NYSE: FSM TSX: FVI fortunasilver.com September 2017 › denvergold › members › corpo… ·...

September 2017

NYSE: FSM | TSX: FVI | fortunasilver.com

NYSE: FSM | TSX: FVI 2

Cautionary Statement on Forward Looking Statements / Non-GAAP Financial Measures This corporate presentation contains forward looking statements which constitute “forward looking information” within the meaning of applicable Canadian securities legislation and “forward looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 (collectively, “Forward looking Statements”). All statements included herein, other than statements of historical fact, are Forward looking Statements and are subject to a variety of known and unknown risks and uncertainties which could cause actual events or results to differ materially from those reflected in the Forward looking Statements. The Forward looking Statements in this corporate presentation may include, without limitation, statements about the company’s plans for its mines and mineral properties; the company’s business strategy, plans and outlook; the merit of the company’s mines and mineral properties; mineral resource and reserve estimates; timelines; the future financial or operating performance of the company; expenditures; approvals and other matters. Often, but not always, these Forward looking Statements can be identified by the use of words such as “estimate”, “estimated”, “potential”, “open”, “future”, “assumed”, “projected”, “calculated”, “used”, “detailed”, “has been”, “gain”, “upgraded”, “expected”, “offset”, “limited”, “contained”, “reflecting”, “containing”, “conduct”, “increasing”, “remaining”, “to be”, “periodically”, or statements that events, “could” or “should” occur or be achieved and similar expressions, including negative variations. Forward-looking Statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to be materially different from any results, performance or achievements expressed or implied by the Forward-looking Statements. Such uncertainties and factors include, among others, 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 issues; as well as those factors discussed under “Risk Factors” in the Company's Annual Information Form. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in Forward-looking Statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking Statements contained herein are based on the assumptions, beliefs, expectations and opinions of management, including but not limited to estimates of future production levels; expectations regarding mine production costs; expected trends in mineral prices and currency exchange rates; the accuracy of the company’s current mineral resource and reserve estimates; that the company’s activities will be in accordance with the company’s public statements and stated goals; that there will be no material adverse change affecting the company or its properties; that all required approvals will be obtained; that there will be no significant disruptions affecting operations and such other assumptions as set out herein. Forward-looking Statements are made as of the date hereof and the Company disclaims any obligation to update any Forward-looking Statements, whether as a result of new information, future events or results or otherwise, except as required by law. There can be no assurance that Forward-looking Statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, investors should not place undue reliance on Forward-looking Statements. Certain technical data in this presentation was taken from the technical report entitled, “Technical Report Update on the Lindero Heap Leach Project Salta Province, Argentina,” dated February 23, 2016, prepared by Carl E. Defilippi, SME Registered Member, Paul Tietz, C.P.G., Thomas L. Dyer, P.E. and David G. Thomas, P.Geo. (the “Lindero Technical Report”), and is subject to the assumptions, qualifications and procedures defined therein. This corporate presentation also refers to non-GAAP financial measures, such as cash cost per tonne of processed ore; cash cost per payable ounce of silver; total production cost per tonne; all-in sustaining cash cost; all-in cash cost; adjusted net (loss) income; operating cash flow per share before changes in working capital, income taxes, and interest income; and adjusted EBITDA. These measures do not have a standardized meaning or method of calculation, even though the descriptions of such measures may be similar. These performance measures have no meaning under International Financial Reporting Standards (IFRS) and therefore, amounts presented may not be comparable to similar data presented by other mining companies. Mr. Eric N. Chapman, M.Sc., Vice President of Technical Services, is the Qualified Person for Fortuna Silver Mines Inc. as defined by National Instrument 43-101. Mr. Chapman is a Professional Geoscientist of the Association of Professional Engineers and Geoscientists of the Province of British Columbia (Registration Number 36328) 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 Inc., and has approved this disclosure.

Dollar amounts expressed in US dollars, unless otherwise indicated.


Our Vision, Mission and Values

Caylloma Mine, Peru

Our Vision To be valued by our workers, the community and our shareholders as a world leading precious metals mining company.

