FVI come up from 2.65 low to 2.84 and rising

These levels could very well be scarce in the coming months. IMO.

GLTA

Right linl: http://stockcharts.com/h-sc/ui?s=FVI.TO

Bottom potential, big rally to come?

FVI taking a hit this past month with Silver under performing.

Take a look at the two year chart. I believe were in for a big run starting sometime soon. Approaching a bottom region, averaging 2.70.

http://stockcharts.com/h-sc/ui

Even last year, round the same period the SP took a bit hit and rallied towards the end of year.

Just my opinion. Feel free to comment.

Glta.

Great buying Opportunity here. Silver rallying into 2016. 6$ by January. IMO.

FVI=$

Fortuna Reports High-Grade Gold and Silver Values at Tlacolula, Mexico

Last update: 7/3/2012 7:00:00 AM
VANCOUVER, July 3, 2012 /PRNewswire via COMTEX/ -- Fortuna Silver Mines Inc. (FSM)(CA:FVI) (bvl:FVI) (frankfurt:F4S.F) is pleased to provide an update of Brownfields exploration results at the San Jose Mine in Oaxaca, Mexico and the Caylloma Mine in Arequipa, Peru. Two diamond drill rigs are currently operating at the San Jose Mine and four diamond drill rigs are operating in the Caylloma District. In addition, generative activities have identified significant untested epithermal systems in the Tlacolula area in Oaxaca and in the Cerro Vilafro area at Caylloma.
Dr. Thomas Vehrs, Vice President of Exploration, commented: "The discovery of high-grade gold and silver mineralization at the Tlacolula Project in Mexico is a significant benchmark in our Brownfields exploration program. We are aggressively advancing the project and look forward to the initiation of drill testing of the Tlacolula vein system in mid-July."

San Jose Mine Brownfields Exploration, Oaxaca, Mexico

Tlacolula Vein System
Surface mapping and sampling has identified a large and untested low sulfidation epithermal vein system in the Tlacolula area of central Oaxaca. Fortuna has an option to acquire a 60% interest in the Tlacolula Property from Radius Gold Inc. by making certain cash payments and issuance of shares in the capital stock of Fortuna, and by completing expenditures totaling US$2 million on the property (see Fortuna news release dated Sept. 23, 2009).

Highlights of the surface channel sample results include the following mineralized intervals:

CH 136366:6.30 m averaging 19.34 g/t Au and 986 g/t Ag (open) 
 CH 135709:9.60 m averaging 0.13 g/t Au and 295 g/t Ag (open) 
 CH 138105: 3.30 m averaging 0.07 g/t Au and 234 g/t Ag 
 CH 135862:1.00 m averaging 4.28 g/t Au and 367 g/t Ag 
 CH 135820:1.50 m averaging 0.52 g/t Au and 561 g/t Ag 
 CH 138118:9.00 m averaging 0.22 g/t Au and 83 g/t Ag (open)

ANIM021512 4.65 m avg. 121 g/t Ag, 6.35 % Pb and 5.37 % Zn 
 ANIM022012 5.05 m avg. 106 g/t Ag, 6.90 % Pb and 7.54 % Zn 
 ANIS022412 6.75 m avg. 78 g/t Ag, 3.20 % Pb and 3.68 % Zn 
 NANS002012 9.55 m avg. 91 g/t Ag, 5.30 % Pb and 7.62 % Zn 
 NANS002112 5.20 m avg. 38 g/t Ag, 2.06 % Pb and 5.21 % Zn 
 

Hole_Id    From   To     Interval Ag    Au    Pb   Zn    Cu 
            (m)    (m)    (m)      (g/t) (g/t) (%)  (%)   (%) 
 ANIM021512 102.95 107.60 4.65     121   0.14  6.35 5.37  0.32 
 ANIM021712 73.60  74.50  0.90     19    0.06  0.95 1.71  0.02 
 ANIM022012 179.80 180.95 1.15     139   0.27  9.15 18.01 0.26 
            184.00 189.05 5.05     106   0.01  6.90 7.54  0.19 
 ANIM022112 238.45 238.80 0.35     95    0.01  0.56 0.73  0.11 
 ANIS022212 209.40 231.20 3.80     67    0.05  2.29 3.75  0.65 
 ANIS022412 126.40 133.15 6.75     78    0.49  3.20 3.68  0.20 
 NANS001712 224.90 226.50 1.60     60    0.11  0.50 16.02 0.29 
 NANS001912 118.50 120.85 2.35     183   0.30  2.77 5.56  2.02 
            197.15 199.70 2.55     43    0.02  1.54 2.38  0.24 
 NANS002012 85.20  97.30  12.10    58    0.07  0.47 3.36  0.31 
 130.80     140.35 9.55   91       0.07  5.30  7.62 0.25 
 NANS002112 124.90 130.10 5.20     38    0.02  2.06 5.21  0.23 
            157.20 160.95 3.75     36    0.06  1.56 4.35  0.16 
            202.15 204.45 2.30     34    6.44  1.14 3.78  0.15 
 

CH 5037150.40 m averaging 3.23 g/t Au and 827 g/t Ag 
 CH 5037080.40 m averaging 2.14 g/t Au and 2,440 g/t Ag 
 CH 5037160.95 m averaging 0.83 g/t Au and 459 g/t Ag 
 CH 5037260.25 m averaging 0.57 g/t Au and 791 g/t Ag 
 CH 5036150.60 m averaging 0.41 g/t Au and 661 g/t Ag 
 

P&F chart has a $7.25 bullish price objective:

.....................................................

Fortuna Silver Reports Record First-Quarter Silver, Gold Production
Tuesday, April 17, 2012 2:46 PM

http://www.kitco.com/reports/KitcoNews20120417_MM.html

Fortuna Silver Mines Inc. (NYSE: FSM)(TSX: FVI)(BVL: FVI) says that the company reached record silver and gold first-quarter production from its San Jose Mine in Mexico and its Caylloma Mine in Peru. Silver production totaled 953,091 ounces in the quarter, a 4.3% increase compared to the fourth quarter of 2011 while gold production increased to 5,137 ounces, a rise of 23.7% compared to the fourth quarter of 2011, the company says. “Not only are we on target to meet our annual guidance, we are also seeing opportunities for higher silver and gold resource and reserve grades in the lower levels of the San Jose mine, says Jorge Ganoza, president and chief executive officer of Fortuna. “We are working to incorporate reconciliation of these higher grades into our resource models by mid-year." The company also produced 4,443,367 pounds of lead, an increase of 1.1% compared to the fourth quarter of 2011, while zinc production fell to 5,320,639 pounds, a decrease of 6.5%, compared to the fourth quarter of 2011. A guidance of 3.7 million ounces of silver and 17,400 ounces of gold or 4.6 million ounces of silver equivalent is expected for 2012. Fortuna is a silver and base metal producer focused on mining in Latin America.

By Alex Létourneau of Kitco News; aletourneau@kitco.com

Scoreboard for the week: -3.57%

For the week: +3.40%

From summer of '09, Fortuna is unstoppabull... nearly a 10 bagger since that time.

INTERESTING READING

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/9/16_Identities_of_JP_Morgan_Silver_Manipulators_Exposed.html

Fortuna about to close near the all time high!!!

News - 9-2-11 - Fortuna’s (TSX: FVI, $6.10) San Jose silver-gold mine in Mexico achieves commercial production

http://www.mineweb.com/mineweb/view/mineweb/en/page32?oid=134667&sn=Detail&pid=102055

Fortuna Silver Mines Applies for NYSE Listing

Vancouver, Canada, August 29, 2011--Fortuna Silver Mines Inc. (TSX: FVI / Lima Stock Exchange: FVI / www.fortunasilver.com) is pleased to announce that it has been authorized to apply to list its common stock on the New York Stock Exchange (NYSE). The application was submitted on August 25, 2011.
Fortuna is a growing silver and base metal producer with mines in Peru and Mexico. Its Caylloma Mine in southern Peru is a wholly-owned low-cost, underground mine producing silver, lead, zinc and gold, operating at a treatment rate of over 1,250 tonnes per day (tpd) of ore. The Company recently announced that it expects to begin commercial production at the San Jose Mine, its second mine, also wholly-owned, in Oaxaca, Mexico on September 1, at an initial mining rate of 1,000 tpd.
“As we continue to expand our mining operations, this application marks an important strategic step for Fortuna. A listing on the NYSE will help raise our profile as an up-and-coming producer of silver and other metals and showcase our solid growth record,” said Jorge A. Ganoza, Fortuna President, CEO and Director.
For 2011, Fortuna’s consolidated production guidance is 2.4 million ounces of silver, 7,530 ounces of gold plus approximately 38.4 million pounds of combined lead and zinc production. For the first two quarters of 2011, silver production at Caylloma was 912,102 ounces, with 10.3 million pounds of lead and 11.9 million pounds of zinc as by products. For 2012, the Company anticipates an increase in production to 3.7 million ounces of silver, 18,041 ounces of gold and approximately 39.8 million pounds of combined lead and zinc production.
-2-
Fortuna Silver Mines Inc.
Established in 2004, 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 mine in Mexico. The Company is selectively pursuing additional acquisition opportunities. For more information, please visit our website at www.fortunasilver.com.

