Fortuna Silver Mines Inc.

Fortuna Silver Mines Inc. TSX-V : FVI Building Ounces at the Caylloma Silver Mine

Investment Highlights Fortuna Silver Mines Inc. has acquired 100% of the Caylloma Silver Mine in southern Peru from the Hochschild Group The mine has produced 250 million ounces of silver from approximately 15 veins, and significant exploration potential exists on an additional 15 veins which have not been drill tested Management has initiated a major drilling campaign to grow the existing silver inventory of 7 million ounces in reserves plus 14 million ounces in resources Production can be resumed in a short time frame for a relatively minimal capital cost

Exploration Potential The property comprises an 8000 hectare land package that has seen limited exploration Numerous high grade vein targets exist that have not been systematically explored or included in the resource base Base metal credits on key structures such as the Animas vein may significantly increase the width of economic mineralization The company is also aggressively pursuing additional acquisitions in the district

Caylloma Mine All mining infrastructure and permits are in place, allowing for rapid production start up Scoping studies indicate low capital costs, clean metallurgy, and positive economics There are no significant social or environmental issues Fortuna intends to advance the project towards a resumption of production in 12 to 18 months

The Company Fortuna is an emerging silver producer focused on Latin America, trading on the TSX Venture and Frankfurt Exchanges Management has extensive exploration, mining and business experience throughout Central and South America The company s goals are to build silver ounces and cash flow through the acquisition and development of advanced projects The company is well positioned to make further acquisitions in the Caylloma district

Corporate Growth Strategy Aggressively explore the Caylloma property Move the project toward production Consolidate other prospects within the district Evaluate additional acquisition opportunities The Caylloma acquisition is just the first step

Management Biographies Simon Ridgway Financier Mr. Ridgway has over 15 years experience managing exploration companies in North, Central and South America, including Radius Gold. His companies have made several major discoveries in Honduras and Guatemala. Peter Thiersch, M.Sc. P.Geo. President Mr. Thiersch is a geologist with 20 years experience in mineral exploration throughout North and South America, specializing in epithermal and porphyry related precious metal exploration. Jorge A. Ganoza Durant, B.Sc. Eng. V.P Business Development Mr. Ganoza Durant is a geological engineer with 12 years experience in mineral exploration and business development for various private and public exploration companies in Central and South America. Jorge R. Ganoza Aicardi, B.Sc. Eng. V.P. Operations Mr. Ganoza Aicardi is a mining engineer with 30 years experience in exploration and mine development in Latin America, including managing the start up of 3 mid size underground mines in Peru and Panama.

Share Structure Shares Issued 26,006,086 Warrants 18,958,411 June 06 1,500,000 @ $0.75 June 07 862,117 @ $0.345 Sept 07 9,600,000 @ $1.00 / $1.25 Sept 07 1,152,000 @ $0.80 Oct 07 4,000,000 @ $1.00 / $1.25 Oct 07 231,056 @ $0.80 Nov 07 1,613,238 @ $0.345 Options 835,000 Fully diluted 45,799,497

Caylloma Silver Mine, Peru Yanacocha Yanacocha Pierina Huaron PierinaMorococha Huaron Castrovirreyna Morococha Castrovirreyna Caylloma Silver Mine Caylloma Silver Mine

Caylloma District and Historic Production Explorador Mine +/- 2.5 M oz Ag /yr Arcata Mine 3 million oz Ag /yr Hoschild Group Arcata Mine Ag-Au Hoschild Group Ares Mine Ag-Au Buenaventura Orcopampa Mine 180,000 ounces Au/year Orcopampa Mine 200,000 oz Au /yr Ares Mine 200,000 oz Au /yr Arequipa City BHP-Billiton Tintaya Mine Cu Caylloma Mine 2.6 M oz Ag /yr Matarani sea port

Mine History Mine has operated over 400 years, and produced more than 250 million ounces of silver Hochschild purchased the 300 tpd operation in 1981 and since expanded it to 600 tpd The plant has traditionally produced a silver-lead concentrate from narrow silver-only veins Mine produced 2.6 million ounces of silver in 2002, and has been on care & maintenance since December 2003

