Silver mining company, Fortuna Silver Mines (FVI.TSX), has appreciated substantially over the past year through both the leverage it offers to the silver price and importantly, company-specific organic growth. The latter was evident today as Fortuna Silver announced a discovery with the potential to add further silver price leverage to its share price. The silver mining company’s discovery consisted of high-grade silver-gold mineralization in the upper portion of the Animas Vein at the company’s flagship Caylloma Mine in southern Peru. Fortuna Silver’s discovery was the latest in a series of positive developments at Caylloma - where the emerging silver company has steadily increased silver production and reduced unit costs in each of the previous three years.

Fortuna Silver provided additional details about the high-grade discovery at Caylloma, including the recently developed series of exploration raises and cross-cuts along the Animas structure, which cut Bonanza-style silver-gold mineralization above level 6. Up until now silver and gold production from the Animas Vein has been completely derived from below the 6th level. Fortuna Silver also discussed highlights from sampling on the new zone, which consisted of:

Raise CH 418N: 41 channel samples taken every two meters along 84m of vertical extent on the raise returned an average of 1,890 grams per ton (g/t) of silver and 5.4 g/t of gold over an average sample width of 1.35m.

Cross-Cut 418N: Averaged 2110 g/t of silver and 13.27 g/t of gold over a true width of 4.36m.

Raise CH412N: 30 channel samples taken every two meters along 60m of vertical extent on the raise returned an average of 404 g/t of silver and 1.26 g/t of gold over an average sample width of 1.55m.

Fortuna stated that this high-grade silver-gold zone at Caylloma is open laterally over a strike distance of 400 meters and vertically to the surface - a distance of 150 to 200 meters along the inclination of the vein. Meanwhile, the silver mining company pointed out that the significance of these results has yet to be fully quantified and incorporated into the current mine plan.

Jorge Ganoza, President, CEO, and a Director of Fortuna Silver, stated that “This is an exciting discovery of high grade silver-gold mineralization in the Animas vein, traditionally a polymetallic vein, that is the source of 85% per cent of production at our Caylloma mine. We’re currently investigating the full significance of the new discovery and our exploration and mine planning teams are working to define resources to be included in our mine plan.”

Over the past several years Fortuna Silver has transitioned itself from a relatively small silver explorer to an emerging mid-tier silver mining producer. CEO Jorge Ganoza and the management team at Fortuna have continued to execute their objective of providing investors with leverage to the price of silver - in a manner that concentrates on generating positive cash flow. Along with the progress at Caylloma, Fortuna Silver plans to begin construction at its San Jose Silver-Gold Project in Mexico. The addition of a second mine will transform the silver mining company into a multi-project operator and diversify the company’s growing revenue base.

Coverage of the silver mining company by investment banks has also increased with Salman Partners just yesterday being the latest to officially follow the company. In Salman’s February 1 report, they concluded that “shares of Fortuna are undervalued using a price-to-cash flow valuation, now and in 2012!” They rate the shares a “Buy” with a target price of C$3.60.

In afternoon trading, shares of Fortuna advanced by C$0.13 to C$2.69 on the news, while the gold price rose by $10.50 to $1,116.64 per ounce and the silver price was up $0.05 to $16.72 per ounce.