PUERTO EDEN, Chile (Reuters) – Hawking sea lion skin souvenir canoes at one of South America's most remote outposts, Francisco Arroyo is among the last members of a Patagonian tribe staring down the barrel of extinction.

The elderly Arroyo recalls wending the icy channels and fjords of southern Chile's Patagonia region with his father as a boy, tending a fire lit on dried earth on the bottom of their canoe and diving naked for giant mussels to survive.

With only an estimated 12-20 pure-blooded members of his nomadic Kawesqar tribe surviving, most of them elderly, another of the far-flung region's tribes will soon disappear.

"It ends with our generation," Arroyo said, huddling against chill wind and spitting rain in a polar fleece and hat on a wooden walkway that skirts the tiny fishing port of Puerto Eden on an island around 1,300 miles south of the capital, Santiago.

Arroyo does not know how old he is. A state census hazarded a guess, assigning him a birth date that makes him 66.

"We are old now. We can't go out in the channels any more. I am not sad. Life is easier now," he said in Spanish, as European tourists in bright orange life vests paid a lightning visit to the far-flung settlement of 120 people, reachable only by boat or helicopter.

He sold a few trinkets, earning less than $10.

His ancestors lived in their canoes, even sleeping and cooking in them, wearing nothing other than a piece of sea lion skin on their backs and smothering themselves in grease and fat when diving for food.

TRIBE RAVAGED BY ILLNESS

As with the tribe of Yaganes further south, of which only one pure-blooded member now survives in Chile, and Indian tribes from the Amazon to Asia, outbreaks of respiratory illness through contact with Europeans and hunters devastated the Kawesqar in the 19th century and again in the 1940s.

"They are in decline because the historic causes (illnesses) have continued until relatively recently," said Eugenio Aspillaga, a bio-anthropologist at the University of Chile.

"Another factor is restrictions on their movement," he added, referring to a program in the 1960s to settle survivors in Puerto Eden. "There is a lesson in survival and human adaptability that we are losing. It is a part of humanity we neither know nor understand."

The youngest full-blooded tribe members are two brothers aged around 40. One married outside the tribe. Oscar Aguilera, an ethno-linguist and leading authority on the Kawesqar who has compiled a dictionary of their language to help preserve it, estimates there are 200 people of mixed Kawesqar descent.

"Their culture is becoming extinct, and their language is also in danger," said Aguilera, who has studied the tribe since 1975.

"Once the few survivors in Puerto Eden disappear, the oldest ones, then the culture will be lost and the tongue will no longer be spoken," he added.

Puerto Eden is a smattering of tiny, brightly colored wood and corrugated sheet metal houses set among dense scrub in the shadow of snow-encrusted Andean peaks.

Many residents who moved to the area in search of work in the fishing industry disagree, but the nearest town is an overnight boat trip away and only one ship passes a week, meaning they are cut off from the rest of the world.

"I never liked it," said 32-year-old Luisa Chiay, who grew up in Puerto Eden but later moved to the town of Puerto Natales further south, where her daughter goes to school.

Chiay, who descends from Chile's most populous indigenous group, the Mapuche, returns for weeks at a time to drive a launch as her brother dives, in full diving suit, for shellfish.

"It's so isolated. There is too much silence. The education is poor. If you fall ill, there is no hospital nearby," she added.

Her sister died eight years ago from a heart attack in Puerto Eden. No ship was passing to carry her for treatment.

(Editing by Kieran Murray)