FVI.TO · 2018-02-22 12:00:00

Fortuna Updates Reserves and Resources

Resource Estimates

Vancouver, February 22, 2018-- Fortuna Silver Mines, Inc. (NYSE: FSM ) (TSX: FVI) is pleased to report

updated Mineral Reserve and Mineral Resource estimates as of December 31, 201 7 for the Cay lloma

Mine located in Peru, the San Jose Mine located in Mexico and the Lindero Project in Argentina.

Jorge A. Ganoza, President and CEO, commented: “ Our infill drill programs at San Jose and Caylloma

mines were successful at replenishing reserves mined in 2017. ” Mr. Ganoza continued, “ In addition, the

exploration programs over the last year at Caylloma have yielded a 92 percent increase in tonnes of

Inferred R esources. This success underpins the potential for this mine to continue presenting

opportunities to extend its life.”

Highlights of Reserve and Resource Update

• Combined Proven and Probable Reserves for the Caylloma and San Jose mines are reported at

6.6 Mt containing 44.8 Moz silver and 273 koz gold, representing year- over-year decreases of 2

percent and 7 percent in contained silver and gold ounces

• Combined Inferred Resources for the Caylloma and San Jose m ines are reported at 8.3 Mt

containing an estimated 39.6 Moz silver and 193 koz gold, reflecting a year-over-year increase of

6 percent in contained silver ounces and a 17 percent decrease in contained gold ounces

• Lindero Proven and Probable Reserves are reported at 88.3 Mt containing 1.7 Moz of gold ,

representing a year-over-year increase of 4 percent in contained gold ounces

• Lindero Inferred Resources are reported at 5.7 Mt containing 0.07 Moz of gold , representing a

year-over-year decrease of 8 9 percent in contained gold ounces . The optimization of the

ultimate pit shell to schedule only material defined as Mineral Reserves has significantly

impacted the reported Mineral Resources due to the exclusion of material at the periphery of

the pit.

Mineral Reserves - Proven and Probable

Contained

Metal

Property Classification Tonnes

(000)

(g/t)

(%)

(Moz)

(koz)

Mines

Caylloma,

Peru

Proven 116 92 0.29 1.97 3.05 0.3 1

Probable 1,487 91 0.23 2.27 3.62 4.4 11

Proven +

Probable 1,603 91 0.23 2.25 3.58 4.7 12

San Jose,

Mexico

Proven 24 151 1.22 N/A N/A 0.1 1

Probable 5,013 248 1.61 N/A N/A 39.9 260

Proven +

Probable 5,037 247 1.61 N/A N/A 40.1 261

Total Proven +

Probable 6,640 210 1.28 N/A N/A 44.8 273

Projects

Lindero,

Argentina

Proven 26,009 N/A 0.74 N/A N/A 0.0 618

Probable 62,263 N/A 0.57 N/A N/A 0.0 1,131

Proven +

Probable 88,272 N/A 0.62 N/A N/A 0.0 1,749

Total Proven + Probable 44.8 2,022

Mineral Resources - Measured and Indicated

Contained

Metal

Property Classification Tonnes

(000)

(g/t)

(%)

(Moz)

(koz)

Mines

Caylloma,

Peru

Measured 510 78 0.32 1.19 2.29 1.3 5

Indicated 1,386 90 0.32 1.36 2.23 4.0 14

Measured +

Indicated 1,896 87 0.32 1.32 2.24 5.3 20

San Jose,

Mexico

Measured 34 71 0.55 N/A N/A 0.1 1

Indicated 287 63 0.47 N/A N/A 0.6 4

Measured +

Indicated 321 64 0.48 N/A N/A 0.7 5

Total Measured +

Indicated 2,217 84 0.34 N/A N/A 6.0 25

Projects

Lindero,

Argentina

Measured 610 N/A 0.24 N/A N/A 0.0 5

Indicated 11,897 N/A 0.24 N/A N/A 0.0 92

Measured +

Indicated 12,507 N/A 0.24 N/A N/A 0.0 97

Total Measured + Indicated 6.0 121

Mineral Resources – Inferred Contained

Metal

Property Classification Tonnes

(000)

(g/t)

(%)

(Moz)

(koz)

