Deal #3220 Version #59411

The silver- and base metal-rich epithermal deposits of the Caylloma Mining District of southern Peru have been mined intermittently since the start of the Spanish colonial period. Located within one of the most important metallogenic provinces of the Andes, past production is estimated at more than 200 million ounces of silver. Fortuna Silver purchased a 100% interest in the Caylloma Mine and related mining concessions in 2005. Following significant expansion and modernization of the mill, the mine was brought back into production in October 2006. The mine and processing plan are currently producing 1,300 tpd. Production is sourced primarily from the silver-polymetallic Animas vein (80%), with the balance from the Bateas and Soledad veins. Exploration of the Caylloma Property is ongoing, with expansion of the existing reserve and resource base the main focus.