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Fortuna increases San Jose Ag-Au Resource: Silver equivalent 17.7
million ounces (Indicated), 49.1 million ounces (Inferred)
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March 12, 2007: Fortuna Silver Mines Inc. (FVI: TSX-V) ("Fortuna") is
pleased to announce the results of a new resource estimate for the San
Jose silver-gold deposit located in Oaxaca, Mexico. San Jose is being
explored and developed under a joint venture between Fortuna (76%) and
Continuum Resources Ltd. (24%).
Using a cut-off grade of 150 g/t Ag equivalent, the inferred and
indicated mineral resources for the Trinidad zone at San Jose are
estimated at:
Indicated Mineral Resources: 1.47 million tonnes grading 262.6 g/t Ag
+ 2.19 g/t Au containing 17.7 million Ag equivalent oz
Inferred Mineral Resources: 3.9 million tonnes grading 260.6 g/t Ag +
2.57 g/t Au containing 49.1 million Ag equivalent oz
A detailed table of the mineral resources for each vein is appended at
the end of this release. Also appended is a table showing the
sensitivity of the mineral resource to silver equivalent cut-off grade.
Silver equivalency estimates were derived using US$10.30/oz for silver
and US$525/oz for gold yielding a Ag:Au ratio of 51:1. Metallurgical
recoveries and net smelter returns are assumed to be 100%.
The previous NI43-101 compliant resources for San Jose were estimated
at 527,283 tonnes grading 396 g/t Ag and 3.5 g/t Au (5 g/t Au cutoff),
all in the inferred category, for a contained total of approximately 10
million ounces silver equivalent (the NI 43-101 compliant technical
report is dated March 2006 and available on SEDAR).
The San Ignacio zone, located approximately 700m along strike to the
south of the Trinidad zone, is not included in the current resource
estimate. Initial drilling in the San Ignacio area has identified
significant silver and gold mineralization but further drilling is
required before a meaningful estimate of the resource potential can be
made for the area.
Pending receipt of permits, drilling is scheduled to resume at the
Trinidad Zone in late March 2007. Initial drilling will be focused on
testing the extension of mineralization to depth, and follow-up
drilling on the high-grade intercepts at the San Ignacio vein which
were reported in 2006 (See news release dated December 7, 2006).
Concurrently, surface geochemical and reconnaissance programs will be
carried out in the San Jose-Taviche District on concessions recently
acquired jointly by Fortuna and Continuum.
Jorge Ganoza, the President of Fortuna commented: "Fortuna has achieved
a new milestone that reflects our commitment to continued growth in
shareholder value. San Jose now has nearly five times more silver
equivalent ounces in the inferred category than were contained in the
previous resource estimate and the system remains open at depth and
along strike."
Methodology
The updated resource estimate was prepared by Independent Mining
Consultants, Inc. of Tucson, Arizona. Mike Hester acted as the
independent qualified person as defined by Canadian National Instrument
43-101.
The estimate is based on all drilling completed to-date and 692 channel
samples collected from the underground workings in the Trinidad zone.
The methods used in determining and reporting the resources are
consistent with CIM Best Practice Guidelines for the estimation of
mineral resources and mineral reserves. For the purposes of the
estimate, metal prices were assumed at US$10.30/oz for silver and
US$525/oz for gold yielding a Ag:Au ratio of 51:1. Metallurgical
recoveries and net smelter returns are assumed to be 100%. A rock
density of 2.59 t/m3 has been assumed for both mineralized vein and
wall rock materials based on specific gravity measurements taken from
64 vein and wall rock samples.
Three-dimensional wireframe models were developed for each vein system
and drill hole grades were composited to 2m intervals. The block model
was based on 2m by 2m by 2m blocks. To improve grade estimation, the
easting coordinate was replaced by a footwall distance coordinate for
both the model blocks and the drill hole composite data. This resulted
in straightening of the veins for estimation purposes.
Silver and gold grades in the veins were estimated by inverse distance
squared with a search radius of 120m along the strike of the vein, 120m
in a dip direction of the vein and 10m in a transversal direction of
the vein. Silver composites exceeding 1700 g/t and gold composites
exceeding 20 g/t were restricted to search radii of 50m along the local
strike of the vein and 50m in the dip direction of the vein. Silver
and gold grades were also estimated for stockwork zones by inverse
distance squared but with more limited search radii of 30m in a
north-south direction, 30m in a vertical direction and 10m in the
east-west direction.
For sensitivity analysis and comparison purposes, resource estimates
were also prepared using ordinary kriging, nearest neighbor polygon and
un-restricted inverse distance methods. Globally, the inverse distance
and ordinary kriging methods resulted in similar block grade
distributions but the inverse distance did a better job of tracking
local grade variations. Resource estimates were validated by
comparison of cross sections of the model blocks with drill hole
composites.
A full NI43-101 compliant report will be filed on www.sedar.com within
45 days of this news release. The report will be co-authored by M.
Hester of Independent Mining Consultants and Gerry Ray, a consulting
geologist with extensive experience at the San Jose project and a
qualified person (QP) under the definition of NI 43-101. Mr. Hester is
responsible for the accuracy of this press release.
Background
Fortuna is a growth-oriented silver and base metal producer focused on
mining opportunities in Latin America. The Company's primary assets
are the Caylloma Silver-Base Metals Mine in southern Peru and the San
Jose Silver-Gold Project in Mexico. The Company is aggressively
pursuing additional acquisition opportunities. For more information,
please visit our website at www.fortunasilver.com.
The TSX Venture Exchange has not reviewed and does not take
responsibility for the adequacy or accuracy of this release.
ON BEHALF OF THE BOARD,
Jorge Ganoza Durant,
President
Fortuna Silver Mines Inc.
Tel: 604-484-4085
Symbol: TSX-V: FVI
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Copyright (c) 2007 FORTUNA SILVER MINES INC. (FVI) All rights
reserved. For more information visit our website at
http://www.fortunasilver.com/ or send mailto:info@fortunasilver.com
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