Greetings, and welcome to the Fortuna Silver Mines' Third Quarter 2014 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to our host, Mr. Carlos Baca, Investor Relations Manager for Fortuna Silver Mines. Thank you, sir. You may begin.

Thank you, Melisa. Good morning, ladies and gentlemen. I would like to welcome you all to Fortuna Silver Mines and to our third quarter 2014 financial and operations results call. Jorge Alberto Ganoza, President and CEO; and Luis Dario Ganoza, CFO will be hosting the call from Lima, Peru. Before I turn the call to Jorge, I would like to indicate that this earnings call contains forward-looking information that is based on the Company’s current expectations, estimates and believes. This forward-looking information is subject to a number of risks, uncertainties and other factors, actual results could differ materially from our conclusion, forecast or projection in the forward-looking information. Certain material factors or assumptions were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information. Additional information about the material factors that could cause actual results to differ materially from the conclusion, forecast or projection in the forward-looking information and the material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information is contained in the Company’s annual information form which is publically available on SEDAR. I would now like to turn the call over to Jorge Ganoza, President, CEO and Co-Founder of Fortuna.

Thank you, Carlos, and good morning to all. Fortuna had a very robust third quarter in terms of production and financial results. The Company produced 1.8 million ounces of silver and 9,700 ounces of gold in the quarter. This represents a 63% and 116% increase respectively when compared to the third quarter of 2013. Production for the first nine months of the year stands at 4.9 million ounces of silver and 26,400 gold ounces. Based on production results for the first nine months we are in a position to exceed our annual guidance of 6 million ounces of silver and 32,000 ounces of gold. During the quarter precious metals accounted for 82% of sales, silver representing 63% and gold 19%. Additionally during the quarter at the Caylloma mine we produced 7.1 million ounce of zinc and 4.2 million ounce of led byproducts. Both our Caylloma and San Jose mines operated consistently during the quarter at San Jose at a rate of 2,000 tonnes per day and at Caylloma 1,300 tonnes per day. At both mines, our teams have captured opportunities to quickly adjust to these new lower price levels and big budgets for production and cost. At San Jose the mine is adequately developed and prepared ahead of production. This provides a mass flexibility to manage grade. As a result grades for the quarter are up 15% and 16% respectively against our budgets for silver and gold. Additionally the grade profile of the mine improves with that as we know and at level 1,200 which currently is the main source of production, we’re already mining in the upper portion of the (various grades) [ph]. At Caylloma we have directed a mine towards level 12 of the Animas Vein our deepest production level where we find higher zinc and lead grades.…

Thank you. For the third quarter of 2014 we’ve had record sales of $46.4 million up 54% from the prior year, net income of $7.8 million compared to a loss of 0.3 million in Q3 of 2013 and cash flow from operations before changes in working capital and after taxes paid of $17.8 million which is up 135% when compared to the prior year period. Silver and gold sold in Q3 of 2014 increased significantly as a result mainly of the commissioning of the expansion of the San Jose mine creating 100 tonnes per day in Q4 of last year and 2,000 tonnes per day towards April of this year. Silver sold was 1.8 million ounces, up 63% and gold sold was 8,751 ounces, up 116%. The realized silver price in our provision of sales for the quarter was $19.14 per ounce compared to $21.20 per ounce in Q3 of 2013. We recorded negative sales adjustments of $2.6 million in the current quarter compared to negative 0.5 million in 2013 related to metal price and assay adjustments. Our mine operating earnings was $16.7 million, 106% above Q3 of 2013 and our gross margins increased from 27% in the comparative period to 36% in the current quarter. The higher margins are solidly grounded on the operational performance at our mines which more than compensated for a lower silver price. At San Jose higher grades of 30% and the lower unit cost of 15% increased our margins significantly and at Caylloma strong zinc production and improved metallurgical recoveries helped compensate the lower silver price. On the selling and G&A line item, we recorded $3.5 million compared to $5 million in 2013, a reduction of $1.5 million. The breakdown of this line item is provided in page 12 of our MD&A and the…

Thank you, Luis. We would now like to turn the call over to any questions that you may have.

