"There were two white lights, as bright as that street lamp," says Jorge Pablo Lopez, pointing across the road. "They were high up, about 1,000 metres. The lights moved west, stopped, turned and moved north. There was no sound."

Spend even a little time in Capilla del Monte and you become aware that just about everyone in this laid-back little Argentinian town has a story like this. For we are in Latin America's UFO capital, where strange lights in the sky, crop circle-like phenomena and mysterious energy fields are what locals gossip about.

Lopez, the friendly owner of our hostel, says his Close Encounters experience took place in October 2010, about two years after he'd moved northwest from Buenos Aires, the nation's capital, to this Cordoba province town of some 10,000 people.

"It's very common to see lights moving in the sky," says Diego Malleo, another porteno, or native of Buenos Aires, who runs guided tours into the surrounding hills. He advises us to scan the night sky above 1,949-metre-high Cerro Uritorco, the summit of which is a four-hour hike from town. Between 8pm and 9pm is the best time, he reckons. Friends, his brother and his girlfriend have all seen the lights, he says.

Capilla del Monte (pronounced capi-sha del mon-tay), "chapel of the mount" in Spanish, is 110 kilometres north of the university city of Cordoba, at the base of the Sierra Chica mountain range and in an area prone to droughts and wildfires. In some ways, it's like many rural Argentinian towns; there are few cars, the streets feel safe and almost everything shuts down for the afternoon siesta. It also has a Malvinas Street, named after the disputed islands in the South Atlantic the British call the Falklands.

Look a little closer, however, and you begin to notice small aberrations: the smell of incense; shops selling crystals that, it is claimed, channel energy; a homeopathic pharmacy; a cabina de ozone.

Sitting down for lunch at a restaurant that serves vegetarian dishes - almost unheard of in a country where the weekend asado, a family celebration of red meat and red wine, is a national institution - we notice that the woman at the next table is giving tarot-card readings.

Some two kilometres north of Capilla del Monte, the multi-domed Templo Shiva Shakti runs "tantra-yoga" and tantric philosophy classes while, according to the town's free tourist map, zen meditation is taught at the Templo Zen Shobogenji.

Capilla del Monte has experienced a significant influx over the past decade, according to townsfolk: portenos escaping crime and poverty in the capital, some 880 kilometres away; those drawn to the leisurely pace of life among these arid hills; and the alternative-lifestyle crowd - from the herbal tea and tofu brigade to those who believe this is a place of inter-dimensional portals and subterranean civilisations where Nazi archaeologists sought ancient artefacts, Raiders of the Lost Ark-style.

Many people are drawn to Capilla del Monte after having received a "call in their minds", says Miguel Angel Gomez Pombo, who runs a little souvenir shop in town. The area radiates a special energy that can't be explained by science, he says.

When Pombo isn't selling UFO-themed T-shirts, mugs and stickers to tourists, he runs Proyecto Catent, a project investigating sightings of unidentified craft and other reports of unusual incidents in the area. The lights seen above Capilla del Monte cannot be on aircraft since there are no flight paths in the area, he says, with the certainty of a man who spends many hours thinking about this sort of thing.

Such conviction can be infectious; we begin to scan the skies.

Not that you have to get a cricked neck to see an alien; bug-eyed extraterrestrials stare at you from signboards and posters, leaflets, window displays and outside shop doorways. The critters are even suspended from ceilings. A huge saucer-shaped silver object hovers permanently over the El OVNI bar and restaurant, next to Ruta Nacional 38, the highway linking the town to the rest of the planet.

OVNI is Spanish for "UFO" and on the menu is the " hamburguesa cosmica".

Visitors can drop in to the Museo OVNI ("all about UFOs and other mysteries") and pay calls on the gleaming pyramid-shaped buildings that dot the dusty rural landscape. These "viewing platforms" - in truth, cunningly disguised gift shops - may have been designed to attract curious tourists, but a conspiracy theorist could think otherwise.

The organisers of a four-day festival in February coax aliens young and old to parade through the town's main street. The best-dressed wins a cash prize.

A smiling green extraterrestrial on the porch welcomes you to a one-storey house with a little lawn tucked away in a quiet side street. A hand-painted, weather-stained wooden sign outside the front gates lets visitors know they're at the Centro de Informes OVNI. The centre compiles reports of UFO sightings from around the world and hosts an annual conference for researchers.

Inside, in a cluttered front room, hangs a framed reprint of a Roswell Daily Record front page (headline: "Gen. Ramey Empties Roswell Saucer"). In 1947, an airborne object some believe was an alien craft crashed in Roswell, in the American state of New Mexico.

"Unfortunately there are people selling the UFOs," says researcher Luz Mary Lopez, on the attempts by others to cash in. "This is not an issue that can be presented like a circus. We are dealing with technology that is beyond our imagination."

So it's in the spirit of serious scientific investigation that my partner and I decide to conduct our own research. A discreet observation post is established at a table outside the Shangri-la cafe, a relaxed watering hole at the southern end of Diagonal Buenos Aires, Capilla del Monte's partially covered main street, where several hours can easily slip away while you read or watch the world go by.

The central location allows a clear view of the imposing peak of Uritorco, to the east - ground zero for many of the eyewitness accounts.

It's a warm Tuesday evening and there's hardly a cloud in the sky. Conditions are favourable. Following Malleo's advice, our surveillance starts at 6pm, as the town enters the twilight zone.

Three hours - and several bottles of Cordoba Dorada, the local brew, some pasta and a pizza - later, our undercover operation stands down, as darkness envelops the distant peaks. Our findings: no strange lights seen, no unusual energy fields detected and no life-changing revelations revealed.

If the mountain of mystery holds any secrets, it isn't surrendering them this evening.


Getting there: United Airlines (www.united.com) flies from Hong Kong to Newark Liberty International Airport, and from there on to Buenos Aires. Aerolineas Argentinas (www.aerolineas.com.ar) operates flights from the Argentinian capital to Cordoba. The only way to get to Capilla del Monte is by road. It's about three hours by intercity bus from Cordoba.