Latin American Minerals Incorporated (LAT-TSXV)
March 4, 2011 Issue
The Most Powerful Name In Corporate News and Information
Canadian Resource Company Latin American Minerals Inc. is Leading Gold and Diamond Exploration in Paraguay, an Emerging Minerals District
Latin American Minerals Inc. is a well-financed mineral exploration company focused on the acquisition and development of base and precious metals projects in highly-prospective countries within South America.
Miles Rideout, B.Sc.
President & CEO
CEOCFO: Mr. Rideout, you have a long history in the industry; what attracted you to Latin American Minerals?
Mr. Rideout: I had been working as a geophysical consultant for Latin American Minerals for the last five or six years. I saw that Latin American was consistently generating high quality projects, doing a very effective evaluation and then moving on to new quality projects. When I came in as CEO of Latin American, I was aware that the pick of this crop were three excellent mineral prospects in Paraguay and Argentina.
CEOCFO: Latin American Minerals describes itself as a dynamic company; what is the focus?
Mr. Rideout: While Mexico and Peru have typically received the largest exploration investment in Latin America, there are neglected areas with excellent geology and good political and social conditions for mine development. Our company uses its broad experience across South America to explore in these emerging areas.
Paraguay has attracted Latin American because of its excellent geology and relatively low development costs. We have evaluated many projects in Argentina and have retained a very good prospect there.
CEOCFO: Paraguay is not often mentioned with other exploration countries in Latin America; what is the mining atmosphere and would you tell us about your project?
Mr. Rideout: Paraguay is an interesting place. It is almost off the map in terms of global development. It has a booming agricultural economy however and life there is pretty quiet and easy. This is probably why Paraguay has lagged in industrial development.
Why mining companies have neglected Paraguay is a bit of a mystery; we see excellent geology. I suppose that the focus of historic exploration has been in the cordillera and in traditional mining regions of the Americas.
Without mountains in Paraguay, we don’t have the mountain-forming processes of Mexico, Peru and Chile, etc. Mountain-forming creates important geologic mechanisms for concentrating minerals.
The primary mineralizing processes of Paraguay derive from events that occurred during the break-up of the ancient single super-continent. As a result, Paraguay’s gold and diamonds are similar in origin to the deposits in southwest Africa. Paraguay has an excellent potential but it is distinct from what we see in much of South America.
CEOCFO: What is the government like in Paraguay?
Mr. Rideout: The regulations of Paraguay strongly favor business investment with low taxes and tariffs and no royalty on mine production. It is a very easy place for a foreign company to invest and develop an attractive enterprise.
Paraguay can afford these low taxes because it still has small government and very basic spending on social programs. Although it has an agricultural landscape and associated infrastructure, Paraguay has also developed a massive hydroelectric project at its northern border with Brazil.
CEOCFO: Would you tell me about your project in Paraguay; what is happening on the ground today?
Our flagship project is named Paso Yobai. It is a structural gold system
with, to date, two mineralized trends. The discovery trend is about 8
kilometers long and several kilometers to the north there is a second trend
11 kilometers long. The footprint of the mineral system is approaching 100
There is obviously a very powerful mineralizing system in this area. On the discovery trend, there is a strong soil gold anomaly about 4.5 kilometers long. We have done reasonably intensive exploration to date over only 1.5 kilometers of this target and the remaining 3 kilometers is little explored with very limited drilling.
Latin American is doing deeper and in-fill drilling along the Discovery Zone where exploration focused in the past. We are also trenching and mapping over the outer areas that have not yet been intensively explored. We are preparing them for the next phase of drilling.
newer 11 kilometer trend features 5 discreet geochemical gold anomaly
targets. These are large soil anomaly targets indicating gold
mineralization. We are developing these targets with auger-hole sampling and
trenching. I anticipate we will have permitting to drill some of these
targets before the end of the year.
CEOCFO: Do you have the personnel you need for your project?
