Carlos Baca - Manager-Investor Relations Jorge A. Ganoza Durant - President, Chief Executive Officer & Director Luis Dario Ganoza Durant - Chief Financial Officer

Chris O. Thompson - Raymond James Ltd. (Broker) Craig Johnston - Scotia Capital, Inc. (Broker) Benjamin Asuncion - Haywood Securities, Inc.

Greetings and welcome to the Fortuna Silver Mines' First Quarter 2015 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Carlos Baca, Investor Relations Manager. You may begin. Carlos Baca - Manager-Investor Relations: Thank you, Rob. Good morning, ladies and gentlemen. I would like to welcome you all to Fortuna Silver Mines and to our first quarter 2015 financial and operations results call. Jorge Alberto Ganoza, President and CEO; and Luis Dario Ganoza, CFO, will be hosting the call from Lima, Peru. Before I turn over the call to Jorge, I would like to indicate that this earnings call contains forward-looking information that is based on the company's current expectations, estimates and beliefs. This forward-looking information is subject to a number of risks, uncertainties and other factors. Actual results could differ materially from our conclusion, forecast or projection in the forward-looking information. Certain material factors or assumptions were applied in drawing our conclusion or making a forecast or projection as reflected in the forward-looking information. Additional information about the material factors that could cause actual results to differ materially from the conclusion, forecast or projection in the forward-looking information and the material factors or assumptions that were applied in drawing our conclusion or making a forecast or projection as reflected in the forward-looking information is contained in the company's annual information form, which is publicly available on SEDAR. I would now like to turn the call over to Jorge Ganoza, President, CEO and Co-Founder of Fortuna. Jorge A. Ganoza Durant - President, Chief Executive Officer & Director: Thank you, Carlos. And good morning to all. Both our Caylloma and San Jose mines operated consistently within plan during the quarter. In Q1, the company produced 1.6 million ounces of silver and 9,700 ounces of gold, up 6% and 19% respectively, when compared to Q1, 2014. We're well within schedule to meet our guidance for the year of 6.5 million ounces of silver and 35,000 ounces of gold. The driver for the quarter-over-quarter production growth was the expansion of our San Jose Mine from 1,800 tonnes per day to 2,000 tonnes per day in April 2014. For the quarter, precious metals accounted for 84% of sales, silver representing 61% and gold 23%. The balance made of byproduct lead and zinc from the Caylloma Mine. At San Jose, we produced – we processed 178,000 tonnes at an average grade of 215 grams per tonne silver and 1.83 grams per tonne gold, resulting in 1.1 million ounces of silver and 9,300 ounces of gold. San Jose guidance is for 4.3 million ounces of silver for this year and 33,300 ounces of gold. At Caylloma, we processed 114,000 tonnes at an average grade of 171 grams per tonne silver, 3.3% zinc and 1.86% lead, resulting in 536,000 ounces of silver, 7.5 million pounds of zinc, 4 million pounds of lead. For 2015, we have guided 2.2 million ounces of silver at this mine, and we remain on target to meet guidance. We recorded lower operating costs at both our mines. At San Jose, we achieved $59.80, down from $66 in Q1 2014. At Caylloma, we achieved $84, down from $87.85 in the comparative quarter. Cost per tonne at both operations were below guidance for the year at $62 at San Jose and $92 at – $90 at Caylloma. At San Jose, the lower cost against guidance are explained by an 8% devaluation of the peso, partially offset by higher mining costs, basically break up, haulage and (0:04:32). At Caylloma, the cost reductions are explained by lower head count services and zinc concentrate transport tariffs and the impact of a 4% devaluation in the sol, the local currency. For the quarter, our consolidated all-in sustaining cash cost net of by-products decreased to $11.80 per ounce of silver, down from $16.50 per ounce in Q1 2014. Our guidance for 2015 is for $16.60. We expect to be within this guidance for the year due to the scheduled capital investments in the coming quarters related to our filter tailings and dry stack projects. All-in sustaining cash cost at the San Jose Mine was $9.37 versus $14.41 in Q1 2014. 2015 guidance is for $16. $6 out of this year is attributed to our filter tailings and dry stack projects. At Caylloma, all-in sustaining cost was $11 versus $13 in the comparable quarter. 