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San Jose Mine, Mexico September 2012 www.fortunasilver.com

Fortuna Silver September Investor Presentation

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Page 1: Fortuna Silver September Investor Presentation

San Jose Mine, Mexico

September 2012www.fortunasilver.com

Page 2: Fortuna Silver September Investor Presentation

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 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

Page 3: Fortuna Silver September Investor Presentation

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To be valued by our workers, the community and our shareholders as a leading silver mining company in Latin America

Caylloma Mine,Peru

Vision

Page 4: Fortuna Silver September Investor Presentation

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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

Page 5: Fortuna Silver September Investor Presentation

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Company SnapshotStrong balance sheet US$60.65 million in cash (Q2 2012) US$20 million credit facility No long term debt No hedging

FVI.TO vs. Ag (Sept. 2011 – Sept. 2012)

Share structure (as of July 30th)

Outstanding: 125.2 million Fully diluted: 131.0 million

Exchanges

Frankfurt: F4S.F

Page 6: Fortuna Silver September Investor Presentation

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Financial Snapshot

Revenue US$ [´000s]

Strong financial performance

Operating Income US$ [´000s]

2012 forecast: Ag = US$30/oz, Au = US$1,660/oz, Pb = US$2,300/t and Zn = US$2,000/t

2009 2010 2011 2012

51,42874,056

110,004

154,122

2009 2010 2011 2012

14,383

27,728

38,06543,402

FORECAST FORECAST

Page 7: Fortuna Silver September Investor Presentation

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Financial SnapshotStrong cash flow and sustainable growth

Earnings Per ShareCash Flow Per Share

Q2 2012 Q1 2012 Q4 2011 Q3 2011 -

0.02

0.04

0.06

0.08

0.10

0.12

0.14

Q2 2012 Q1 2012 Q4 2011 Q3 2011 (0.02)

0.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14

Page 8: Fortuna Silver September Investor Presentation

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2009 2010 2011 2012

44% 49%64% 65%

4%3%

7%19%

23%21%

14%

9%29% 23%

15%7%

1% 4%

Copper Lead

Zinc Gold

Silver

FORE-CAST

2012 forecast: Ag = US$30/oz, Au = US$1,660/oz, Pb = US$2,300/t and Zn = US$2,000/t

Financial SnapshotRevenue by metal

Page 9: Fortuna Silver September Investor Presentation

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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

Page 10: Fortuna Silver September Investor Presentation

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Investment Highlights

Proven mine developers and operators

Strong cash flow and sustainable growth from existing mines

Disciplined acquisition strategy

Brownfields exploration upside

1

2

3

5

4

Emergence of a leading silver mining company in the Americas

Page 11: Fortuna Silver September Investor Presentation

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Emergence of a Leading Silver Mining CompanySustainable mineral reserve and resource growth

2005 2006 2007 2008 2009 2010 20110.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0Inferred ResourcesMeasured & Indicated ResourcesProven & Probable Reserves

Cont

aine

d M

etal

- A

g Eq

(Moz

) *

* Ag Eq calculated using Ag = US$25.14/oz and Au = US$1,391.63/oz

Page 12: Fortuna Silver September Investor Presentation

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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 Production

M o

zo z

Production forecast

25,00030,000

20,00015,00010,000

5,000-

20082007 2009 2010 2011 2012 2013 2014 2015

3,3002,100 2,300 2,500

7,000

17,400

21,100

26,000 27,000

Production forecast

4.0

5.0

3.0

2.0

1.0

-20082007 2009 2010 2011 2012 2013 2014 2015

0.440.81

1.61.9

2.4

3.7 4.1

4.9 4.9

Page 13: Fortuna Silver September Investor Presentation

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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.

Robert BrownVice 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.

Page 14: Fortuna Silver September Investor Presentation

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Proven Mine Builders and OperatorsBoard of Directors

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.

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.

