Latin American Minerals (CVE:LAT) (OTCQX:LATNF) is a Canadian junior mineral exploration company that is currently moving to develop Paraguay's first gold mine. LAT is also developing a diamond project and a rare earths project in Paraguay, as well as a zinc and copper project in Argentina.
Latin American is the most active junior exploration company in the rapidly growing Paraguayan mining sector. Many knowledgeable investors are favorably comparing the mineral, especially gold, potential of Paraguay to the opportunities in Colombia a few years ago. Like Colombia, Paraguay is one of the most prospective, yet most underexplored countries in all of South America. Unlike Colombia, however, Paraguay never experienced civil strife and political instability. In fact, Paraguay has long been one of South America's most stable democracies. It is a rapidly modernizing middle income country with a modern mining code and very hospitable to business. Consequently, there are mining opportunities in Paraguay that could never be found in established mining regions like Chile, Peru or Brazil.
Latin American's flagship property is the 15, 615 hectare Paso Yobai Gold Project, located 150 km east of Asuncion, and is readily accessible by highways and secondary roads. The nearby village of Paso Yobai provides a large labor pool. LAT has recently commenced small scale gold production at the project and is currently finalizing plans for an extensive drill campaign at a new mineralized trend at Paso Yobai.
Latin American has completed comprehensive aeromag/aeroEM and ground magnetic surveys over the properties, as well as extensive mapping, sampling, drilling and a deep trenching program. This work has identified gold mineralization traceable over a strike length of 4.5 km. This structure has been named the Discovery Trend.
But a newly discovered second gold-bearing trend traceable over 14.8 km has become the focus of ongoing exploration efforts. So far, the company's exploration efforts have identified significant gold mineralization. The surface gold occurrences mapped at the Paso Yobai Project indicate an epithermal system with a footprint of approximately 100 sq. km.
Discovery Trend Development
Latin American Minerals has completed approximately 7,000 metres of diamond drilling on the Discovery Trend. The most intensively tested section - termed the 'Discovery Zone', carries gold mineralization over a strike length of 1,200 metres, proven to depths of over 100 metres. This quarter (approximately) of the larger trend contains a conceptual mineral resource target with potential of 450,000 to 900,000 tonnes at grades ranging from 4.0 g/t Au to 7.0 g/t Au, for up to 225,000 ounces of gold. This high-grade mineral zone remains open at depth and along strike.
2011 drilling highlights include DDH-49, which intersected 2.55 metres grading 17.03 g/t Au at a depth of 66.30 metres; and DDH-53, which returned 0.50 metres at 17.02 g/t Au by fire assay, and 6.02 g/t Au by screen assay, at a depth of 121.02 metres.
Bulk Sample/Early Production/Early Cash Flow
Small scale gold production by artisanal miners has existed at Paso Yobai for 15 years and provides telling evidence of notable mineralization. The gold is epithermal and is known for its coarse appearance and erratic nuggety distribution that defies conventional resource evaluation by diamond drilling. In order to better define and evaluate near-surface gold resources, bulk sampling methods utilizing a US$2.0 million concentrator pilot plant to extract and process gold to 20 metres depth will be employed.
This will allow Latin American to evaluate the near surface resource at the Discovery Zone, to expose, map and sample the ore shoots, and to finance the ongoing resource estimate for the entire Discovery Trend. The pilot plant production will be invaluable in refining the company's understanding of the district's mineralization and will aid their future efforts to outline further potential resources. Moreover, the revenue generated by the pilot plant will help subsidize their ongoing exploration activities.
Aggressive Gold Exploration on the New Trend at Paso Yobai
Latin American is now focusing its exploration efforts on the 14.8 km "New Trend" at Paso Yobai, which has demonstrated exciting surface exploration results, the company said. Multiple surface gold targets on the 100% owned prospecting concession have been identified. Drilling permits were received in December 2011 and a 2,000 metre drilling program is in progress. With the drill campaign and aggressive exploration program, there will be steady news flow in 2012.
Rare Earth Elements and Niobium
The company owns the Chiriguelo Rare Earth Elements Project, which is near the Brazilian border and contains an alkaline-carbonatite complex with a well-developed circular structure approximately seven km in diameter, where previous exploration has delineated a significant pyrochlore niobium target and the original Chiriguelo REE target.
In 2011, comprehensive grid coverage of ground magnetics and radiometrics, and soil and rock sampling has defined an additional target containing elevated REE values over a 2,000 metre by 2,000 metre area. The program confirmed that the average for all 46 rock samples was 0.93% total rare earth oxide (TREO), with the highest value at 5.89% TREO. The average of 100 soil samples was 0.289% TREO, and the highest value was 1.41% TREO. Taking only the upper quartile set of rock samples, the distribution of the major REO's was 50.94% Cerium, 36.27% Lanthanum, 7.86% Neodymium, 3.83% Praseodymium, 0.67% Yttrium, and 0.43% Samarium.
The carbonatites identified within the Project area may be similar to those found in the world's two largest niobium deposits Araxá and Catalão, located in Brazil. Chiriguelo's REE potential may resemble other carbonatite-hosted REE deposits such as Mountain Pass in California, and Mount Weld in Western Australia.
The company intends to assemble a portfolio of REE/Nb projects in Paraguay, with the objective of developing these to a stage suitable for spin-off, joint venture or strategic partnership. Latin American previously identified and spun off Lithium Americas as an IPO in 2010, from which it collected $12 million on sale of stock.
In July 2011, the company signed an option agreement with Olivut Resources Ltd. (CVE:OLV) for Latin American Minerals' Itapoty Diamond Project. This 220,000 ha property package is located in eastern Paraguay, and shares geologic similarities with the cratonic and diamond producing regions of southern Africa. Olivut can earn-in for a 50% interest, and has already committed to an exploration program to evaluate the Project area.
Early exploration by Latin American produced multiple occurrences of Kimberlite Indicator Minerals, and recovered 37 diamonds from controlled sampling programs. The distribution of the KIMs and diamonds suggest that there are multiple local supply sources, with emplaced diatremes and dykes as likely diamond sources. Sampling last year recovered 22 new diamonds, the largest being 2.4mm in size.
Zinc and Copper Exploration
Votorantim Metais continues to explore for zinc and copper in the second year of its option on Latin American Minerals' Rio Tendal Massive Sulfide Project, which is located in La Rioja Province, Argentina. Previous work has found massive sulphides of zinc and lead, extending over a 2 kilometre strike length, with outcrop width of 18 metres at the Espinal formation. Copper exploration also progresses at the project where copper veining, associated with a porphyry intrusive, has been mapped. Votorantim, the largest zinc producer in South America, can earn a 51% interest in the project by investing $4.5 million in exploration over three years. It can earn a 70% interest by completing a mine feasibility study at the project.
Latin American provides investors with a unique opportunity to capitalize on Paraguay's emerging mining sector. Investing early in emerging "regional plays" has rewarded investors time and again. For example, investors who chose well placed junior mining companies in Colombia in 2007 or Burkina Faso in 2010 received well above average junior mining returns. Paraguay is an extremely underexplored but highly prospective mineral country with all of the political, legal and material attributes needed to flourish.Latin American, with its strong portfolio of high impact projects and management team experienced in South American mining, is enviably placed to benefit from Paraguay's growth.