Recent Work A significant exploration and development program was conducted by the previous owners in 2003-2004 Over 10,000m of diamond drilling and 2700m of underground drifting was completed on multiple structures This work outlined the 7 million ounce reserve and 14 million ounce resource which was acquired by Fortuna The polymetallic Animas vein contains about half of this defined resource and is open to expansion

Aerial view of the mine area looking NE VEINS BASALT ANDESITE VEINS 6 km ALTERED TUFFS MILL CAMP TAILINGS RESERVOIR

Geology and Mineralization Regional caldera setting Volcanic hosted Classic low sulphidation system At least 30 silver bearing veins Veins 1 4 km in strike, ave 1.5m width, but up to 20m Ave grades of 10-15 oz/ton Ag

Two Types of Silver Ore: Traditional - High grade silver - Ruby silvers, tetrahedrite and <1% base metals - Narrow veins Polymetallic - Silver - lead - zinc - Tetrahedrite and 3-5% base metals locally to 10% Zn - Wider veins w/ bulk tonnage potential

Traditional Veins

San Carlos Vein 1.05m @ 67.7 oz/t Ag, 1.3% Pb,, 3.4% Zn Open at depth RESERVE BLOCKS RESOURCE BLOCKS

Silver-Lead-Zinc Animas Vein +20m

San Pedro Vein 1.35m @ 21.5 oz/t Ag, 1.5% Pb,, 2.5% Zn 300 m RESERVE BLOCKS RESOURCE BLOCKS Open at depth Animas Vein RESERVE BLOCKS 3800 m RESOURCE BLOCKS

Animas Vein 4645 Level Plan Preliminary Interpretation Known Mineralization Calculated Resource Interpreted Mineralized Zone Adit trace Proposed Drill Holes Aprox 25m

Animas Vein 4645 Level Plan Preliminary Interpretation Known Mineralization Calculated Resource Interpreted Mineralized Zone Adit trace Proposed Drill Holes Aprox 25m

Schematic Animas Vein Cross Section 5 Existing Drill Holes High Grade Silver Band 1m of 5-10 opt Ag (basis of ore reserve) 3m to 7m of: 2-7 opt Ag 3-8% Pb 7-12% Zn (not included in ore reserve) Parallel Silver Band 4m @ 13 opt Ag (not included in ore reserve) Existing Adit and Cross Cuts ANDESITE WALL ROCK

Animas Vein Potential The Animas vein hosts wider zones of economic mineralization than were previously modelled The existing resource is restricted to a high grade silver band, ignoring important ore grade vein material over wider intervals Mechanized mining on these wider widths could lead to reduced costs and increased production rates Exploration drilling will focus on significantly expanding the silver resource and establishing the optimum production rate

Caylloma Mine 43-101 Compliant Resource Estimate P&P RESERVES tonnes contained Ag oz Ag oz/t Au g/t Pb % Zn % Cu % Traditional Silver Veins 319,138 4,659,415 14.6 0.84 0.06 0.08 0.02 Polymetalic Vein - Animas 457,212 2,482,661 5.43 0.35 3.06 4.88 0.23 Total Mineable Reserves 776,350 7,142,420 9.2 0.55 1.83 2.91 0.14 INFERRED RESOURCE tonnes contained Ag oz Ag oz/t Au g/t Pb % Zn % Cu % Traditional Silver Veins 454,947 6,878,799 15.12 0.38 0.32 0.7 0.16 Polymetalic Vein - Animas 691,652 7,338,428 10.61 0.61 3.62 5.49 0.5 Total Inferred Resource 1,146,599 14,217,828 12.4 0.52 2.31 3.59 0.37

. Fortuna Silver Mines Inc. Caylloma Project Upside Summary 8,000 hectare concession with at least 30 known veins Additional resources on past producers and untested veins Bulk tonnage potential of wider polymetallic Animas vein Potential for additional acquisitions in the district

District Scale Potential Barrick s Paco Paco high sulphidation gold project Past producers and other silver-gold prospects Caylloma Concessions

