Just weeks following the release of its Q2 results, Fortuna Silver Mines (TSX:FVI,NYSE:FSM) is back again, this time with an updated mineral resource estimate for the San Jose mine in Mexico. The new estimate includes an update on the Trinidad North discovery's mineral resource; it is based on 41 further step-out and 12 infill drill holes. Altogether, San Jose now holds a measured and indicated resource of 5.8 million tonnes containing an estimated 42.3 million ounces of silver and 334,000 ounces of gold. The revised figures reflect a 42-percent increase in contained silver ounces as well as a 29-percent increase in contained gold. The inferred category is now made up of 7.1 million tonnes containing an estimated 58.9 million ounces of silver and 401,000 ounces of gold. Compared to the previous estimate, the inferred resource shows a 67-percent rise in contained silver and a 47-percent increase in contained gold. Dr. Thomas Vehrs, Fortuna's vice president of exploration, said in a press release that "[b]rownfields exploration drilling has been very successful in the past year at extending the Trinidad North mineralization." He added, "[h]igh-grade silver-gold mineralization at Trinidad North remains open to the north and to depth. Underground access and new drilling chambers are currently in preparation to allow for exploration of an additional 250 meter extension of the mineralized system with drilling projected to start from the new drill chambers in September of 2014." That sentiment was echoed by Haywood Securities analyst Benjamin Asuncion, who said today in a note that Trinidad North is driving resource growth at the San Jose project. Asuncion said, "[g]lobal resource (M&I plus Inferred) demonstrated significant growth with contained silver-equivalent ounces increasing 57% year-over-year, largely driven by a doubling of the Trinidad North Zone, whilst improving overall grades by 5%."
Asuncion also noted that his firm's interest in Fortuna is driven by the company's ability to grow production and cash flow from a portfolio of two wholly owned mines: San Jose and Cayloma in Peru. "We view the Trinidad North zone at San Jose as the principal driver of production growth and cost reduction due to its higher grades, which in conjunction with steady-state production anticipated from Caylloma, drives production growth from 7.6 Moz of silver-equivalen in 2013 to an estimated 11.7 Moz of silver-equivalent in 2015," his note states.Moving forward, Fortuna's focus will be on Trinidad North in terms of both exploration and development. The company is aiming for a production start target of 2015. Following today's news, Fortuna Silver rose to an intraday high of $5.64. The stock closed $0.03 higher from the previous day, at $5.53. Securities Disclosure: I, Vivien Diniz, hold no investment interest in any of the companies mentioned. Related reading: Fortuna Reports Solid Q2; Should Exceed 2014 Production Guidance Fortuna's Updated Mineral Resource Estimate for San Jose Boosted by Trinidad North Zone from Silver Investing News