Our Mission To create value through the growth of reserves, metal production and the efficient operation of our assets with a commitment to safety, social and environmental responsibility.

Our Values

We value the health and safety of our workers We do not tolerate unsafe acts or conditions

We value the environment We subscribe to the highest environmental standards

We value our neighbours and other stakeholders We respect cultural diversity and work as a strategic partner towards the sustainable development of neighbouring communities

We value the commitment to excellence We achieve high standards and best practices

We value integrity We act according to our philosophy

NYSE: FSM | TSX: FVI

Foundations of a world leading precious metals mining company

Historic Highlights

• Fortuna Silver Mines established

• Caylloma Mine: Re-started production

• San Jose Project: 100% interest acquired

• San Jose Mine: Construction and commissioning completed on-time and on-budget; commercial production declared at 1,000 tpd in September 2011

• San Jose Mine: Trinidad North high-grade silver-gold discovery

• San Jose Mine: Expansion from 2,000 tpd to 3,000 tpd commisioned in July 2016; on-time and under budget

• Caylloma Mine: Mill throughput expanded from 1,300 tpd to 1,430 tpd in March 2016

Caylloma Mine in Arequipa, Peru San Jose Mine in Oaxaca, Mexico San Jose Mine Trinidad North Discovery

2005–2007 2009–2011 2013–2016

4

Lindero Project in Salta, Argentina1

2016 - 2017 • In July 2016, the open pit

Lindero gold Project was acquired from Goldrock Mines Corp.

• Positive construction decision made in September 2017

• Proven and Probable Mineral Reserves of 88.3 Mt averaging 0.62 g/t Au (1.75 Moz contained Au)

Note: 1. Mineral Reserves reported as of September 9, 2017


Strong financial position to support growth strategy

Capital Structure and Share Performance

5

Robust Financial Position • $188.0 million in cash (end Q2 2017) • Debt outstanding: $40 million term loan

- Debt to EBITDA¹: < 0.5x • No hedging of precious metals

Share Structure (as of 10AUG17)

Outstanding: 159.5 million Fully diluted: 161.5 million

Exchanges NYSE: FSM TSX: FVI

Relative Performance of FVI.T (19SEPT16 – 19SEPT17)

Note: 1. Last twelve months Adjusted EBITDA

-42%

-4%

-7%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

19

-Se

p-1

6

3-O

ct-1

6

17

-Oct

-16

31

-Oct

-16

14

-No

v-1

6

28

-No

v-1

6

12

-De

c-1

6

26

-De

c-1

6

9-J

an-1

7

23

-Jan

-17

6-F

eb

-17

20

-Fe

b-1

7

6-M

ar-1

7

20

-Mar

-17

3-A

pr-

17

17

-Ap

r-1

7

1-M

ay-1

7

15

-May

-17

29

-May

-17

12

-Ju

n-1

7

26

-Ju

n-1

7

10

-Ju

l-1

7

24

-Ju

l-1

7

7-A

ug-

17

21

-Au

g-1

7

4-S

ep

-17

18

-Se

p-1

7

FVI Lodon Ag Fix XAU IndexLondon Ag Fix


Positive construction decision for the Lindero Project located in Argentina

Core Assets

6

Production

• Increasing silver and gold production

• Low cost silver mines

• 2017E consolidated AISC¹ = $9.8/oz Ag

• Lindero gold Project in Salta, Argentina

- 18,750 tpd open pit, heap leach mine

- Initial capital: $239 million

- 18 month construction period starting in October 2017

- Lindero Mine commissioning expected in Q2 2019

New Exploration Projects

• Funding Strategic Alliances with the right to select projects for joint venture:

- Medgold Resources Corp. (TSX.v: MED) | (Serbia): C$3.0 M equity investment; 23.97% ownership; Tlamino Gold Project selected for joint venture

- Prospero Silver Corp. (TSX.v: PSL) | (Mexico): C$1.5 M equity investment; 14.91% ownership

