Greetings, and welcome to the Fortuna Silver Mines 2016 First Quarter Earnings 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. It is my now my pleasure to introduce your host, Carlos Baca, Investor Relations Manager. Thank you, sir. You may begin.

Thank you, Latonya. Good morning, ladies and gentlemen. I would like to welcome you all to Fortuna Silver Mines and to our first quarter 2016 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 over 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 beliefs. 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 our 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 our 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 publicly available on SEDAR. I would now like to turn the call over to Jorge Alberto Ganoza, President, CEO and Co-Founder of Fortuna.

Thank you, Carlos, and good morning to all. Both our Caylloma and San Jose mines operated consistently and within plan during the quarter. In Q1 the Company produced 1.6 million ounces of silver and 9,200 ounces of gold silver production was in line with Q1 2015 and gold production 5% below. We’re well within schedule to meet our guidance for the year of 7 million ounces of silver and 43,000 ounces of gold. For the quarter precious metals accounted for 76% of sales, silver representing 54% and gold 22%. The balance is made up by-product lead and zinc from the Caylloma mine in Peru. Our realized average silver price for the quarter was $14.99 and $1,203 per gold, it was 10% lower for silver and basically in line for gold compared with a year ago. In terms of production both our Caylloma and San Jose mine had an eventful quarters and performed largely in line with our guidance. At San Jose we had the benefit of higher silver and gold grades against budget, which led to 14% and 13% higher production compared to last year again. And at Caylloma commissioning of the plant optimization at the end of the quarter generated a few more days of downtime more than yearly plan, but it is up and running now. Something to highlight, it's our all in consolidated cash cost per silver ounce netted by-product, for the quarter, the consolidated fee came in at a low of $9.39 well below the $11.80 of a year ago and also below our 2016 guidance of $11.10. Another thing to note it's the advance of our capital projects so infrastructure CapEx guidance fee for 2016 is $46 million. The allocation is $37 million to San Jose mine and roughly $9.5 million to Caylloma. The book of the budget is allocated to San Jose where we continue advancing with the 3,000 ton per day expansion according to schedule and budget. We are pre-commissioning stage and plan to be operational by end of June. I’ll now turn it on to Luis who’ll give you more detail on the financial results.

Thank you. So sales for the quarter were $42.7 million, that’s 7% above the comparative period in 2015. Silver sold was slightly above at 2% and gold slightly below at 4%. We had short-term incremental lead and zinc sold however of 126% and 44%. Realized prices on our provision of sales were below the previous year for all metals; although we had a positive effect from the rise in silver prices towards the end of the quarter, which gets reflected in sales adjustments. All in all, we had higher metal production compensating for lower metal prices. Our mine operating earnings was $15.5 million that is 24% above Q1 2015, reflecting the sales growth and stronger margins at both operations, San Jose and Caylloma. At San Jose mine operating earnings increased 18% to $12 million and the gross margins increased 4 percentage points to 43% as higher head grades and improved recoveries more than compensated lower silver and gold prices. Our Caylloma mine operating earnings increased 31% to $3.5 million driven by lower unit costs and lower depletion. Our selling and G&A was $9.7 million compared to $5.5 million in Q1 2015. When we look at the breakdown of this line item, we see the large increase coming from higher stock based compensation charge, which went from $0.8 million in the previous year to $5.7 million in 2016. These large swings are the result of certain instruments being marked to market in the context of the variability of our share price. Excluding this variability, the charge in 2016 would have been $2.2 million and $1.4 million in 2015. Our G&A cash expenses actually came down from $4.5 million in 2015 to $3.8 million in 2016, mostly as a result of lower corporate expenses. Our operating income was $6.1 million and 23% below Q1 2015 in spite of our strong operating results due to higher stock based compensation charge which I described. Cash flow from operations before changes in working capital and after taxes paid was $9.9 million, up 86% from Q1 2015. The largest portion of the increase is related to timing issues in the payment of income taxes. On working capital items, we have a large change in accounts receivable of $60 million which is due to having collected payment December sales in the month of December when it would typically take place in the subsequent months. As a better comparison of cash generation capacity for this quarter, EBITDA for Q1 2016 increased 18% to $18 million. On expenditures, in mineral properties plant and equipment, we recorded $16.1 million. We expect to see a similar figure in Q2 as we conclude San Jose plant expansion after which we should see lower amounts in the second half of the year. Finally cash and short term investments were $95.9 million at the end of the quarter, and total liquidity available to the Company was $115.9 million considering the $20 million revolving facility we have in place. Thank you, back to you Carlos.

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 will conduct a question-and-answer session [Operator Instructions]. Our first question comes from Jessica Fung with BMO Capital Markets. Please proceed with your question.

Just a question on San Jose, and good to hear that the expansion is going as planned. Wanted to get an idea from you guys, what you think sustaining CapEx will be at San Jose after this expansion is done?

Thank you, Jessica. Our sustaining capital figure for 2017 and onwards is around $10 million, $12 million in our life of mine models.

And then a second question if I can, just we’ve got an update on your M&A activity? And how you guys are progressing and what you’re looking at?

Well, we continue very active on seeking for investment precision opportunities. We have done through detailed reviews on capital. As you can appreciate, I am not in a position to give detail, but I can say that we are currently working on a couple of reviews.

