Fortuna Silver Mines Inc.
TSX VENTURE : FVI

Fortuna Silver Mines Inc.

November 16, 2007 12:12 ET

Fortuna Reports Revenue of $9.2 Million, Operating Cash Flow of $3.84 Million, and Net Loss of $3.39 Million for 3Q 2007

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 16, 2007) - Fortuna Silver Mines Inc. (TSX VENTURE:FVI) reports it has filed its financial statements for the nine months ended September 30, 2007. The financial statements are available on SEDAR and have been posted on the Company's website at www.fortunasilver.com.

Third quarter 2007 highlights:

- Quarterly operating cash flow of $3.84 million, and accumulated operating cash flow for 9 months of $7.38 million.

- Increase in revenue of 4.55% over the previous quarter to $9.2 million.

- Net loss of $3.39 million and operating loss of $1.44 million after recording a non-cash compensation charge of $4.12 million.

- Metal production: 132,450 oz of silver, 1,049 MT of lead and 1,712 MT of zinc. Up 11.2%, 10.2%, and 6.7% respectively over the previous quarter.

- 25,000 meter drill program underway at San Jose delivering consistent results as reported in our news releases dated May 30, July 16, August 21, and September 6, 2007.

For the third quarter of 2007 the Company had a net loss of $3.39 million after recording a non-cash compensation charge of $4.12 million. Quarterly revenue from the sales of lead-silver and zinc concentrate at the Caylloma Mine hit a record high for the year of $9.2 million. Net cash provided by operating activities at the consolidated level totaled $3.84 million.

The Caylloma mine continues to show improvements with further increases in milled ore and head grades as well as plant recoveries which have resulted in increments in metal production with respect to the previous quarter. Total ore milled during the quarter increased 3.1% with respect to the previous period to 65,806 tonnes. Cash production cost per tonne of processed ore was US$49.15 against a net smelter return value per tonne of processed ore of US$139.80.

During the quarter the Company realized net proceeds of $10.58 million from the exercise of warrants. As at September 30, 2007, Fortuna held working capital of $46.98 million. The Company has no long term debt.

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.

ON BEHALF OF THE BOARD,

Jorge Ganoza Durant, President

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

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