Mine Infrastructure 350 man camp with ISO 14001 certification

600 tpd Flotation Plant Estimated replacement value of $10 M usd

Remediated Tailings Area Clean, environmentally responsible operation

Purchase Agreement $7.55M USD cash payment, plus 10.803% of fully diluted capital Payment Schedule $100,000 cash on signing Agreement (paid) $2.95M cash on 6 month anniversary (paid) $4.5M cash on 12 month anniversary Shares and warrants (at 40% and 60% ratio) totaling 10.803% of the fully diluted capital of the Company Acquisition cost of just $0.35 per ounce

Preliminary Mine Plan Start production on traditional silver-only veins Upgrade plant to add zinc recovery circuit Develop production stopes on polymetallic Animas vein Blend traditional and polymetallic ores at 20% - 80% ratio Upgrade plant to increase production to 1000 tpd

Estimated Total Capital Investment (USD millions) Mine Development 2.4 Infrastructure 1.0 Equipment 0.7 Plant Upgrade 1.1 Working Capital 1.0 Other Costs 0.6 Contingency 0.7 Total $ 7.5 M Plus $ 1.2 M in exploration and sustaining capital per year once production starts

Production Targets Annual Production 210,000 t ore 2 M oz Ag 8,000 t Zn 5,000 t Pb Recoveries Ag 85% Pb 88% Zn 88% Net Revenues Operating Margin After Tax U$ 13 M per year U$ 5 M per year U$ 4 M per year Based on a production rate of 600 tpd

Target Economics (USD) Total Mining Costs Ave Rock Value Total Cash Cost Est. Silver price Operating Margin Net Cash Flow $43 per tonne $70-80 per tonne $4.00 per ounce $6.00 per ounce $2.00 per ounce $4 M per year Based on a production rate of 600 tpd

Immediate Work Plan Detailed analysis of existing drill data to evaluate bulk tonnage potential of Animas vein Comprehensive drill program started in August to: Target high grade ore shoots in traditional veins Define extent of wider mineralized zone in Animas vein Recalculation of resource and cash flow estimates to include polymetallic upside

Proposed Year One Expenditures (USD millions) Exploration Drilling 2.0 Engineering and Mine Development 1.0 General and Admin 0.5 Total $ 3.5 M Plus $ 2.95 M cash payment to vendors

Caylloma Summary The mine contains a significant resource that is open to expansion The Animas vein presents excellent potential for wider zones of economic mineralization amenable to low cost mechanized mining The property is underexplored and the company intends to consolidate a larger land position in the district A major drilling campaign started in August Production can be resumed relatively quickly and at minimal cost

Market Cap Comparison Company Project Shares issued Price Market cap per oz Fortuna Caylloma, Peru 25,271,585 $1.40 $35,380,219 $1.68 2M oz per year 7M oz reserve 14M oz resource Endeavour Silver Santa Cruz Mexico 22,242,233 $2.40 $53,381,359 $2.67 300-600k oz /yr 12M oz resource First Majestic La Parilla Mexico 23,399,717 $2.20 $51,479,377 $2.57 1M oz /yr 20M oz resource First Silver San Martin Mexico 38,596,921 $2.25 $86,843,072 $2.07 2.0 M oz /yr 12M oz reserve 30M oz resource Data from Corporate Websites Sep 2005

Market Capitalization Comparison Share #, Mcap $, Resource oz's (millions) 100 90 80 70 60 50 40 30 20 10 0 FVI EDR FR FSR $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 Share Price, Mcap $/oz Peer Group Silver Companies Shares Out (millions) Mcap ($millions) Resource oz's (millions) Share Price ($) Mcap per oz ($)

Fortuna Silver Mines Inc. TSX-V : FVI #840 355 Burrard Street Vancouver, BC Canada V6C 2G8 604 484 4085 www.fortunasilver.com

Forward-Looking Statements Certain statements in this presentation constitute forward-looking statements. Such forwardlooking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance of achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following risks inherent in mineral exploration: risks associated with development, construction and mining operations; restrictions of foreign ownership; uncertainties relating to carrying on business in foreign countries; the Company s history of operating losses and uncertainty of future profitability; uncertainty of access to additional capital; environmental liability claims and insurance; and dependence on joint venture partners. Mineral resources which are not minerals reserves do not have demonstrated economic viability. The Company relies upon litigation protection for forwardlooking statements. The TSX Venture Exchange has not reviewed the information presented here and does not accept responsibility for its adequacy or accuracy.