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Positioned for Sustainable Growth with Two Low-cost Underground Operating Silver Mines In Mexico and Peru

Business Summary

Fortuna Silver Mines is engaged in silver mining and related activities, in Latin America, including exploration, extraction, and processing.

Fortuna is one of the fastest growing silver producers in Latin America, with two 100 percent owned underground mines in Peru and Mexico.

In 2014, the company expects to produce 6 Moz of silver and 32.3 koz of gold at an estimated consolidated all-in sustaining cash cost of US$17.14/oz Ag, net of by-products gold, lead and zinc. The company has followed a disciplined growth strategy since its formation in 2005 and has earned a reputation as efficient mine builders and strong operators.

Projects

San Jose Mine, Oaxaca, Mexico

Fortuna Silver owns a 100% of the mine. The San Jose mine is located in the southern portion of the state of Oaxaca, approximately 47 road kilometers (one hour drive) south of the city of Oaxaca. Access to the property is excellent and local infrastructure is good.

San Jose achieved commercial production at a rate of 1,000 tpd in September 2011. Construction started in March 2010 and concluded on time and on budget at a capital cost of US$55 million. In September 2013, Fortuna commissioned the mill expansion from 1,150 to 1,800 tpd. An additional mill expansion to 2,000 tpd is scheduled for the beginning of the second quarter of this year without incurring in additional capital expenditures. For 2014, the mine is expected to produce 4 Moz Ag and 30.4 koz Au at an estimated all-in sustaining cash cost of US$14.43/oz Ag, net of by-product gold.

Taviche Oeste Concession

On February 4, 2013, Fortuna Silver Mines Inc. announced that the transaction to acquire the Taviche Oeste Concession (Fortuna news release January 24, 2013) has now closed. Fortuna has acquired a 55 percent interest in the property for a US$4 million cash payment and entered into an option agreement whereby upon announcement of a production decision, Fortuna may purchase the remaining 45 percent interest for a US$6 million payment. The Taviche Oeste concession is subject to NSR royalties totaling 2.5 percent.

San Jose Mine – Trinidad North Discovery: 200 meter strike extension step-out drilling beyond existing resource boundary

Fortuna drills step-out hole of 3.5 kg/t Ag and 15 g/t Au over a true width of 3.7 meters at Trinidad North

On January 21, 2014, Fortuna Silver Mines Inc. to announced results for step-out drilling of the Trinidad North discovery located contiguous with the San Jose Mine in Oaxaca, Mexico.

Assay results are presented for eight drill holes completed in the fourth quarter of 2013 confirming the continuation of the high-grade Trinidad North zone over a further 200 meter strike extension beyond the limits of existing Inferred Resources. The mineralization remains open to the north and to depth as well as vertically above the 1200 meter level.

Highlights of Step-out Drilling

SJOM-331

Ø 605 g/t Ag and 3.59 g/t Au (820 g/t Ag Eq) over estimated true width of 10.3 m

SJOM-334

Ø 233 g/t Ag and 2.31 g/t Au (371 g/t Ag Eq) over estimated true width of 6.5 m

SJOM-335

Ø 3,511 g/t Ag and 15.04 g/t Au (4,413 g/t Ag Eq) over estimated true width of 3.7 m, and 474 g/t Ag and 2.54 g/t Au ( 626 g/t Ag Eq) over estimated true width of 9.1 m

SJOM-336

Ø 124 g/t Ag and 0.97 g/t Au (182 g/t Ag Eq) over estimated true width of 13.4 m, and368 g/t Ag and 1.80 g/t Au ( 476 g/t Ag Eq) over estimated true width of 5.5 m

Caylloma Mine, Arequipa, Peru

Fortuna Silver purchased a 100% interest in the Caylloma Mine and related mining concessions in 2005. Following significant expansion and modernization of the mill, the mine was brought back into production in October 2006. The mine and processing plan are currently producing 1,300 tpd.

Production is sourced primarily from the silver-polymetallic Animas vein (95%), with the balance from the Bateas and Soledad veins. Exploration of the Caylloma Property is ongoing, with expansion of the existing reserve and resource base the main focus.

The Caylloma Mine is located 225 kilometers (approximately 4 hour drive northwest) of Arequipa, Peru in mountainous highlands at an elevation of 4,500 meters above sea level. The mine, processing plant and related infrastructure are located in the Caylloma Mining District, 14 kilometers northwest of the town of Caylloma. The mine is connected to the national power grid and water is locally available.

For 2014, Caylloma is forecast to produce 2 Moz Ag and 1.9 koz Au at an estimated all-in sustaining cash cost of US$17.01/oz Ag, net of by-products lead and zinc.

Production Summary

2014E consolidated AISCC* = US$17.14/oz Ag

(*) AISCC = All-In Sustaining Cash Cost; net of by-product credits and based on the guidelines from the World Gold Council

Growing Reserve and Resource Base: Net growth in Inferred Resources

Fundamental Considerations

Production guidance for 2014:

· 6.02 Moz silver

· 32.3 koz gold

· 22.6 Mlbs zinc

· 16.6 Mlbs lead

Investment Highlights:

· Positive Cash Flow generated in 2013, sustainable free cash flow generation

· Expansion of production in 2014 and 2015

· Growth Strategy: Focused on organic growth, disciplined M&A

· Maximizing production and profitability

· Capitalizing on Trinidad North silver-gold discovery

· Strong treasury: US$42 M in cash (end of 3Q13), US$40 M untapped credit facility,

Technical Considerations

The Timeless Precious Metal Fund

The Investment Policy

The Company will attempt to achieve maintenance of value and capital growth through the following investment policy:

1. Purchase and sale of equity in listed companies producing precious metals which have, at the same time, the potential to replace reserves and to add to reserves

2. Purchase and sale of equity in listed precious metals companies that have the potential to become producing companies and that have considerable exploration potential.

3. Purchase and sale of equity in listed Companies that explore for precious metals

The Investment Manager shall reserve the right to invest up to 20% of the NAV in private placement non-equity investments in LISTED companies such as bonds, warrants, futures, options, and other financial derivatives.

The Timeless Funds (The Timeless Precious Metal Fund, The Sierra Madre Gold & Silver Venture Capital Fund, The Timeless Uranium Fund, The Timeless US Growth Fund (waiting for approval)) are managed by

Timeless Asset Management Ltd, Malta (www.timeless-funds.com)

Investment Advisor is P. ZIHLMANN INVESTMENT · MANAGEMENT AG

Peter Zihlmann

www.pzim.ch

invest@pzim.ch

phone: +41 44 268 51 10, mobile +41 79 379 51 57

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Disclosure:

The author has not been paid to write this article, nor has he received any other inducement to do so.

Disclaimer:

The author’s objective in writing this article is to invoke an interest on the part of potential investors in this stock to the point where they are encouraged to conduct their own further diligent research. Neither the information nor the opinions expressed should be construed as a solicitation to buy or sell this stock.

Investors are recommended to obtain the advice of a qualified investment advisor before entering into any transactions in the stock - or to use their own brains.

In our opinion, the best approach is to buy a diversified portfolio of stocks as represented in THE TIMELESS PRECIOUS METAL FUND or THE SIERRA MADRE GOLD & SILVER VENTURE CAPITAL FUND instead of shares of only a small number of companies.

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