2015 guidance is for $12.78. We expect to be within guidance of sustaining capital projects, particularly mine development pick-up in the second quarter and third quarter. Our CapEx guidance for 2015 is for $70.6 million, the allocation is $56.5 million to the San Jose Mine and $14 million to the Caylloma Mine. In the first quarter, we have reported investments on mineral property, plant and equipment of $6.1 million. We expect the capital investments line to pick up in the course of the year, as our main projects are advancing according to schedule. The San Jose tailings project, the largest budget this year with $28 million, has a physical (0:06:45) advance of 60%, and for the 3,000 tonne per day expansion with a 2015 budget of $12.5 million, orders for the bow mill and other large equipment have been placed already. Touching briefly on exploration at the San Jose Mine, we are advancing with our drilling at the north end Trinidad, with eight drill holes and 4,800 meters concluded up to-date. We're advancing with exploration of two new areas La Noria to the west of the mine, which is a parallel vein system and the continuation of the Trinidad system, on some southern place, some 2 kilometers from the (0:07:35) Mine facility along (0:07:36). We expect to report our results on these new areas as the work advances. Now for – I'll let you – I'll let Luis take you through summary of the financial results. Luis Dario Ganoza Durant - Chief Financial Officer: Thank you, Jorge. For Q1 2015, we recorded sales of $39.8 million, down 13% from Q1, 2014 and net income of $3.9 million, a decrease of 20% compared to the same period last year. Main driver for lower income and the sales was a lower realized silver price, which fell 18% to $16.60 per ounce. This negative price effect was partially compensated by higher gold and base metals sold of 11% and 10% respectively, where silver sold was 1.62 million ounces, with no significant variation from Q1, 2014. Our mine operating earnings was $12.6 million, 27% below Q1, 2014 as a result of the lower sales. Gross margin, that is mine operating earnings over sales, came down from 38% to 32%, reflecting the impact of lower metal prices. This negative effect, however, was partially offset by lower unit costs year-over-year at both of our operating units. We recorded selling, general, and administrative expenses of $4.6 million, a decrease of $3.4 million compared to the prior year period. The decrease is explained by lower stock-based compensation charges, a reduction in corporate expenses of $0.8 million, and foreign exchange gain in the period. Operating income was $8 million, 14% below Q1 of 2014. And finally, net income was $3.8 million or $0.03 per share compared to $0.04 per share in Q1 of 2014. When comparing our financial results to the previous quarter, that is to Q4 of 2014, our sales were 5% higher, mine operating earnings was 25% higher and operating income was 180% higher, as a result of lower costs and expenses and higher metals sold. Moving down to the cash flow statement, cash flow from operations before changes in working capital and after taxes paid was $5.6 million, compared to $16.9 million in Q1 of 2014. The majority of that increase is related to timing issues in the payment of income taxes. And as a better comparison, EBITDA for Q1 2015 was $15.2 million, 16% below the $18 million generated in Q1 of 2014. Expenditures in mineral properties, plant and equipment was $6.1 million. As Jorge mentioned, we expect to see this figure rise over Q2 and Q3 as our two main projects for the year gain momentum. Moving on to the balance sheet, our total cash position, including short-term investments, as of the end of the quarter was $77 million, which remains at similar levels compared to year-end 2014. On our payables, we closed 2014 with $9.7 million of income tax payable related mostly to our Mexican operation. For this year moving forward, we anticipate we will see the opposite effect, as we start paying taxes. So we should expect that to see a tax credit building up in the balance sheet over the next couple of quarters. On April 1, we drew down $40 million in the term loan trench of our expanded bank credit facility. The $40 million is structured as a bullet loan with a four-year term. We have also proceeded to fix (0:12:14) the interest rate and the loan to an interest rate swap or this will allow us to add additional financial flexibilities to our balance sheet during the expansion phase of the San Jose Mine, as well as secure what we regard as a very competitive interest rate. Thank you. Back to you, Carlos. Carlos Baca - Manager-Investor Relations: We would now like to turn the call over to any questions that you may have.

