FORM 10Q

0001023175-10-000252.txt : 20100816 0001023175-10-000252.hdr.sgml : 20100816 20100816170543 ACCESSION NUMBER: 0001023175-10-000252 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20100630 FILED AS OF DATE: 20100816 DATE AS OF CHANGE: 20100816 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Tara Minerals Corp. CENTRAL INDEX KEY: 0001387054 STANDARD INDUSTRIAL CLASSIFICATION: METAL MINING [1000] IRS NUMBER: 000000000 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 333-143512 FILM NUMBER: 101020801 BUSINESS ADDRESS: STREET 1: 2162 ACORN COURT CITY: WHEATON STATE: IL ZIP: 60187 BUSINESS PHONE: 630-462-2079 MAIL ADDRESS: STREET 1: 2162 ACORN COURT CITY: WHEATON STATE: IL ZIP: 60187 10-Q 1 tmjun30201010qterri.htm QUARTERLY REPORT ON FORM 10Q FOR THE PERIOD ENDED JUNE 30, 2010 FORM 10Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

R QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2010

£ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION FROM __________ TO __________.

COMMISSION FILE NUMBER 333-143512

TARA MINERALS CORP.

(Exact Name of Registrant as Specified in its Charter)


Nevada		20-5000381
(State or other jurisdiction of		(I.R.S. Employer
incorpor ation or organization)		Identification No.)

2162 Acorn Court
Wheaton, IL		60189
(Address of principal executive offices)		(Zip code)

Issuer's telephone number: (630) 462-2079

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes R No £

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§233.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes £ No £

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer o	Accelerated filer o
Non-accelerated filer o	Smaller reporting company þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes £ No R

As of August 16, 2010, the Company had 54,630,981 outstanding shares common stock.

TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION	Page

Item 1. Financial Statements	3
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	20
Item 4T. Controls and Procedures	21

PART II - OTHER INFORMATION

Item 1. Legal Proceedings	22
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	22
Item 3. De faults Upon Senior Securities	22
Item 4. [REMOVED AND RESERVED]	22
Item 5. Other Information	22
Item 6. Exhibits	22

SIGNATURES	23

PA RT I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

TARA MINERALS CORP. AND SUBSIDIARIES

(A Subsidiary of Tara Gold Resources Corp)

(An Exploration Stage Company)

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR

THE SIX MONTHS ENDED

JUNE 30, 2010 AND 2009

AND

THE PERIOD FROM INCEPTION (MAY 12, 2006) THROUGH JUNE 30, 2010

TARA MINERALS CORP. AND SUBSIDIARIES

(A Subsidiary of Tara Gold Resources Corp)

(An Exploration Stage Company)

CONDENSED CONSOLIDATED BALANCE SHEETS


		June 30,		December 31,
		2010		2009
Assets		(Unaudited)		(Audited)
Current assets:
Cash	$< /p>	43,016	$	1,230,376
Recoverable value added taxes, net of allowance for bad debt of $155,290 and $114,139 at June 30, 2010 and December 31, 2009, respectively		1,238,726	1,618,345
Other receivables		86,180		42,496
Total current assets		1,367,922		2,891,217

Property, equipment, mine development and land net of accumulated depreciation of $150,703 and $67,008 at June 30, 2010 and December 31, 2009, respectively		7,993,873		11,087,282
Mining deposits		25,398		25,000
Goodwill		12,028		12,028
Other assets		62,834		18,784
Total assets	$	9,462,055	$	14,034,311

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	47,013	$	17,320
Accrued expenses		439,699		184,488
Notes payable, current portion, net of discount of $134,377 and $0 at June 30, 2010
and December 31, 2009, respectively		915,630		945,814
Note payable related party, current portion, net of discount of $25,244 and $0 at
June 30, 2010 and December 31, 2009, respectively		24,756		-
Due to related parties, net		2,941,329		2,331,530
Total current liabilities		4,368,427		3,479,152

Notes payable, non-current portion		1,004,762		5,273,604
Total liabilities		5,373,189		8,752,756

Commitments and contingencies		-		-

Stockholders’ equity:
Common stock: $0.001 par value; authorized 75,000,000 shares; issued and outstanding 54,630,981 and 51,036,092 shares at June 30, 2010 and December 31, 2009, respectively		54,631		51,036
Additional paid-in capital		19,789,220		9,886,201
Deficit accumulated during exploration stage		(17,384,195)		(6,123,835)
Other comprehensive loss		(209,293)		(140,016)
Total Tara Minerals stockholders’ equity		2,250,363		3,673,386

Non-controlling interest		1,838,503		1,608,169
Total Equity		4,088,866		5,281,555
Total liabilities and stockholders’ equity	$	9,462,055	$	14,034,311

See Accompanying Notes to these Condensed Consolidated Financial Statements.