Thank you. At this time, we’ll be conducting a question-and-answer session [Operator Instructions]. Our first question comes from the line of Benjamin Asuncion with Haywood Securities. Please proceed with your question.

Good morning guys and congratulations on a strong quarter. I've got two questions here, first relating to the G&A disclosure that you had in terms of the corporate cost reduction. Could you give us a sense of what your annualized G&A is? And then also just from a modeling perspective if we can get that broken down by corporate, Mexico and Peru.

: Sure. Based on this quarter Ben and as we’ve been guiding over in the previous calls, our total G&A including cost and corporate is in the range of -- has been in the range of $4 million to $4.5 million per quarter, so call it $80 million on a yearly basis and based on the cost reductions we’ve implemented, we expect that should come down to around $17 million, so $1 million less of total G&A expenses on a yearly basis. And out of that 17 million the subsidiary G&A should be in the range of $6 million to $7 million. So those are the numbers we should expect to see moving forward.

And then secondly just following on just the taxes, just given the fact that as I understand, correct me if I am wrong, you’re still in kind of a tax holiday at San Jose in Mexico. Can you give us a sense of -- so the 8 million that’s taxes accrued and can you give us a sense of what the tax payment would be due, I mean in terms of the advance tax payment in January or in Q1 of next year?

Yes, I mean what’s happening is that this is the first year that we’re incurring current taxes in Mexico and because it’s the first year we’re not yet paying tax installments throughout the year which is what you typically expect. That will change next year, so by year-end we will close with an income tax payable probably in the range of $10 million and then will be a lump-sum payment in March. So starting 2015 incurred income tax should be more similar to the actual taxes paid throughout the year, we shouldn’t have such a large variation as we’re seeing in this year.

Thank you. Our next question comes from the line of Chris Thompson with Raymond James and Associates. Please proceed with your question.

Just a couple of quick questions here. Noticed the good low unit costs I guess on a per tonne basis [indiscernible] for Q3. Are these sustainable at these levels Jorge?

Yes we believe so, we’re always subject to see variation quarter-on-quarter but we’re guiding for cost in the low to mid 60s per tonne at San Jose.

And I guess just a quick question the expansion obviously details I would imagine will be provided at the end of the year where we have guidance. Is that correct when you make a production decision?

Could you repeat that please?

So my understanding is you are going to be making I guess development decision at the end of the year now, if that is positive would we expect guidance to come along with that?

Yes of course. It’s a key project for the company, and what we expect is that by year-end we can go through the formality of having a construction approval with the Board. Our expectation is that we can do that in early December, if there is a delay we’ll go until early January. But we aim to have for 2015 to be a construction year, so that construction decision I don’t see any major reasons not to be taken towards the end of the year or early January.

Maybe a bit of a pointer question, obviously you’re going to incur CapEx et cetera, et cetera and I guess the scope of the project is going to be governed by the return on capital. Looking at silver prices at the moment is there a silver price that really doesn’t -- it make sense to pull the trigger on an expansion decision?

What we’ve seen two months ago when we started the process the budgeting process and we had some three years back from the engineering work we started running and budgets and running -- doing some scenarios on the financial returns of the project of the expansion. We decided to use -- to run the budgets and as part of the multiple scenarios we ran with $14 which at that time sounded like ultra conservative. Well today it doesn’t seem to be ultra conservative, barely conservative. But that $14 we’re still seeing returns in the mid-20s, so low to mid 20s that $14 silver. So it’s a very robust project, it makes a world of sense, it not only -- it’s a good use for capital but it also certainly has an impact on our all-in cost and brings (subsidiary) [ph] for all-in the San Jose mine well below $10 on a sustained basis, that’s what we’re seeing.

And then my final question Jorge. Just sort of switching gears to Caylloma at the moment, and I realize we spoke about this a couple of weeks ago. But can you just outline the sort of operating improvements that might be available for you at Caylloma.