With record prices, FVITF is on the move.

Down 7.71% for the week...

$9.75 would be good. The $7.00s is OK for now, in any event.

P&F chart still says bullish price objective: $9.75

I think once we clear through the "Wall-o-shorts" that is impacting most of the miners, it will be a quick run up to $7 and beyond.

-3.58% is the scorecard for the week...

Nice thought... in the meantime, a 15% pop today!!!

Is this stock going to be listed anytime soon. I could see the second coming of first majestic.

How blue is the sky up here?

Easily the quietest story in the world of silver.

My friends, for the week: +7%!!!

Agreed... in the meantime, today is another multi-year closing high!!!

Is fortuna going to be listed soon, following in the footsteps of first majestic? that would send this stock considerably higher

CPM Group Looks For Historically High Silver Prices For Next Decade

10 December 2010, 10:30 a.m.
By Kitco News
http://www.kitco.com/

http://www.kitco.com/reports/KitcoNews20101210AS_CPM.html

(Kitco News) - Silver prices are projected to remain at historically high levels over the next 10 years, concludes CPM Group in its 2010 edition of its “Silver Long-Term Outlook,” released Thursday by the New York commodities research and advisory firm.

The 224-page study is a comprehensive analysis of the key market fundamentals of silver that are expected to influence prices over a decade. The report contains projections for global mine production through 2019 on a mine-by-mine basis and also contains a new China section with an analysis of the silver supply and demand in a previously opaque market. CPM Group said the use of silver in China during 2009 was perhaps twice as much as had been believed.

The report also reviews uses for silver, including new fabrication demand such as solar panels, as well as investment. The report includes 10-year projections of supply, demand, and prices under a base case and two alternative scenarios.

“Strong investment demand, the single most important factor in influencing the price of the metal, is expected to keep silver prices at elevated levels during the projected period,” CPM Group said in a news release announcing the publication, which can be purchased. “Investors who view silver as a safe-haven asset are expected to continue buying large amounts of silver over the next couple of years as uncertainty regarding global economic growth, financial market instability, and volatility in major currency markets persist. As these concerns recede later in the decade, investment demand is projected to decline. Silver prices are expected to weaken alongside the decline in investment demand as the decade progresses.”

CPM Group said fabrication demand for silver is forecast to rise over the projected period, providing additional support to prices.

“Even in present economic conditions, there is strong demand for some of the products in which silver is used, including various electronic components used in a full range of consumer and industrial equipment,” CPM Group said. “Fabrication demand for silver is expected to rise further over the next few years, due to an anticipated improvement in global economic activity coupled with increased use of silver in some of its new and relatively new uses, such as solar panels, silver-zinc batteries.”

Primary silver mine production is expected to increase due to high silver prices and the relatively low cash and total operating costs, CPM Group said. Also, since much silver is produced as a byproduct of gold, copper, lead, and zinc, favorable market fundamentals and rising prices for these metals are expected to mean higher output and thus more silver as a by-product during the initial years covered by the CPM Group report. However, during the second half of the forecast period, net additions to silver mine supply are expected to decline, which CPM Group forecast to support silver prices during that time.

Meanwhile, CPM Group said silver use in China is estimated to have risen around three and a half times over the last decade, from 40.8 million ounces in 2000 to 139.2 million ounces in 2009, twice as large as many Western commentators have previously suggested. “Chinese silver fabrication demand is projected to account for nearly a fifth of global silver fabrication demand this year,” CPM Group said.

Previously, a lack of reliable statistics on silver fabrication demand and secondary recovery prevented China’s inclusion in international statistics. However, CPM said it has developed what it feels are sufficiently reliable statistics on silver fabrication demand by major industrial category and scrap recovery, relying on a network of industry associations and industrial participants in these markets.

By Allen Sykora of Kitco News; asykora@kitco.com

Interview With Theodore Butler

By: James Cook & Theodore Butler
Posted 24 November, 2010

Cook: For the past ten years you have been claiming that silver was the best thing people could own. How do you feel now with silver around $25 an ounce?
Butler: I have a sense of relief that I could not possibly have hurt anyone who followed my advice. I also feel intellectually vindicated about the way things are turning out. Lastly, I feel amazed how good silver still looks for further gains.

Cook: How high could it climb?
Butler: Real high, but by now you should know I shy away from specific price targets.

Cook: A lot has been going on with silver lately. Most of the things you’ve written about are starting to happen. What do you think about the recent spate of lawsuits against JPMorgan and HSBC?
Butler: It’s a big deal. The main thing is not the outcome of this case, but rather the fact that they were filed.

Cook: How many lawsuits were filed?
Butler: The latest tally is 25, I’ve been told.

Cook: Why do you think these lawsuits are important?
Butler: It is another confirmation of the growing recognition that silver has been manipulated in price.

Cook: They must be reading your newsletter because everything claimed in the first lawsuit originated with you. Do you agree?
Butler: Yes, I know that for a fact.

Cook: The basis of the lawsuit is that these big banks are short an inordinate amount of silver. How much to be exact?
Butler: It varies over time, but at the time referenced in the lawsuit, JPMorgan, either alone or with another U.S. bank, held short on the COMEX the equivalent of 25% of world annual mine production

Cook: How many ounces is that?
Butler: In most recent CFTC data, it is 150 million ounces, but within the past year it has been over 200 million ounces

Cook: You’re claiming that’s manipulative?
Butler: Absolutely. It would be impossible for such a concentrated short position not to be manipulative. It was this observation that led to the current CFTC silver investigation which, in turn, led to this lawsuit.

Cook: How many ounces are there held short in total?
Butler: The total net short position in COMEX futures is around 550 million ounces, but if you include everything, especially unbacked bank certificates and pool accounts, it grows to 2 or 3 billion ounces.

Cook: Who are these short sellers outside of the big one or two?
Butler: On the COMEX, there are about 8 commercial entities short over 300 million ounces, including the biggest.

Cook: They got squeezed pretty good when silver hit $29, didn’t they?
Butler: You bet.

Cook: How big have the losses been for the shorts?
Butler: In silver, the big 8 were out over $3 billion at the top, and more than $5 billion if you include all the shorts.

Cook: You pointed out that there had to be a lot of margin calls, when gold is included, what’s the total?
Butler: All in all, almost $15 billion.

Cook: They actually had to cough up $15 billion?
Butler: Absolutely. That’s a key component of the clearinghouse system.

Cook: Did anybody fail to make their margin calls?
Butler: It’s hard to tell.

Cook: I thought the price rise to $29 might have been because some folks couldn’t make margin calls and the brokerage firm bought back their position. No?
Butler: I’m certain there was a lot of that; they liquidate the contracts to satisfy the margin calls.

Cook: They don’t mess around do they?
Butler: This is basic commodity stuff. As a customer, if you don’t meet your margin calls your broker will liquidate your position. Otherwise the brokerage firm must eat the customer’s loss. Brokerage firms don’t allow customers a free ride. If a brokerage firm doesn’t meet its overall margin requirements to the clearinghouse, that’s a default, a real no-no.

Cook: It’s hard for me to believe that JPMorgan is sitting flatfooted waiting for the axe to fall. Don’t you think they’ve dug up a lot of silver to help reduce this short position?
Butler: I’m sure they’ve come up with as much silver as possible, but there are physical constraints to that. Their problem is not a money problem, but a physical material problem.

Cook: I see they raised margin requirements on silver. Why only silver?
Butler: Silver had moved the most and the margins should have been raised. The scandal was when they raised the margins. This is an issue of timing. They waited until prices made a downside reversal and then raised silver margins.

Cook: Is this fishy?
Butler: This is an example of why I refer to the CME Group (COMEX) as operating a criminal enterprise, as I’ve seen them pull this dirty trick numerous times in the past. The exchange times the margin increase so that it comes when it is least likely to hurt, and maybe help, its big constituent member short holders. That time is always best when the price makes a sudden reversal down after a big climb. This way, the margin increase actually hurts the longs and benefits the shorts. The reversal to the downside swings the financial tide against the longs temporarily.

Cook: What should they have done?
Butler: What they should have done is raised margins on the way up, but that would have hurt the shorts, something the exchange would never do. By timing the margin increase just after a price reversal to the downside, the exchange helps the shorts.

Cook: Are they above the law?
Butler: What’s particularly infuriating and illegal is that the exchange is designated under commodity law as a self-regulatory organization (SRO). That means the CME Group is supposed to do things on a fair and even-handed basis, not cater to the selfish interests of its most important members. The phrase that comes to mind when describing how the CME fulfills its regulatory obligations is letting the fox guard the henhouse.