TARA MINERALS CORP. AND SUBSIDIARIES

(A Subsidiary of Tara Gold Resources Corp)

(An Exploration Stage Company)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND

COMPREHENSIVE LOSS

(UNAUDITED)

< /tr>


	For the Three Months Ended		For the Six Months Ended		From Inception
	June 30,		June 30,		May 12, 2006 to
	2010	2009	2010	2009	June 30, 2010

Mining revenues:	$ 37,775	$ -	$ 37,775	$ -	$ 37,775

Cost of revenue:
Exploration expenses	292,679	42,355	1,888,650	52,384	2,339,508

Operating, general, and administrative expenses:
Operating, general, and administrative expenses	2,570,705	628,618	9,685,754	810,553	14,485,532
	2,570,705	628,618	9,685,754	810,553	14,485,532

Net operating loss	(2,825,609)	(670,973)	(11,536,629)	(862,937)	< p style="PADDING-LEFT:5px; MARGIN:0px" align=right>(16,787,265)

Non-operating (income) expense:
Interest (income)	(6,142)	(6,637)	(12,836)	(13,517)	(122,476)
Other (income)	(27)	(1,045)	(1,056)	(25,304)	(779,851)
Interest expense	34,694	4,626	34,915	4,716	1,796,554
Gain on debt extinguishment	(6,138)	-	(6,138)	-	(6,138)
	22,387	(3,056)	14,885	(34,105)	888,089

Provision (benefit) for income taxes	-	-	-	-	-

Net loss	(2,847,996)	(667,917)	(11,551,514)	(828,832)	(17,675,354)

Less: Non-controlling interest	291,154	-	291,154	-	291,159&nbs p;
Net loss attributable to Tara Minerals’ common shareholders	(2,556,842)	(667,917)	(11,260,360)	(828,832)	(17,384,195)

Other comprehensive (expense) income:
Foreign currency translation	(64,400)	94,899	(69,277)	46,863	(209,293)
Comprehensive loss	$ (2,621,242)	$ (573,018)	$(11,329,637)	$ (781,969)	$ & nbsp; (17,593,488)

Net loss per share attributable to Tara Minerals’ common shareholders, basic and diluted	$ (0.05)	$ (0.01)	$ (0.22)	$ (0.02)

Weighted average number of shares of common stock outstanding, basic and diluted	53,998,455	40,036,349	52,954,278	38,979,131

See Accompanying Notes to these Condensed Consolidated Financial Statements.

TARA MINERALS CORP. AND SUBSIDIARIES

(A Subsidiary of Tara Gold Resources Corp)

(An Exploration Stage Company)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

< td width=15 style=MARGIN-TOP:0px valign=top>


						From inception
		Six Months		Six Months		(May 12, 2006)
		Ended		Ended		through
		June 30, 2010		June 30, 2009		June 30, 2010
Cash Flows From Operating Activities:
Net loss	$	(11,260,360)	$	(828,832)	$	(17,384,195)
Adjustments to reconcile net loss to cash used in operating activities
Bad debt expense		493,696		-		611,667
Depreciation expense		83,695		9,067		182,627
Stock based compensation and bonus plans		3,642,041		135,500		4,935,714
Common stock issued for services		4,109,748		218,475		5,084,223
Non-controlling interest		(270,147)		4		(270,142)
Cancellation of common shares for settlement		-		-		(750,000)
Expense of mining deposit upon note modification		-		6,000		6,000
Accretion of beneficial conversion feature		31,924		-		1,726,924
Accrued interest converted to common stock		-		-	55,088
Exploration expenses paid with common stock		1,224,375		-		1,224,375
Gain on debt extinguishment		6,138		-		6,138
Changes in assets and liabilities
(Increase) in receivables		-		(8,796)		-
(Increase) in recoverable value added taxes		(170,346)		(216,716)		(872,749)
(Increase) in other receivables		(42,783)		-		(89,111)
(Increase) in other assets		(44,051)		(48)		(62,834)
Increase (decrease) in accounts payable		29,695		(11,574)		46,791
Increase (decrease) in accrued expenses		195,209		(57,204)		367,623
Net cash used in operating activities		(1,971,166)		(754,124)		(5,213,785)

Cash Flows from Investing Activities:
Acquisition of land		-		-		(19,590)
Purchase of mining concession		(25,149)		(23,450)		(830,309)
Payments made for construction in progress		-		(464,498)		(2,163,485)
Acquisition of machinery and equipment		(229,622)		(48,925)		(386,781)
Payments toward mining deposits		(398)		(558,760)		(31,398)
Cash included in business acquisition		-		2,037		2,037
Business acquisition goodwill		-		(3,758)		(3,758)
Net cash used in investing activities		(255,169)		(1,097,354)		(3,433,284)