Corporate Office Vancouver, Canada

Management Head Office Lima, Peru

MEXICO

SAN JOSE MINE Silver, Gold

PERU

CAYLLOMA MINE Silver, Lead, Zinc

ARGENTINA

LINDERO PROJECT Gold

Notes: 1. All-in sustaining cash cost (AISC) is net of by-product credits for gold, lead and zinc

Construction


Snapshot

Lindero Project, Argentina

COMMODITY

Gold

OPERATION

18,750 tpd open pit, heap leach

RESERVE LIFE

15 years

LOCATION

Salta Province, Argentina

OWNERSHIP

100 %

DEPOSIT TYPE

Porphyry Gold

LOM AISC

$802/oz Au

Lindero Project

7

Life of Mine Gold Production1

(koz/yr)

Note: 1. Gold recovered to doré 2. Refer to slide 34 for life of mine annual production plan details

137 138

104 115

88 80

90 85 80 83 84 88

81

33

17

0

20

40

60

80

100

120

140

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15


Low cost gold production over 15 years of operation


8

Key Financial Metrics @ $1,250/oz Au

After-tax NPV2 @ 5%: $130 M

After-tax IRR3: 18%

Payback period4: 3.6 years; 80% payback in first 2 years

AISC: Average first 4 years < $700/oz Au; LOM $802/oz Au

Key Production Metrics

LOM1 strip ratio (waste to ore): 1.2

LOM head grade: 0.62 g/t

LOM recovery: 75%

LOM gold recovered to doré: 1.3 Moz

Notes: 1. LOM = Life of Mine 2. NPV = Net Present Value; considers initial capital in one single annual period; excludes High-Pressure-Grinding-Roller (HPGR) acquired upon the acquisition of Goldrock Mines Corp. 3. IRR = Internal Rate of Return; considers initial capital in one single annual period; excludes High-Pressure-Grinding-Roller (HPGR) acquired upon the acquisition of Goldrock Mines Corp. 4. Payback based on undiscounted cash flow


Strong growth in Mineral Reserves

Growing Reserve and Resource Base

9

Notes: 1. Ag Eq calculated using Au = $1,140/oz and Ag = $19/oz (60:1 Au:Ag ratio); Ag Eq does not include base metals 2. Refer to slides 31 - 33 for back-up to each resource and reserve bar; Caylloma and San Jose mines´ reserves and resources reported as of December 31, 2016, reserves and resources for Lindero reported as of September 9, 2017

Reserve and Resource Base

Reserves by Metal (1)

76%

24% Gold (as Ag Eq)

Silver

0

20

40

60

80

100

120

140

160

180

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Co

nta

ined

Met

al -

Ag

Eq (

Mo

z)1

Proven & Probable Reserves Measured & Indicated Resources Inferred Resources

2


3.3 3.9 4.5 5.0 6.0

4.8

3.0

3.6

6.4 7.2

8.9 10.3

25.5

21.1

15.9

14.8

10.3 11.7

5.0

10.0

15.0

20.0

25.0

30.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

2012 2013 2014 2015 2016 2017E

AIS

C (

$/o

z A

g)

Ag

Eq M

oz

Caylloma Mine, Peru San Jose Mine, Mexico AISC ($/oz Ag Eq)

Consolidated production rate of ~15 Moz Ag Eq in 2017E at an AISC of $11.7/oz Ag Eq

Consolidated Ag Eq Production and AISC

10

Notes: 1. 2017E AISC estimated at metal prices of $1,200/oz Au, $17.00/oz Ag, $1,900/t Pb and $2,100 /t Zn; Brownfields exploration costs included in 2017E AISC. Historical AISC based on realized metal prices. 2. Estimated Ag Eq production is calculated using ratios of Ag:Au = 60:1; Ag:Pb (lbs) = 1:19.7; Ag:Zn (lbs) = 1:17.8

15.1

7.5

10.9

12.2

14.9

6.3


0.4 0.8 1.7 1.9 2.0 2.0 2.1 2.2 1.7 1.3 1.0

0.5 1.9

2.5

4.4 4.9 6.1 7.1

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017E

Caylloma Mine, Peru

San Jose Mine, Mexico

Consolidated Silver Production (Moz)