Cook: How in the world did this come about?
Butler: The CFTC and Congress made a very big mistake when they turned over so much regulation to the exchanges years ago. There is a conflict of interest in what the exchange does in its regulatory role. That’s why the COMEX is fighting the CFTC tooth and nail over position limits and every other issue that may infringe on its own interests.

Cook: The Commodity Future Trading Commission has ruled that within 3 months or so they will put limits on how much one entity can be long or short. Will this break up the concentrated short position?
Butler: If they stick to the timeline dictated by the new law and if they impose legitimate limits and throw out the phony exemptions to those limits.

Cook: Won’t that set silver “free at last?”
Butler: Yes, “thank God Almighty.”

Cook: Will the COMEX back down?
Butler: I don’t think so. They know this is the one issue that can blow the lid off silver.

Cook: Silver could turn into a runaway train. Why don’t these short sellers get out of the way and cover now?
Butler: They desperately want to, but it’s easier said than done because their position is so large that they are trapped. Just covering the limited amount of shorts to date has already had a profound impact on price. Why do you think we’ve risen so much in the past few months?

Cook: One of the commissioners at the CFTC has made a number of statements criticizing the shorts and the Commodity Exchange itself. Sounds like the senior regulators have embraced your views. Do you agree?
Butler: It’s hard to reach any other conclusion.

Cook: If that’s true then position limits are inevitable would you say?
Butler: The new law has mandated position limits, so unless the law is repealed I would say they are inevitable. But more than that, it’s important to remember that position limits are of specific relevance for silver more than any other market.

Cook: What do you mean?
Butler: COMEX silver is the only market which must have position limits radically reduced from the current accountability level. In all other commodities, including gold, the level of position limits is not so important because the short position is not that large. In silver, it’s the core issue.

Cook: What kind of position limit level do we need to see in silver?
Butler: If we don’t see a new level of close to 1500 contracts, instead of the current 6000 contract level, then this market is more crooked than I have been alleging. And I would think those in the public who follow this issue closely will be outraged and demand an explanation from the regulators. I know I will be.

Cook: Is it safe to say that silver is a buy until the short position is covered?
Butler: At least until the concentrated short position is reduced.

Cook: The volume on the SLV, the exchange traded fund, went ballistic recently. How many shares were trading before this jump and what did it go to?
Butler: There was an average daily volume of close to 15 million shares a day and it jumped to ten times that on a recent trading day.

Cook: How much of that was day trading?
Butler: Close to 99%, same as in every other market.

Cook: OK, but how much silver do you think was purchased on balance and must be delivered to the SLV?
Butler: I had been guessing close to 20 million ounces, but much to BlackRock’s credit (they’re the new sponsor), the silver is being brought in much more quickly than when Barclays was the sponsor.

Cook: Where is the silver coming from?
Butler: No one knows for sure, but the hallmarks on many of the new bars being deposited were from Russia and China. I think that’s good, because as those two countries wake up to the silver manipulation, they should be unlikely to continue supplying material at artificially depressed prices.

Cook: I heard a big delivery came in to the SLV last week. True?
Butler: Yes, there was an extraordinary deposit of 11.3 million ounces into the SLV on Wednesday, November 10, the largest one day deposit in the ETF since 2006. This brings the deposits into the Trust to over 18 million ounces in little more than a week and a half, to a new record of over 344 million ounces.

Cook: Are you underestimating the amount of silver available? Seems like there is always more silver.
Butler: While it is certainly possible that I have underestimated the amount of silver bullion in the world, that is not yet evident to date. I have always estimated about one billion ounces and we haven’t grown above that amount yet. What has happened is that more silver is being transferred from unreported inventories to reported inventories. This does create the illusion that the supply of silver is endless. It is not.

Cook: How much is left in unreported inventories that can come into the market?
Butler: Unless you have Superman’s x-ray vision and can see all the world’s vaults simultaneously, there is no way to know how much is left in unreported inventories. And I guarantee that you will make yourself crazy if you persist in trying to figure out the amount remaining.

Cook: Are you still sane?
Butler: No one comes with a butterfly net.

Cook: How much is known or in the reported category?
Butler: Since 2006, more than 550 million ounces have been transferred from unreported silver into reported world inventories, including the SLV and all other similar programs. Currently there are more than 716 million ounces in total world visible silver bullion inventories. That’s a very big chunk of my long-time estimate of one billion ounces in total world inventories. The way to look at it is that there are 550 million ounces less that can be transferred in the future. The long-term rise in price would seem to confirm my thinking.

Cook: Could the big shorts be buying the SLV to cover their short position?
Butler: Sure, but not to excessive amounts, as that would require lying to the SEC on ownership disclosure regulations. That’s not likely.

Cook: How much silver do you think JPMorgan and one other bank are short?
Butler: As of this moment, I’m guessing JPM may now be below 25,000 contracts. That’s 125 million ounces. But we won’t know for sure until more CFTC data are released.

Cook: How about the big eight shorts?
Butler: My guess is they are down to 56,000 contracts. That’s 280 million ounces.

Cook: How about all the shorts combined?
Butler: In COMEX futures total, I’d guess a bit under 500 million.

Cook: How does that compare with other commodities?
Butler: Still way off the charts when comparing paper contracts to real world production and inventories.

Cook: Do you see this leading to a price explosion in silver soon?
Butler: It’s one of several things that will lead to an explosion.

Cook: How does the silver short position compare to gold?
Butler: The silver short position is much bigger than gold in every measurement, especially compared to world inventories. Silver’s relative short position is more than 100 times larger than gold’s.

Cook: Do you think silver will outperform gold?
Butler: Yes. Silver has yet to leave gold in the dust, although it has fully matched or exceeded gold’s price performance. That is actually an advantage to those gold investors who have yet to make the switch into silver. It’s not too late.

Cook: Are you suggesting a switch now?
Butler: Yes. The facts suggest silver will outperform gold in the future, the logical investment action would be to convert gold into silver. Not because gold is likely to go down necessarily, but because silver is likely to offer better investment bang for the same buck.

Cook: Have people begun to switch?
Butler: There has been a noticeable shift to physical silver investment demand, perhaps from gold investors, although I still believe it’s in the early stages. Additionally, U.S. Mint sales of Silver Eagles are particularly strong relative to Gold Eagle sales, further confirming what may be a growing investor preference for silver over gold. Given how little silver exists compared to gold, if this trend continues, the influence on silver prices should be profound.

Cook: What’s the gold-silver ratio now?
Butler: The gold/silver ratio narrowed to almost 52. This is the best relative reading for silver since the summer of 2008, just before the price of silver was manipulated lower by JPMorgan and other commercial crooks on the COMEX.

Cook: You’ve got big cahunas calling JPMorgan a crook over and over again. Ever hear from their lawyers?
Butler: Not a peep and I send every article I write in which I mention JPMorgan to Jamie Dimon, CEO of JPMorgan and to the top regulatory officials at the CME, in addition to the CFTC.

Cook: I wonder why they haven’t sued you. If someone was calling my company crooked I think I would at least have my lawyer send them a letter.
Butler: Look, I’m not looking to get sued, but I don’t know of any other way to flush these weasels out. I know that JPM and the CME are operating as a criminal enterprise when it comes to silver.

Cook: What about the COMEX? You’ve been calling them sleazy for years. Have you ever received an answer to the numerous letters you’ve sent them?
Butler: Up until a few years ago, they would respond from time to time, but more recently they’ve been hiding behind the CFTC’s skirt and letting the Commission do their dirty work.

Cook: Yes, but now I see the COMEX has been in bitter disagreement with the CFTC on position limits. Why are they so opposed?
Butler: It may indicate that the CFTC, under Gary Gensler, is sick of the exchange using the CFTC. The reason the CME is so opposed to position limits is because of silver, not any other commodity. Don’t be fooled into thinking this isn’t a silver-specific issue.

Cook: Why only silver?
Butler: This is an important point. There is no position limit problem in any other commodity apart from silver. Not in oil, or grains or gold. Just silver. It’s the dirty secret that’s about to be revealed.

Cook: How much money have the banks made over the years with this big short position in silver?
Butler: Cumulatively, it could be billions of dollars.

Cook: This gravy train has suppressed the price, right?
Butler: Yes. The concentrated short position makes it impossible for the price not to have been suppressed.

Cook: If the market gets free of the concentrated short position it should revert to the true market price. Any idea what that is?
Butler: I’ll let the market tell us, but much higher than we’ve been in silver.

Cook: Do you think it will overshoot?
Butler: I think it’s impossible for it not to overshoot.

Cook: You think that Chairman Gensler at the CFTC is a straight shooter, right?
Butler: I think he walks on water. I may be dead wrong, but I’m a pretty good judge of human character.

Cook: Will he cure the silver mess?
Butler: If he follows the law and what he knows to be right.

Cook: Is he more competent than prior chiefs?
Butler: Gensler is the smartest guy in any room. It would be an insult to compare him to any former chairman or chairwoman.