Cash Flows from Financing Activities:
Cash from the sale of common stock		978,905		458,000		5,352,906
Payments toward notes payable		(711,452)		(110,462)		(1,180,503)
Payments toward equipment financing		-		-		(160,026)
Proceeds from notes payable, non-related parties		380,103		-		380,103
Proceeds from notes payable, related parties		50,000		-		50,000
Change in due to/from related parties, net		150,214		1,743,125		2,588,252
Non-controlling interest, net assets of subsidiary		260,482		-		1,868,646
Net cash provided by financing activities		1,108,252		2,090,663		8,899,378

Effect of exchange rate on cash		(69,277)		46,863		(209,293)

Net (decrease) increase in cash		(1,187,360)		286,048		43,016

Cash, beginning of period		1,230,376		21,012		-

Cas h, end of period	$	43,016	$	307,060	$	43,016

See Accompanying Notes to these Condensed Consolidated Financial Statements.

TARA MINERALS CORP. AND SUBSIDIARIES

(A Subsidiary of Tara Gold Resources Corp)

(An Exploration Stage Company)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(CONTINUED)

(UNAUDITED)


						From inception
		Six Months Ended June 30, 2010		Six Months Ended June 30, 2009		(May 12, 2006) through June 30, 2010
Supplemental Information:

Interest paid	$	25,649	$	23,450	$	154,309
Income taxes paid	$	-	$	-	$	-

Non-cash Investing and Financing Transactions:

Purchase of mining concession paid by debt to related party
plus capitalized interest	$	-	$	(52,048)	$	1,281,655

Purchase of mining concession paid with notes payable plus capitalized
interest (current period movement due to note modification)	$	(3,324,485)	$	349,869	$	2,325,684

Recoverable value-added taxes incurred through additional debt and due
to related party (current period movement due to note modification)	$	(508,814)	$	(4,923)	$	521,267

Beneficial conversion value for convertible debt	$	-	$	1,695,000	$	1,695,000

Convertible debt converted to common stock, plus accrued interest	$	-	$	-	$	1,750,088

Purchase of mining equipment with common stock	$	-	$	-	$	600,000

Stock-based compensation issuance of common stock for equipment	$	-	$	-	$	1 ,164,173

Acquisition of property and equipment through debt	$	60,000	$	-	$	227,072

Construction in progress reclassified to property plant and equipment	$	2,163,485	$	-	$	2,163,485

Acquisition of property and equipment through debt	$	984,375	$	-	$	984,375

Warrants with debt	$	191,546	$	-	$	191,546

Business Combination of American Copper Mining:
Cash	$	-	$	(2,037)	$	(2,037)
Due from related parties		-		1,989		1,989
Goodwill (from net assets)		-		8,270		8,270
Accounts payable and accrued expenses		-		12,071		12,071

See Accompanying Notes to these Condensed Consolidated Financial Statements.

TARA MINERALS CORP. AND SUBSIDIARIES

(A Subsidiary of Tara Gold Resources Corp)

(An Exploration Stage Company)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1.

Nature of Business and Significant Accounting Policies

Nature of business and principles of consolidation:

The accompanying Condensed Consolidated Financial Statements of Tara Minerals Corp. (the “Company”) should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2009. Significant accounting policies disclosed therein have not changed, except as noted below.

Tara Minerals Corp. (the “Company”) was organized May 12, 2006 under the laws of the State of Nevada. The Company currently is engaged in the acquisition, exploration and development of mineral resource properties in Mexico. The Company owns 99.9% of the common stock of American Metal Mining, S.A. de C.V. (“AMM”), which was established in December 2006 and operates in México. The Company also owns 90% of the common stock of Adit Resources Corp. (“Adit”), which in turns owns 99.9% of American Copper Mining, S.A. de C.V. (“ACM”), which was established in December 2006 and operates in México. Adit was organized in June 2009 and ACM was purchased in June 2009. The Company commenced operations, but has not generated any significant revenue. As a result the Company is considered an Exploration Stage Company; in accordance with the Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) Development Stage Entities Topic,.

The Company is a subsidiary of Tara Gold Resources, Corp. (the “Company’s Patent”).

The accompanying Condensed Consolidated Financial Statements and the related footnote information are unaudited. In the opinion of management, they include all normal recurring adjustments necessary for a fair presentation of the condensed consolidated balance sheets of the Company at June 30, 2010, and the condensed consolidated statement of operations for the three and six months ended June 30, 2010 and 2009. Results of operations reported for interim periods are not necessarily indicative of results for the entire year. The consolidated financial statements include the financial statements of the Company, AMM, Adit and ACM. All amounts are in U.S. dollars unless otherwise indicated. All significant intercompany balances and transactions have been eliminated in consolidation.