Mr. Rideout: Our development team largely consists of Paraguayan professionals. They are extremely motivated, extremely well prepared for this job and they love the project. We prefer to employ Paraguayans to encourage local support for the project.
Of course, when we need them, we will bring in foreign consultants for some technical details. Our management is largely composed of experienced mineral exploration technocrats; we have high confidence in the Paraguayan development team and our consultants.
CEOCFO: It is very interesting to be involved in this kind of a project!
Mr. Rideout: It is; I love visiting Paraguay. Firstly, it is a beautiful country. Secondly, the geological evidence we see at Paso Yobai is truly impressive. Latin American has made more than a dozen large mechanized trenches, excavated to a 13 or 14 meters depth. You can take a penknife to the wall of the trenches and dig out little bits of this soft material with visible gold flakes. After working on hundreds of gold projects, I haven’t previously witnessed this quantity of visible gold.
CEOCFO: What is happening in Argentina?
Mr. Rideout: In Argentina, we have the Tendal massive sulphide project in La Rioja Province, where we have a joint venture agreement with Votorantim Metais of Brazil.
They are the largest zinc producer in South America and I think the fourth largest in the world. In the last two decades, they moved beyond the limits of Brazil, purchasing several zinc projects in Peru. Votorantim is now looking hard at Argentina and is focusing on Latin American’s Tendal project. Their JV commitment allows them to earn in 51% of our project by spending $4.5 million on exploration and development over the next three years. They are conducting an aggressive program combining relatively deep geophysical exploration and extensive drilling.
CEOCFO: What is the financial picture like for Latin American Minerals today?
Mr. Rideout: We have today about $11 million in the bank. After exhausting our treasury in 2008, we applied a financing strategy whereby we established and developed a lithium project with private backing. We spun the project off in exchange for shares and, late last year, sold those shares, receiving $12.5 million. It was a drawn out process and it meant that the company was essentially inactive, or with restricted activity on our core projects, for about eighteen months.
CEOCFO: That is a nice cash position for a company in your sector; you rarely hear that at all!
Mr. Rideout: I entered the company about five months ago and fortunately, most of the hard work was done prior to my direct involvement.
I’d like to add that we have two additional projects in Paraguay, one of which is a first-rate diamond prospect. We have just completed a letter of intent with Olivut Resources, a Canadian diamond exploration company. This will produce an option agreement whereby Olivut can earn 50% of our Itapoty diamond project by funding and executing the diamond exploration over the next thirty months.
55 diamonds have been recovered to date at Itapoty. Latin American has focused on assembling a large exploration concession, so that the probable sources of these diamonds will be found within our property limits. Due to the size of the project and the probability of multiple diamond sources, it was prudent for us to team with a technically astute diamond company. This represents a great joint venture opportunity, now with better technical resources and additional financial resources to take on this very serious, very large-scale diamond project.
CEOCFO: In closing, why should investors pick Latin American Minerals out of the crowd?
Mr. Rideout: The key point would be we have several outstanding projects. We have selected very good joint venture partners on two of our leading projects so they are investing their capital and they are applying their technical ability in areas where they are specialists.
Additionally Latin American Minerals is taking on and developing our large scale Paso Yobai gold project. This project is now permitted for mining and a small mine operation will begin within months.
Finally, because the company was inactive for eighteen months, the stock is
depressed, only beginning to recover now. I anticipate our market value will
have a very good trajectory as investors learn about the company, and as we
publish results from the gold project and our joint ventured massive
sulphide and diamond projects.
I had been working as a geophysical consultant for Latin American Minerals for the last five or six years. I saw that Latin American was consistently generating high quality projects, doing a very effective evaluation and then moving on to new quality projects. When I came in as CEO of Latin American, I was aware that the pick of this crop were three excellent mineral prospects in Paraguay and Argentina. - Miles Rideout, B.Sc.
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