Combination of low cost organic growth

Increasing Silver and Gold Production

11

Notes: 1. CAGR = Compound Annual Growth Rate

Consolidated Gold Production (koz)

2.5

3.3 3.2 2.7 2.6 2.4 2.8 2.2 1.8 1.2 0.5 0.5 4.6

17.9 19.0

33.5 38.5 46.0

51.9

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017E

Caylloma Mine, Peru


3.9 4.6

6.6 6.6 7.4

8.1

21.2

39.7

46.5 52.4

35.3

7.0

20.7


44.5

64.1

49.6

83.0

99.1

2013 2014 2015 2016 2017E¹

7.0 4.7 3.6

0.3 1.1

7.0

4.8 6.8

2.8 3.4

2.3

1.1 0.6

1.1 1.4

3.7

2.8 2.5

2.2 2.1

0.5

1.1 1.0

1.9 1.9

20.5

14.5 14.5

8.4 9.8

2013 2014 2015 2016 2017E¹

Worker's participation,royalties & mining tax

G&A

Brownfields exploration

Sustaining CAPEX

Cash cost per oz

137.4

174.0 154.7

210.3 224.5

2013 2014 2015 2016 2017E¹

Sales ($ M)

Maximizing margins through management of cost and capital

2017 Financial Snapshot

12

Cash Flow from Operations² ($ M)

Note: 1. Estimated using Au = $1,200/oz, Ag = $17.00/oz, Pb = $1,900/t and Zn = $2,200/t 2. Before changes in working capital 3. Non-GAAP financial measure; refer to slide 29

Adjusted EBITDA³ ($ M) AISC ($/oz Ag)

40.9

59.8

30.6

62.3 61.5

2013 2014 2015 2016 2017E¹


10.6 11.2

Q2 2017 Q2 2016

5%

7.2 8.8

Q2 2017 Q2 2016

19%

14.5

9.4

Q2 2017 Q2 2016

2.1

1.6

Q2 2017 Q2 2016

75% of precious metals contribution to sales

Q2 2017 Consolidated Production

13

Silver Production (Moz) Gold Production (koz)

Base Metals Production

Zinc (Mlbs) Lead (Mlbs)

36% 55%

Note: H1 2017 silver production of 4.2 Moz, gold production of 27.7 koz, lead production of 14.4 Mlbs and zinc production of 21.4 Mlbs

Provisional Sales Contribution by Metal

51%

24%

10%

15%

Ag Pb

Au

Zn


12.0

-1.4

16.7

7.4

Q2 2017 Q2 2016

Net cash provided by operatingactivities

Cash from operations beforechanges in working capital

8.9

-1.4 -2.0

0.0

2.0

4.0

6.0

8.0

10.0

Q2 2017 Q2 2016

63.9

44.5

Main financial metrics materially improved YOY

Q2 2017 Consolidated Financial Highlights

14

Sales ($ M) Net Income ($ M)

Cash Provided by Operating Activities ($ M)

-0.01 0.06 EPS, basic ($)

0.06 0.10 CFPS ($)

17% 26% Margin over sales

Cash from operations before changes in working capital

44%

Q2 2017 Q2 2016

126%

Notes: 1. EPS = Earnings Per Share | CFPS = Cash Flow Per Share 2. AISC = All-In Sustaining Cash Cost

8.2

9.8

Q2 2017 Q2 2016

16%

AISC ($/oz Ag)


17.9 17.8 16.2

23.8

32.7 30.0

2012 2013 2014 2015 2016 2017E

2.0 2.1 2.2

1.7

1.3

1.0

2012 2013 2014 2015 2016 2017E

Snapshot

Caylloma Mine, Peru

15

COMMODITIES

Silver, zinc, lead

OPERATION

1,430 tpd underground mine

RESERVE LIFE

3 years

LOCATION

Arequipa, Peru

OWNERSHIP

100 %

DEPOSIT TYPE

Intermediate sulphidation epithermal deposit

2017E AISC, NET OF BY-PRODUCTS Au, Pb, and Zn

$10.8/oz Ag

Silver Production (Moz)