The reporting currency of the Company and Adit is the U.S. dollar. The functional currency of AMM and ACM is the Mexican Peso. As a result, the financial statements of the subsidiaries have been remeasured from Mexican pesos into U.S. dollars using (i) current exchange rates for monetary asset and liability accounts, (ii) historical exchange rates for nonmonetary asset and liability accounts, (iii) historical exchange rates for revenues and expenses associated with nonmonetary assets and liabilities and (iv) the weighted average exchange rate of the reporting period for all other revenues and expenses. In addition, foreign currency transaction gains and losses resulting from U.S. dollar denominated transactions are eliminated. The resulting remeasurement gain or loss is recorded as other comprehensive income (loss).

The financial statements of the Mexican subsidiaries should not be construed as representations that Mexican pesos have been, could have been or may in the future be converted into U.S. dollars at such rates or any other rates.

Relevant exchange rates used in the preparation of the financial statements for the subsidiary are as follows for the six months ended June 30, 2010. (Mexican pesos per one U.S. dollar).


	June 30, 2010
Current exchange rate	Ps.	12.8394
Weighted average exchange rate for the six months ended	Ps.	12.6732

Allowance for doubtful accounts

Each period we analyze our receivables for collectability. When a receivable is determined to not be collectible we allow for the receivable until we are either assured of its collection or assured that a w rite off is necessary. At June 30, 2010 and December 31, 2009 we have allowed receivables relating to recoverable value added taxes of $155,290 and $114,139, since we have determined that the Mexican government may not allow the complete refund of these taxes.

Debt Discount

Debt premiums/discounts, fees paid by the debtor to the creditor(s) as part of the issuance of debt or warrants issued with debt, are accounted for as a direct reduction of or addition to the face amount of the debt (valuation account) as the discount or premium is inseparable from the debt giving rise to it.

Mexican Inc ome Tax Rates: Recoverable Value Added Taxes (IVA) and Income Tax (ISR)

Effective January 1, 2010 the Mexican government increased Impuest al Valor Agregado taxes (IVA) from 15% to 16% and Impuesto Sobre la Renta (ISR) from 28% to 30%. These financial statements reflect these increases.

Reclassifications

Certain reclassifications reported in prior records, which have no effect on net loss, have been adjusted to conform to the current presentation.

Fair Value Accounting

As required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The three levels of the fair value hierarchy are described below:


	Level 1	Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;


	Level 2	Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability;


	Level 3	Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (sup ported by little or no market activity).

Recently Adopted and Recently Issued Accounting Guidance

Adopted

In June 2009, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance for “Accounting for Transfers of Financial Assets,” which eliminates the concept of a “qualifying special-purpose entity,” changes the requirements for derecognizing financial assets, and requires additional disclosures in order to enhance information reported to users of financial statements by providing greater transparency concerning transfers of financial assets, including securitization transactions, and an entity’s continuing involvement in and exposure to the risks related to transferred financial assets. This guidance is effective for fiscal years beginning after November 15, 2009. The Company adopted this guidance for the period ended March 31, 2010. The adoption of this guidance did not have a material impact on the consolidated financial statements.

In June 2009, the FASB issued authoritative guidance amending existing guidance. The amendments include: (1) the elimination of the exemption for qualifying special purpose entities, (2) a new approach for determining who should consolidate a variable-interes t entity, and (3) changes to when it is necessary to reassess who should consolidate a variable-interest entity. This guidance is effective for the first annual reporting period beginning after November 15, 2009 and for interim periods within that first annual reporting period. The Company adopted this guidance for the period ended March 31, 2010. The adoption of this guidance did not have a material impact on the consolidated financial statements.

In January 2010, the FASB issued guidance to amend the disclosure requirements related to recurring and nonrecurring fair value measurements. The guidance requires new disclosures on the transfers of assets and liabilities between Level 1 (quoted prices in active market for identical assets or liabilities) and Level 2 (significant other observable inputs) of the fair value measurement hierarchy, including the reasons and the timing of the tra nsfers. The guidance became effective for the Company with the reporting period beginning January 1, 2010. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements.

In February 2010, the FASB issued amended guidance on subsequent events to alleviate potential conflicts between FASB guidance and SEC requirements. Under this amended guidance, SEC filers are no longer required to disclose the date through which subsequent events have been evaluated in originally issued and revised financial statements. This guidance was effective immediately and we adopted these new requirements for the period ended March 31, 2010. The adoption of this guidance did not have a material impact on our financial statements.

