Mineral Reserves and Mineral Resources are as defined by CIM Definition Standards on Mineral Resources and Mineral Reserves
Mineral Resources are exclusive of Mineral Reserves
Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability
There are no known legal, political, environmental, or other risks that could materially affect the potential development of the Mineral Resources or Mineral Reserves at San Jose
Mineral Resources and Mineral Reserves are estimated as of June 30, 2016 and reported as of December 31, 2016 taking into account production-related depletion for the period through December 31, 2016
Mineral Reserves for San Jose are estimated using a break-even cut-off grade of 127 Ag Eq g/t based on assumed metal prices of US$19/oz Ag and US$1,140/oz Au; estimated metallurgical recovery rates of 90.5% for Ag and 90.5% for Au and and projected operating costs. Mineral Resources are estimated at a 100 g/t Ag Eq cut-off grade with Ag Eq in g/t = Ag (g/t) + Au (g/t) * ((US$1,140/US$19) * (90.5/90.5)). Proven + Probable Reserves include 2.31 Mt containing 22.3 Moz of silver and 141.0 koz of gold reported at a 130 g/t Ag Eq cut-off grade and Inferred Resources totaling 1.57 Mt containing 13.6 Moz of silver and 80.0 koz of gold reported at a 100 g/t Ag Eq cut-off grade located in the Taviche Oeste concession and subject to a 2.5% royalty
Eric Chapman, P.Geo. (APEGBC #36328) is the Qualified Person for resources and Edwin Gutierrez (SME Registered Member #4119110RM) is the Qualified Person for reserves, both being employees of Fortuna Silver Mines Inc..