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Fortuna Options the Mario Ag-Au-Pb-Zn Property in Central Peru

May 30, 2011

VANCOUVER, May 30, 2011 /PRNewswire/ – Fortuna Silver Mines Inc. (TSX: FVI / Lima Stock Exchange: FVI) is pleased to announce the signing of an agreement with Crocodile Gold
Corp. (TSX: CRK) granting Fortuna the exclusive right and option to acquire a 100%
interest in the Mario Property of Crocodile Gold, located in the
Department of Junin in central Peru. The option agreement is the first
to be signed under Fortuna’s project acquisition program which is
focused on identifying high quality silver-rich targets in Latin
America.

The Mario property covers highly prospective silver-gold-base metal
mineralization occurring as massive sulfide replacement bodies, veins,
mantos, hydrothermal breccias, disseminations and skarn-type bodies.
The Property covers 3,850 contiguous hectares and is located in the
highly prospective central Peru metallogenic province, which hosts
numerous large Ag-Pb-Zn carbonate replacement style deposits such as El
Porvenir, Cerro de Pasco and Atacocha. It has undergone several phases
of historic exploration, most recently in 2006 by Franc-Or Resources
Corp.

Mr. Jorge Ganoza, Fortuna’s President and CEO, commented “The Mario
Property is an exciting exploration project for the Company, located in
one of the most prolific and productive silver-base metal provinces of
Peru. This new growth opportunity comes as a result of the execution of
our exploration team’s project generation programs, being carried both
in Peru and Mexico.  The Company currently has four drill rigs working
at the Caylloma Mine and the San Jose Project and looks forward to
advancing the Mario Property to a drill stage prior to the end of the
year”.

Highlights of the historic drilling carried out at Mario include:

     _________________________________________________________________________
    |          |   From |    To  |  Drill  |    Ag  |    Au  |    Pb  |   Zn  |
    |  Hole_Id |   (m)  |   (m)  |Int. (m) |  (g/t) |  (ppb) |   (%)  |   (%) |
    |__________|________|________|_________|________|________|________|_______|
    |FO-06-02  |    1.45|    8.90|     7.45|     192|     440|    1.21|   1.77|
    |__________|________|________|_________|________|________|________|_______|
    |FO-06-03  |  111.00|  129.75|    18.75|     265|     554|    2.57|  12.61|
    |__________|________|________|_________|________|________|________|_______|
    |FO-06-05  |   59.20|  131.40|    72.20|      44|     974|    0.55|   0.66|
    |__________|________|________|_________|________|________|________|_______|
    |FO-06-07  |   39.30|   56.15|    16.85|     390|     483|    4.86|   6.90|
    |__________|________|________|_________|________|________|________|_______|
    |FO-07-25  |  174.30|  177.70|     3.40|     309|     119|    0.36|   0.52|
    |__________|________|________|_________|________|________|________|_______|
    |FO-08-29  |   70.30|   81.80|     8.75|     658|     229|    6.04|   1.32|
    |__________|________|________|_________|________|________|________|_______|
    |FO-08-29  |  111.10|  117.00|     5.90|     523|     875|    5.56|   6.85|
    |__________|________|________|_________|________|________|________|_______|
    |FO-08-29  |  125.80|  133.05|     7.25|     176|     694|    2.93|   4.77|
    |__________|________|________|_________|________|________|________|_______|
    |FO-08-34  |  107.10|  149.85|    42.75|      31|   1,047|    0.54|   0.55|
    |__________|________|________|_________|________|________|________|_______|
    |PU-00-01  |  143.90|  152.60|     8.70|     404|      NA|    3.16|  11.34|
    |__________|________|________|_________|________|________|________|_______|
    |PU-00-03  |   89.45|   91.00|     1.55|   1,021|      NA|   13.96|   2.98|
    |__________|________|________|_________|________|________|________|_______|
    |PU-00-08  |   29.45|   38.60|     9.15|     560|      NA|    6.35|  26.10|
    |__________|________|________|_________|________|________|________|_______|
    |PU-00-09  |   50.70|   54.55|     3.85|     486|      NA|    4.91|   7.87|
    |__________|________|________|_________|________|________|________|_______|
    |PU-03-24  |   10.30|   18.80|     8.50|     283|     315|    2.56|   3.14|
    |__________|________|________|_________|________|________|________|_______|
    |PU-03-28  |   72.20|   85.80|    13.60|     303|   2,918|    3.96|  11.05|
    |__________|________|________|_________|________|________|________|_______|
    |PU-03-29  |   23.00|   27.00|     4.00|     434|     315|    2.65|   3.44|
    |__________|________|________|_________|________|________|________|_______|
    |PU-03-38  |  141.70|  145.90|     4.20|     475|     417|    4.24|   1.88|
    |__________|________|________|_________|________|________|________|_______|

