Latin American Minerals will support exploration on prolific ground with impending production

Within the next three months Latin American Minerals Inc (CVE:LAT) should be established as a small-scale seller of gold produced in Paraguay.

The company’s processing plant at the Independencia mine may have had its teething problems on re-start, but those are now past and Latin American’s chief executive Basil Botha is confident that cash flow is about to start rolling in.

“The plan is that three months from now we’ll be producing 300 ounces of gold per month,” he says.

The idea initially is that the plant will process 85,000 tonnes of previously mined material grading around 0.84 grams per tonne.

Because it’s already been mined, costs per ounce of production are likely to be low. Exactly how low won’t become clear until the plant has been running for some time. But certain signs are there.

“Much of the material runs at 99% pure gold,” says Botha. By that, he means it’s free gold which only needs gravity to separate it from the surrounding ore, rather than chemical processing, which in turn means that as long as the Latin team balances its gravity circuits right, all that’s needed now is the application of a little power and a little water.

As for the rest of the material, there’s a plan for that too.

“Anything that comes through the gravity circuits goes on to the cyanide leach, where we pick up our concentrate, melt it and come up with ingots.”

It’s not quite pure gold that Latin American will end up producing, but it’s close enough that a serious buyer in Miami has signed on the dotted line and agreed to take product at a slight discount.

“We will ship them 87% gold with a little bit of silver,” says Botha. “There’s no copper, so no contaminant.”

With that little operation and the cash that will come in as a result of it, Latin American will be free to look up and around for other opportunities. Two are already in the companies sights.

First, there’s the plethora of tailings dumps in the wider region. Conceivably these could provide material for the Independencia plant for the foreseeable future, in turn providing cash flow to support the second ongoing opportunity – exploration.

In fact, the exploration around the Paso Yobai project is the real prize, as Botha emphasises. As far as specifics are concerned he’s more able to talk about grade than overall size, although the footprint looks big.

And the grades certainly are encouraging.

As recently as last month at the Discovery site, the company drilled 7.34 metres at 37.94 grams per tonne, with significant showings of visible gold.

That compares well with intercepts the company hit 7 kilometres away at Tacurú, which ran as high as 94.6 grams over 2.6 metres and 107.7 grams over 3.3 metres.

The trick now will be to work out just how the geology works and how it all links up.

“It’s an alkaline system, so it will be difficult,” concedes Botha.

“But we know that throughout this 90 square kilometres that we’ve got that the rocks at the Discovery site and the rocks at Tacurú are identical. So we know it’s prolific. We just need to identify where the feeder zones are. The intention is to fund the drilling from production if all goes well. We’re just steadily running the drill.”

To tide the company over though, until that first production comes hot out of the plant, a placing of units to raise up to C$1.6 mln is underway.

That ought to close out without any trouble and then after that, keep your eyes peeled for a steady flow of production and exploration news.

Story by ProactiveInvestors