Mines Caylloma,

Peru Inferred 5,751 105 0.35 2.82 4.07 19.5 66

San Jose,

Mexico Inferred 2,596 241 1.53 N/A N/A 20.1 128

Total Inferred 8,347 148 0.72 N/A N/A 39.6 193

Projects Lindero,

Argentina Inferred 5,700 N/A 0.36 N/A N/A 0.0 65

Total Inferred 39.6 258

1. Mineral Reserves and Mineral Resources are as defined by CIM Definition Standards on Mineral Resources and

Mineral Reserves

2. Mineral Resources are exclusive of Mineral Reserves

3. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability

4. There are no known legal, political, environmental, or other risks that could materially affect the potential

development of the Mineral Resources or Mineral Reserves

5. Mineral Resources and Mineral Reserves are estimated as of June 30, 201 7 for San Jose and as of September 30, 2017

for Caylloma and reported as of December 31, 201 7 taking into account production- related depletion for the period

through December 31, 201 7. Mineral Resources and Mineral Reserves for Lindero are reported as of September 9,

2017

6. Mineral Reserves for San Jose are estimated using a break -even cut -off grade of 1 17 g/t Ag Eq based on assumed

metal prices of US$19/oz Ag and US$1, 250/oz Au; estimated metallurgical recovery rates of 9 2% for Ag and 9 1% for

Au and actual operating costs. Mineral Resources are estimated at a 100 g/t Ag Eq cut -off grade with Ag Eq in g/t = Ag

(g/t) + Au (g/t) * ((US$1, 250/US$19) * (91/92)). Proven + Probable Reserves include 2. 74 Mt containing 2 5.6 Moz of

silver and 153 koz of gold reported at a 120 g/t Ag Eq cut-off grade and Inferred Resources totaling 1.36 Mt containing

11.3 Moz of silver and 62 koz of gold reported at a 100 g/t Ag Eq cut -off grade located in the Taviche Oeste

concession and subject to a 2.5% royalty

7. Mineral Reserves for Caylloma are estimated using break -even cut-off grades based on estimated NSR values using

assumed metal prices of US$19/oz Ag, US$1 ,250/oz Au, US$2,200/t Pb and US$2,500/t Zn; metallurgical recovery

rates of 84% for Ag, 17% for Au, 93% for Pb and 90% for Zn with the exception of high zinc oxide areas that use

metallurgical recovery rates of 57% for Ag, 17% for Au, 57% for Pb and 35% f or Zn; and actual operating costs.

Caylloma Mineral Resources are reported based on estimated NSR values using the same metal prices and

metallurgical recovery rates as detailed for Mineral Reserves; and an NSR cut -off grade of US$50/t for veins classified

as wide (Animas, Animas NE, Nancy, San Cristobal) and US$135/t for veins classified as narrow (all other veins)

8. Mineral Reserves for Lindero are reported based on open pit mining within designed pit shells based on variable gold

cut-off grades and gold recoveries by metallurgical type. Met type 1 cut -off 0.27 g/t Au, recovery 75.4%; Met type 2

cut-off 0.26 g/t Au, recovery 78.2%; Met type 3 cut -off 0.26 g/t Au, recovery 78.5%; and Met type 4 cut -off 0.30 g/t

Au, recovery 68.5%. The cut -off grades and pit designs are considered appropriate for long term gold prices of

US$1,250/oz. Lindero Mineral Resources are reported within the same conceptual pit shell above a 0.2 g/t Au cut -off

grade using a long -term gold price of US$1,250/oz, mining costs at US$1.67 pe r tonne of material, with total

processing and process G&A costs of US$7.84 per tonne of ore and an average process recovery of 75%. The refinery

costs net of pay factor were estimated to be US$6.90 per ounce gold. Slope angles are based on 3 sectors (39°, 42°,

and 47°) consistent with geotechnical consultant recommendations

9. Eric Chapman, P.Geo. (APEGBC #36328) is the Qualified Person for resources and Edwin Gutierrez (SME Registered

Member #4119110RM) is the Qualified Person for reserves, both being employees of Fortuna Silver Mines Inc.

10. Totals may not add due to rounding procedures

11. N/A = Not Applicable

San Jose Mine, Mexico

As of December 31, 201 7, the San Jose Mine has Proven and Probable Mineral Reserves of 5.0 Mt

containing 40.1 Moz of silver and 261 koz of gold, in addition to Inferred Resources of 2 .6 Mt containing

a further 20.1 Moz of silver and 128 koz of gold.