Cook: Do you still claim the CFTC has looked the other way?
Butler: They have in the past, but I sense that is changing.

Cook: I think they hate your guts. Nobody’s been in their face with solid accusations like you have. Are they still hostile?
Butler: Hard to tell. I’m not concerned with past feelings. I don’t see why they would still be hostile; I offer constructive solutions where nobody else does. If they are hostile to anyone it should be towards those responsible for the manipulation, like JPMorgan and CME.

Cook: You’ve been the pioneer of virtually every new revelation about silver for over a decade. Just about everything that you predicted has come to pass. You’ve been a great conceptual thinker on silver and the premier whistleblower. Do you think the CFTC will ever acknowledge this and give you the award you deserve?
Butler: I sure hope so, but you’d have to ask them.

Cook: Everybody and his brother is writing about silver now. Some of it is amateurish and the good stuff originated with you. However, most of these articles never give credit to you. Do you agree that this is dishonorable?
Butler: Yes.

Cook: These organizations and individuals are trying to elbow themselves into position to take credit for your work. I’ve never seen anything like it, have you?
Butler: No.

Cook: What do you make of it?
Butler: Those that plagiarize are stealing my stuff and then lying by pretending they thought up my ideas. I’d avoid such people with a ten-foot pole.

Cook: They need to at least mention you if you are the source of their information. Right?
Butler: I think so.

Cook: Let’s change directions. What about COMEX silver inventories? What’s going on with them?
Butler: Recently, COMEX warehouse inventories dropped to near four year lows, at just under 108 million ounces. This drop, importantly, was accompanied with great turnover (in and out movements); highly suggestive of tightness and that the inventory is held in strong hands.

Cook: What’s the historical perspective on this?
Butler: COMEX silver inventories are down 60% from the 280 million ounce peak in the mid-1990’s. In contrast, COMEX gold inventories are at a record high of over 11.3 million ounces, the highest in the 45 year history of the COMEX. This is an apples to apples comparison, as the COMEX is the dominant market for both gold and silver trading.

Cook: Are we in a shortage?
Butler: I think we are in the early stages of a silver shortage that is bound to grow more severe.

Cook: Won’t this cause a surge in mining production?
Butler: Sure, eventually. But any mining increase in response to higher silver prices will take many years to hit the market. It’s not like flipping a light switch.

Cook: You’ve mentioned three things that will drive up the price of silver. It looks like one of them, investment demand, is kicking in. Will it get bigger than this?
Butler: I think that’s a certainty, as more people are waking up to the silver story.

Cook: Your second bullish factor is industrial demand. Do you still expect industrial users to panic because of a shortage?
Butler: Ever see what’s left in a supermarket after a hurricane warning?

Cook: Where does the price of silver burn itself out if a buying panic occurs?
Butler: Use your imagination. Then double it.

Cook: Your final and biggest bullish factor is the end of the concentrated short position. What will this do?
Butler: Terminating the concentrated short position will end the decades-old manipulation itself. That will bring about an honest and free market.

Cook: How will they cover the short position?
Butler: By buying back the position, delivering against it or by defaulting on it.

Cook: What about going forward? What will no big short sellers mean for the future?
Butler: It will be a different world price-wise.

Cook: According to the CFTC, the deadline for position limits is just over 2 months. Is silver a ticking time bomb until then?
Butler: Silver is a ticking time bomb for many reasons and the coming open debate on position limits is one of them.

Cook: The shorts are going to have to buy back futures aren’t they?
Butler: At some point, the shorts buying back is the post plausible outcome, as the only other choices are to deliver metal or default.

Cook: How many more shorts other than JPMorgan will have to cover?
Butler: My guess is somewhere around 15 to 20 thousand, a 75 to 100 million ounce equivalent.

Cook: Am I missing something or is this a lock?
Butler: If you mean much higher prices, then it looks like a lock to me.

Cook: This is so compelling I have to ask why it hasn’t been discounted in the silver price? How come it’s not $100 already?
Butler: I think it’s a combination of a lack of homework and the initial disbelief of the whole silver premise which prevents an objective investigation.

Cook: I remember when we first met ten years ago. You were telling me silver was the best thing on earth to own. Meanwhile, a well known investment service was sending out mailings suggesting people short silver at $4.00. They said silver was more plentiful than cockroaches. I wonder what happened to them?
Butler: I hope they covered their shorts quickly.

Cook: I bring this up because a lot of people have disagreed or argued with you along the way. They’ve all been proven wrong. However, to this day there are naysayers. What do you say to a guy like Jeffrey Christian at CPM who says there’s no way that JPMorgan is short that much silver?
Butler: Generally it’s good that disagreement exists so that market participants can hear both sides of the silver story.

Cook: What about Jon Nadler who says if Ted Butler was right the price would already have gone up?
Butler: The price has gone up and will continue to do so, in my opinion.

Cook: Why exactly has silver made this big recent move?
Butler: Primarily because of a lack of additional commercial short selling on the COMEX. It was the absence of additional commercial short selling, particularly by the big concentrated shorts, like JPMorgan, that allowed the price to climb as much as it did. On the rally it became obvious that the shorts were experiencing great financial stress, being forced to deposit many billions of dollars in margin calls. This should be taken as further proof of the manipulative role that the big shorts exerted on the price of silver.

Cook: Why did it get whacked?
Butler: The problem for the big shorts was that not only were they experiencing financial stress due to the rising price, they were unable to reduce their short position. That circumstance threatened to result in financial ruin if permitted to continue. Faced with financial ruin and the growing awareness by many of the predicament the big shorts were in, they resorted to their only alternative to that ruin – create a large and dramatic sell-off. That was what we began to see on Tuesday, with the CME’s unethically timed silver margin increase and the collusive vicious sell-off on Friday, under the cover of general commodity weakness.

Cook: What’s next?
Butler: No one knows for sure. It comes down to how much additional long liquidation the big shorts can engineer. We are still above all the critical moving averages, so there does exist the possibility we could go lower to get the technical funds completely flushed out. For sure, if we do go lower, it will be because JPMorgan and the other COMEX crooks are successful in tricking the technical funds into forced selling and not for any other reason. But there has been significant liquidation already, so it is just as possible it could be done or nearly so. Certainly there is nothing in the real world of silver that would account for further selling.

Cook: What’s the status of the formal investigation of silver by the CFTC, Enforcement Division?
Butler: It has yet to be concluded. A new director was just named which should help resolve the investigation that was initiated because of my revelations in 2008 and which Commissioner Bart Chilton publicly referenced recently. No one is more anxious than me to see what the investigation concludes.

Cook: You’ve made a big thing about pool accounts at brokerage firms, international banks and private mints. What can go wrong?
Butler: Everything. It is not hard to imagine investors ending up with a total loss because the metal may not exist to back these programs. If someone is claiming to store 1000-ounce bars for you and you don’t have the serial numbers for the exact bars you paid for, you should run, not walk, to a storage program that allows you to get the specific bars. I’d be especially wary of metal purported to be stored out of the country.

Cook: Are you recommending people switch from gold to silver?
Butler: Most definitely. That still appears to be a switch, which will be greatly rewarding. It amazes me how so many commentaries predict that silver will outperform gold, yet won’t come out and say that you should sell gold in order to buy silver. It makes no sense not to sell gold in order to buy silver if you are convinced silver will outperform gold. I think many feel it’s heresy to sell gold for any reason. But if your goal is to get the best return on your investment dollar in the future, which it should be, switch to silver from gold.

Cook: The bottom line is that people who followed your advice have made a lot of money. What advice would you give to our clients now?
Butler: Well, the days of 4 or 5, 7 to 12 dollar silver are over and that’s too bad for new buyers. At least we spared no effort in urging folks to buy all along. I think in the future we will look back at current prices with much the same result, namely, large profits for those who bought. Although the price is much higher now than it was then and conditions have changed, in many ways today’s new conditions are better.

http://news.silverseek.com/SilverSeek/1290625106.php

+6% for the week...

NICHOLAS CAMPBELL, Canaccord Adams (10/26/2010)
"A new exploration discovery at the San Jose project would add a new value driver for Fortuna Silver. In our previous valuation, to account for the exploration upside potential of the Caylloma mine and San Jose project, we ascribed a value of US$1.25 per ounce to the silver-equivalent resources excluded from our discounted cash flow valuation. However, we note that the average in situ value per ounce of silver-equivalent resource for non-producers is US$2.12/oz. Given that producers tend to receive a premium value, we are increasing our in situ value per ounce to US$2.50/oz, from US$1.25 previously, which translates into a value of US$54.6 million. To put this value in context, this represents roughly a one-year mine life extension at both the Caylloma and San Jose mines.

Given the regional exploration potential of the San Jose project, we ascribe an additional value of US$2.50/oz to a potential resource of 10 Moz. of silver-equivalent to account for the upside potential of the district. After factoring in these changes, our peak silver/gold estimate of NAVPS (5%, US$25/oz Ag, US$1500/oz Au) increases to C$5.51, up from C$5.06 previously. . .We also note that FVI is the only silver producer in our coverage universe that is trading at a discount to its NAVPS using spot silver and gold prices. . .We maintain our SPECULATIVE BUY recommendation on the shares of Fortuna Silver."