Yes, we have two areas, one is of course the mine. We have in -- the mine is even though we cut down on development both our mines more San Jose driven Caylloma but still I would say both mines have flexibility in terms of the kind of development we have ahead of production, we’re not feeding hand to mouth. So we have been able to gear the mind towards a little level of the Animas Vein where we have 7% combined lead zinc resources with 7% combined lead zinc, zinc being more like 4%, 4.5%, still with 2 to 3 ounce silver or significant with. So one, we’re capturing that opportunity, it’s a polymetallic mine and silver is down 20% but zinc is up 20% and we’ve been able to improve our zinc grade with respect to last year by 11% and with respect to our original budget for 2015 by 21% which has meant that our zinc production for the quarter is up 25% because as we increase head grade we also improve recovery for zinc. So that is certainly additional welcome income at a moment like this for that mine. And we will continue to focus on that. And at the same time at the [indiscernible] vein which is one of the narrow veins which sources high grade, we are in a zone, where we are mining kilo of silver per tonne that has been the contribution of the [indiscernible] vein this quarter has been a modest tonnage of 8,000 tonnes in the quarter, but with the silver grade of almost a kilo. So we’re doing smart things I believe but the deposit is also helping. With respect to the plant moving forward, we have some opportunities to optimize the processing facility that will require capital and we are assessing that capital deployment. Basically, we can improve metallurgical recoveries for silver our expectation is as much as three to four recovery points by improving retention time on [indiscernible]. And by going to a different kind of replacing cyclones with by rating high speed -- high rate by grading screens we could be seeing an increasing throughput capacity from the current 1,300 tonnes per day to 1,450 tonnes per day. Certainly that would be more like an expansion project we will receive more of an optimization project. And so those are the main two things we have at hand. On the downside we had a dry year this year so our energy costs has gone up higher than budgeted and we are also looking at a few alternatives with our neighbors to see if we can get more power from the line but that is already a long story and we are seeing if we can reach a final agreement. But those are the main initiatives at the Caylloma mine.

Thank you. Our next question comes from the line of John Kratochwil with Canaccord Genuity. Please proceed with your question.

Good morning guys. Congratulations on the quarter. I have two questions, first related to the G&A announcement in the MD&A. I noticed that you said the position of VP Corporate Development has been closed. Does that kind of mean in the near term we shouldn’t expect to do -- look at any M&A activities? I know reflecting the current commodity price probably you’re not looking at that so strongly. But you’ve always said that you are open to opportunities. So has that view changed or is that just being taken over by someone else?

No, we have certainly a focus for the next two years due we seen us focused on our most accretive project which is the expansion of the San Jose Mine. And we are fine tuning and fighting the organization and focusing on the two mines we have and the execution of that expansion. And also a reflection of that is that we have made a promotion as well, our corporate manager for project development has been promoted to the position of Vice President of Project Development and that’s also a sign of where the focus will be. Having said that, we are not closed for business. Now, what you will see us doing over the next months and years is scouting the segments of the market using the office of our Vice President of Exploration to assess new opportunities. We all see clearly that there has been complete capitalization in the explorer segment of the industry. We’re back to the world of $200,000 financings for the explorers and if you’re an explorer with cash for sure you’re trading well below your cash. So, while there is opportunity there we’re going to be -- we’re actively looking at some things in that segment. But it’s going to be more on that segment of the industry right now more than large corporate transactions.

I understand. Okay. About a year ago you had given just a rough view that within a certain period of time you wanted to be at 14 million ounces silver equivalent. Has that view changed then given where we are today?

