Fortuna Silver Increases Indicated Resources at San Jose by 112% to 37.6
Million Ag Eq ounces

VANCOUVER, Oct. 26 /CNW/ - Fortuna Silver Mines Inc. (TSX.V: FVI / Lima Exchange: FVI) - is pleased to announce an updated NI 43-101 compliant mineral resource estimate for the San Jose Project located in southern Mexico. Indicated Resources have increased 83% to 2.69 million tonnes with contained silver equivalent ounces increasing 112% to 37.6 million. Silver and gold grades in the Indicated Resource category have increased by 12% to 295 g/t and 4% to 2.27 g/t, respectively. The new resource estimate will serve as the basis for pre-feasibility level engineering studies projected for completion by year end.

At a cut-off grade of 150 g/t Ag Equivalent, the Indicated and Inferred Mineral Resources for the Trinidad Zone at San Jose are estimated at:

    
    Indicated Mineral Resource:    2.69 million tonnes grading 295 g/t Ag and
                                   2.27 g/t Au containing 37.6 million Ag
                                   Equivalent(1) ounces

    Inferred Mineral Resource:     2.41 million tonnes grading 262 g/t Ag and
                                   2.11 g/t Au containing 30.4 million Ag
                                   Equivalent(1) ounces

    (1) Silver equivalency estimates were derived using metal prices of US
    $13.75/oz for silver and US$856.16/oz for gold (36-month average + 24
    month future metal prices as of July 31, 2009). Metallurgical recoveries
    were estimated at 92.5% for silver and 91.5% for gold based on
    metallurgical testing completed by Metcon Research of Tucson, Arizona.
    

A detailed table of the estimated mineral resources by resource category and by silver equivalent cut-off grade is included below under the heading "San Jose Resource Estimate".

The resource estimate incorporates data from 196 core drill holes totaling 64,204 meters and 908 underground channel samples. Previously reported NI 43-101 compliant resources for San Jose were estimated at 1.47 million tonnes grading 263 g/t Ag and 2.19 g/t Au in the Indicated category and 3.9 million tonnes grading 261 g/t Ag and 2.57 g/t Au in the Inferred category (see March 31, 2007 Technical Report available on the company website (www.fortunasilver.com) and on SEDAR).

Mr. Jorge Ganoza, CEO and Director of the Company commented: "Although the resource estimation process suffered delays, the wait has been worthwhile. Our staff and consultants have delivered good news with overall improvements to the quality of the San Jose resource. We look forward to the granting of environmental approvals and construction permits in the coming weeks as the next milestones for the project."

San Jose Resource Estimate

The updated mineral resource estimate for San Jose was prepared by Michael J. Lechner of Resource Modeling Inc. and by Donald F. Earnest of Resource Evaluation Inc. Mr. Lechner and Mr. Earnest have acted as independent qualified persons as defined by the Canadian National Instrument 43-101. The Mineral Resources reported herein were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards on Mineral Resources and Reserves. This resource estimate is based on all data available through June 30, 2009.

    
    -------------------------------------------------------------------------
                         Indicated Mineral Resources
    -------------------------------------------------------------------------
                                                        Contained Metal
     Ag Eq                                       ----------------------------
    Cutoff   Tonnes    Ag Eq                     Ag Eq Ozs  Ag Ozs   Au Ozs
     (g/t)    (000)    (g/t)   Ag (g/t) Au (g/t)   (000)     (000)    (000)
    -------------------------------------------------------------------------
       50     4,636     292      196      1.56     43,465    29,163    232
    -------------------------------------------------------------------------
       75     4,018     327      220      1.74     42,231    28,422    224
    -------------------------------------------------------------------------
      100     3,478     364      246      1.92     40,725    27,486    215
    -------------------------------------------------------------------------
      125     3,043     400      271      2.10     39,153    26,497    205
    -------------------------------------------------------------------------
      150     2,690     435      295      2.27     37,596    25,504    196
    -------------------------------------------------------------------------
      175     2,370     471      321      2.45     35,930    24,429    187
    -------------------------------------------------------------------------
      200     2,102     508      346      2.63     34,314    23,382    177
    -------------------------------------------------------------------------
      225     1,883     542      370      2.79     32,823    22,416    169
    -------------------------------------------------------------------------
      250     1,685     578      396      2.96     31,315    21,433    160
    -------------------------------------------------------------------------



