PARAGUAY: OPEN FOR BUSINESS

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?

For a while over the past year, we became accustomed to the stratospheric rise of the Paraguayan local currency, the Guarani (currency code: PYG). At the end of October 2007, one US dollar bought 5000 Guarani. But by June 2008, your dollar bought less than 3800 Guarani – a huge increase in a little time. My consulting and investment clients who had bank accounts in Guaranis (for example, those applying for residence) were of course thrilled! As of today, however, the rate is hovering around 4,800, with Obama’s victory not having had a big impact either way on the dollar.

Most imported goods (the expensive things) in Paraguay are priced in dollars, whereas day to day purchases are priced in Guarani. ATM machines typically pay out cash in both currencies.

Of course, a national currency denomination is something like buying shares in the country. The same is true of both Paraguay and the United States. It’s my view that the dollar is going to tank again soon – after all, they just printed $700 billion more to bail out the banks, and when there’s more around of something, the price has to go down. Basic law of supply and demand.

An interesting factor for the Paraguayan economy is that it is a gold producing nation, albeit that the quantities are still miniscule in terms of the world market for gold and precious metals generally. Gold is currently down, but is set to head upwards in the not too distant future. There’s an interesting commentary on “The Trial of Gold” by David Galland of “Big Gold” experts Casey Research, recently submitted to the Free Articles area at Q Wealth Report.

“Just today we’ve seen the dollar dipping once again into its downward spiral,” says my colleague, friend and offshore banking guru Peter Macfarlane. “Don’t be misled by short term booms!” Peter also offers up further evidence on his blog that the big government’s conspiracy to control money is breaking. It makes interesting reading for those of us who want to study international currencies, particularly Latin American ones, and their relationship to the price of gold.

I’ve always said Paraguay is a speculative investment. But speculative investments are also the ones that can pay the biggest rewards, right?

TORONTO, ONTARIO–(Marketwire – Sept. 3, 2008) – Latin American Minerals Inc. (TSX VENTURE:LAT) announces that it has retained Hedenquist Consulting, Inc. and Smee & Associates Consulting Ltd. to provide advise in the Paso Yobai Gold Project in Paraguay.

Dr. Jeffrey W. Hedenquist, Ph.D., President of Hedenquist Consulting, Inc., provided advice on the exploration model, the nature of the epithermal system and the ongoing exploration and proposed drilling program aimed at a resource definition. Dr. Barry W. Smee, Ph.D., P.Geo., of Smee & Associates Consulting Ltd., audited the Paso Yobai preparation laboratory, reviewed the company quality control procedures and examined the soil geochemical data generated to date.

Both independent complete reports can be reviewed on www.latinamericanminerals.com under the Technical Reports folder.

“We are extremely pleased to have internationally recognized and respected experts visit Paso Yobai to provide guidance on the mineralization, deposit model, quality control procedures and sampling protocols. Their insights provided the basis for an expanded exploration plan, including detailed resource definition diamond drilling and metallurgical testing to supplement the ongoing bulk sampling program,” commented Dr. Waldo Perez, Senior VP Exploration of Latin American Minerals Inc.

The drilling will be carried out on the Discovery Zone, a 2km portion of the 7km Paso Yobai gold anomaly, on sections established at 25m intervals. Prior drill results from this area include DDH-LAT-11 reporting 26.64gpt Au over 6.5m and DDH-LAT-6 reporting 15.3gpt Au over 6.5m. This program is expected to commence in September.

Hedenquist Consulting Inc. provides consulting to major international mining companies on exploration for and assessment of hydrothermal ore deposits (Au, Cu) and geothermal energy systems. Dr. Jeffrey Hedenquist has over 24 years of experience in over 30 countries, and is an advisor to the U.S. Geological Survey and to the governments of New Zealand, Japan and Sweden. Additionally, Dr. Hedenquist has published extensively and holds adjunct professorships with Colorado School of Mines, USA, and University of Ottawa, Canada.

Smee & Associates Consulting Ltd. provides geochemical and geological consulting to major international mining companies encompassing field techniques, sampling programs, training, analytical methods, statistical manipulations, data presentation and interpretation. Specialization includes methods suitable for detecting blind deposits, geochemical data imaging, data base and analytical quality assurance and control programs, including the manufacture of standards, and laboratory audits. Dr. Barry Smee has over 35 years of international experience with mineral deposit types which include porphyry copper, volcanogenic massive sulphide, stratabound massive sulphide, skarn precious and base metal, iron formation gold, vein and shear gold, epithermal gold, and unconformity-associated uranium. Dr. Smee’s work has been published extensively.

Latin American Minerals is a mineral exploration company focused on the acquisition and development of mineral projects in under-explored but highly prospective countries of Latin America.

This news release contains forward-looking statements, which can be identified by the use of statements that include words such as “could”, “potential”, “believe”, “expect”, “anticipate”, “intend”, “plan”, “likely”, “will” or other similar words or phrases. These forward-looking statements, including statements regarding the Corporation’s beliefs in potential mineralization, are based on current expectations, assumptions and projections about future events and entail various risks and uncertainties that are beyond the Corporation’s ability to control or predict. Actual results may materially differ from expectations as more information regarding a property is gathered or if the Corporation’s estimates or assumptions prove inaccurate. Factors that may materially affect actual results include, but are not limited to, political, business and economic conditions in jurisdictions where the Corporation conducts business, and risks associated with mineral exploration and production. The Corporation does not intend, and does not assume any obligations, to update forward looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities law. Readers should not place undue reliance on forward-looking statements.

The TSXV has not reviewed and does not accept responsibility for the adequacy or the accuracy of this release.