No, and I think we’re on a very clear path to make or meet our strategic objective. We believe that we are in a position -- with the expansion of the San Jose mine that mine will be in a position at 3,000 tonnes per day throughput capacity and the kind of research that we have that mine can be in a position to produce around 7, 7.5 million ounces in peak years as much as 8 million ounces of silver annually plus some 50,000 ounces of gold. And the Caylloma mine can continue to contribute at steady state 2 million ounces of silver. So that can take over silver annual production to roughly 9.5 million ounces of silver plus 50,000 ounces of gold. That takes us on a silver equivalent basis to 13 million ounces of silver and if we do some alchemy and use our by-product lead and zinc and convert it to silver -- we have 14, so we’re meeting our strategic objective.

And then my final question has to do with San Jose, is there any further updates on talks with the locals on getting the surface access right there?

Nothing that I can report. I am planning myself and my Vice President of Operations to go to Mexico before the end of the year and meet with the Governor. We have a good rapport with the authorities, we’re just not being able to mobilize, even though we have certain -- I believe a key issue surround their support at local level and state level have been discussed, everything is understood. We just need to see that the state government gets mobilized. I am sure they have their priorities but what we want is to go through an assembly with the town being in company of the state government, the representatives of the state government and we’re getting difficulties, getting dates from them. So we’re going to go speak with them and understand what their timing issues are.

But I mean at this point it seems more like a timing issue rather than not having much backing from the locals.

No, we -- our interactions with the authorities at the municipal level and state level and it's been very supportive and a fluid process. We have good connection I believe with the majority of the town, but we have to go through an assembly and we want to be well prepared by the time we do this and that requires good -- to be accompanied by the state authorities. So we just have to do it right and maybe it’ll take time.

Thank you. Our next question comes from the line of Craig Johnston with Scotia Bank. Please proceed with your question.

First just on going back to San Jose, thinking about Trinidad North and thinking about when you are looking at developing the decline and bringing Trinidad North into production and if your thinking and timing on that has changed?

Yes it has changed somewhat. Two years ago or 1.5 year ago we -- the expansion of the San Jose mine was to 3,000 tonnes per day was not something in the cards what we had in front of us was an expansion to 1,800 which ended up being 2,000 as we capture opportunities. So our main thinking is how can we benefit from Trinidad North without just having seen it further around the mine plan, how can we impact our annual production. And in fact that is why we moved some of our drilling for resource conversion and that’s why we have in preparation for mining in 2015 developed resources and reserves. In Trinidad North we currently report roughly 400,000 tonnes in reserves, as silver equivalent in grades close to 500 grams per tonnes equivalent. But the expansion then came into the cards and we've had some gains from incurred resources as we converted, we mentioned and indicated in the upper levels or we’re currently mining level 1,200. And we have enough developed ore in -- that is good for two to 2.5 years in the upper levels right now. So we’re debating right now the best use of our capital, and that’s part of the budgeting process and mine planning we’re concluding now because we want to bring Trinidad North forward in time that means getting more outlays of capital upfront to develop that when we already have two years of developed ore. So, I believe it will be very likely that as mining Trinidad North in this environment will be somewhat delayed probably towards 2016. That is one of the scenarios we’re seeing as part of our budgeting process. And if we do that at the end is because it makes good financial sense.

Okay, that’s great. I appreciate the clarity there. And then thinking grade wise for 2015 and I know you’re still in the budgeting process. But looking at grades of 239 grams per tonnes in Q3, and then looking at over Q4 and into 2015, any kind of clarity or guidance you could provide on that knowing that say the higher grades from Trinidad North may not be coming until 2016?

With respect to grades what we’re seeing is in the areas where we’re mining silver grades in the range of 215, 220 grams, plus gold over 1.5, 261.8, that is the kind of grades we’re seeing at [indiscernible] mining and again what we need to balance is the financial return of accelerating development today versus the benefits of just conclude advancing with the accelerated consumption of research as we go to 3,000 tonnes per day. I mean we will be developing Trinidad North. We will be developing the main access, the question is how much, how meaningful is it going to be to production. I believe that our regional plan of a year ago to start seeing as much as 20% of production, 25% of production coming from Trinidad North in Q1 of 2015 will change. And our reserves grade in the upper portion of the deposit currently stands at around 230 grams, we’ll continue to find opportunities to beat a plan so the visibility we have right now is for around 220 grams for 2015. That’s a figure that will change and we’ll provide guidance, but those are the kind of reserves we have in level 1,200 today.

