![Financial Snapshot
Strong financial performance
Revenue US$ [millions] Operating Income US$ [millions]
45.2 43.9
181.8 38.1
161.0
27.7
110.0
74.1 14.4
51.4
2009 2010 2011 2012 2013E 2009 2010 2011 2012 2013E
2013 forecast: Ag = US$30.00/oz, Au = US$1,700/oz, Pb = US$2,100/t and Zn = US$2,000/t
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Fortuna silvermar13presentation
- 1. San Jose Mine, Mexico www.fortunasilver.com March 2013
- 2. Regulatory Disclaimer 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 information contained in this presentation is an accurate summary of the original reports and data provided to or developed by Fortuna Silver Mines. 2
- 3. Vision To be valued by our workers, the community and our shareholders as a leading silver mining company in Latin America Caylloma Mine, Peru 3
- 4. Core Assets Operating 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 51,000 meter drill program in 2013 4
- 5. Company Snapshot Strong balance sheet Share structure (as of Mar 20 ) th Exchanges US$64.7 million in cash (Q4 2012) Outstanding: 125.3 million US$20 million undrawn credit facility Fully diluted: 131.4 million No long term debt No hedging Relative performance (%) of FVI & SLV FVI-T SLV Frankfurt: F4S.F 170% 5.60 160% 150% 5.10 140% Share Price 4.60 Performance % 130% 4.10 120% 114% 110% 3.60 104% 100% 3.10 90% 6/29/2012 7/29/2012 8/28/2012 9/27/2012 1/25/2013 10/27/2012 11/26/2012 12/26/2012 2/21/2013 5
- 6. Proven Mine Builders and Operators Senior Management Jorge A. Ganoza Dr. Thomas I. Vehrs Cesar Pera Luis Dario Ganoza Manuel Ruiz-Conejo Robert Brown President, Vice President, Vice President, Chief Financial Vice President, Vice President, CEO and Director Exploration Human & Organizational Officer Operations Corporate Development Development Co-founder of Over 35 years Over 25 years Over 15 years Over 25 years 20 years experience in Fortuna. Peruvian experience managing experience in experience in the experience in the exploration, project geological engineer. exploration organizational operations and execution of multi- development and Identified and programs in the development financial million dollar finance. Former CEO negotiated purchase Americas. Tom also and change in management of mining projects and of Calibre Mining of Caylloma, built serves as an Latin American public mining the implementation Corp. and senior the Fortuna team. independent director companies. companies. Luis of community manager at Barrick Jorge also serves as for AQM Copper Inc. also serves as a relations programs. Gold in exploration Chairman of the Director of Atico and business Board of Atico Mining Corporation, development. Mining Corporation, TSX.V: ATY TSX.V: ATY 6
- 7. Proven Mine Builders and Operators Board of Directors Simon Ridgway Chairman 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 over 30 years experience. financier. Also founded currently serves as Chairman of and Director of Radius Served as Director of Focus Ventures, Radius the Board for Eldorado Gold Gold, Endeavour Silver, Explorations for the Gold, Mar West Resources Corporation and as a Director for Magellan, Focus Ventures Hochschild Group. and Northland Resources. Layne Christensen Company. and Iron 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 production, minerals industry from 1998 to January 2005. engineer. Identified and consulting and corporate President and Director of Niogold negotiated purchase of management in various Latin Mining Corp. since 1998. Caylloma, built the Fortuna American countries; currently team. Jorge also serves as serves as CEO of Apurimac Ferrum, Chairman of the Board of a private company developing iron Atico Mining Corporation, ore assets in Peru. TSX.V: ATY 7
- 8. Key Milestones Foundations of a Leading Silver Mining Company Commissioning of 1,500 tpd Plant expansion at expansion to San Jose Shares begin 1,500 tpd at trading on San Jose mine Shares begin NYSE trading on TSX Acquired 100% Commenced interest in Reported commercial Shares begin San Jose positive trading production at project pre-feasibility San Jose mine, Successful on BVL drilling at study at on time and Commenced Received EIS San Jose on budget San Jose Increased production at approval and significantly silver Company Caylloma on permits for Started increased production established time and on San Jose construction Ag Eq by 85% budget resources of San Jose Shares trade Increased mine on the TSX.V Acquired stake silver in production Increased Acquired San Jose by 96% silver Caylloma mine project production by 13% 2005 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 2013 8
- 9. Emergence of a Leading Silver Mining Company Sustainable Mineral Reserves and Resources 140.0 Inferred Resources 120.0 Measured & Indicated Resources Proven & Probable Reserves Contained Metal - Ag Eq (Moz) * 100.0 80.0 60.0 40.0 20.0 0.0 2005 2006 2007 2008 2009 2010 2011 2012 * Ag Eq for Resources calculated using Ag = US$25.14/oz and Au = US$1,391.63/oz Ag Eq for Reserves calculated using Ag = US$29.36/oz and Au = US$1,544.00/oz 9
