The story of the discovery of gold and gold mining in Paraguay is an interesting and relatively recent one. Although rumors of gold had been circulating for years in the area of Paso Yobai, it’s only in the last ten years or so that there has been any serious attempt to tap into Paraguay’s gold resources.
Paso Yobai is historically known for the high quality of its production of yerba mate. Is also known for the production of sugar-cane, cotton and soy.
The story of this new Klondike-style gold rush begins with Ecuadorian who, on a trip to the Paraguayan capital Asunción, fell in love with a young lady from Paso Yobai – a fertile and green place with beautiful undulating hills. Shortly afterwards the two were married, and the Ecuadorian discovered gold in a stream on his father-in-law’s property. From there began the gold rush fever that changed the life of many local families, as well as investors around the world looking to profit from the spectacular rise in the gold price over the past ten years.
Mining activity started on a small scale. Local gold bugs known as “garimpeiros” are really artisan miners. It generally takes between one and two days for a small scale miner to extract a gram of gold. But this gram is difficult to obtain. A garimpeiro can gernerally survive strictly of their mining activities if he can obtain 25 grams or more of gold a months.
The grams of gold are sold locally to other companies who process and export it. From there, the gold may be used in industrial processes or more commonly it is stored in international banks and bullion dealers in the form of gold coins and gold bars for investment purposes. Gold, after all, is the only real international currency that cannot be devalued.
Anyway, I digress. Back to Paraguay! Although mining has brought increased prosperity to Paso Yobai, it has also created serious environmental issues. Miners use mercury to separate gold from sand an clay. Unfortunately, the mercury often enters and contaminates creeks. Arroyo Gasory, Paso Yobai’s largest creek, is now highly contaminated with mercury and the fish are unsafe to consume.
The Canadian TSX-quoted company Latin American Minerals Inc. bought a local mining company in 2007 and negotiated an agreement with the Paraguayan government to begin mining in the district. Latin American Minerals claims that that Paso Yobai may contain one of the largest gold veins of the world. Others talk of gold reserves in the huge and virgin Chaco.
It remains to be seen how Paraguay’s gold business develops over the coming decade. But I for one believe investing in an undiscovered, low cost country that is so rich in natural resources has to make very good sense. Paraguay has water, clean electricity, oil, gas, gold and friendly people. Plus, it is an undiscovered tax haven. What more could a foreign investor want? Why not consider Living, Investing and Doing Business in Paraguay?
Tags: gold, Latin American Minerals, Paso Yobai
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