UPDATE: Fortuna Silver Mines $FVI.TO $FSM – Setup and rally similar situation happened mid 2011

UPDATE:

In the morning, I saw silver was down, so I moved my stop to 3.92.  I avoided being stopped out, but only time will tell if this scenario will play out.  A break to 4.50-4.75 could happen within the next 2 weeks

 

 

Fortuna Silver Mines TSX:FVI NTSE:FSM June 2011

 

Fortuna Silver MineTSX:FVI NTSE:FSM End of April  2012

 

Note that May 4th, there was some buy volume that came into the market.  On the top Chart, this would be the buy volume that came in before the large volume increase a few days later.  Therefore, within the next couple of days, I would expect large volume to come into the market to set this rally to 5.38 (GAP FILL from March 26th, 2012).

This Price will also coincide with the 200 Day ma which should steadily drop over the next couple of months at which time, price will need to make a decision.  Likely, a relatively deep correction 50%, before ultimately going higher, that correction could find support where ever the 50 day MA ends up.

Notice other similarities such as the bollinger bands.  Currently (bottom graph), we have entered a compressed bollinger band.  In the above (past) rally, the bollinger bands were compressed for some time, but then broke to the upside half way through the rally.

Currently hold a position at $3.88 and will likely sell OOM calls at 5.00 for July Expiration  near the end of the month, if the price continues to climb.  Have a relatively tight stop at $3.95.

 

April 16th, 2012, Fortuna Q1 2012 results were release here are some excepts:

 

First Quarter Production Highlights

  • Silver production of 953,091 ounces; 4.3% increase over Q4 2011
  • Gold production of 5,137 ounces; 23.7% increase over Q4 2011
  • Lead production of 4,443,367 pounds; 1.1% increase over Q4 2011
  • Zinc production of 5,320,639 pounds; 6.5% decrease over Q4 2011

 

First Quarter 2012 Fourth Quarter 2011
Caylloma, Peru San Jose, Mexico Consolidated Caylloma, Peru San Jose, Mexico Consolidated
Processed Ore
Tonnes milled 113,444 87,056 116,364 87,884
Average tpd milled 1,289 989 1,307 987
Silver*
Grade (g/t) 171 198 177 159
Recovery (%) 77.51 84.64 80.78 84
Production (oz) 484,226 468,865 953,091 536,426 377,377 913,803
Gold
Grade (g/t) 0.39 1.92 0.35 1.48
Recovery (%) 45.33 83.51 44.87 84.90
Production (oz) 640 4,497 5,137 591 3,562 4,153
Lead
Grade (%) 1.98 1.85
Recovery (%) 89.92 92.40
Production (lbs) 4,443,367 4,443,367 4,396,319 4,396,319
Zinc
Grade (%) 2.43 2.47
Recovery (%) 87.71 89.73
Production (lbs) 5,320,639 5,320,639 5,687,747 5,687,747

 

  • The San Jose mine continues to outperform planned metal production. Silver and gold productions for the quarter were 15% and 29% above budget respectively. Average head grades for silver and gold were 198 g/t and 1.92 g/t or 20% and 41% above plan
  • Caylloma Mine, Peru – Silver and gold productions for the quarter were 5% and 17% above budget respectively. Average head grades for silver and gold were 171 g/t and 0.39 g/t or 2% and 8% above plan.

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