Caylloma Mine

Note: H1 2017 silver production of 469.8 koz, lead production of 14.4 Mlbs and zinc production of 21.4 Mlbs

Lead Production (Mlbs)

22.4 25.2 27.4

35.8

43.2 41.0

2012 2013 2014 2015 2016 2017E

Zinc Production (Mlbs)


Animas NE vein step-out drilling*

Caylloma Mine, Peru

16

• High grade Ag, Pb and Zn mineralization below current production areas

• Open at depth and along strike to the NE

• Prospective for extending mineralization

(*) Refer to slide 30 for assay results of principal mineralized intervals


Snapshot


Silver Production (Moz)

COMMODITIES

Silver, gold

OPERATION

3,000 tpd underground mine

RESERVE LIFE

5 years

LOCATION

Oaxaca, Mexico

OWNERSHIP

100 %

DEPOSIT TYPE

High-grade, low sulphidation epithermal deposit

2017E AISC, NET OF BY-PRODUCT Au

$8.4/oz Ag

Gold Production (koz)

San Jose Mine

17.9 19.0

33.5 38.5

46.0

51.9

2012 2013 2014 2015 2016 2017E

1.9 2.5

4.4 4.9

6.1

7.1

2012 2013 2014 2015 2016 2017E

17

Note: H1 2017 silver production of 3.7 Moz and gold production of 27.5 koz


Miocene epithermal belt – Southern Mexico and CA


18

• San Jose deposit centrally located in prolific Miocene Epithermal Belt

• World class or giant silver deposit*

• World class neighbors: Pachuca, Marlin and Escobal

(*) Largest 10% of deposits based on metal content


Mineral concessions: 64,400 hectares


19


Mineral Reserves and Resources as of December 31, 2016


20


Trinidad North Discovery: Step-out drilling highlights – Stockwork


21

• Characterized by high-grades and wide widths

• Contiguous with existing operation

• Mineralization open at depth and to the north


• Silicified outcrop may represent the top part of the Au-Ag epithermal mineralizing system

• Drill program will test potential of a well-mineralized zone at various vertical levels below the outcrop at the projected intersection of the Trinidad and Ocotlan veins

Brownfields Exploration: Trinidad North Extension (TNE) target


22


Focused on organic growth, disciplined M&A

Growth Strategy

23

Capitalize on Brownfields and Greenfields exploration initiatives

• Bottom-quartile operating and all-in sustaining costs

• Positive construction decision at the Lindero gold Project, Argentina made in September 2017; commissioning expected in Q2 2019

• In 2016, Caylloma and San Jose mill throughputs expanded to 1,430 tpd and 3,000 tpd, respectively

Maximize production, profitability and sustainable free cash flow generation

• Exploration potential for new discoveries in and around land positions in Peru, Mexico and Argentina

• Funding strategic alliances:

- Medgold Resources Corp.(TSX.v: MED) | Serbia: two C$1.5 M equity investments; 23.97% ownership

- Prospero Silver Corp. (TSX.v: PSL) | Mexico: C$1.5 M equity investment; 14.91% ownership

• Acquired the Tlacolula Property (Oaxaca, Mexico) from Radius Gold Inc (TSX.v: RDU)


Low cost production profile and a strong financial position

Investment Highlights

24

PROVEN MINE DEVELOPERS AND STRONG OPERATORS

$188.0 M in cash (end Q2 2017)

ROBUST FINANCIAL POSITION

$40.0 M Term loan (due 2019)

<0.5x Debt to EBITDA¹

8.1

2017 PRODUCTION GUIDANCE

52.4 41.0 30.0 Moz Ag

koz Au

Mlbs Zn

Mlbs Pb

Bottom quartile operating and AISC

Low cost gold production

Lindero Project, Argentina over 15 years of reserve life

Note: 1. Last twelve months Adjusted EBITDA


Carlos Baca Investor Relations Manager T: +51.1.616.6060, ext. 2 [email protected] www.fortunasilver.com

Contact Information


Appendix

26


APPENDIX Senior Management

Jorge A. Ganoza President, CEO and Director Co-founder of Fortuna. Peruvian geological engineer. Identified and negotiated purchase of Caylloma, built the Fortuna team. Director of Ferreycorp S.A.A..

