Fortuna Silver Mines Inc.
TSX VENTURE : FVI

Fortuna Silver Mines Inc.

January 11, 2007 11:33 ET

Fortuna Closes $34.2 Million Private Placement

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Jan. 11, 2007) - Fortuna Silver Mines Inc. (TSX VENTURE:FVI) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Mr. Jorge Ganoza, President of Fortuna, is pleased to announce that it has closed the brokered private placement previously announced on December 11 and 12, 2006. The offering was co-led by Pacific International Securities Inc. and Sprott Securities Inc. and included Salman Partners Inc. (the "Agents"). The Agents exercised the over-allotment option in full, and accordingly, the Company issued 18.0 million units (the "Units") at a price of $1.90 per Unit to raise gross proceeds of $34.2 million. Each Unit consists of one common share and one-half of a common share purchase warrant. Each whole warrant entitles the holder to purchase one additional common share of the Company for 18 months at a price of $2.30.

As consideration for acting as agent, the Company paid the Agents a commission equal to 7.0% of the subscription proceeds realized from the sale of the Units. The commission was comprised of $1,589,103 and 422,300 Units. In addition, the Company issued a total of 1,348,575 agent options, which is equal to 7.5% of the number of Units sold. Each agent option entitles the holder to purchase one common share of the Company at a price of $2.30 for a period of 18 months following closing.

All securities issued pursuant to this financing have a four-month hold period expiring on May 12, 2007.

The net proceeds of the placement will be used for advancement of the Company's San Jose Project in Mexico, to repay a credit facility recently issued to the Company in connection with its acquisition of a 76% interest in the San Jose Project, and for general working capital purposes.

Fortuna is a growth-oriented silver producer focused on mining opportunities in Latin America. Our primary assets are the Caylloma Silver Mine in southern Peru and the San Jose Silver-Gold Project in Mexico. Fortuna is aggressively pursuing additional acquisitions. For more information, please visit our website at www.fortunasilver.com.

ON BEHALF OF THE BOARD

Jorge Ganoza Durant, President

This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

The TSX Venture Exchange has not reviewed and does not take responsibility for the accuracy of this release.

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