Drill hole assay averages reproduced from news releases and technical
reports previously published by Franc-Or Resources Corp (‘FO-’
Hole_Ids) and Sulliden Gold Corp. Ltd. (‘PU-’ Hole_Ids). NA= Not
Assayed.

Past Exploration Results at the Mario Property

The Mario Property has been previously explored by Teck-Cominco
(1995-99), Sulliden Gold Corp. Ltd. (2000-03) and Franc-Or Resources
Corp. (2006-08), who subsequently amalgamated with Crocodile Gold in
2009. Past exploration has included geologic mapping, geochemical
sampling, geophysical surveys and approximately 14,000 meters of
drilling resulting in the identification of Ag-Au-Pb-Zn mineralization
in the form of massive sulfide replacement bodies, veins, mantos,
hydrothermal breccias, disseminations and skarn-type deposits.

Terms of the Purchase Option Agreement

The Purchase Option Agreement grants to Fortuna the exclusive right and
option to purchase an undivided 100% interest in the Mario Property
subject to the following terms:

      1. Payment of US$500,000 on signing of agreement

      2. Payment of US$500,000 on or before six months from the signing of
         the agreement

      3. Payment of US$500,000 on or before 12 months from the signing of
         the agreement

      4. Payment of US$2,500,000 on or before 24 months from the signing of
         the agreement

The purchase of the property by Fortuna is subject to a 1% net smelter
return (NSR) royalty on production from the property payable to
Crocodile Gold. Fortuna shall have the right to purchase the NSR
royalty from Crocodile at any time during the five year period
following the final option payment for the sum of US$3,000,000. The
property is also subject to a 2% NSR royalty on production payable to
Teck Cominco and a 0.5% NSR royalty on production payable to Socrate
Capital Inc., with each royalty in turn subject to certain buy-back
provisions.

Qualified Person

Mr. Miroslav Kalinaj, P. Geo., is the Company’s Qualified Person as
defined by the National Instrument 43-101 and has verified the
technical information in this news release.

Fortuna Silver Mines Inc.

Fortuna is a growth oriented, silver and base metal producer focused on
mining opportunities in Latin America.  Our primary assets are the
Caylloma silver Mine in southern Peru and the San Jose silver-gold
Project in Mexico.  The Company is selectively pursuing additional
acquisition opportunities.  For more information, please visit our
website at www.fortunasilver.com.

ON BEHALF OF THE COMPANY

Jorge Ganoza
President, CEO and Director
Fortuna Silver Mines Inc.

Symbol: TSX: FVI / Lima Stock Exchange: FVI

Forward-Looking Statements

Certain statements in this press release constitute forward-looking
statements and as such are based on an assumed set of economic
conditions and courses of action. These include estimates of the time
of commencement, commissioning and full production, future production
levels, expectations regarding mine production costs, expected  trends
in mineral prices and statements that describe Fortuna’s future plans,
objectives or goals. There is a significant risk that actual results
will vary, perhaps materially, from results projected depending on such
factors as changes in general economic conditions and financial
markets, changes in prices for silver and other metals, technological
and operational hazards in  Fortuna’s mining and mine development
activities, risks inherent in mineral  exploration, uncertainties
inherent in the calculation of mineral reserves, mineral resources, and
metal recoveries, the timing and availability of financing,
governmental and other approvals, political unrest or instability in
countries where Fortuna is active, labor relations and other risk
factors.
 

 

SOURCE Fortuna Silver Mines Inc.


Source: newswire



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