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J U N E / J U L Y 2 0 1 6 www.resourceworld.com 45 SilvER ANOThER SILVER MINER that has seen significant increase in its value this year is Fortuna Silver Mines [FVI-TSX; FSM- NYSE]. The company has two producing mines – the Caylloma silver mine in southern Peru and the San Jose silver-gold mine in Mexico. Fortuna recently reported strong financial results for the first quarter. Net income rang in at US $2.6 million on revenues of US $42.7 million. This is up from US $39.8 million in the comparable quarter last year. Consolidated metal production for the quarter tallied 1.6 mil- lion ounces silver and 9,264 ounces gold. All-in sustaining cash cost (AISCC) net of by-product credits for gold, lead and zinc was US $9.39/oz of payable silver. Jorge Ganoza, President and CEO, said, "We have made a strong start to the year operating well within our production and cost targets and look forward to the commissioning of our key expansion project at the San Jose Mine in July." Ganoza continued, "At San Jose's new production rate of 3,000 tpd, the company will target total annual consolidated production of approximately 9 million ounces of silver and 52,000 ounces of gold, with an AISCC below $9/oz of silver." For 2016, the com- pany anticipates that it can produce 7.0 million ounces of silver and 42.8 thousand ounces of gold. San Jose is currently operating at an average mill throughput rate of 2,059 tonnes per day with an average grade of 240 g/t sil- ver, 1.73 g/t gold with recoveries of 93% and 92%, respectively. The mill expansion (to 3,000 tpd) has an estimated CAPEX of US $31.6 million which includes a filter plant expansion as well. At the Caylloma Mine, silver production totaled 337,085 ounces compared with 535,959 ounces in the first quarter of 2015. Zinc and lead production was 38% and 110% higher, respectively, year-over-year. During the first quarter the mine milled an average of 1,317 tonnes of ore per day with grades of 103 g/t silver, 0.19 g/t gold, 3.73% lead and 4.49% zinc. Recoveries averaged 87% for silver, 15% for gold, 94% for lead and 90% for zinc. Fortuna states it is focused on an organic growth strategy with disciplined M&A. That being said, it intends to capitalize on its Trinidad North silver-gold discovery which lies on strike just north of the San Jose vein system. The discovery is hosted by hydrothermal breccias, crackle breccias and quartz-carbonate vein stockworks in an extensional fault system. Mineralization is contiguous with the existing operation and remains open at depth and to the north. Fortuna Silver has $95.9 million in cash which includes short term investments (as of March 31, 2016). The company's market capitalization is $1.09 billion with 129 million shares out- standing. n San Jose expansion on track for July startup Underground ore transfer operations at the San Jose Mine in Oaxaca State, Mexico. Photo courtesy Fortuna Silver Mines Inc.