Jose Pacora Vice President, Project Development Over 30 years’ experience in the mining industry working for both engineering firms and mining companies developing strong capabilities in engineering, construction and project management.

Eric Chapman Vice President, Technical Services A resource geologist with 15 years´ experience in the mining industry who has provided technical guidance to Fortuna since 2011. Previously Eric was a Senior Consultant to Snowden Mining Industry Consultants working on a variety of mine and exploration projects in Africa and the Americas.

Luis Dario Ganoza Chief Financial Officer / Chief Compliance Officer Over 14 years’ experience in the operations and financial management of public mining companies. Luis also serves as Chairman of the Board of Atico Mining Corporation.

Manuel Ruiz-Conejo Vice President, Operations Over 25 years’ experience in the execution of multi-million dollar mining projects and the implementation of community relations programs.

David Volkert Vice President, Exploration A mine finder with a long, successful career in the mining industry; instrumental in the discovery of Barrick’s Laguna Norte gold deposit and the acquisition of the Pierina gold deposit in Peru; spearheaded the discovery of Bear Creek’s Corani and Santa Ana silver-lead-zinc deposits in Peru.

Gordon Jang Vice President, Finance and Accounting Over 20 years of senior financial management experience in the mining industry; wealth of experience in the areas of tax planning and compliance, financial reporting, Sarbanes Oxley /internal controls, implementation of ERP systems and mergers and acquisitions.


Board 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.

Jorge A. Ganoza, President and CEO Co-founder of Fortuna. Peruvian geological engineer. Identified and negotiated purchase of Caylloma, built the Fortuna team. Director of Ferreycorp S.A.A..

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.

David Farrell President of Davisa Consulting, a private consulting firm working with junior to mid-tier global mining companies. Successfully negotiated, structured and closed more than $25 billion worth of M&A.

David Laing Mining engineer with over 35 years of experience in the industry. David was the COO of True Gold Mining which developed a gold heap leaching operation in Burkina Faso, and COO and EVP of Quintana Resources Capital, a base metals streaming company. He is currently COO of Luna Gold Corp.

Mario Szotlender Co-founder of Fortuna. Financier, businessman and Director of Endeavour Silver, Radius Gold, Focus Ventures and Revelo Resources.

Alfredo Sillau Managing Partner, CEO and Director of Faro Capital, an investment management firm that manages private equity and real estate funds. Mr. Sillau is also a Director of Cosapi S.A. and PECSA.

APPENDIX

Kylie Dickson Executive with over 14 years of experience in the mining industry. Kylie has worked with companies at various stages of the mining lifecycle including playing a key role in multiple financings and M&A transactions. Kylie is currently VP of Business Development at Trek Mining.


Adjusted EBITDA

29

APPENDIX

Year ended December 31

Expressed in $’000s 2016 2015

NET INCOME $ 17,858 $ (10,608)

Add Back:

Net finance items 1,431 1,547

Depreciation, depletion and amortization 33,024 25,739

Income taxes 29,252 7,391

Impairment of mineral properties – 25,000

Other operating expenses 1,420 550

Adjusted EBITDA $ 82,985 $ 49,619

Non-GAAP financial measures


Anima NE vein Step-out Drilling

Note:

1. ETW = Estimated true width

Assay results for principal mineralized intervals

Drill Hole From (m)

To (m)

Interval (m)

ETW¹ (m)

Ag (g/t)

Au (g/t)

Pb (%)

Zn (%)

