Fortuna Silver Mines Expands Presence in Mexico

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By jturbin | January 25, 2013 3:45 AM EST

Gold Alert

Fortuna Silver Mines (FVI.TSX, NYSE: FSM) announced that its wholly owned subsidiary, Compania Minera Cuzcatlan S.A. de C.V., and Plata Pan American S.A. de C.V. – a wholly owned subsidiary of Pan American Silver Corp. – have entered into an acquisition and option agreement for the 6,254 hectare Taviche Oeste Concessions immediately surrounding the San Jose Mine in Oaxaca, Mexico.

Highlights:

* Fortuna Silver Mines ntoed that under the terms of the agreement, Cuzcatlan will purchase a 55% undivided interest in the Taviche Oeste Concessions for a cash payment of $4.0 million

* Once a production decision is made to develop ore from the Taviche Oeste Concessions, Cuzcatlan will purchase the remaining 45% undivided interest in the property for $6.0 million

* Plata Pan American will retain a 2.5% net smelter royalty on ore production from this property

* The transaction is expected to close on January 30, 2013

Jorge A. Ganoza, President and CEO of Fortuna Silver Mines:

“This is an important acquisition for our company, not only does this simplify the mineral tenure immediately surrounding our existing mine and infrastructure, but the acquisition strengthens our exploration portfolio along the trend of current production. We will be planning an aggressive exploration program to immediately follow up on targets that we have developed.”

Graeme Jennings, Cormark Securities:

“We believe that the Company offers investors exposure to an undervalued ‘best in class’ mid-tier silver producer with a rapidly growing production profile supported by high quality in-situ resources and exploration assets.”

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This article is contributed by Gold Alert and does not represent the views or opinions of International Business Times.

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