Fortuna Silver Mines Inc.
TSX VENTURE : FVI

Fortuna Silver Mines Inc.

August 15, 2007 15:42 ET

Fortuna Reports Revenue of $8.8 Million, Operating Cash Flow of $3.06 Million and Net Income of $0.95 Million for 2Q 2007

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 15, 2007) - Fortuna Silver Mines Inc. (TSX VENTURE:FVI) reports it has filed its financial statements for the six months ended June 30, 2007. The financial statements are available on SEDAR and have been posted on the Company's website at www.fortunasilver.com.

Second quarter 2007 highlights:

- Increase in revenue of 53% over the previous quarter to $8.8 million.

- Quarterly operating cash flow of $3.06 million, before changes in non-cash working capital.

- Net income of $0.95 million, operating income of $2.44 million, and mine operating income of $4.01 million.

- Metal production; 119,110 oz of silver, 1,605 MT of zinc, and 952 MT of lead. Up 25%, 36%, and 47% respectively over the previous quarter.

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

During the second quarter of 2007 the Company recorded a Net Income of $0.95 million on Revenue of $8.8 million from the sales of lead-silver and zinc concentrate from the Caylloma Mine. Net Cash provided by operating activities at the consolidated level totaled $3.06 million before changes in non-cash working capital.

The Caylloma Mine continued to deliver strong operating performance with significant increases in metal production of silver, zinc, and lead compared to the previous quarter. Total ore milled during the quarter increased 21% with respect to the previous period to 63,806 tonnes. Cash production cost per tonne of processed ore was US$46.65 against a Net Smelter Return value per tonne of processed ore of US$123.65.

The mine and mill operations at Caylloma have continued to show steady monthly increments in throughput, and improvements in efficiency and have now reached design parameters.

As at June 30, 2007, Fortuna held $35.28 million in cash and cash equivalents, and had working capital of $39.14 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

Fortuna Silver Mines Inc.

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

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