Our first question comes from Chris Thompson with Raymond James. Please proceed with your question. Chris O. Thompson - Raymond James Ltd. (Broker): Good morning, gentlemen. Thanks for taking my question. Couple of quick, quick questions here. The first one relates to the gold grade at San Jose, I noticed they're slightly higher than guidance. Do you see this as continuing and is this sustainable? Jorge A. Ganoza Durant - President, Chief Executive Officer & Director: Hello, Chris. Grades, we expect to be – we – for the year, we expect to be within guidance. Yeah, we don't see a major variation, any changes, they're just (0:13:50) natural swings in the sequencing of the mine. Chris O. Thompson - Raymond James Ltd. (Broker): Okay, great. And just obviously good cost for the quarter really on the back, I guess, of weakness in the peso and sol, I mean, if you do – if you move forward and assume that same sort of weakness or they stayed as quite as it is today, do you see your costs on an operating basis sort of indicative of what was delivered in Q1 for the remainder of the year? Luis Dario Ganoza Durant - Chief Financial Officer: Hi Chris. As you say, we assume the exchange rate we've seen in Q1, the answer will be yes. We would expect to be somewhat below our guidance. Otherwise we would expect to be very much close to what we've guided within 3% to 4% range. Chris O. Thompson - Raymond James Ltd. (Broker): Okay, thanks. And as far as the CapEx allocation, I guess, for the build (0:14:55) items at San Jose for the remainder of this year, I mean would it be fair to say, we – for the – for what you're looking to spend this year, should we apportion it in equal portions remainder of the year on a quarterly basis, is that how you see things happening? Luis Dario Ganoza Durant - Chief Financial Officer: We – yes, we expect over the next two quarters to see the bulk of the scheduled CapEx being expensed, let's call it $45 million to $40 million over the next two quarters. Chris O. Thompson - Raymond James Ltd. (Broker): Correct. (0:15:30) Great. Thank you very much. Congratulations, again, guys. Jorge A. Ganoza Durant - President, Chief Executive Officer & Director: Thank you.

Our next question is from Craig Johnston with Scotiabank. Please proceed with your question. Craig Johnston - Scotia Capital, Inc. (Broker): Hi guys, thanks for taking my call, good quarter. Just two questions, just relating to costs, both operations and I know, as (0:16:02) you mentioned, and kind of looking at the detailed schedules that mining cost at San Jose seem to have kind of trended higher Q4, as well as into Q1. Just wondering what's kind of driving that and kind of where you see mining costs going forward at San Jose? Jorge A. Ganoza Durant - President, Chief Executive Officer & Director: Yes. Well. We have been accelerating some on schedule (0:16:30) development in the mine that will have an impact. Also, there are some changes in support. So, we don't see any material deviations, nor anything that would lead us to alter our guidance at this moment, no. Craig Johnston - Scotia Capital, Inc. (Broker): Okay. Thanks. And then, just going to Caylloma, it looks like a great quarter from a cost per tonne perspective, kind of well exceeding or beating last year. Just thinking is that kind of primarily related to the depreciation in the currency, or is there more to it, and we can expect to see a cost per ton beat (0:17:25) going forward? Jorge A. Ganoza Durant - President, Chief Executive Officer & Director: I think, well, what we are seeing in Caylloma is a result in part of the optimization of the mine that's been taking place. We have taken away through that some flexibility in the mine, but, no, basically we're benefiting from some lower tariffs. We're shipping zinc concentrate out of the Matarani seaport. There is a positive change with respect to what we have been doing historically at this mine, where we've been trucking 1,000 kilometers all the way to (0:18:12) in Lima. So there is a reduction that we hope will remain. And lower head count as part of the restructuring, no. Now at the same time, we have taken some flexibility out of the mine, reducing development ahead of production, and what not, but all in all, we expect savings to stay. Craig Johnston - Scotia Capital, Inc. (Broker): Okay. Great. That's very helpful. And that's it from me. Thanks guys. Jorge A. Ganoza Durant - President, Chief Executive Officer & Director: Thank you.