ANIS040516 307.7 313.2 5.4 5.3 132 0.09 7.89 8.86

ANIS041316 330.4 332.7 2.3 2.2 121 0.06 10.29 6.33

ANIS042116 287.2 290.9 3.8 3.6 566 0.10 2.12 2.67

ANIS042416 326.7 328.5 1.8 1.5 69 0.04 4.57 2.54

ANIS042816 316.1 320.3 4.2 3. 8 71 0.06 3.06 7.64

ANIS043016 325.8 327.6 1.8 1.6 57 0.04 4.32 4.61

ANIS043116 361.6 363.1 1.4 1.3 53 0.04 2.99 2.68

ANIS043516 368.4 376.2 7.7 6.8 97 0.04 4.27 3.96

ANIS043816 415.2 416.8 1.5 1.1 32 0.03 1.85 5.81

ANIS044416 443.7 456.7 13 7.8 116 0.04 7.77 9.39

ANIS044516 466.8 472.8 6.0 5.2 220 0.47 16.76 7.16

ANIS044917 364.8 369.3 4.5 3.5 111 0.05 5.03 6.28

ANIS045017 475.6 479.8 4.2 4.0 304 0.04 13.7 10.1

ANIS045917 452.3 461.4 9.1 8.8 127 0.06 2.96 5.37

ANIS046017 431.2 446.6 15.4 13.1 72 0.05 2.95 3.15

ANIS046617 451.4 456.8 5.4 5.3 134 0.04 1.46 3.76

ANIS046817 469.2 472.8 3.6 2.9 35 0.03 3.06 3.07

ANIS047217 493.0 495.0 2.0 1.55 14.5 0.03 0.86 4.36

ANIS047317 427.2 433.0 5.8 4.23 60.8 0.04 2.65 4.30

APPENDIX


NI 43 – 101 Reserves and Resources


31

Classification Tonnes (000)

Ag (g/t)

Au (g/t)

Contained Metal

Ag (Moz)

Au (koz)

Proven & Probable Reserves 5,021 249 1.72 40.2 278.4

Measured & Indicated Resources 846 78 0.61 2.1 16.7

Inferred Resources 3,101 252 1.66 25.1 165.4

Mineral Reserve and Mineral Resource estimates prepared in accordance with NI 43 - 101:

1. Mineral Reserves and Mineral Resources are as defined by CIM Definition Standards on Mineral Resources and Mineral Reserves

2. Mineral Resources are exclusive of Mineral Reserves

3. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability

4. There are no known legal, political, environmental, or other risks that could materially affect the potential development of the Mineral Resources or Mineral Reserves at San Jose

5. Mineral Resources and Mineral Reserves are estimated as of June 30, 2016 and are reported as of December 31, 2016 taking into account production-related depletion for the period through December 31, 2016

6. Mineral Reserves for San Jose are estimated using a break-even cut-off grade of 127 Ag Eq g/t based on assumed metal prices of US$19/oz Ag and US$1,140/oz Au; estimated metallurgical recovery rates of 90.5% for Ag and 90.5% for Au and and projected operating costs. Mineral Resources are estimated at a 100 g/t Ag Eq cut-off grade with Ag Eq in g/t = Ag (g/t) + Au (g/t) * ((US$1,140/US$19) * (90.5/90.5)). Proven + Probable Reserves include 2.31 Mt containing 22.3 Moz of silver and 141.0 koz of gold reported at a 130 g/t Ag Eq cut-off grade and Inferred Resources totaling 1.57 Mt containing 13.6 Moz of silver and 80.0 koz of gold reported at a 100 g/t Ag Eq cut-off grade located in the Taviche Oeste concession and subject to a 2.5% royalty

7. Totals may not add due to rounding procedures

APPENDIX



Caylloma Mine, Peru

32

Mineral Reserve and Mineral Resource estimates prepared in accordance with NI 43 - 101:

1. Mineral Reserves and Mineral Resources are as defined by CIM Definition Standards on Mineral Resources and Mineral Reserves

2. Mineral Resources are exclusive of Mineral Reserves

3. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability

4. There are no known legal, political, environmental, or other risks that could materially affect the potential development of the Mineral Resources or Mineral Reserves at Caylloma

5. Mineral Resources and Mineral Reserves are estimated as of June 30, 2016 and are reported as of December 31, 2016 taking into account production-related depletion for the period through December 31, 2016