Page 15: Fortuna Silver September Investor Presentation

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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

2012E cash cost/t US$85.00

Caylloma Mine, PeruOverview

2009 2010 2011 2012 1,500

1,600

1,700

1,800

1,900

2,000

Chart Title

Production forecast

Ag Production

k oz

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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

Page 17: Fortuna Silver September Investor Presentation

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Commodities Silver, goldOperation 1,050 tpd underground mine

Reserve Life 9 Years

Location Taviche Mining District, Oaxaca, Mexico

Ownership 100%

Deposit type High-grade, low sulphidation epithermal vein deposit

2012E cash cost/t US$75.00

San Jose Mine, MexicoOverview

2011 2012 2013 2014 -

500

1,000

1,500

2,000

2,500

3,000 Chart Title

2011 2012 2013 2014 -

5,000

10,000

15,000

20,000

25,000

k oz

oz

Ag Production Au Production

Production forecastProduction forecast

Page 18: Fortuna Silver September Investor Presentation

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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

Page 19: Fortuna Silver September Investor Presentation

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K

L M

A I

E J

HG

B

F

C D

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 1100

Waste Pass

Service Raise

L 1540L 1540

L 1360L 1360

SouthSouthNorthNorth

Main Ramp

Auxiliary Branch

Page 20: Fortuna Silver September Investor Presentation

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Exploration Pipeline

PRODUCTION

LAND PACKAGE

DEVELOPMENT PROJECTS

EARLY STAGE

DRILL TARGETS

Over 87,000 hectares

Caylloma Mine

San Jose Mine

Bateas

Animas NE/ Nancy

Don Luis

San Pedro, San Carlos, El Toro, Apóstoles

Tlacolula

Cerro Vilafro, Vilafro Sur

El PochotleCailloma 6

Page 21: Fortuna Silver September Investor Presentation

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Exploration SnapshotBrownfields Peru

29,000 ha land package

4 drill rigs in operation

US$7.2M 2012 exploration budget

Brownfields exploration program oriented at expanding resource base with priority given to silver-rich veins

Page 22: Fortuna Silver September Investor Presentation

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Animas/Nancy Vein System 100% ownership High-grade polymetallic vein system with moderate Ag

values:- ANIM022012: 5.05 m avg. 106 g/t Ag, 6.90% Pb and

7.54 % Zn [Animas vein]- NANS002012: 9.55 m avg. 91 g/t Ag, 5.30% Pb and

7.62 % Zn [Nancy vein] Generating updated resource model

Cerro Vilafro 100% ownership Epithermal system with a NE-SW trending vein swarm,

hosted by Cretaceous quartzites with potential to be a bulk-mineable, open-pit target:

- CH 503715: 0.40 m avg. 3.23 g/t Au and 827 g/t Ag

- CH 503708: 0.40 m avg. 2.14 g/t Au and 2,440 g/t Ag Drill testing planned for 3rd/4th quarter of 2012

Exploration SnapshotBrownfields Peru

Page 23: Fortuna Silver September Investor Presentation

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Exploration SnapshotSan Jose land package, Mexico

58,000 ha concession package Soil and stream sediment sampling 2 drill rigs in operation US$5.8 M 2012 exploration budget Significant resource growth

potential within trucking distance to processing plant

Page 24: Fortuna Silver September Investor Presentation

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Tlacolula Option to acquire 60% interest from Radius Large and untested low sulfidation epithermal vein system Two main veins identified, Tlacolula and Guila:

- CH 136366: 6.30 m avg. 19.34 g/t Au and 986 g/t Ag (open) [Guila Vein]

- CH 135709: 9.60 m avg. 0.13 g/t Au and 295 g/t Ag (open) [Tlacolula Vein]

1,600 meter drill program in preparation stage

El Pochotle 100% owned High-grade Ag – Au epithermal vein systems 6,000 meter drill program planned for 3rd /4th quarter of 2012

Exploration SnapshotBrownfields Mexico

Page 25: Fortuna Silver September Investor Presentation

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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

Page 26: Fortuna Silver September Investor Presentation

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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

Page 27: Fortuna Silver September Investor Presentation

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Proven operators and mine builders in the Americas Organic growth potential Consistent cash generation

Caylloma MinePeru

Page 28: Fortuna Silver September Investor Presentation

Management Head OfficeCarlos BacaT: +51.1.616.6060, ext. 0

Corporate OfficeHolly HendershotT (Toronto): +1.647.725.0813T (Vancouver): +1.604.484.4085

September 2012www.fortunasilver.com