- 10. Emergence of a Leading Silver Mining Company Increasing Exposure to Precious Metals 5.0 Ag Production 4.9 4.4 4.5 4.0 4.0 3.5 3.0 2.5 M oz 2.5 1.9 2.0 1.7 1.5 1.0 0.8 0.4 0.5 0.0 2007 2008 2009 2010 2011 2012 2013E 2014E Au Production 30,000 26,000 25,000 23,300 20,700 20,000 15,000 oz 10,000 6,900 5,000 3,300 2,400 2,600 2,200 0 2007 2008 2009 2010 2011 2012 2013E 2014E 2013 base metal revenue estimate = US$30M; Pb = US$2,100/t & Zn = US$2,000/t 10
- 11. Financial Snapshot Strong financial performance Revenue US$ [millions] Operating Income US$ [millions] 45.2 43.9 181.8 38.1 161.0 27.7 110.0 74.1 14.4 51.4 2009 2010 2011 2012 2013E 2009 2010 2011 2012 2013E 2013 forecast: Ag = US$30.00/oz, Au = US$1,700/oz, Pb = US$2,100/t and Zn = US$2,000/t 11
- 12. Financial Snapshot Strong cash flow and sustainable growth Cash Flow Per Share US$ Earnings Per Share US$ 0.18 0.14 0.16 0.12 0.14 0.10 0.12 0.10 0.08 0.08 0.06 0.06 0.04 0.04 0.02 0.02 - - Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2012 12
- 13. Project Pipeline San Jose Mine PRODUCTION Caylloma Mine DEVELOPMENT PROJECTS Trinidad Carolina Don Luis North San Pedro Oeste, Cross DRILL TARGETS Animas NE Lode, El Toro, Trinidad Cerro Vilafro, Vilafro Sur Cailloma 6 Los Ocotes EARLY STAGE Over 95,600 hectares LAND PACKAGE 13
- 14. San Jose Mine, Mexico Overview Commodities Silver, gold Operation 1,050 tpd underground mine Reserve Life 9 Years Taviche Mining District, Location Oaxaca, Mexico Ownership 100% High-grade, low sulphidation Deposit type epithermal vein deposit 2013E cash cost/t US$70 3,500 Ag Production 24,000 Au Production 3,000 20,000 2,500 2,000 16,000 k oz oz 1,500 12,000 1,000 8,000 500 - 4,000 2011 2012 2013 2014 2011 2012 2013 2014 Forecasts Forecasts 14
- 15. San Jose Mine, Mexico Solid reserve and resource base Contained Metal Tonnes Ag Au Classification (000) (g/t) (g/t) Ag Au (Moz) (koz) Proven & Probable Reserves 3,335 190 1.58 20.4 169.5 Measured & Indicated Resources 56 74 0.61 0.1 1.1 Inferred Resources 4,257 185 1.57 25.3 214.9 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 San Jose Mineral Resources & Mineral Reserves are reported as of December 31, 2012 Refer to www.fortunasilver.com for full disclosure 15
- 16. San Jose Mine, Mexico Underground mine design North South Service Raise L 1540 Main Ramp Auxiliary Branch Auxiliary Ramp L 1400 Ventilation Raise L 1360 L 1300 LEGEND Main Levels Projected ramp Ore Pass Projected level The image cannot be displayed. Your computer may not have enough memory to open the image, or the image may have been corrupted. Restart your computer, and then open the file again. If the red x still appears, you may have to delete the image and then insert it again. L 1200 Indicated resources Inferred resources Waste Pass Production block L 1100 16
- 17. San Jose Mine Brownfields Exploration Anomaly evaluation, mapping, sampling, target identification 64,400 ha concession area US$7.5M 2013 exploration budget 17
- 18. San Jose Brownsfields Exploration Trinidad Longitudinal Section 18
- 19. Caylloma Mine, Peru Overview Commodities Silver, gold, zinc, lead Operation 1,300 tpd underground mine Reserve Life 8 Years Location Arequipa, Peru Ownership 100% Intermediate sulfidation Deposit type epithermal deposit 2013E cash cost/t US$96 Ag Production 2,000 1,900 k oz 1,800 1,700 1,600 1,500 2011 2012 2013 2014 Forecasts 19
- 20. Caylloma Mine, Peru Solid reserve and resource base Contained Metal Tonnes Ag Au Pb Zn Classification (000) (g/t) (g/t) (%) (%) Ag Au (Moz) (koz) Proven & Probable Reserves 4,308 130 0.37 1.52 2.15 17.9 51.1 Measured & Indicated Resources 1,601 79 0.33 0.79 1.43 4.1 17.0 Inferred Resources 6,633 101 0.27 1.84 2.58 21.5 58.5 Notes to Mineral Reserve and Mineral Resource tables prepared in accordance with NI 43 - 101: Mineral Reserve and Mineral Resource estimates prepared in accordance with NI 43-101 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, 2012 Refer to www.fortunasilver.com for full disclosure 20
- 21. Caylloma Mine Brownfields Exploration 2013 Exploration Targets 31,200 ha concession area US$6.7M 2013 exploration budget 21
- 22. Growth Strategy Three-pronged approach to create shareholder value Maximize production, Commissioning of San Jose expansion to 1,500 tpd by 3Q 2013 profitability and cash flow of current mines Focus on operational efficiencies to reduce cash costs Capitalize on 51,000 meter exploration program between Peru and Mexico brownfields 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 revenue M&A opportunities Below industry median for cash cost 22
- 23. Community Relations Program Forging 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 23
- 24. Investment Highlights 1 Emergence of a leading silver mining company in the Americas 2 Proven mine developers and operators 3 Strong cash flow and sustainable growth from existing mines 4 Brownfields exploration upside 5 Disciplined acquisition strategy 24
- 25. Management Head Office Carlos Baca T: +51.1.616.6060, ext. 0 info@fortunasilver.com Corporate Office Holly Hendershot T (Toronto): +1.647.725.0813 T (Vancouver): +1.604.484.4085 www.fortunasilver.com March 2013