Mr. Jorge Ganoza reports

FORTUNA REPORTS 2011 YEAR END RESULTS

Fortuna Silver Mines Inc. has filed its audited financial statements and management's discussion and analysis for 2011. The full documents are available on SEDAR and have also been posted on the company's website.

Year 2011 financial statements and management's discussion and analysis highlights:

• Net income of $19.53-million (U.S.), compared with $16.00-million (U.S.) in 2010, an increase of 22 per cent;
• Earnings per share of 16 U.S. cents, compared with 15 U.S. cents in 2010, an increase of 7 per cent;
• Sales of $110.00-million (U.S.) compared with $74.06-million (U.S.) in 2010, an increase of 49 per cent;
• Net cash from operating activities of $35.51-million (U.S.), compared with $21.73-million (U.S.) in 2010, an increase of 63 per cent;
• The company's cash position (including short-term investments) and working capital as at year-end of $55.73-million (U.S.) and $63.90-million (U.S.), respectively;
• Record silver production of 2,486,655 ounces, up 30 per cent over 2010 (only includes commercial production);
• Silver accounted for 65 per cent of revenue;
• Cash cost per silver ounce, net of byproduct credits, of 37 U.S. cents.

                                       FINANCIAL RESULTS
                                  (expressed in $000s (U.S.))
 
                                                       Year ended Dec. 31, 2011   Year ended Dec. 31, 2010

Sales                                                                  $110,004                    $74,056
Operating income                                                         38,065                     27,728
Net income (loss)                                                        19,533                     16,003

During the year ended Dec. 31, 2011, the company generated net income of $19.53-million (U.S.) (2010: $16.00-million (U.S.)) on operating income of $38.07-million (U.S.) (2010: $27.73-million (U.S.)). The increase in net income is mainly attributable to higher mine operating income of $60.97-million (U.S.) (2010: $39.21-million (U.S.)) driven by higher sales at Caylloma and the contribution of the San Jose mine, offset by higher selling, general and administrative expenses of $19.84-million (U.S.) (2010: $10.98-million (U.S.)), income taxes of $18.80-million (U.S.) (2010: $11.51-million (U.S.)), impairment of mineral properties, property, plant and equipment of $1.89-million (U.S.) (2010: nil), exploration and evaluation costs of $1.72-million (U.S.) (2010: $550,000 (U.S.)), and lower gain on commodity contracts of $480,000 (U.S.) (2010: $740,000 (U.S.)).

                                     OPERATING RESULTS

                                           Quarterly results           Year-to-date results         
                                  Three months ended Dec. 31,           Years ended Dec. 31,       
                                       2011             2010            2011           2010
Consolidated metal production  Consolidated     Consolidated    Consolidated   Consolidated

Silver (oz)*                        913,803          481,802       2,486,655      1,906,423
Gold (oz)*                            4,153            1,822           6,843          2,556
Lead (000s lb)                        4,396            5,338          19,678         21,373
Zinc (000s lb)                        5,688            6,158          23,425         26,137
Copper (000s lb)                          0              987              36          4,596

* Caylloma: silver in lead and copper concentrates; San Jose: silver in silver-gold 
concentrates from commercial production.

The company's silver production in fourth quarter of 2011 was 90 per cent higher than fourth quarter 2010 as a result of higher silver production from Caylloma of 11 per cent and the contribution from San Jose for its first full quarter under commercial operations.

The company's silver production in 2011 was 30 per cent higher than in 2010 as a result of higher silver production from Caylloma of 5 per cent and the contribution from San Jose for the second half of the year.

Consolidated production highlights for fourth quarter 2011:

• Silver production of 913,803 ounces, a 90-per-cent increase over fourth quarter 2010;
• Gold production of 4,153 ounces, 128-per-cent increase over fourth quarter 2010;
• Lead production of 4,396 (in thousands) pounds, an 18-per-cent decrease over fourth quarter 2010;
• Zinc production of 5,688 (in thousands) pounds, an 8-per-cent decrease over fourth quarter 2010.

Consolidated production highlights for 2011:

• Silver production of 2.49 million ounces, a 30-per-cent increase over 2010;
• Gold production of 6,843 ounces, a 168-per-cent increase over 2010;
• Lead production of 19,678,000 pounds, an 8-per-cent decrease over 2010;
• Zinc production of 23,425,000 pounds, a 10-per-cent decrease over 2010.

Caylloma mine fatal accident report

It is with great sorrow the company informs that on Feb. 26, 2012, a fatal accident claimed the life of driller Sixto Chambilla Apaza and injured his supervisor Felix Larota Puma, both working for the company's mine contractor operating the Animas vein on Level 12 of the Caylloma mine. Upon knowledge of the tragic accident, all mine operations were stopped immediately, resuming on Feb. 28.

Fortuna's senior operations management team travelled to the mine site the same day of the accident to launch a corporate investigation. Findings indicate the crew of contractors suffered a premature detonation on a round of rib and ditch blast. Levels of responsibility and breaches of safety regulations and procedures that led to the accident have been identified as a result of the investigation. Fortuna is implementing corrective actions across the organization to make sure certain additional safeguards are set in place against violations of safety regulations and procedures.

The company is working closely with the contractor to ensure that both grieving families receive all possible emotional, moral and financial support. Fortunately, Mr. Larota is in a stable condition and recovering in a hospital in Arequipa.

Jorge Ganoza, president and chief executive officer, commented: "This tragic incident which resulted in the death of Mr. Chambilla is mourned by the entire company. The accident occurred despite the various systems set in place to safeguard against breaches in safety protocols and procedures. As president, CEO and director of Fortuna, I can assure that the organization is truly committed to our core safety principle -- we do not tolerate unsafe acts or work conditions -- in order to preserve the well-being, health and safety of our workers. This is my most sincere commitment and that of the entire Fortuna family."

Conference call to review year-end 2011 financial results

The company will hold a conference call to discuss the year-end 2011 financial results and comment on recent events at the company's Caylloma mine in Peru on March 27, 2012, at 9 a.m. Pacific Time/11 a.m. Lima Time/12 p.m. Eastern Time. Hosting the call will be Mr. Ganoza, president and chief executive officer, and Luis Ganoza, chief financial officer.

Shareholders, analysts, media and interested investors are invited to listen to the live conference call by logging onto the webcast or over the phone by dialling just prior to the starting time.

Conference call details:

Date:  March 27, 2012

Time:  9 a.m. PST/11 a.m. Lima Time/12 p.m. EST

Dial-in number (toll-free):  1-877-407-8035

Dial-in number (international):  1-201-689-8035

Replay number (toll-free):  1-877-660-6853

Replay number (international):  1-201-612-7415

Replay passcodes (both are required for playback)

Account No.:  286

Conference ID No.:  391125

Playback of the webcast will be available until June 28, 2012. Playback of the conference call will be available until April 10, 2012, at 11:59 p.m. EST. In addition, the call will be archived in the company's website.

We seek Safe Harbor.