Thank you. Our next question comes from the line of Matthew O’Keefe with Dundee Capital Markets. Please proceed with your question. Matthew O’Keefe - Dundee Capital Markets: Thanks operator. Good afternoon. A question really is looking a bit further ahead that I have, the drop in the silver price here is coming obviously it’s continued to drop and it’s been a challenge for mine planning. And clearly you’ve done a great job in staying ahead of it. I mean the cost cuts that you announced are obviously coming across as proactive which is good. But the next sort of thing that we’re going to see in the silver space is everyone is going to be restating their reserves. And I am just wondering what silver price you expect to be using? And what impact if any that you expect it will have on the mine lives and mine plans at Caylloma and San Jose?

Well, we use in our last reserve estimates $21 for San Jose and we have updated reserves for resources for Caylloma also $21 which assist part of our practice are published once a year in January-February as we adjust for depletion. So, we do have reserves and we’re seeing our reserves at $21. We can see from the sensitivity of San Jose that the mine is quite resilient to lower prices now as we don’t lose a lot of ounces and grade increases significantly moving the cut of some 10 to 20 grams, 30 grams is [indiscernible] lose of tonnes but grade improved significantly. So that mine is quite resilient. Caylloma certainly there are risks in Caylloma. Caylloma currently has about 4 million tonnes in reserves which are more sensible to prices of course. We are benefiting from the higher base metal prices, that’s also offsetting lower zinc prices in a way, not completely but it’s offsetting some of the net effect of lower silver prices. And bear in mind that 80%, 90% of our resources and reserves are on the Animas Vein which is not particularly silver rich, it’s a polymetallic vein. Typically 2 to 3 ounce silver and depending where you are you can see 4% to 7% combined lead zinc, its highest 10% combined lead zinc in some areas. So we will be running, we’ll wait probably to be closer to year-end to see what prices we’re going to use but sure enough in this environment, whether we end up using what, $17 something like that in that range, $16, $17. It’s a tough question, what prices to -- we’ll try to be conservative I believe perhaps in the range of 16, 17 is not a discussion we have entertained yet. Now we run sensitivities on this always. Matthew O’Keefe - Dundee Capital Markets: But I think your point is well taken earlier that these are high grade mines and pretty resilient if price changes. Thanks for that. And then just one other question on the drilling, are you still drilling at Trinidad North and when are we expecting some additional drill results from there?

We stopped because of the conclusion of the drill chambers, we restarted a few weeks ago and in this new area we’re drilling with two rigs from the underground chambers and again we’re going to give coverage to an additional 250 meters from the northern most boundary of our inferred resource shelf. So you should see perhaps results before the end of the year.

Thank you. [Operator Instructions]. Our next question comes from the line of Benjamin Asuncion with Haywood Securities. Please proceed with your question.

I’ve just got a couple of house-keeping questions here. Just in regards to the capital cost that you’re talking about at Caylloma with all-in sustaining cost trending up. Can you give me the latest iteration of what capital guidance is by sort of the in-fill mine development and plant upgrades or infrastructure?

For 2015 you mean?

For ’14.

For ’14. Our budget for the Caylloma mine was for $10 million for the year, we have executed down to the third quarter, $7 million.

And then just sort of following on that just from an optics perspective in fourth quarter and trying to look at some potential noise in earnings. Any thoughts on you’re going to be looking at for valuation tests for Caylloma in terms of carrying values and what the scope of potential impairment charges would look like?

Not at this stage Ben, we’ll currently be running the usual impairment testing analysis at year-end in particular given the recent drop in prices and I wouldn’t want to give at this stage.

Thank you. Mr. Baca there are no further question at this time. I’d like to turn the floor back to you for any closing and final remarks.