Issued

In October 2009, the FASB issued changes to revenue recognition for multiple-deliverable arrangements. These changes require separation of consideration received in such arrangements by establishing a selling price hierarchy (not the same as fair value) for determining the selling price of a deliverable, which will be based on available information in the following order: vendor-specific objective evidence, third-party evidence, or estimated selling price; eliminate the residual method of allocation and require that the consideration be allocated at the inception of the arrangement to all deliverables using the relative selling price method, which allocates any discount in the arrangement to each deliverable on the basis of each deliverable’s selling price; require that a vendor determine its best estimate of selling price in a manner that is consistent with th at used to determine the price to sell the deliverable on a standalone basis; and expand the disclosures related to multiple-deliverable revenue arrangements. These changes become effective on January 1, 2011. The Company has determined that the adoption of these changes will not have an impact on the consolidated financial statements, as the Company does not currently have any such arrangements with its customers.

In January 2010, the FASB issued guidance to amend the disclosure requirements related to recurring and nonrecurring fair value measurements. The guidance requires a roll forward of activities on purchases, sales, issuances, and settlements of the assets and liabilities measured using significant unobservable inputs (Level 3 fair value measurements). The guidance will become effective for the Company with the reporting period beginning July 1, 2011. The adoption of this guidance is not expected to have a material impact on the Company’s condensed consolidated financial statements.

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC did not, or are not believed by management to, have a material impact on the Company’s present or future consolidated financial statements.

Note 2.

Property, plant, equipment, mi ne development and land


	June 30, 2010	December 31, 2009
	(Unaudited)	(Audited)

Land	< p style="MARGIN-TOP:0px; FONT-SIZE:11pt; FLOAT:left; MARGIN-BOTTOM:-2px; WIDTH:102px; TEXT-INDENT:9px; LINE-HEIGHT:12pt; MARGIN-RIGHT:-93px">$ 19,590	$ 19,590

Mining concessions:
Pilar (a)	710,172	710,172
Don Roman (b)	521,739	521,739
Las Nuvias (c )	100,000	100,000
Centenario (d)	1,919,282	1,905,472
Pirita (e)	246,454	245,270
Picacho (f)	1,250,000	4,564,331
Mining concessions	4,747,647	8,046,984

Construction in Progress	-	2,163,485
Property, plant and equipment	3,377,339	924,231
	8,144,576	11,154,290
Less – accumulated depreciat ion	(150,703)	(67,008)
	$ 7,993,8 73	$ 11,087,282

Pilar, Las Nuvias, Centenario and Don Roman, are geographically located in Mexico and are known as the Don Roman Groupings.

In September 2006 Amermin, S.A. de C.V. (“Amermin”) a subsidiary of the Company’s Parent, acquired the P ilar de Mocoribo Prospect (“Pilar”) from an unrelated third party for $800,000 plus $120,000 of value added tax. This property was then assigned to AMM in January 2007. In June 2009, AMM and the note holder modified the agreement to return one mining concession under this agreement and reduce the purchase price by $60,870 plus the related $9,130 of value added tax. The resulting purchase price of the remaining concessions is $739,130 plus $115,737 of value added tax. The Company is required to repay the other subsidiary of its parent for this mining concession $535,659 (which includes the applicable value added tax) which was due in 2009 but remains unpaid.

In accordance with the Interest Topic of FASB ASC, the future payments have been discounted using the incremental borrowing rate of 5.01%. As of June 30, 2010, the present value of future payments is as follows:


		Debt		IVA		Total
Total remaining debt	$	486,739	$	77,879	$	564,618
Imputed interest		(28,959)		-		(28,959)
Present value of future payments	$	457,780	$	77,879	$	535,659

Effective January 1 , 2010 the Mexican government increased Impuest al Valor Agregado taxes (IVA) to 16%.

On January 8, 2007 the Company amended its October 2006 agreement to acquire the Don Roman prospect (Don Roman) from an unrelated third party for $521,739 plus $78,261 of value added tax. The purchase price was paid in full in January 2007. This property was assigned to the Company in January 2007 by the Company’s Parent. In October 2007, the Company purchased five hectares of land adjacent to the Don Roman property to build a mill, equipment yard, and campsite for construction and mining. Construction activities on this land began in October 2007. In October of 2007, the Company entered into an agreement with an independent third party to purchase constru ction equipment for the development and operation of the Don Roman Property. Pursuant to this agreement, the Company issued 1,200,000 shares of common stock at a fair value of $600,000 during the first quarter of 2008.

On January 8, 2007 the Company acquired the Las Nuvias Prospect (Las Nuvias) for $100,000 plus $15,000 of value added tax from an unrelated third party. The purchase price was paid in full in January 2007. This property was assigned to the Company in January 2007 by the Company’s Parent.

