Fortuna Silver Mines (FVI.TSX, NYSE: FSM) reported 2011 production results and its 2012 production forecast from the San Jose Mine in Mexico and the Caylloma Mine in Peru.  The Canadian-based silver Company announced silver production of 2.50 million ounces, a 31% increase over 2010.  Cash costs on a consolidated basis came in at $0.37 per silver ounce.

Highlights:

* Fortuna delivered its fifth consecutive year of silver production growth and sustained low cash costs per silver ounce

* The Company issued 2012 production guidance of 3.7 million ounces of silver and 17,400 ounces of gold, or 4.6 million silver equivalent ounces plus base metal credits

* Exploration at San Jose in 2012 will continue to concentrate on the evaluation and advancement of multiple mineral occurrences outlined through mapping and stream and soil sampling

* Caylloma District exploration for 2012 includes 24,000 meters of diamond drilling and 3,500 meters of underground drifting and is focused on the evaluation of high-grade silver targets on the 32,000 hectare land package controlled around the mine

Mr. Jorge Ganoza, President and CEO:

“2011 was marked by two milestones for the Company, our NYSE listing on September 19th and the start of commercial operations on September 1st at our San Jose Mine in Mexico.  The San Jose Mine initiated operations at a rate of 1,000 tonnes per day and for 2012 we have an approved plan and budget to expand capacity to 1,500 tpd.  This expansion will continue fueling our low cost annual silver production growth into 2012 and 2013.”

Graeme Jennings, Cormark Securities:

“We believe that the Company offers investors exposure to an undervalued ‘best in class’ mid-tier silver producer with a rapidly growing production profile supported by high quality in-situ resources and exploration assets.”