Fortuna's San Jose Project on Schedule for Production in Q3 2011
Oct. 20, 2010 (PR Newswire) --

VANCOUVER, Oct. 20 /PRNewswire/ - Fortuna Silver Mines Inc. (TSX: FVI / Lima Stock Exchange: FVI) is pleased to provide an update on construction activities at its 100% owned San Jose silver-gold project in Oaxaca, Mexico. Construction of the US$ 56 million project is on schedule and budget for completion and commissioning of the mine in the third quarter of 2011.

Once in operation at a rate of 1,500 tpd, the San Jose Mine will produce 5 million silver equivalent ounces annually at a cash cost of US$ 6.20 per ounce (see Fortuna's news release dated April 26, 2010). At that point, Fortuna's consolidated annual silver equivalent production will be 7 million ounces plus base metal credits from the Caylloma Mine. Operations are scheduled to start at 1,000 tpd and achieve full design capacity of 1,500 tpd within 24 months from the start of operations. The technical report of the San Jose Project is available on the Company's website at www.fortunasilver.com and on SEDAR at www.sedar.com .

Construction Highlights

To the end of September, US$ 11.5 million invested in construction or 21% of CAPEX.
Rebuilding of the grey water treatment plant, source of 20% of make-up water for the operation, is completed and pipeline installation to the mine site is 84 % advanced.
Ground preparation for the process plant is 80% advanced with concrete foundation and civil work to start shortly.
Purchase orders for all major equipment have been placed; the 13' x 19.5' ball mill arrived on site in September.
Tailings dam construction is 40% advanced and is scheduled for completion in December.
Construction of the power substation is 52% advanced and is scheduled for completion in February 2011.
The main haulage ramp has an advance of 1,200 meters and the cross-cut on level 1430 into the Bonanza, Trinidad and Fortuna veins has an advance of 50 meters.
Jorge Ganoza, President and CEO, commented, "With the planned start-up of operations at San Jose ten months away, Fortuna is on a clear path to organically grow its consolidated annual silver production from the current 2 million ounces to 7 million silver equivalent ounces within twenty four months from start-up; at a cash cost below US$ 6 per ounce. Concurrent with construction activities, our exploration crews are advancing the exploration programs in the surrounding mineral concessions. Management is enthusiastic about the potential to increase silver and gold resources in this large and under explored 58,000ha land package. Drill recommendations for the San Ignacio and Taviche targets are currently under review and drilling is expected to commence towards year-end."

Water Sourcing

On January 1st, 2010, a 15 year renewable agreement was signed with the Municipality of Ocotlan de Morelos, located 11 km north of the project site, to upgrade and manage their local sewage treatment plant in exchange for use of its residual water, source of 20% of the make-up water for the 1,500 tpd processing plant. The refurbished plant is now operational. Balance of the make-up water will be sourced from rain fall captured in a water reservoir.

Construction of an 8" high density polyethylene pipeline to carry the water from the sewage plant to the project site is 84% advanced and scheduled to be completed in November 2010.

Tailings Dam

Construction of the tailings dam is 40% advanced and scheduled to be completed in December. Heavy rains during August and September have resulted in a two week delay in ground preparation. Provisions have been taken to recover lost time throughout the remainder of the construction.

Power Substation

On April 28th, 2009, the Mexican Federal Energy Commission granted authorization to connect the project to the national power grid. Construction of the transformer and switching stations are 46% and 57% advanced respectively and scheduled to conclude in February 2011.

Processing Plant and Ancillary Facilities

The Company is on time and on budget for commissioning the processing plant at an initial production rate of 1,000 tpd in the third quarter of 2011. Earth work and site preparation for the 1,500 tpd processing plant is 80% advanced and scheduled to be completed in November. The contractor will begin pouring concrete for foundations for the crushing station in the upcoming days. The project has no long lead items on critical path and purchase orders for all major plant equipment have been placed. The 13' x 19.5' ball mill with a capacity to treat ore for up to 1,500 tpd arrived on site in September.

Underground Mine Development

The Company is advancing with underground development and stope preparation for start up of production at an initial mining rate of 1,000 tpd in the third quarter of 2011. At this mining rate the operation is scheduled to produce 1.88 million Ag ounces and 16,000 Au ounces or 2.8 million Ag Eq ounces in the first year of operation.

The main haulage ramp has an advance of 1,200 meters and the cross-cut on level 1430 into the Bonanza, Trinidad and Fortuna veins has an advance of 50 meters. The cross-cut intersected the Trinidad and the Fortuna veins with a width of 8 and 3 meters respectively. Assays are pending.

Two new 6 yard LHDs are scheduled to arrive on site in late October.

Awesome!!!!!!!!!!!!!!!!! Fantastic news.

Fortuna Reports Production Results for Third Quarter
October 14, 2010: Fortuna Silver Mines Inc. (TSX: FVI / Lima Stock Exchange: FVI) is pleased to announce production figures for third quarter of 2010 from the Caylloma Mine located in Arequipa, Peru. Year to date, Caylloma has produced 1.42 million ounces of silver and is on track to exceed the annual silver production forecast of 1.7 million ounces. The 1,500 tpd underground San Jose Mine located in Oaxaca, Mexico is scheduled to commence production on the third quarter of 2011 and an update on on- going construction activities will be issued in the upcoming days.
Third Quarter Highlights
• • • •
Silver production of 474,489 ounces; 8% increase over Q3 2009 Zinc production of 6,790,230 pounds; 8% decrease over Q3 2009 Lead production of 5,147,788 pounds; 19% decrease over Q3 2009 Copper production of 249,122 pounds; 6% decrease over Q2 2010
Operating Highlights
(1) Ag recovery in Pb and Cu concentrate (2) Ag production in Pb and Cu concentrate
Q3 - 2010
Q2 – 2010
Q3 - 2009
Processed ore (t)
112,886
108,010
105,241
Head grade
Ag (g/t)
154.56
156.35
146.5
Zn (%)
3.10
3.02
3.6
Pb (%)
2.27
2.30
3.0
Cu (%)
0.20
0.21
--
Recovery (%)
Ag (1)
85
87
84.2
Zn
88
88
88.6
Pb
91
91
93.2
Cu
51
54
--
Metal produced
Ag (oz) (2)
474,489
470,310
438,186
Zn (lb)
6,790,230
6,320,248
7,365,644
Pb (lb)
5,147,788
4,966,619
6,391,201
Cu (lb)
249,122
266,331
--
-2-
Silver production for the third quarter was 474,489 ounces, 13 percent higher when compared against the budget for the period and 8 percent higher than silver production for the third quarter of 2009. Lead and zinc metal production increased 4 percent and 7 percent respectively when compared against second quarter of 2010 but are 14 percent and 3 percent below budget for the period respectively. Base metal production is being affected by the Company’s focus on silver production.
A NI 43–101 Technical Report dated August 11, 2009 on Reserves and Resources for the Caylloma Mine is available on the Company’s website at www.fortunasilver.com.

What a tremendous run...

Big Autumn Silver Rally 2

By Adam Hamilton
Aug 20 2010 1:00PM

http://www.ZealLLC.com

http://www.kitco.com/ind/hamilton/aug202010.html

Silver has been drifting in a rather lackluster summer. Ever since surging to $19.50 in mid-May, this often-popular white metal has been grinding sideways to lower. By late July it had fallen over 10% to about $17.50. But despite silver’s recent excitement-bereft sojourn, it actually has excellent potential for a big autumn rally in the coming months.

The primary reason is gold. Since the early 1970s, silver has closely followed and sometimes amplified the price moves of the granddaddy of precious metals. Over the vast majority of this decades-long span, silver has been nearly perfectly statistically correlated with gold. When gold is strong, traders flock to silver. And when gold is weak, they abandon its smaller cousin. In hard technical price-chart terms, there is no doubt at all that silver is a derivative play on gold.

Of course autumn is typically an excellent time of the year for gold, and therefore for the whole precious-metals complex. Big seasonal factors converge which tend to seriously ramp up global gold demand and hence gold prices. These include income-cycle drivers like Asian harvest, after which farmers invest some of their year’s surplus income in gold. They also include cultural drivers, like Indian wedding season where brides are adorned with intricate and expensive gold-jewelry dowries.

While the usual autumn gold rally is very bullish for silver, it certainly isn’t the only thing silver has going for it right now. This essay will explore those other factors, including silver technicals coiled like a spring and ready to launch as well as silver’s continuing undervaluation relative to gold. Even if gold somehow managed to languish flatlined this autumn, silver’s own intrinsic merits are exceptionally bullish today.