6. Mineral Reserves for Caylloma are estimated using break-even cut-off grades based on estimated NSR values using assumed metal prices of US$19/oz Ag, US$1,140/oz Au, US$2,150/t Pb and US$2,300/t Zn; metallurgical recovery rates of 85% for Ag, 22% for Au, 94% for Pb and 90% for Zn; and projected operating costs. Caylloma Mineral Resources are reported based on estimated NSR values using the same metal prices and metallurgical recovery rates as detailed for Mineral Reserves; and an NSR cut-off grade of US$50/t for veins classified as wide (Animas, Animas NE, Nancy, San Cristobal) and US$100/t for veins classified as narrow (all other veins)



Ag (g/t)

Au (g/t)

Pb (%)

Zn (%)

Contained Metal

Ag (Moz)

Au (koz)

Proven & Probable Reserves 1,596 109 0.28 2.39 3.24 5.6 14.2

Measured & Indicated Resources 2,014 87 0.34 1.21 2.31 5.6 22.1

Inferred Resources 3,003 128 0.69 1.67 2.96 12.3 66.4

APPENDIX



Au (g/t)

Cu (%)

Contained Metal

Au (koz)

Proven & Probable Reserves 88,272 0.62 0.11 1,749

Measured & Indicated Resources 12,507 0.24 0.07 97

Inferred Resources 5,700 0.36 0.10 65



33

Notes: 1. Mineral Reserves and Mineral Resources are as defined by CIM Definition Standards on Mineral Resources and Mineral Reserves 2. Mineral Resources are exclusive of Mineral Reserves 3. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability 4. There are no known legal, political, environmental, or other risks that could materially affect potential development of the Mineral Resources or Mineral Reserves at Lindero 5. Mineral Resources and Mineral Reserves for Lindero are reported as of September 9, 2017 6. Mineral Reserves for Lindero are reported based on open pit mining within designed pit shells based on variable gold cut-off grades and gold recoveries by metallurgical type.

Met type 1 cut-off 0.27 g/t Au, recovery 75.4%; Met type 2 cut-off 0.26 g/t Au, recovery 78.2%; Met type 3 cut-off 0.26 g/t Au, recovery 78.5%; and Met type 4 cut-off 0.30 g/t Au, recovery 61.7%. The cut-off grades and pit designs are considered appropriate for long term gold prices of $1,250/oz

7. Lindero Mineral Resources are reported within a conceptual pit shell above a 0.2 g/t Au cut-off grade using a long-term gold price of $1,250/oz, mining costs at $1.67 per tonne of material, with total processing and process G&A costs of $7.84 per tonne of ore and an average process recovery of 75%. The refinery costs net of pay factor were estimated to be $6.90 per ounce of gold. Slope angles are based on 3 sectors (39°, 42°, and 47°) consistent with geotechnical consultant recommendations

8. Eric Chapman, P.Geo. (APEGBC #36328) is the Qualified Person for resources and Edwin Gutierrez (SME Registered Member #4119110RM) is the Qualified Person for reserves, both being employees of Fortuna Silver Mines Inc.


APPENDIX


Lindero LOM Annual Production Plan

34

APPENDIX

1.3 million ounces of gold recovered to doré at an average AISC of 802/oz Ag

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 LOM

Ore placed in heap (Mt) 6.7 6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.6 6.6 - - 87.5

Waste (Mt) 6.8 7.3 8.2 10.3 10.2 10.4 8.8 8.5 10.7 9.9 7.2 8.6 2.8 - - 109.8

Strip ratio (W:O) 0.8 0.8 1.1 1.7 1.7 2.4 1.3 1.2 2.0 1.3 1.2 1.3 0.4 - - 1.2

Head grade (g/t) 0.94 0.86 0.66 0.63 0.56 0.49 0.58 0.54 0.50 0.59 0.52 0.56 0.60 - - 0.62

Gold recovered to doré (koz) 137 138 104 115 88 80 90 85 80 83 84 88 81 33 17 1,302

AISC ($) 528 537 1,041 691 854 975 839 896 943 934 874 842 860 502 1,168 802

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