    -------------------------------------------------------------------------
                         Inferred Mineral Resources
    -------------------------------------------------------------------------
                                                        Contained Metal
     Ag Eq                                       ----------------------------
    Cutoff   Tonnes    Ag Eq                     Ag Eq Ozs  Ag Ozs   Au Ozs
     (g/t)    (000)    (g/t)   Ag (g/t) Au (g/t)   (000)     (000)    (000)
    -------------------------------------------------------------------------
       50     4,020     272      181      1.48     35,199    23,389    192
    -------------------------------------------------------------------------
       75     3,497     304      202      1.65     34,151    22,735    185
    -------------------------------------------------------------------------
      100     3,074     334      222      1.80     32,963    21,988    178
    -------------------------------------------------------------------------
      125     2,681     366      244      1.97     31,545    21,061    170
    -------------------------------------------------------------------------
      150     2,411     392      262      2.11     30,357    20,293    164
    -------------------------------------------------------------------------
      175     2,137     421      282      2.26     28,922    19,351    155
    -------------------------------------------------------------------------
      200     1,883     452      304      2.41     27,393    18,379    146
    -------------------------------------------------------------------------
      225     1,696     479      321      2.56     26,113    17,522    140
    -------------------------------------------------------------------------
      250     1,545     503      337      2.69     24,958    16,747    133
    -------------------------------------------------------------------------

       *Estimates of contained metal may vary due to rounding errors.
    

Resource Estimation Methodology

Three-dimensional wireframe envelopes were constructed for each vein in the San Jose deposit based on a combination of lithology and silver equivalent grades. Block grades were estimated inside of the three-dimensional wireframes by inverse distance interpolation methods using two-meter-long composites of drill hole and underground channel samples. Voids created by historic underground mining of the deposit were also modeled with three-dimensional wireframes where cavity survey data were available and these voids were deleted from the resource model. Above the 1450m elevation level, all material within the vein wireframes was excluded from the resource model due to incomplete coverage of the cavity survey data in areas with inaccessible mine workings. MineSight(R) software was used to construct the block model which consists of blocks with a dimension of 2 meters along each side. The percentage of each block contained inside of each wireframe was stored for computing tonnage. A dynamic anisotropy search ellipse method which matched drill hole composite and block centroid distances from the hanging wall surfaces was used for the primary veins (Bonanza, Trinidad, Paloma, and Fortuna). These four veins represent 86% of the total San Jose wireframe volume. A single pass inverse distance-cubed method was used to estimate block grades for the secondary veins. A bulk density factor of 2.61 g/cm(3) based on systematic density determinations was used to tabulate resource tonnage. Mineral resources were classified into Indicated and Inferred categories using the distance to composite sample data and the number of drill holes containing the composites used to estimate each block. Blocks with three holes within 33m, two holes within 23m or one hole within 13 meters were classified as Indicated Resources with Indicated Resources being further restricted to the Bonanza, Trinidad, Paloma, and Fortuna vein structures. All other blocks within the wireframes were classified as Inferred Resources. Resources were tabulated using silver equivalent cutoff grades.

A full NI 43-101 compliant report authored by M. Lechner of Resource Modeling Inc. and D. Earnest of Resource Evaluation Inc. will be available on www.sedar.com within 45 days of 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 .

Qualified Persons

Michael J. Lechner of Resource Modeling Inc. and Donald F. Earnest of Resource Evaluation Inc. are the Qualified Persons as defined by National Instrument 43-101 and are responsible for the accuracy of the technical information in this news release.

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 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.

    
    Neither the TSX Venture Exchange nor the Investment Industry Regulatory
    Organization of Canada accepts responsibility for the adequacy or
    accuracy of this release.

    ON BEHALF OF THE BOARD

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

    Symbol: TSX-V: FVI / Lima Exchange: FVI
    

SOURCE Fortuna Silver Mines Inc.

For further information: For further information: Investor Relations: Lima office: Carlos Baca - Tel: 51.1.616.6060; Vancouver office: Ralph Rushton, Erin Ostrom - Tel: (604) 484-4085

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