Latin American falls on Paso Yobai results (January 14, 2008)

Vancouver — The first assay results fromLatin American Minerals’(LAT-V, LATNF-O) new Paraguayan gold venture show the project has potential. Investors were less than enthusiastic about the news, however, likely because the announcement did not make it clear that higher-grade results are yet to come.

Latin American kicked off a planned 5,000-metre drill program at Paso Yobai in October. In mid-December, the company announced visible gold in a 6-metre section of quartz-carbonate veins and stockworks. Since then, Latin American’s share price had climbed to $1.27 from a 52-week low of 34.5.

In early January, the company released assay results from two of the 12 holes completed to date. Hole 1, drilled from the bottom of a small prospector pit called Guaira, returned 10 metres grading 1.03 grams gold per tonne from 92 metres down-hole, including 2 metres grading 4.23 grams gold. Collared 650 metres southeast along strike, also from the bottom of a small prospector pit, hole 6 intersected 6 metres grading 11 grams gold from 112 metres depth, including 1 metre of 30.77 grams gold and another grading 24.59 grams gold.

Though the results are positive, Latin American’s share price dropped 35 or 28% on the news, closing at 92 on 3.6 million shares traded. But investor disappointment was likely just confusion. Shareholders were anxiously awaiting assay results from the sections containing visible gold, but those have to be assayed using metallic assay procedures, which take longer than the conventional gold assay methods used to grade the rest of the core, and therefore are not yet complete.

Thus, the latest release only included results from the sections without visible gold. The release explained the metallic screen assays are yet to come, but did not underline the point, and Latin American president and CEO David Wahl thinks the fine print got lost.

“It looks like that’s what happened: people don’t realize that the visible gold core results are not in there,” he says, adding that he hopes the company will make up the lost ground when those results do emerge in a few weeks. “And anyway, we’re quite frankly very excited about the results, and most of the mining analysts who have been following us are quite pleased, so that’s that.”

The 6-metre section of hole 1 that contained visible gold started 86 metres down-hole, directly above the 10 metres of disseminated sulphides that returned 1.03 grams gold. The company also saw visible gold in drill hole 11.

All 12 holes drilled to date intersected the mineralized body, with intercepts ranging in width from 3 to 10 metres. Latin American has defined the gold-bearing mineralized zone along strike for at least 4 km, with a further 2 km indicated by soil geochemistry, and to a depth of 120 metres.

Paso Yobai is a high-level lowsulphidation epithermal system related to an alkalic suite of rocks. Gold typically occurs in association with quartz-sulphide mineralization (gold within pyritecrystals) and in native form within thin quartzpyrite and quartz-manganese vein systems near the contact of mafic dykes and the sandstones.

The company is earning a 70% interest in the project by making staged payments of US$2.1 million over three years, issuing 100,000 shares and spending US$500,000 on exploration over the first year.