In November 2008, AMM executed an agreement to acquire eight mining concessions known as “Centenario” from an independent third party. The properties approximate 5,400 hectares and were purchased for a total of $1,894,050, including $247,050 in value added taxes.

In June 2009, AMM and the note holder modified the agreement to 1) revalue the entire Centenario concession to $2,000,000, 2) apply $127,000 toward the purchase price which had already been paid and recorded as a mining deposit, and 3) apply $197,956 toward the new price of the concession which was originally paid by a nother subsidiary of the Company’s Parent. These changes resulted in the following 1) additional debt of $28,044 plus related value added tax for these concessions, 2) the reduction of the amount of the mining deposit, 3) the expense of $6,000 that AMM also paid but which was not included in the revaluation of the concession, and 4) the increase in Due to Related Party of $197,956 plus related value added tax. The effective amount financed in relation to this concession is $1,675,044 plus $266,001 of value added tax.

The resulting debt payment schedule, including applicable value added tax, is as follows:


Calendar Year
2010	$	251,874
2011		551,673
2012		698,474
	$	1,502,021

In accordance with Interest Topic of FASB ASC, the future payments have been discounted using the incremental borrowing rate of 2.97%. As of June 30, 2010, the present value of future payments on the Centenario contract is as follows:


	Debt	IVA	Total
Future payments	$ 1,364,429	$ 218,309	$ 1,582,738
Imputed interest	(80,717)	-	(80,717)
Present value of debt	1,283,712	218,309	1,502,021
Less: current portion	(446,088)	(80,000)	(526,088)
	$ 837,624	$ 138,309	$ 975,933

Effective January 1, 2010 the Mexican government increased Impuest al Valor Agregado taxes (IVA) to 16%.

In June 2009 AMM executed an agreement to acquire three mining concessions known as “Pirita” from an independent third party. The properties approximate 6,700 hectares and were purchased for a total of $50,000 cash, $230,000 financed, including $30,000 in value added taxes.

The resulting debt payment schedule, including applicable value added tax, is as follows:


Calendar Year
2010	$	84,477
2011		85,978
	$	170,455

In accordance with the Interest Topic of FASB ASC, the future payments have been discounted using the incremental borrowing rate of 2.76%. As of June 30, 2010, the present value of future payments on the Pirita contract is as follows:


	Debt	IVA	Total
Future payments	$ 150,000	$ 24,000	$ 1 74,000
Imputed interest	(3,545)	-	(3,545)
Present value of debt	146,455	24,000	170,455
Less: current portion	(121,625)	(20,000)	(141,625)
	$ 24,830	$ 4,000	$ 28,830

Effective January 1, 2010 the Mexican government increased Impuest al Valor Agregado taxes (IVA) to 16%.

In June 2009 ACM executed an agreement to acquire eight mining concessions known as “Picacho” from an independent third party. The properties approximate 3,236 hectares and were purchased for a total of $500,000 cash, $4,945,000 financed, including $645,000 in value added taxes.

In March 2010, Adit and the note holder agreed to reduce the purchase of the Picacho concession to $1,250,000. Under the revised agreement, Adit paid the vendor $500,000 in cash (plus applicable taxes) as final consideration for the mining concession. These changes resulted in the following: 1) decrease debt by $3,324,485; and 2) decrease recoverable value-added taxes by $508,814. At March 31, 2010 the amended purchase price was paid in full.

In March 2010, Adit purchased Technical Data pertaining to the Picacho Prospect from the prospect’s former owner in consideration for the issuance to the former owner of 437,500 shares of the Company’s common stock and 320,000 shares of Adit’s common stock. The Technical Data includes engineering reports, maps, assessment reports, exploration samples certificates, surveys, environmental studies and other miscellaneous information pertaining to the Picacho Prospect. As of March 31, 2010 the Picacho Prospect did not have any proven reserves. As such, the information purchased is considered research and development on a developing mine and in accordance with the ASC Research and Development (R&D) Topic - R&D is expensed when incurred. The parties agreed that the value of the stock for the Technical Data was $2.25 per share for Adit stock and $4.00 per share for the Company’s common stock. ;In these financial statements the Company has accounted for the shares at their fair market value amounts as follows: 320,000 shares of Adit’s common stock, which was valued at $0.75 per share, and 437,500 shares of the Company’s common stock which was valued at $2.25. All fair market values were determined based on contemporaneous stock issuances for cash or if the stock was quoted on an exchange, its closing stock price. All stock was issued April 2010.

Note 3.