This first chart looks at silver’s impressive technicals. Silver and its key moving averages are tied to the right axis, while Relative Silver is rendered in red on the left. Relativity is a measure of oversoldness and overboughtness, helping traders understand when prices are exceptionally low (the time to buy) or exceptionally high (the time to sell). rSilver is computed by dividing the close in silver by its 200-day moving average. The result charted over time creates a horizontal constant-percentage trading range.

.............................................

In order to understand why silver looks exceptionally bullish emerging out of this year’s typical summer doldrums, we need some technical perspective. Back in the summer of 2008, silver was consolidating high after a massive rally in late 2007 (which started in autumn) and early 2008. Then the brutal stock panic hit like an F5 tornado, destroying the global appetite for all risky assets including silver. In just 4 months, this metal plummeted a sickening 53%!

Ever since that epic panic anomaly, silver has been relentlessly recovering. This recovery provides the critical strategic lens through which all recent price action must be considered. Silver had already stubbornly returned to its pre-panic price levels last autumn. It averaged $18.07 in July 2008 before the panic, and $17.90 in November 2009 after last year’s autumn rally. Since then, it has generally consolidated sideways.

Provocatively, this high consolidation over most of the past year occurred within the old pre-panic high-consolidation range. Silver did fall out of this range once, when it plunged 20% in 3 weeks in late January and early February 2010 in response to sharp gold and stock-market retreats. But that correction was quickly erased, silver rapidly climbed back up into this high-consolidation trend less than a month later.

High consolidations are basing events, very important technically. After any fast rally to new price levels not yet seen in a bull, traders are nervous about whether those seemingly-stellar prices are sustainable. Some traders, looking for a correction, sell. Meanwhile other traders, excited because the price has rallied so far, buy to ride the momentum. The net result is a high consolidation, prices grind sideways not far off their new highs while traders digest their implications.

The longer a high consolidation lasts, the more comfortable traders get with those new price levels. Back in early 2008, $18 silver seemed pretty high and overbought. While the silver-to-the-moon zealots loved it, more prudent traders were concerned since silver often plunges even faster than it rallies. Yet today, since we’ve seen $18 silver on and off for a few years now, it seems perfectly normal. Silver doesn’t feel overbought at all at $18, we’ve been conditioned to accept this level.

This base has been established over a long time, either since late 2009 or early 2008 depending on your perspective. The longer that a particular price level bases in a fundamentally-driven secular bull, the more powerful the inevitable rally out of that base. Since the stock panic was an ultra-rare once-in-a-century anomaly, silver’s base extends back to 2008 in my book. But if you want to be more conservative and consider it only relevant since late 2009, that is still a long basing period.

Remember, silver follows gold. Back in February 2008 when silver pierced $18 initially in this bull, gold averaged $926. Last month (July 2010) when silver averaged $18, gold averaged $1192 (29% higher). So as I’ll discuss after the next chart, silver’s high basing in the face of strong gold prices makes it look even cheaper today. This high base is the perfect springboard for a major silver rally.

There are some other bullish technical developments beyond this long high consolidation to note. First, silver’s key support zones are converging today. Its recent recovery-support line since the panic has just hit its old pre-panic high-consolidation support line. For technically-oriented traders who pay attention to these things, and most silver-futures traders do, a convergence of major support lines is a powerful incentive to buy. Right in time for the autumn rally!

More importantly, check out rSilver’s position in its horizontal range. Considered as a multiple of its 200dma, over the past 6 years or so silver has tended to run between 0.96x its 200dma when it is oversold and 1.40x when it is overbought. The last time rSilver traveled in the upper half of its long trading range was way back last autumn. Languishing at an average under 1.04x so far this month, silver is low in its range and near-oversold today. It’s been a long time since silver has seen any excitement.

The best time to buy anything is when traders aren’t excited about it, when it is low relative to its 200dma. And thanks to this year’s summer doldrums, rSilver has been grinding ever lower on balance since spring. To see silver mired in bearish sentiment, and hence low technically, right before the usual strong autumn seasonal factors kick in is exceptionally bullish. If silver was overbought instead, stretched well above its 200dma, too much greed could lead to a correction fighting against autumn seasonals.

But this isn’t the case today. As we exit the summer doldrums and head into gold’s strong autumn, rSilver is near the oversold end of its secular trading range and traders aren’t excited at all about this metal. Meanwhile silver has been consolidating high for at least a year and building a strong base from which to launch its next big rally to new bull highs. On top of all this, the recovery support line has converged with silver’s high-consolidation support. Together these facts create a great environment to be long silver.

Way back in the heart of the stock panic, we bought silver stocks aggressively and encouraged our subscribers to do the same. Why? Silver was radically undervalued relative to gold. Since then, I’ve advanced this argument several times using the Silver/Gold Ratio. Prior to the panic silver traded in a definite range relative to gold. The panic anomaly blew that apart as risky silver plummeted much faster than much-safer gold. But ever since that panic, silver has been gradually recovering relative to gold.

This next chart highlights the state of the Silver/Gold Ratio today, another powerfully-bullish driver for silver this autumn. Since the silver price divided by the gold price yields a difficult-to-parse small decimal, I prefer dividing gold by silver and then inverting the axis to get an easier-to-understand proxy for the SGR. This SGR is rendered in blue on the right axis, while the raw silver price is slaved to the left in red.

..............................................

For years prior to that stock-panic anomaly, the SGR was actually climbing higher in a secular uptrend. And this makes sense. Strong gold prices get traders interested in leveraging the precious-metals bull in silver. So the longer a gold bull persists, and the higher it runs, the more traders want silver exposure. And the more traders bidding silver higher, the faster its price rises. Since silver is such a tiny market compared to gold, as a gold bull matures silver gradually gains ground relative to the gold price.

Between January 2005 and August 2008, the time of normalcy before all the wild dislocations the panic spawned, the SGR averaged 54.9x. An ounce of silver traded for about 1/55th the price of an ounce of gold. In addition, silver had a correlation r-square with gold of 95% over this span! In other words, 95% of the daily price action in silver was directly explainable statistically by gold’s own price action. This was the normal precious-metals secular-bull environment.

But when highly-speculative silver plunged far faster than gold during the panic, this relationship was blown apart. Between September and December 2008 when the extreme the-sky-is-falling panic psychology reigned, the SGR averaged a dismal 75.8x. At worst at the panic’s nadir, it easily hit its lowest point of the entire secular bull (1/84th the price of gold!). And in correlation terms silver started following the US stock markets rather than gold, its r-square with the yellow metal fell to an unbelievable 53%.

Now if you’ve studied silver’s historical relationship with gold, even in the bowels of the panic it was crystal-clear this anomaly couldn’t be sustained. It was the best opportunity of this entire secular bull to buy silver stocks, so we and our subscribers did aggressively. And time has vindicated our hardcore contrarian stance then, as silver has indeed been recovering relative to gold since.

From January 2009 to today, the SGR has regained a 66.4x average. And silver’s correlation r-square with gold is back up to 89%, nicely returning towards historic norms. But I don’t believe this post-panic recovery is over yet. Remember that silver is highly-speculative, and thus exceptionally sensitive to prevailing sentiment in the financial markets. And ever since the panic, widespread fear and anxiety have continued to dominate. This ugly environment has slowed silver’s recovery relative to gold, but not stopped it.

Depending on where you want to measure it from, silver’s undervaluation relative to gold today runs somewhere from substantial to enormous. Ever since this post-panic recovery got underway in earnest in early 2009, the SGR has been recovering in the uptrend rendered above. Today the SGR is down low near its support, silver is unloved thanks to the summer doldrums. But if the SGR merely climbs back up to resistance, we are looking at an SGR of 58x or so.

At $1200 gold, this yields a silver price of $20.70. But gold tends to rally in the autumn, and is set up beautifully this year (low in its relative trading range, near its 200dma). At $1300 gold, a 58x SGR yields a silver price approaching $22.50. But for a variety of reasons, I think merely using this SGR recovery uptrend’s resistance line is far too conservative. Ever since the panic, I’ve argued that silver ought to at least regain its old secular pre-panic average SGR near 55x.

At $1200 and $1300 gold, this yields “fairly-valued” silver prices around $21.75 and $23.50. Of course these are well into new-bull-high territory, as silver achieved its best level of this secular bull ($20.77) back in March 2008. And you better believe that as soon as silver surges to new bull highs, interest in buying silver stocks is going to soar. Probabilities are high that we’ll see new bull highs in silver this autumn.

For me, a return to the old pre-panic average SGR is plenty bullish enough. But for some investors, silver is a religion. They hold nothing but physical silver and silver stocks, and their whole financial future revolves around a silver moonshot. While not being diversified is extremely risky, this all-or-nothing bet on silver is common enough to throw out some optimistic projections for these silver zealots.

Check out the SGR’s old pre-panic secular uptrend rendered above. Today its support extends to 46x and its resistance to 35x. Remember the longer a precious-metals bull persists, the more traders get interested in silver and the higher it is bid relative to the gold price. So it is probable at some point, though almost certainly not this autumn, that the SGR will re-enter this pre-panic trend. If you plug a 46x or 35x SGR into a reasonable gold price in the coming years, you get some silver-price projections that will make even the raging bulls smile.

