Fortuna boasts 1.7 million oz. silver at Caylloma

Fortuna Silver Mines (FVI-T) nearly doubled silver production at its Caylloma mine in Peru in 2009 and is forecasting just as good a year in 2010.

The company produced about 1.7 million oz. silver, a 96% increase over 2008 production.

Fortuna also produced 28.4 million lbs. of zinc and 25.1 million lbs. lead at Caylloma, an increase of 22% and 52% respectively. About 189,000 lbs copper were also produced.

The average head grades were 154.96 grams per tonne silver, 3.66% zinc, 3.1% lead while recoveries were 85.4%, 89.1% and 93%, respectively. The average copper grade was just 0.25%.

“We expect to maintain production of all commodities at close to current levels during 2010 with the exception of copper,” said Fortuna CEO Jorge Ganoza in a statement.

Fortuna is forecasting production of 1.7 million oz. silver, 28.4 million lbs. zinc 25.2 million lbs. lead and 1 million lbs. copper.

The company’s future growth will come from the San Jose project in Mexico where the company expects to launch construction in the first quarter this year.

Fortuna is planning to publish a prefeasibility study and has signed a letter to enter into a US$20-million senior secured revolving credit facility with the Bank of Nova Scotia.

San Jose will be a 1,500 tonne per day underground mine with a flotation plant that will process gold and silver concentrates.

The project has indicated resources of 37.6 million silver equivalent oz.