service Raise L 1540 Main Ramp Auxiliary BranchAuxiliary Ramp L 1400 Ventilation Raise L 1360 L 1300 LEGEND Main Levels Projected Ramp Ore Pass Projected Level L 1200 Indicated Resources Inferred Resources Waste Pass Production block L 1100 19
    20. 20. San Jose Mine, MexicoSilver and Gold Production Forecast Ag Production Au Production 20
    21. 21. Brownfields Upside, CayllomaProlific Mining District Source: INGEMMET 21
    22. 22. Brownfields Upside, CayllomaExploration Success Fueling Growth 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 22
    23. 23. Brownfields Upside, San JoseUnder-Explored Mining District Source: Mexican Geological Society 23
    24. 24. 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 24
    25. 25. 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 25
    26. 26. Growth StrategyThree-Pronged Approach to Create Shareholder ValueMaximize production,  Execute on production ramp-up at San Jose by 4Q 2013profitability and cash  Focus on operational efficiencies to reduce cash costsflow of current mines  Off-site Ag - Au concentrate leaching facility at San Jose Capitalize on  44,000 meter exploration program between Peru and Mexico brownfields  Two crews evaluating multiple Ag - Au anomalies at San Jose exploration opportunities  Commanding land packages in Peru and Mexico  Post discovery, pre-development opportunities in the Americas Pursue selective  Silver contribution of >50% of revenueM&A opportunities  Below industry median for cash cost 26
    27. 27.  Proven operators and mine builders in the Americas Organic growth potential Consistent cash generation Caylloma Mine Peru 27
    28. 28. Management Head OfficeCarlos BacaT: +51.1.616.6060, ext. 0Corporate OfficeHolly HendershotT (Toronto): +1.647.725.0813T (Vancouver): +1.604.484.4085 www.fortunasilver.com JUNE 2012
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