Year-over-year, Mineral Reserves remained unchanged in terms of tonnes and contained silver , while

contained gold decreased by 6 percent after net changes resulting from production -related depletion

and the upgrading and conversion of Inferred Resources to Mineral Reserves due to a successful infill

drill program focused primarily on the Stockwork zones adding 0.7 Mt of new reserves averaging 286 g/t

Ag and 1.44 g/t Au. Silver grade decreased 1 percent to 247 g/t and gold grade decreased 6 percent to

1.61 g/t.

Measured and Indicated Resources exclusive of Mineral Reserves decreased year-over-year from 0.8 Mt

to 0.3 Mt due to a decrease in operating costs and better commercial terms resulting in the breakeven

cut-off grade for reserves decreasing from 127 g/t to 117 g/t Ag Eq.

Year-over-year, Inferred Resources decreased 20 percent and 23 percent in contained silver and gold

ounces, respectively. Silver grade decreased 4 percent and gold grade de creased 8 percent. The net

variation is due to reductions resulting from the upgrading of Inferred Resources by infill drilling in the

Trinidad North and Stockwork zones.

Brownfields exploration program budget for 2018 at the San Jose Mine is US $8.4 million, which includes

45,500 meters of diamond drilling and 340 meters of underground development for drilling access and

platforms. Exploration drilling will focus on the Trinidad Central and Trinidad North zones and on the

sub-parallel Victoria vein.

An infill drilling program of 6 ,485 meters for the upgrading of Inferred Resources into Measured or

Indicated Resources is underway at the San Jose Mine. The budget of the infill drill program for 201 8 is

US$0.84 million.

Caylloma Mine, Peru

As of December 31, 201 7, the Caylloma Mine has Proven and Probable Mineral Reserves of 1.6 Mt

containing 4.7 Moz of silver and 1 2 koz of gold, in addition to Inferred Resources of 5.8 Mt containing

19.5 Moz of silver and 66 koz of gold.

Year-over-year, Mineral Reserve tonnes remained unchanged while silver grade decreased 16 percent to

91 g/t, lead grade decreased 6 percent to 2.25%, and zinc grade increased 10 percent to 3.58%. Changes

are primarily due to mining related depletion and the upgrading and conversion of Inferred Resources to

Mineral Reserves due to a successful infill drill program focused on the Animas NE vein.

Measured and Indicated Resources, exclusive of Mineral Reserves, de creased by 6 percent year-over-

year to 1.9 Mt.

Inferred Resources in creased by 2.7 Mt or 92 percent year -over-year. Silver grade decreased by 17

percent, whereas lead and zinc grades increased 69 percent and 37 percent, respectively. The increase

in Inferred Resources is primarily due to a successful Brownfields exploration drill program of the

Animas NE vein that discovered 2.5 Mt of new resources averaging 81 g/t Ag, 3.82% Pb, and 5.42% Zn.

Brownfields exploration program budget for 2018 at the Caylloma Mine is US$2.2 million, which includes

10,250 meters of diamond drilling. Drilling will focus on a previously unexplored area between ore

shoots on the Animas NE vein that were discovered in 2017 (see Fortuna news release dated October

11, 2017).

An infill drilling program of 6 ,150 meters for the upgrading of Inferred Resources into Measured or

Indicated Resources is being presently conduct ed at the Caylloma Mine. The budget of the infill drill

program for 2018 is US$0.71 million.

Lindero Project, Argentina

The Lindero Project has Proven and Probable Mineral Reserves of 88.3 Mt containing 1.7 Moz of gold, in

addition to Inferred Resources of 5.7 Mt containing 0. 07 Moz of gold (see Fortuna news release dated

September 21, 2017).

Year-over-year, Mineral Reserve tonnes increased 7 percent while gold grade decreased 2 percent to

0.62 g/t. Changes are primarily due to increases in the expected metallurgical recoveries based on

updated testwork conducted in 2017, adjustments in projected processing and refining costs, and the

conversion of Inferred Resources to Mineral Reserves due to the metallurgical infill drill program

conducted in late 2016.