Notes Payable

During the six months ended June 30, 2010 various non-related parties loaned the Company a total of $380,000. The notes bear interest at 10% per year, and are due and payable six months after the promissory note date. The Company may elect to extend the maturity of the notes by six months. The interest will increase to 12% from and after December 15, 2010. As further consideration for extending credit to the Company, each note holder received a warrant that entitles them to purchase 380,000 shares of the Company’s restricted common stock at a price of $1.20 per share. The warrant may be exercised at any time on or prior to June 15, 2013. As of June 30, 2010 the debt discount associated with the notes is $134,377 (see Note 5).

Note 4.

Stockholders’ Equity

The authorized common stock of the Company consists of 75,000,000 shares with par value of $0.001.

January 2010, the Company issued 100,000 shares of common stock valued at $157,000 or $1.57 a share for officer bonuses.

February 2010, the Company issued 50,000 shares of common stock valued at $77,500 or $1.55 a share for investor relations.

Feb ruary 2010, the Company issued 30,000 shares of common stock valued at $63,000 or $2.10 a share; 29,286 shares for investor relations and 714 shares for cash.

February 2010, the Company issued 40,000 shares of common stock valued at $80,000 or $2.00 a share for investor relations.

February 2010, the Company issued 1,250,000 shares of common stock for investor relation and banking services valued at $2,687,500 or $2.15 a share, with warrants to purchase 1,250,000 common shares, vesting throughout 2010 with a total warrant value of $2,684,028.

February 2010, the Company issued 10,000 shares of common stock for warrants exercised, valued at $12,000 or $1.20 a share for cash.

February 2010, the Company issued 250,000 shares of common stock for warrants exercised, valued at $100,000 or $0.40 a share for cash.

February 2010, the Company issued 4,000 shares of common stock valued at $9,360 or $2.34 a share, 3,658 shares for investor relations and 342 shares for cash.

March 2010, the Company issued 416,667 shares of common stock for warrants exercised, valued at $458,334 or $1.10 a share for cash.

March 2010, the Company issued 81,053 shares of common stock valued at $162,106 or $2.00 a share for cash.

March 2010, the Company issued 23,000 shares of common stock for warrants exercised, valued at $27,600 or $1.20 a share for cash.

March 2010, the Company issued 140,000 shares of common stock for warrants exercised, valued at $56,000 or $0.40 a share for cash.

April 2010, the Company issued 17,669 shares of common stock for warrants exercised, valued at $21,203 or $1.20 a share for cash.

April 2010, the Company issued 10,000 shares of common stock for options exercised, valued at $10,000 or $1.00 a share for cash.

< /p>

April 2010, the Company issued 50,000 shares of common stock for warrants exercised, valued at $20,000 or $0.40 a share for cash.

April 2010, the Company issued 437,500 shares of common stock for the assignment of Technical Data pertaining to the Picacho Prospect, valued at $984,375 or $2.25 a share.

April 2010, the Company issued 60,000 shares of common stock, valued at $133,800 or $2.23 a share for services.

May 2010, the Company issued 50,000 shares of common stock with $3.00 warrant, valued at $100,000 or $2.00 a share for cash.

May 2010, the Company issued 10,000 shares of common stock for options exercised, valued at $10,000 or $1.00 a share for cash.

May 2010, the Company issued 65,000 shares of common stock, valued at $120,250 or $1.85 a share for services.

June 2010, the Company issued 500,000 shares of common stock for warrants exercised, valued at $940,000 or $1.88 a share for services and cash.

Net los s per common share

Net loss per share is calculated in accordance with the Earnings Per Share Topic of FASB ASC. The weighted average number of common shares outstanding during each period is used to compute basic loss per share. Diluted loss per share is computed using the weighted averaged number of shares and dilutive potential common shares outstanding. Dilutive potential common shares are additional common shares assumed to be exercised, such as options, warrants and convertible debt.

At June 30, 2010, the Company had a net loss resulting in no dilution of any common stock equivalents.

Note 5.

Options and Warrants

On February 1, 2007, the Company adopted the following stock option plans:

Incentive Stock Option Plan (for up to 1,000,000 shares)

Nonqualified Stock Option Plan (for up to 3,000,000 shares, as amended)

Stock Bonus Plan (for up to 750,000 shares)

In July 2008, the Company filed a registration statement on Form S-8 to register the shares issuable upon the exercise of Incentive Stock and Nonqualified Stock Option as well as any shares that may be issued pursuant to the Stock Bonus Plan.

In February 2007, the Company granted 1,000,000 options under its Nonqualified Stock Option Plan for 1,000,000 shares of common stock with an exercise price of $0.05 to two of the Company’s officers for compensation which originally expired February 1, 2010. In January 2010, the expiration date of these options was extended to Febru ary 2012. In the first quarter of 2010, the Company recognized an additional $889,031 in stock compensation associated with the extension of the expiration date.

