SILVER PRICE NEWS - The silver price rally in 2010 has generated a tailwind for the share prices of silver stocks, and Fortuna Silver Mines (FVI.TSX) is a prime example. While the silver price has gained $1.56 per ounce, or 9.3%, year-to-date, shares of Fortuna Silver Mines have climbed 34% thus far in 2010. Shares of this emerging silver producer have gained on the heels of not just the silver price leverage the company provides, but also due to several positive, company-specific developments that have emanated from Fortuna Silver over the past six months.

Fortuna Silver’s 34% advance has significantly outpaced that of most mid- and large-cap silver stocks - including Silver Wheaton (SLW), Silver Standard Resources (SSRI), and Pan American Silver Corp. (PAAS) - which have posted returns of 16.4%, -10.4%, and 6.9%, respectively.

This morning, the company announced the release of its first quarter 2010 production results, which included a 30% rise in silver production to a record of 479,821 ounces. Fortuna Silver also produced 6,868,811 pounds of zinc, a 1% decrease over Q1 2009. Lead production was 5,920,140 pounds while copper production came in at 295,854 pounds, 1.5% and 213% greater than in the first quarter of 2009, respectively.

Fortuna attributed the record production figures to improved grades in production stopes with respect to the mine plan, and contribution of development material from the new high-grade discovery made in the upper levels of the company’s Caylloma vein in Peru. The Canadian-based silver producer went on to say that exploration drilling of this discovery is continuing to progress, concurrent with stope preparation for production.

In addition, Fortuna is prioritizing the definition of resources in this new area to incorporate them into its 2010 Caylloma mine plan. The past three months comprised the first full quarter of commercial operation for the copper circuit, where production reached 295,854 pounds of copper in concentrate.

Fortuna Silver Mines is a silver and base metal producer focused on mining opportunities in Latin America. The company’s primary assets are the Caylloma Silver Mine in southern Peru and the San Jose Silver-Gold Project in Mexico, which is currently under construction. In afternoon trading, Fortuna was one of the largest gainers among silver stocks, rallying 2.2% to C$2.81 per share. The gold price gained $2.73 to $1,163.68 per ounce and the silver price advanced $0.03 to $18.41 per ounce.