Measured and Indicated Resources exclusive of Mineral Reserves decreased year -over-year from

34.8 Mt to 12 .5 Mt due to the application of updated metallurgical recoveries and the optimization of

the ultimate pit shell.

Year-over-year, Inferred Resources decreased 88 percent in tonnes and 89 percent in contained gold

ounces. The net variation is primarily due to the optimization of the ultimate pit shell to schedule only

material defined as Mineral Reserves, resulting in the exclusion of 34.2 Mt or 0.47 Moz of I nferred

Resources located at the periphery of the updated pit design. In addition, 6.6 Mt or 0.07 Moz of Inferred

Resources was upgraded to Mineral Reserves as a consequence of the metallurgical infill drill program

and adjustments in the geological interpretation.

The 201 8 Brownfields exploration budget at Lindero is US$ 321,000 which includes investigating the

economic potential of including t he Arizaro gold-copper porphyry target that lies within the concession

block into the existing Lindero resource through additional surface mapping and 2,000 meters of core

drilling targeting shallow, high-grade copper-gold mineralization.

An infill drilling program of 2,000 meters is to be conducted at the Lindero Project in the second quarter

of 2018 to improve the grade estimates of material planned for mining in Year 1 and collect additional

metallurgical samples for testwork in the second half of 2018 . The budget of the infill drill program for

2018 is US$460,000.

Qualified Person

The Mineral Resource estimates have been prepared under the supervision of Eric Chapman, Vice

President of Technical Services of Fortuna Silver Mines. The Mineral Reserve estimate and the Mineral

Resource estimate exclusive of Mineral Reserves were prepared under the supervision of Edwin

Gutierrez, Technical Services Corporate Manager for Fortuna Silver Mines.

E. Chapman and E . Gutierrez are Qualified Persons as defined by the National Instrument 43 -101. Mr.

Chapman is a Professional Geoscientist of the Association of Professional Engineers and Geoscientists of

the Province of British Columbia (Registration Number 36328) and is responsible for ensuring that the

information contained in this news release is an accurate summary of the original reports and data

provided to or developed by Fortuna Silver Mines.

About Fortuna Silver Mines Inc.

Fortuna is a growth oriented, precious metal producer with its primary assets being the Caylloma silver

mine in southern Peru, the San Jose silver -gold mine in Mexico and the Lindero gold Project in

Argentina. The company is selectively pursuing acquisition opportunities throughout the Americas and

in select other areas. For more information, please visit its website at www.fortunasilver.com.

ON BEHALF OF THE BOARD

Jorge A. Ganoza

President, CEO and Director

Fortuna Silver Mines Inc.

Trading symbols: NYSE: FSM | TSX: FVI

Investor Relations:

Carlos Baca- T (Peru): +51.1.616.6060, ext. 0

Forward looking Statements

This news release contains forward looking statements which constitute “forward looking information” within the

meaning of applicable Canadian securities legislation and “forward looking statements” within the meaning of the

“safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 (collectively, “Forward looking

Statements”). All statements included herein, other than statements of historical fact, are Forward looking

Statements and are subject to a variety of known and unknown risks and uncertainties which could cause actual

events or results to differ materially from those reflected in the Forward looking Statements. The Forward looking

Statements in this news release may include, without limitation, statements about the Company’s plans for its

mines and mineral properties; the Company’s business strategy, plans and outlook; the merit of the Company’s

mines and mineral properties; mineral resource and reserve estimates; timelines; the future financial or operating

performance of the Company; expenditures; approvals and other matters. Often, but not always, these Forward

looking Statements can be identified by the use of words such as “estimated”, “potential”, “open”, “future”,

“assumed”, “projected”, “used”, “detailed”, “has been”, “gain”, “planned”, “reflecting”, “will”, “containing”,

“remaining”, “to be”, or statements that events, “could” or “should” occur or be achieved and similar expressions,

including negative variations.

