Fortuna Silver Mines Inc.

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Fortuna increases San Jose Ag-Au Resource: Silver equivalent 17.7

million ounces (Indicated), 49.1 million ounces (Inferred)

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March 12, 2007: Fortuna Silver Mines Inc. (FVI: TSX-V) ("Fortuna") is

pleased to announce the results of a new resource estimate for the San

Jose silver-gold deposit located in Oaxaca, Mexico. San Jose is being

explored and developed under a joint venture between Fortuna (76%) and

Continuum Resources Ltd. (24%).

Using a cut-off grade of 150 g/t Ag equivalent, the inferred and

indicated mineral resources for the Trinidad zone at San Jose are

estimated at:

Indicated Mineral Resources: 1.47 million tonnes grading 262.6 g/t Ag

+ 2.19 g/t Au containing 17.7 million Ag equivalent oz

Inferred Mineral Resources: 3.9 million tonnes grading 260.6 g/t Ag +

2.57 g/t Au containing 49.1 million Ag equivalent oz

A detailed table of the mineral resources for each vein is appended at

the end of this release. Also appended is a table showing the

sensitivity of the mineral resource to silver equivalent cut-off grade.

Silver equivalency estimates were derived using US$10.30/oz for silver

and US$525/oz for gold yielding a Ag:Au ratio of 51:1. Metallurgical

recoveries and net smelter returns are assumed to be 100%.

The previous NI43-101 compliant resources for San Jose were estimated

at 527,283 tonnes grading 396 g/t Ag and 3.5 g/t Au (5 g/t Au cutoff),

all in the inferred category, for a contained total of approximately 10

million ounces silver equivalent (the NI 43-101 compliant technical

report is dated March 2006 and available on SEDAR).

The San Ignacio zone, located approximately 700m along strike to the

south of the Trinidad zone, is not included in the current resource

estimate. Initial drilling in the San Ignacio area has identified

significant silver and gold mineralization but further drilling is

required before a meaningful estimate of the resource potential can be

made for the area.

Pending receipt of permits, drilling is scheduled to resume at the

Trinidad Zone in late March 2007. Initial drilling will be focused on

testing the extension of mineralization to depth, and follow-up

drilling on the high-grade intercepts at the San Ignacio vein which

were reported in 2006 (See news release dated December 7, 2006).

Concurrently, surface geochemical and reconnaissance programs will be

carried out in the San Jose-Taviche District on concessions recently

acquired jointly by Fortuna and Continuum.

Jorge Ganoza, the President of Fortuna commented: "Fortuna has achieved

a new milestone that reflects our commitment to continued growth in

shareholder value. San Jose now has nearly five times more silver

equivalent ounces in the inferred category than were contained in the

previous resource estimate and the system remains open at depth and

along strike."

Methodology

The updated resource estimate was prepared by Independent Mining

Consultants, Inc. of Tucson, Arizona. Mike Hester acted as the

independent qualified person as defined by Canadian National Instrument

43-101.

The estimate is based on all drilling completed to-date and 692 channel

samples collected from the underground workings in the Trinidad zone.

The methods used in determining and reporting the resources are

consistent with CIM Best Practice Guidelines for the estimation of

mineral resources and mineral reserves. For the purposes of the

estimate, metal prices were assumed at US$10.30/oz for silver and

US$525/oz for gold yielding a Ag:Au ratio of 51:1. Metallurgical

recoveries and net smelter returns are assumed to be 100%. A rock

density of 2.59 t/m3 has been assumed for both mineralized vein and

wall rock materials based on specific gravity measurements taken from

64 vein and wall rock samples.

Three-dimensional wireframe models were developed for each vein system

and drill hole grades were composited to 2m intervals. The block model

was based on 2m by 2m by 2m blocks. To improve grade estimation, the

easting coordinate was replaced by a footwall distance coordinate for

both the model blocks and the drill hole composite data. This resulted

in straightening of the veins for estimation purposes.

Silver and gold grades in the veins were estimated by inverse distance

squared with a search radius of 120m along the strike of the vein, 120m

in a dip direction of the vein and 10m in a transversal direction of

the vein. Silver composites exceeding 1700 g/t and gold composites

exceeding 20 g/t were restricted to search radii of 50m along the local

strike of the vein and 50m in the dip direction of the vein. Silver

and gold grades were also estimated for stockwork zones by inverse

distance squared but with more limited search radii of 30m in a

north-south direction, 30m in a vertical direction and 10m in the

east-west direction.

For sensitivity analysis and comparison purposes, resource estimates

were also prepared using ordinary kriging, nearest neighbor polygon and

un-restricted inverse distance methods. Globally, the inverse distance

and ordinary kriging methods resulted in similar block grade

distributions but the inverse distance did a better job of tracking

local grade variations. Resource estimates were validated by

comparison of cross sections of the model blocks with drill hole

composites.

A full NI43-101 compliant report will be filed on www.sedar.com within

45 days of this news release. The report will be co-authored by M.

Hester of Independent Mining Consultants and Gerry Ray, a consulting

geologist with extensive experience at the San Jose project and a

qualified person (QP) under the definition of NI 43-101. Mr. Hester is

responsible for the accuracy of this press release.

Background

Fortuna is a growth-oriented silver and base metal producer focused on

mining opportunities in Latin America. The Company's primary assets

are the Caylloma Silver-Base Metals Mine in southern Peru and the San

Jose Silver-Gold Project in Mexico. The Company is aggressively

pursuing additional acquisition opportunities. For more information,

please visit our website at www.fortunasilver.com.

The TSX Venture Exchange has not reviewed and does not take

responsibility for the adequacy or accuracy of this release.

ON BEHALF OF THE BOARD,

Jorge Ganoza Durant,

President

Fortuna Silver Mines Inc.

Tel: 604-484-4085

Symbol: TSX-V: FVI

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Copyright (c) 2007 FORTUNA SILVER MINES INC. (FVI) All rights

reserved. For more information visit our website at

http://www.fortunasilver.com/ or send mailto:info@fortunasilver.com