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While most of the world is full of too many people squabbling over not enough land, Chile still has a frontier.

There you can lie in hot springs, watching the steam rise to meet rain falling on a forest-covered mountain. There may be more hot springs on the other side of the mountain, but no one knows because it hasn`t been explored. The frontier is the vast south of Chile, the Patagonian wilderness that leads down to the tip of the South American continent, to places with names like Isla de Desolacion (Desolation Island) and Tierra del Fuego (Land of Fire).

Until recently, you could reach the area only by riding a horse over the vast pampas, by sailing along its coasts or by flying. But Chile is now building the President Pinochet Longitudinal Southern Highway, heading south into Patagonia from Puerto Montt.

The ”highway” is just a gravel road, and it is frequently interrupted by bridges and ferry crossings, slowing the trip but providing beautiful views. Almost 750 miles of the road have been completed in the 15 years since it was started, and about 120 miles are left to be constructed, at the southern end. For the moment it is possible to drive as far as Villa O`Higgins, a village named after Chile`s independence hero, Bernardo O`Higgins.

The drive passes magnificent scenery: volcanic mountains covered by rain forests at their feet and by snow at their summits, deep fjords, glaciers and fishing villages tucked into wide bays. The first sizable town south of Puerto Montt is Chaiten, with a population of 4,000 and one good hotel, Mi Casa, on a hill overlooking the town.

Soak and supper

About 15 miles down the highway from Chaiten are the hot springs of Rio Amarillo. Entrance to the springs (about $4) gets your own hut above a small, clean swimming pool that is continuously refilled with hot water from the springs. You can soak for as long as you like, then relax further over a candlelit dinner in the log-cabin restaurant next to the springs.

The owner of the restaurant told me that he believes there are also hot springs on the other side of the volcanic mountain, but there is no reasonable way to get to them through the thick forest.

Farther south (about 400 miles from Puerto Montt) is the town of Coyhaique, with superb salmon fishing in rivers nearby. For rainbow trout fishing and more spectacular scenery, go on to Lake Gen. Carrera, the second- largest lake in South America.

There are small hotels and guest houses at reasonable intervals along the highway, but many have hot water only when you ask the owners to turn on the gas heater and some have none at all.

Since the region is cold and wet for much of the year, it is wise to buy an inexpensive, thick sweater made from the local chilote wool before leaving Puerto Montt. When the southern summer sun comes out (in our winter), the countryside glows and the temperature climbs into the 70s.

For another view of the region, and to get farther south, you can travel by sea. Luxurious cruise ships that sail south from Puerto Montt to the famous and spectacular San Rafael glacier, more than 200 feet high and more than a mile wide, can be booked through U.S. travel agents.

Less-expensive boats and car ferries can be booked in Puerto Montt. Advance booking is usually not necessary, and all the lines have offices in Puerto Montt and in Chaiten.

For trips to Antarctica, book cruise ships well in advance from the United States or travel first to Punta Arenas, the southernmost city in the world, where several organizations-including the Chilean Navy-offer trips. Do not count, however, on being able to go on immediately from Punta Arenas, because the cruises are relatively few but popular.

If you are curious but not so ambitious, a good route in southern Chile would be to travel by ferry or plane from Puerto Montt to Chaiten. From Chaiten take a ferry across to the 120-mile-long island of Chiloe.

Monsters and maidens

On Chiloe, you will find picturesque fishing villages, magnificent seafood, comfortable hotels, and colorful history, real and mythical. Charles Darwin visited the island, and current residents report that it is constantly visited by monsters and beautiful maidens dancing on the sand at night.

From the northern end of Chiloe, there are buses that drive directly onto ferries to take you back to Puerto Montt.

Puerto Montt is just as good a starting point for trips headed into the Chilean lake district as for trips farther south. You can rent a car there

(Hertz, Budget and local companies have offices downtown) or travel by bus. Only about 40 minutes north of Puerto Montt is the picturesque town of Puerto Varas, on the edge of Lake Llanquihue.

Across the lake you can see the snow-covered volcanoes of Osorno and Calbuco, and in town you can admire elegant gardens and architecture influenced by the large number of German immigrants who began arriving in southern Chile more than a century ago.

There are innumerable other lakes nearby, but do not miss the Lago Todo Los Santos, which is a startling emerald green because of volcanic minerals running into it. At the nearby Saltos de Petrohue, the same green water flows over volcanic rock to form waterfalls.

Driving along all of the lakes is beautiful because they are surrounded by pine forests. You are deep in the trees one minute and gazing out over the water the next.

Frutillar, a little farther north along Lake Llanquihue, is a small, manicured, excessively touristy town, but it hosts an interesting classical music festival in late January and early February. It is also worth a side trip any time for its German pastries, especially the kuchen at the Vista Hermosa guesthouse in Bajo Frutillar, overlooking the lake.

Plan to spend several days wandering the lake district if possible, dining on fresh fish and munching pastries while gazing at the snow-topped volcanoes. You can return to Santiago easily by car, bus, train or by plane from Puerto Montt.