Back to a more reasonable 55x in the near term, $1200 and $1300 gold projections are conservative. On average seasonally, gold rallies about 5% between mid-August and late September and then another 12% between late October and late February. Together these rallies average around 14% in the autumn and winter buying season. If gold rallies 14% this year from its recent late-July low, we’d be looking at $1325 before next spring.

Heck in last year’s autumn rally, which was admittedly quite exceptional, gold soared 31% between late July and early December. A similar rally this year, which I’m not betting on since its odds aren’t great, would push gold up above $1500! Even at the pre-panic average 55x SGR, this would yield a silver price around $27.25. And even if we don’t see this until autumn 2011, the appreciation potential of silver stocks is vast thanks to silver’s continuing post-panic recovery relative to gold.

So while gold and hence silver seasonals are always bullish in autumn, this year looks like it has greater potential than normal. Silver has been basing for a long time getting traders comfortable with $18ish levels. It looks cheap technically trading near its 200dma and sentiment, while not exactly rotten, is certainly still totally bereft of any greed or excitement. On top of all this, silver remains very undervalued relative to gold, and is even trading near support in its post-panic-recovery SGR uptrend. What an explosive setup heading into autumn!

The bottom line is silver looks very bullish heading into autumn 2010. Big seasonal gold-demand spikes are approaching, and rising gold prices get traders excited about silver. After consolidating high and forming a strong base for at least a year, silver has the perfect springboard from which to launch to new bull highs. Couple this with converging major support lines, near-oversold technicals, and little enthusiasm today, and silver is perfectly positioned for a fast ride higher in the coming months.

Overarching all these bullish silver technicals is this metal’s continuing panic-driven undervaluation relative to gold. Until this valuation gap is fully closed, silver has a lot of ground to regain and thus should rally faster on balance to catch up. Thanks to all these bullish influences, this year’s big autumn silver rally certainly has the potential to surprise on the upside. And silver stocks will naturally soar if all this comes to pass, creating a great opportunity for traders today.

Adam Hamilton, CPA
August 20, 2010

I just bought Fortuna last week at $2.05... Sweet!

Mid-Tier Silver Producers Report from METAL AUGMENTOR http://www.metalaugmentor.com/


Report: http://silveraxis.com/todayinsilver/wp-content/uploads/2010/06/mid_tier_silver_june_2010.pdf

Conclusion

After taking all of the above charts and qualitative factors into account, the three best overall values among mid-tier silver producers presently appear to be Fortuna, Silver Standard and First Majestic. We are currently accumulating a position in Fortuna and will be on the lookout for buying opportunities in Silver Standard and First Majestic should we get a further pullback in the markets....

That move must look sweet today... second week in a row to finish up.

I took advantage of the recent firesale on Fortuna and tripled my position. Got to love the Q1 results.

Price of silver is cooperating too!!!

LUV LUV LUV being ahead of the crowd!

A complete turnaround... gotta luv it!!! - "... Caylloma's financial performance keeps adding to our Company's strong cash position... Fortuna is on a clear path to materially increase its silver production and become a low cost leading silver miner.

Fortuna Reports Record Net Income of US$ 5.30 Million on Revenue of US$ 17.53 million in Q1 of 2010

VANCOUVER, April 29, 2010 /PRNewswire via COMTEX/ -- Fortuna Silver Mines Inc. (TSX: FVI / Lima Stock Exchange: FVI) - is pleased to announce that it has filed its financial statements and MD&A for the three months ended March 31, 2010. The full documents are available on SEDAR and have also been posted on the Company's website at www.fortunasilver.com.



First quarter 2010 highlights:
- Historic record net income of US$ 5.30 million, compared to a net
loss of US$ 1.06 million in Q1 2009
- Historic record revenue of US$ 17.54 million, compared to US$ 8.98
million in Q1 2009
- Historic record operating income of US$ 7.89 million, compared to US
$ 0.08 million in Q1 2009
- Cash flow from operations before changes in non-cash working capital
of US$ 4.88 million, compared to US$4.23 million in Q1 2009
- Record silver production of 479,821 oz, up 30% over Q1 2009
- Cash position and working capital as at March 31, 2010 were US$ 69.26
million (including short term investments) and US$ 72.73 million
respectively





Jorge Ganoza, President, CEO and Director, commented, "Caylloma's financial performance keeps adding to our Company's strong cash position. With construction activities commencing at San Jose, Fortuna is on a clear path to materially increase its silver production and become a low cost leading silver miner. Looking further ahead, exploration activities for high grade silver mineralization have been reinitiated at our highly prospective land packages around San Jose and Caylloma, which will set the stage for a next phase of expansion."

A conference call has been scheduled for Tuesday, May 4, 2010 at 12:00 p.m. (Eastern Time), 11:00 a.m. (Lima Time) and 9:00 a.m. (Pacific Time) to discuss the financial results of the first quarter of 2010 and the pre-feasibility study. Call details are available at the end of this news release.



Financial Results
-----------------





During the first quarter of 2010, the Company generated record net income of US$ 5.30 million compared to a net loss of US$ 1.06 million in Q1 2009. This increase is attributable to a higher price environment, increased silver output and the addition of copper production as reflected by the strong operating income of $7.89 million in Q1 2010 compared to US$ 0.08 million in the same period of 2009.

The Company's price protection program generated a gain on commodity contracts of US$ 1.75 million during the first quarter of 2010. Adjusting for the mark-to-market effect on the gain on commodity contracts, a non-GAAP measure, the first quarter of 2010 resulted in adjusted net income of US$ 4.38 million compared to a net loss of US$ 0.79 million in Q1 2009.



Summary of financial results:
Three months ended
US$ 000s March 31, 2010
---------------------------------------------------------------------
Revenue 17,543
---------------------------------------------------------------------
Operating Income 7,891
---------------------------------------------------------------------
Net Income 5,296
---------------------------------------------------------------------
Cash Flow from Operations before changes in non-cash
working capital items 4,881
---------------------------------------------------------------------
Cash Cost per Ag oz net of by-product credits (US$/oz) (11.41)
---------------------------------------------------------------------

Operating Results
-----------------





During the first quarter ended March 31, 2010, the Company achieved record silver production of 479,821 ounces, compared to 367,986 ounces in Q1 2009, with a negative cash cost per ounce of payable silver of US$ 11.41, net of by-product credits. In the first quarter of 2010, 101,503 tonnes of ore were treated, compared to 91,449 tonnes in the same period of 2009, and the cash cost per tonne of treated ore was US$ 48.33*.

The 30% increase in silver production over the corresponding period of 2009 is attributable to a 13% increase in silver head grade, an 11% increase in throughput and a 4% increase in silver recoveries.

The first quarter of 2010 was the first full quarter of production for the copper circuit, which is now operating within design parameters.

(*) Cash cost is a non-GAAP measure. Please refer to page 8 of the MD&A for reconciliation of cash cost to the cost of sales in the consolidated statement of operations.



San Jose Project
----------------





On April 26, 2010, Fortuna issued a press release with the results of the prefeasibility study.

Fortuna has already been granted all of the necessary permits to commence construction at San Jose. Project staffing for the construction phase is currently being finalized and the Engineering Procurement Construction Management (EPCM) contract for the construction of the plant and ancillary facilities has been awarded to M3. M3 is an international engineering and construction company out of Tucson, Arizona with ample experience in Mexico. The Company has also initiated pre-construction activities for the water project, tailings facilities and power connection.

The Company anticipates commissioning San Jose in the third quarter of 2011.



Conference Call to Review First Quarter 2010 Financial Results and
------------------------------------------------------------------
Pre-Feasibility Study
---------------------





The Company will hold a conference call to discuss the financial results and the pre-feasibility study on Tuesday, May 4, 2010 at 12:00 p.m. (Eastern Time), 11:00 a.m. (Lima Time) and 9:00 a.m. (Pacific Time). Hosting the call will be Jorge Ganoza, President, CEO and Director, and Luis Dario Ganoza, Chief Financial Officer.

Shareholders, analysts, media and interested investors are invited to listen to the live conference call by logging onto the webcast at http://www.investorcalendar.com/IC/CEPage.asp?ID=158207 or over the phone by dialing just prior to the starting time.



Conference call details:

Date: Tuesday, May 4, 2010
Time: 12:00 p.m. (Eastern Time) / 11:00 a.m. (Lima Time) / 9:00 a.m.
(Pacific Time)
Dial in number (Toll free): +1.877.407.8035
Dial in number (international): +1.201.689.8035

Replay number (Toll free): +1.877.660.6853
Replay number (International): +1.201.612.7415
Replay passcodes (both are required for playback):
Account number: 286
Conference ID number: 350239





Playback of the webcast will be available until August 5, 2010. Playback of the conference call will be available until 11:59 p.m. (Eastern Time) on May 18, 2010. In addition, the call will be archived in the Company's website.

