Fortuna Silver Mines Inc.
TSX VENTURE : FVI

Fortuna Silver Mines Inc.

March 24, 2006 09:00 ET

Fortuna Closes $19 Million Private Placement

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 24, 2006) -

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

Fortuna Silver Mines Inc. (TSX VENTURE:FVI): Mr. Jorge Ganoza, President of Fortuna is pleased to announce that it has closed the brokered private placement previously announced on March 2, 2006. The offering was co-led by Pacific International Securities Inc. and Salman Partners Inc. and included Sprott Securities Inc. (the "Agents"). The Agents exercised the over-allotment option in full, and accordingly, the Company issued 12.7 million units (the "Units") at a price of $1.50 per Unit to raise gross proceeds of $19.05 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 two years at a price of $1.85.

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 $192,794 and 760,261 Units. In addition, the Company issued a total of 952,275 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 $1.85 for a period of eighteen months following closing.

All securities issued pursuant to this financing have a four-month hold period expiring on July 24, 2006.

The net proceeds of the placement will be used to make capital expenditures related to the re-opening of the Caylloma Mine in Peru, for exploration of the Company's properties in Peru and Mexico, and for general working capital purposes.

The Company is also pleased to announce that Mr. Simon Ridgway, a director of the Company, has been appointed as Chairman of the Board.

Fortuna is a growth oriented, near term silver producer focused on Latin America. Our primary assets are the Caylloma Silver Mine in southern Peru, and the San Jose Silver-Gold Project in Mexico, and we are 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.

Contact Information