But I came here for a grand opening!

Instead of the pomp of a new mine opening, Latin American Minerals (LAT-V) dashed investors hopes of any ceremony by announcing that it was suspending operations at what was set to become Paraguay’s first modern gold mine.

The extreme measures came after local groups, made up largely of artisanal miners,
blocked off entry to the Paso Yobai mine and attacked company officials, forcing them to sleep overnight in the plant for protection.

Reuter’s quotes the company’s manager at the site, Juan Carlos Benitez, as blaming regional political interests for the attack.

“We won the government bid and they want to kick us out and take over the deposit,” Benitez was quoted as saying.

Latin America announced it had successfully built the pilot plant back in December and was set to get it running at 100 tonnes per day this month.

The project, which sits roughly 200-km southwest of the Paraguay’s capital, Asuncion, was to have a plant running near a deposit without a compliant resource. But Latin American says the plant was built at such an early stage to help it evaluate the main prospective area on the property – the Discovery Trend.

The trend is characterized by coarse gold mineralization extending from surface to greater than 100 metres. Drilling over 2011 returned highlight intercepts of 26.6 grams gold over 6.5 metres.

The company says its strategy is to use trenching and diamond drills to locate mineral shoots and then verify the grades of zones by bulk sampling.

Local miners area afraid that the processing plant will spell the end of their work, but one of the chief reasons that Latin American was awarded the rights to the land was so that a modern processing plant would bring an end to the artisanal use of mercury in the gold extraction process.

Within Paraguay, the company has been accused of only hiring artisanal miners temporarily and mining gold with out properly declaring it. The company denies the charges.

In Toronto on Weds. Feb. 1 Latin American shares were off 6¢ or 22% to 21¢ on 246,000 shares traded.