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.

ON BEHALF OF THE BOARD

Jorge Ganoza

President, CEO and Director

Fortuna Silver Mines Inc.

Symbol: TSX: FVI / Lima Stock Exchange: FVI

SOURCE Fortuna Silver Mines Inc.


http://www.marketwatch.com/story/fortuna-reports-record-net-income-of-us-530-million-on-revenue-of-us-1753-million-in-q1-of-2010-2010-04-29?siteid=nbsh

Fortuna Receives Positive Pre-Feasibility Study for the San Jose Project; Construction Activities to Commence

VANCOUVER, April 26, 2010 /PRNewswire via COMTEX/ -- Fortuna Silver Mines Inc. (Fortuna) (TSX: FVI/Lima Stock Exchange: FVI) - is pleased to announce the results of a positive Pre-feasibility Study (CA:PFS 19.00, 0.00, 0.00%) for its 100% owned San Jose Project in Oaxaca, Mexico. The PFS was prepared by Chlumsky, Armbrust and Meyer (CAM) from data supplied by Fortuna and their consultants. CAM is an internationally recognized mining consulting firm based in Denver, Colorado.

Fortuna has already been granted all of the necessary permits to commence construction at San Jose. Project staffing for the construction phase is currently being finalized and the Engineering Procurement Construction Management (EPCM) contract for the construction of the plant and ancillary facilities has been awarded to M3. M3 is an international engineering and construction company out of Tucson, Arizona with ample experience in Mexico. The Company has also initiated pre-construction activities for the water project, tailings facilities and power connection.



Highlights of the Pre-feasibility Study include:

- 3.5 million tonnes of Probable Reserves with 23.2 million ounces of
contained silver and 181,000 ounces of contained gold (average head
grades of 205 g/t of silver and 1.6 g/t of gold)

- 2.7 million tonnes of Inferred Resources* with 17 million ounces of
contained silver and 133,500 ounces of contained gold not included in
the Reserves or the economic model

- After-tax Net Present Value (NPV) of US$ 36.4 million at an 8%
discount rate

- After-tax Internal Rate of Return (IRR) of 18%

- Estimated Pre-production Capital Expenditures (CAPEX) of
US$ 55.7 million

- Average Cash Cost per silver equivalent (Ag Eq) ounce over life of
Reserves of US$ 6.90

- 9 year production plan based on existing Reserves

- Incremental throughput rate starting at 750 tonnes per day (tpd),
scaling to 1,000 tpd in 2014 and to 1,500 tpd in 2016

* This figure refers to resources above the break even cut-off grade.





San Jose Project Summary

The PFS is based on the resources described in our NI 43-101 compliant resource estimate dated December 10, 2009 which has been filed on SEDAR, and defines a total of 3.5 million tonnes in Reserves with a projected life of 9 years. Average head grades for the life of the Reserves are estimated at 205 g/t of silver and 1.6 g/t of gold. The economic evaluation is treated on a project basis using a silver price of US$ 15.12 per troy ounce and a gold price of US$ 897.51 per troy ounce.

Pre-tax and after-tax NPVs are estimated at US$ 46 million and US$ 36.4 million respectively, both at a discount rate of 8%. The IRR is estimated at 20% and 18% pre-tax and after-tax, respectively. Pay back on an undiscounted basis is estimated at 5.5 years. Cumulative undiscounted free cash flow is projected at US$ 95.1 million.

Capital costs for the pre-production stage are projected at US$ 55.7 million. Capital costs during the operational stage for the life of Reserves are estimated to be US$ 60 million for purposes of sustaining CAPEX as well as project expansion to the 1,500 tpd production level.

At the San Jose Project there will be two payable metals - silver and gold, with silver being the predominant metal. The San Jose Mine will be an underground operation with the metallurgical process consisting of conventional flotation to recover silver and gold from sulphide ores in the form of a concentrate.

Operations are modeled to start at 750 tpd scaling to 1,000 tpd after the initial two and a half years of operation with a subsequent ramp-up to 1,500 tpd. Metal produced in concentrates over the life of current existing Reserves will be 20.4 million ounces of silver and 163,000 ounces of gold. These projections do not take into consideration the silver and gold that will be produced from the Inferred Resources following their upgrading to reserves.

Average unit cash costs throughout the life of the Reserves are estimated to be US$ 38.8 per tonne of treated ore and US$ 6.9 per Ag Eq ounce.

Jorge Ganoza, President, CEO and Director, commented, "Management is pleased to report the results of the pre-feasibility study of San Jose. The study shows a project that is viable with conventional mining and processing methods with healthy economic returns. It has been challenging to incorporate into a study of this nature all the areas of opportunity that in Management's view, make San Jose a robust project. The old miner's adage: "drill for structure and drift for reserves" holds true. The limitation to model an underground mine including only Measured and Indicated resources for reserve conversion meant that a significant amount of Inferred resources located in the upper portions of the mine, where mining takes place in the initial years, are not accounted for in the mine plan. Under this scenario, the mine demands more upfront development and a longer time to achieve the targeted 1,500 tpd in the pre-feasibility study. Management is now focused on advancing San Jose and capitalizing on this and other areas of opportunity."


Whole article here...

http://www.marketwatch.com/story/fortuna-receives-positive-pre-feasibility-study-for-the-san-jose-project-construction-activities-to-commence-2010-04-26?siteid=nbsh

That was exactly how I responded when I saw that.

- Copper production of 295,854 pounds; 213% increase over Q4 2009

WOW!

Fortuna reports 30% increase in silver production in Q1 2010

VANCOUVER, April 12, 2010 /PRNewswire via COMTEX/ -- Fortuna Silver Mines Inc. (TSX: FVI / Lima Stock Exchange: FVI) - is pleased to announce its production figures for first quarter 2010.

First Quarter Highlights



- Record silver production of 479,821 ounces; 30% increase over Q1 2009
- Zinc production of 6,868,811 pounds; 1% decrease over Q1 2009
- Lead production of 5,920,140 pounds; 1.5% increase over Q1 2009
- Copper production of 295,854 pounds; 213% increase over Q4 2009





Q1 2010 record silver production is due to to improved grades in production stopes with respect to the mine plan and contribution of development material from the new high grade discovery made in the upper levels of the Caylloma vein. Exploration drilling of this discovery is ongoing concurrent with stope preparation for production. The Company is prioritizing the definition of resources in this new area to incorporate them into the mine plan this year. This is the first full quarter of commercial operation for the copper circuit with a production of 295,854 pounds of Cu in concentrate.

Operating Highlights



--------------------------------------------------------
Q1 - 2010 Q4 - 2009 Q1 - 2009
--------------------------------------------------------
Processed ore (t) 101,503 97,989 91,449
--------------------------------------------------------

--------------------------------------------------------
Head grade
--------------------------------------------------------
Ag (g/t) 167.23 165.05 147.81
--------------------------------------------------------
Zn (%) 3.44 3.42 3.83
--------------------------------------------------------
Pb (%) 2.87 3.14 3.11
--------------------------------------------------------
Cu (%) 0.25 0.24 0.23
--------------------------------------------------------

--------------------------------------------------------
Recovery(%)
--------------------------------------------------------
Ag (1) 88 86 85
--------------------------------------------------------
Zn 89 89 90
--------------------------------------------------------
Pb 92 93 93
--------------------------------------------------------
Cu 53 -- --
--------------------------------------------------------

--------------------------------------------------------
Q1 - 2010 Q4 - 2009 Q1 - 2009
--------------------------------------------------------
Metal produced
--------------------------------------------------------
Ag (oz) (2) 479,821 449,449 367,986
--------------------------------------------------------
Zn (lb) 6,868,811 6,597,229 6,948,967
--------------------------------------------------------
Pb (lb) 5,920,140 6,322,356 5,831,316
--------------------------------------------------------
Cu (lb) 295,854 94,227 --
--------------------------------------------------------
(1) Ag recovery in Pb and Cu concentrate
(2) Ag production in Pb and Cu concentrate





A NI 43 - 101 Technical Report dated August 11, 2009 on Reserves and Resources for the Caylloma Mine is available on the Company's website at www.fortunasilver.com.

Qualified Person

Mr. Miroslav Kalinaj, P. Geo., is the Company's Qualified Person as defined by National Instrument 43-101 and is responsible for the accuracy of the technical information in 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.

ON BEHALF OF THE BOARD



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

Symbol: TSX: FVI / Lima Stock Exchange: FVI


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.

SOURCE Fortuna Silver Mines Inc.


http://www.marketwatch.com/story/fortuna-reports-30-increase-in-silver-production-in-q1-2010-2010-04-12?siteid=nbsh

Cash cost of negative US$ 4.93 per silver ounce, net of by product credits

hard to beat free...

Link to the recorded CC...

http://www.investorcalendar.com/IC/CEPage.asp?ID=156726

Not much in the way of volume yesterday, but it's in a nice uptrend.