Fortuna-Continuum post San Jose resource (March 12, 2007)

Vancouver – A new resource estimate has been tabled for Fortuna Silver Mines (FVI-V, FVITF-O) and Continuum Resources (CNU-V, CUUFR-O) San Jose silver-gold project in Oaxaca State, Mexico.

The joint venture partners detailed an indicated resource of 1.47 million tonnes grading 262.6 grams silver per tonne and 2.2 grams gold per tonne (primarily within the Trinidad and Bonanza veins) containing about 12.4 million oz. of silver and 103,500 oz. of gold.

An additional 3.9 million tonnes of inferred resource averaging 260.6 grams silver and 2.6 grams gold were also estimated giving around 32.7 million contained oz. of silver and 321,500 oz. of gold.

The study, focused on the Trinidad zone, used a 150 gram silver-equivalent cut-off grade based on a 51-to-1 silver-to-gold ratio (factored from a US$10.30 per oz. price for silver and US$525 per oz. for gold).

The updated resource significantly surpasses the previous tally of 527,283 inferred tonnes at 396 grams silver and 3.5 grams gold, about 6.7 million contained oz. of silver and 59,000 oz. of gold.

Fortuna president Jorge Ganoza commented: “San Jose now has nearly five times more silver equivalent ounces in the inferred category than were contained in the previous resource estimate and the system remains open at depth and along strike.”

The property partners also remain optimistic on the San Ignacio zone located about 700 metres along strike and south of Trinidad. Recent drilling has turned up decent silver and gold mineralization (including 12.75 metres of 2.33 grams gold and 182 grams silver). Fortuna acknowledged further drilling is necessary before any resource estimates can be made.

The JV partners are getting geared up to resume drilling at Trinidad where an initial focus will test for additional mineralization at depth plus follow-up the recent high-grade results from San Ignacio.

San Jose is a high-grade silver-gold vein system located in the Taviche silver district of southern Mexico. Mineralization consists of silver sulphosalts (pyrargyrite, proustite and tetrahedrite), native silver and gold occurring within epithermal quartz veins and breccias, hosted by andesite volcanics.

The main Trinidad vein has been traced over 3 km north-south with several northwest to southeast trending splays.

A number of historic underground workings are located on the Trinidad, San Ignacio and Corona zones. The previous underlying owner recently conducted small scale mining (about 100-tonnes-per-day) from a shaft at Trinidad targeting the Bonanza and Fortuna vein splays, and the Bonanza Footwall zone. About 800 metres of the vein system was exploited in previous mining and only to about 180-metres depth.

San Jose is now owned 76% by Fortuna and 24% by Continuum under a new agreement that superseded a prior deal that had Continuum earning an 80% interest with Fortuna acquiring up to 70% share of Continuums ownership. The revised deal saw Fortuna pay the full purchase price of US$8 million, US$250,000 worth of its shares and US$250,000 worth of Continuum shares it held.

Continuum kicked in additional concession in the area on which it holds options.

Looking to advance the project to production this year, the JV partners recently purchased the plant that previously processed ore from San Jose. The fully permitted operation is located about 12 km from the deposit and has a 150-tonne-per-day capacity. Upgrades are underway to bring the capacity up to 360-tonnes-per-day.

The prior operator produced silver-gold concentrates that were sold to Industrias Peoles (IPOAF-O) Met-Mex smelting-refining complex in Torreon. Records indicate metallurgical recoveries of 80% for silver and gold were achieved.

With both companies seeing a recent stock price rally, shares of Continuum slipped 7% to close off a nickel at 69 apiece following the March 12th resource announcement while Fortuna shares also dropped 5 to close at $3.40.

Fortuna also operates its Caylloma silver-zinc-lead mine in southern Peru that recommenced production in late-2006. The mine is processing about 500-tonnes-per-day of ore.