[Operator Instructions] Our next question comes from Chris Thompson with Raymond James. Please proceed with your question.

Two quick questions really, I mean Jorge, can you just remind us again on the optimization plans at Caylloma, and where you are right now?

The optimization work at the Caylloma plant basically consisted of having additional flotation capacity on the left circuit to improve retention time on the circuit. And second, adding high frequency screens in the classification in the milling circuit. So those two projects are concluded. The optimization has been commissioned, and we should start seeing the benefit of that starting this second quarter of the year.

That’s great, I mean and I...

Another thing to add is that at last we managed to conclude the interconnection to the national grid. So all of our power is now coming from the grid at Caylloma, before we were still sourcing about, seasonally, about 20% as much as 30% of our power was being sub-generated. And we should also start seeing the full benefit of that in the second quarter.

I noticed your costs were good, were low. Do you see those being sustainable for the rest of the year at the Q1 level?

I’ll let Luis elaborate a bit more. But in general terms, we would expect to see cost come up. There’re some, mainly on the mine, some development that will start to pickup in the second-quarter, third-quarter. So we would expect to see that cost trend towards the guidance. It came at low $5 I think the boys at Caylloma and the management group are to be praised, not all of the savings are going to be permanent, I think lot of that is going to -- had to with some lag in the start of development. But Luis, do you want to elaborate?

I think that covered it all Jorge. We basically should see, as Jorge mentioned Chris, cost pretty much trending towards the annual guidance level as we progress throughout the year.

Just a final question, I guess as far as the expiration activity at San Jose. Can you elaborate on where we stand right now with the sense of timing of new flow?

We have currently drilled roughly about 7,000 meters in the first quarter, about 3,000 meters of drilling on the Trinidad central deep, which is a central portion of the main deposit. We started drilling from the underground as well. This new blend discovery which we call the Ocotlan vein which is a parallel vein running parallel in the north, parallel to the main Trinidad, Bonanza area. So it's in the area of Trinidad North and it's a blank new vein. We have about 350 meters of drilling there to-date. And then on La Noria, which is this mirror system to the main deposit located some 1,800 meters to West from the vein system we’re currently mining. And we have another 3,000 meters for a total of roughly 7,000 meters of drilling done to-date. Results should be coming in this month, before the end of the month I would expect we can give an update on the published results.

Thank you. Our next question comes from Rahul Guram, a Private Investor. Please proceed with your question.

My question is actually been answered already. But I do want to touch with a couple of minor items. I am thinking Fortuna is a lowest cost cash cost producer among all the silver companies. Can management comment on that based on annual guidance given and as well as based on Q1 results? Is it correct to say that Fortuna is a cost leader in the silver space? Thank you.

Thank you for your question. We certainly placed ourselves of being one of the lowest cost silver producers in this space of primary silver miners. We expect that costs -- as we materialize expansion of the San Jose mine this year, our all in sustaining cost from the consolidated all in sustaining cost will trend from our current guidance of about $11 to below $10, in the neighborhood of $10 slightly below $10. At that point or San Jose mine will likely be producing at an all in sustaining cost of roughly in the neighborhood of $6 to $7 per ounce of silver. So certainly it's a key asset for us, the San Jose mine. As we can see Caylloma can contribute to the low cost structure, it's not a high cost compared to San Jose, yes it is but on an absolute basis San Jose is not a high cost operation. And it is certainly something we look at carefully and we look at business development opportunities as well, or margins it's something that we look at carefully. And that is to help answer your question and give you management’s view with respect to our intent to continue preserving the attribute of being one of the lowest cost producers in the space. As we look for new business development opportunities we certainly take a lot of -- pay a lot of attention to margin accretion.

And one more quick question and I appreciate you allowing me to ask questions. Regarding next year, because the expansion is completed at both San Jose and as well as Caylloma this year. I understand you already achieved 10% expansion at Peru mine, Caylloma. Now next year, looking at next year, I suspect it is hard to find an acquisition match in your current operations, the kind of lowest cost operations. So, obviously management has proved overtime or many of them rough years that you have always a plan ahead and come up with alternate scenarios, so I am sure what is next year in meaning store for you without giving too much details obviously, we don’t want to reveal. Can you have plan yet be like that to maintain our cost leadership as well as growth leadership, because I view Fortuna in both of these avenues right now has proved itself over time, not just one year or so. So, thank you and that’s all my questions.

So thank you for the last question. And what I can say is that we are actively looking for our next project our next mine and here I am talking outside of brownfields, because we are everyday working hard in our home grounds. But we are starting to look for the past year or over a year now, we’ve been very actively driving a process to identify projects. And those, not only -- don’t need to be necessarily a producing mine. We look at opportunities all through the development spectrum from early stage exploration to more advanced project. But a key attribute that we look is exploration potential, certainly, jurisdiction and margin accretion, therefore low cost. So, that’s something that we keep in mind. And if we start generating as we expect with the expansion significant cash and we cannot identify a place where we can get the returns I think, or shareholders reserve, we will certainly consider a way to return capital to our shareholders via dividend of share buybacks, that still need to be discussed at the board level. But we cannot give you the returns you would expect, or we expect from us through the development of annual project, we’ll institute a way to get back to the shareholders.

Thank you. At this time, I would like to turn the call back over to management for closing comments.

Carlos -- thank you everybody.