Our next question is from Benjamin Asuncion with Haywood Securities. Please proceed with your question. Benjamin Asuncion - Haywood Securities, Inc.: Good morning, guys. Just a quick question here for Luis. Just looking at the taxes, how should we look at taxes being paid going forward, so there was an accrual of just over $4 million for Q1, what's the timing on tax payments? Luis Dario Ganoza Durant - Chief Financial Officer: Yes. So, as I mentioned during the call, Ben, we – this year, we'll start paying tax installments. We've also paid around $8.7 million – sorry, actually more than that – $9.6 million in the first quarter, most of it related to fiscal 2014 in Mexico. So, where we should see – we should expect to see is payments above and beyond our incurred taxes in particular for the next two quarters. But all in all, towards year-end, we should accumulate a tax credit in the balance sheet of – in the range of $2 million to $3 million, right. Hope that gives you a good sense with respect to payments based on your – the assumptions you might have on incurred taxes, right. Benjamin Asuncion - Haywood Securities, Inc.: Okay, okay. So they're not – just so I understand correctly, so on a quarterly basis we'll see some cash outflow on taxes being made relatively consistently as opposed to just sort of a big bullet payment, correct? Luis Dario Ganoza Durant - Chief Financial Officer: Yes, yes. Benjamin Asuncion - Haywood Securities, Inc.: Okay. Perfect, that's it from me. Thanks, guys. Jorge A. Ganoza Durant - President, Chief Executive Officer & Director: Thank You.

Our next question is from Raghu Gordon, (0:20:29) a private investor. Please proceed with your question.

Hello. Thank you. I'm just calling to request you to comment on exploration activity near San Jose, Trinidad North specifically and all the surrounding areas. We were expecting kind of a press release in the last couple of months and there was nothing came and I was wondering when you would be commenting officially releasing a press release, statement something like that. Can you elaborate a little bit on that? Thank you. Jorge A. Ganoza Durant - President, Chief Executive Officer & Director: Yes, thank you. We have a drilling budget of 12,000 meters basically allocated to San Jose this year. We have executed this first half of the year 4,800 meters – sorry – this first months of the year 4,800 meters, that's in eight drill holes. So we are waiting to conclude the program in the area of Trinidad North where we're currently working, before releasing. We're just a few holes short of concluding this first phase of the program. And with that, we will be publishing a release. This is drilling taking place on the northern most end of the Trinidad North discovery. We are also preparing to drill the north – the western vein system located some 2 kilometers away from the mine. Structurally, it looks like a mirror system to the Trinidad system, where we're currently mining. We have conducted all the necessary work to develop drill targets. We're working on getting land surface right to access (0:22:41) to set up for drilling and we expect to re-drilling towards middle of the year. That's our expectation. And we're also advancing with work south of the mine area on some place called Maria and northern minor (0:23:04) space from the main trend. We're also doing current surface work with expectation of developing new drill targets. So, what you will see us is concluding this year's drilling in Trinidad North in the coming weeks, publishing results for eight drill holes to 12 drill holes and then working to move our drill rigs to these other areas, La Noria and hopefully Maria.

Thank you. That's excellent. And one other quick question if you may. Recently, zinc and lead prices have strengthened, and it should bode well for Fortuna going forward being a byproduct. Can you comment your views on that? And it's really, I think, exciting times ahead for the company either way you look. Thank you. Jorge A. Ganoza Durant - President, Chief Executive Officer & Director: Thank you for that. Yes, I mean lead and zinc combined quarterly (0:24:12) account for 15% of sales roughly. At the Caylloma Mine, they account for roughly 35% of sales. So, there is definitely (0:24:31) important at the mine level and a nice widespread byproduct credit that helps from an all-in perspective or cash cost per ounce perspective lower cost. We are unhedged on these commodities, on these by-products, so we are benefiting from the increasing prices. We know that there is – there's been for a longtime, an expectation of higher zinc prices that we share. And we – if you see our zinc grades and lead grades at the Caylloma Mine, we've been moving or transitioning the mine towards areas of higher polymetallic grades. So, our zinc grades this quarter have been 3.3% versus 2.8% a year ago and our lead grade is also slightly higher, that is a result of us (0:25:45) transition in the mine towards this higher base metal – higher grade base metal zones. And we'd like to think that that mine is naturally hedged with this base metal component. So, yeah, now we are reaping that benefit at the mine.

There are no further questions at this time. At this point, I'd like to turn the call back over to management for any closing remarks. Carlos Baca - Manager-Investor Relations: Thank you, Rob. If there are no further questions, I would like to thank everyone for listening to today's earnings call. We look forward to you joining us next week – next quarter, sorry.

This concludes today's teleconference. We thank you for your participation. You may disconnect your lines at this time.