Forward looking Statements involve known and unknown ri sks, uncertainties and other factors which may cause

the actual results, performance or achievements of the Company to be materially different from any results,

performance or achievements expressed or implied by the Forward looking Statements. Such uncert ainties and

factors include, among others, whether the Company’s activities at its properties will proceed as planned; changes

in general economic conditions and financial markets; changes in prices for silver and other metals; technological

and operational hazards in Fortuna’s mining and mine development activities; risks inherent in mineral exploration;

uncertainties inherent in the estimation of mineral reserves, mineral resources, and metal recoveries; governmental

and other approvals; political unrest or instability in countries where Fortuna is active; labor relations issues; as well

as those factors discussed under “Risk Factors” in the Company's Annual Information Form. Although the Company

has attempted to identify important factors that could cause actual actions, events or results to differ materially

from those described in Forward looking Statements, there may be other factors that cause actions, events or

results to differ from those anticipated, estimated or intended.

Forward looking Statement s contained herein are based on the assumptions, beliefs, expectations and opinions of

management, including but not limited to: that the Company’s activities at its properties will proceed as planned;

expectations regarding mine production costs; expected trends in mineral prices and currency exchange rates; the

accuracy of the Company’s current mineral resource and reserve estimates; that the Company’s activities will be in

accordance with the Company’s public statements and stated goals; that there will be no material adverse change

affecting the Company or its properties; that all required approvals will be obtained; that there will be no

significant disruptions affecting operations and such other assumptions as set out herein. Forward looking

Statements are made as of the date hereof and the Company disclaims any obligation to update any Forward

looking Statements, whether as a result of new information, future events or results or otherwise, except as

required by law. There can be no assurance that Forw ard looking Statements will prove to be accurate, as actual

results and future events could differ materially from those anticipated in such statements. Accordingly, investors

should not place undue reliance on Forward looking Statements.

This news release also refers to non- GAAP financial measures, such as cash cost per tonne of processed ore; cash

cost per payable ounce of silver; total production cost per tonne; all -in sustaining cash cost; all -in cash cost;

adjusted net (loss) income; operating cash f low per share before changes in working capital, income taxes, and

interest income; and adjusted EBITDA. These measures do not have a standardized meaning or method of

calculation, even though the descriptions of such measures may be similar. These performance measures have no

meaning under International Financial Reporting Standards (IFRS) and therefore, amounts presented may not be

comparable to similar data presented by other mining companies.

Cautionary Note to United States Investors Concerning Estimates of Reserves and Resources

Reserve and resource estimates included in this news release have been prepared in accordance with National

Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43 -101") and the Canadian Institute of Mining,

Metallurgy, and Petroleum Definition Standards on Mineral Resources and Mineral Reserves. NI 43 -101 is a rule

developed by the Canadian Securities Administrators that establishes standards for public disclosure by a Canadian

company of scientific and technical information concerning mineral projects. Canadian standards, including NI 43 -

101, differ significantly from the requirements of the United States Securities and Exchange Commission ("SEC"),

and reserve and resource information contained in this news r elease may not be comparable to similar information

disclosed by U.S. companies. In particular, the term "resource" does not equate to the term "reserves". Under U.S.

standards, mineralization may not be classified as a "reserve" unless the determination has been made that the

mineralization could be economically and legally produced or extracted at the time the reserve determination is

made.

The SEC's disclosure standards normally do not permit the inclusion of information concerning "measured mineral

resources", "indicated mineral resources" or "inferred mineral resources" or other descriptions of the amount of

mineralization in mineral deposits that do not constitute "reserves" by U.S. standards in documents filed with the

SEC. You are cautioned not to assume that resources will ever be converted into reserves. You should also

understand that "inferred mineral resources" have a great amount of uncertainty as to their existence and great

uncertainty as to their economic and legal feasibility. You should al so not assume that all or any part of an "inferred

mineral resource" will ever be upgraded to a higher category. Under Canadian rules, estimated "inferred mineral

resources" may not form the basis of feasibility or pre- feasibility studies except in rare ca ses. You are cautioned not

to assume that all or any part of an "inferred mineral resource" exists or is economically or legally mineable.

Disclosure of "contained ounces" in a resource is permitted disclosure under Canadian regulations; however, the

SEC normally only permits issuers to report mineralization that does not constitute "reserves" by SEC standards as

in-place tonnage and grade without reference to unit measures. The requirements of NI 43 -101 for identification of

"reserves" are also not the same as those of the SEC, and reserves reported in compliance with NI 43 -101 may not

qualify as "reserves" under SEC standards. Accordingly, information concerning mineral deposits set forth in this

news release may not be comparable with information made public by companies that report in accordance with

U.S. standards.

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