In January 2010, the Company granted 750,000 options under it Incentive Stock Option Plan for 750,000 shares of common stock with an exercise price of $1.57 to two of the Company’s officers for compensation. These options vest at various times until January 2017 and begin expiring at various times beginning January 2015. The vested amount of these options was valued at $182,735.

In January 2010, the Company granted 1,250,000 options under it Nonqualified Stock Option Plan for 1,250,000 shares of common stock with an exercise price of $0.05 to three of the Company’s officers for compensatio n. These options vested immediately and expire January 2015. These options were valued at $2,334,201.

In 2010, the Company granted 1,000,000 options for 1,000,000 shares of common stock for investor relations services with an exercise price of $2.15 a share, vesting throughout 2010 with a total value of $2,684,028. During the second quarter of 2010, the number of options granted was reduced to 500,000 with no incremental compensation cost.

Warrants issued in relation to investor relations agreements vest at various rates that began the second quarter of 2010.

Warrants issued in relation to debt that may be exercised at any time on or prior to June 15, 2013.

The fair value of each option/warrant award discussed above is estimated on the date of grant using the Black-Scholes option valuation model that uses the assumptions noted in the following table. Expected volatilities are based on volatilities from the Company’s traded common stock. The expected term of options granted is estimated at half of the contractual term as noted in the individual option/warrant agreements and represents the period of time that management anticipates option/warrants granted are expected to be outstanding. The risk-free rate for the periods within the contractual life of the option is based on the U.S. Treasury bond rate in effect at the time of grant for bonds with maturity dates at the estimated term of the options.


	2010
Expected volatility	208.37% - 208.85%
Weighted-average volatility	208.64%
Expected dividends	0
Expected term (in years)	0.75 – 3
Risk-free rate	0.3% - 1.57%

A summary of option activity under the Plan as of June 30, 2010, and changes during the period then ended is presented below:


Options	Shares	Weighted- Average Exercise Price	Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at December 31, 2009	1,000,000	$ 0.05
Granted	3,450,000	0.97
Exercised	(20,000)	1.00
Forfeited or expired	(1,000,000)	0.05
Outstanding at June 30, 2010	3,430,000	$ 0.52	4.0	$ 4,532,200
Exercisable at June 30, 2010	2,655,000	$ 0.52	4.0	$ 4,401,200


Nonvested Options	Options	Weighted -Average Grant-Date Fair Value
Nonvested at December 31, 2009	-	$ -
Granted	2,450,000	1.50
Vested	(1,675,000)	1.52
Forfeited	-	-
Nonvested at June 30, 2010	775,000	$ 1.50

< td width=79 style="MARGIN-TOP:0px; BACKGROUND-COLOR:#f3f3f3" valign=bottom>


Warrants	Shares	Weighted- Average Exercise Price	Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at December 31, 2009	3,222,500	$ 0.65
Granted	2,221,053	1.81
Exercised	(2,815,164)	1.09
Forfeited or expired	(500,000)	2.15
Outstanding at June 30, 2010	2,128,389	$ 1.42	1. 0	$ 2,096,703
Exercisable at June 30, 2010	1,378,389	$ 0.65	1.0	$ 1,259,203


Nonvested Warrants	Warrants	Weighted- Average Grant-Date Fair Value
Nonvested at December 31, 2009	-	$ -
Granted	2,221,053	1.97
Vested	(971,053)	1.54
Forfeited	(500,000)	-
Nonvested at June 30, 2010	750,000	$ 1.17

Note 6.

Income Taxes

We did not provide any current or deferred U.S. federal income tax provision or benefit for any of the periods presented because we have experienced operating losses since inception. We provided a full valuation allowance on any net deferred tax assets, consisting of net operating loss carry forwards, because management has determined that it is more likely than not that we will not earn income sufficient to realize the deferred tax assets during the carry forward period.

Tara Minerals and American Metal Mining

The Company and AMM are part of the consolidated return of the Company’s Parent and as such, all related deferred tax assets or liabilities are calculated on the consolidated tax return basis and pushed down to t he underlying subsidiaries as needed. No tax benefit has been reported in connection with the net operating loss carry forwards as of the date of these financials statements that relate to the Company and AMM.

The Company’s Parent files income tax returns in the United States and Mexico. With a few exceptions, the Company is no longer subject to U.S. federal examination by tax authorities on tax returns filed before January 31, 2006. The Company’s U.S. federal returns are considered open tax years upon filing. The 2007 U.S. federal return of the Company’s Parent is currently under U.S. Internal Revenue Service (IRS) audit, no interest and penalties have been accrued as of the balance sheet date, as the IRS audit is not yet finished.

Effecti ve January 1, 2010 the Mexican government increased Impuesto Sobre la Renta Income Tax (ISR) to 30%.

Adit Resources, Inc. and American Copper Mining

Adit was organized in June 2009 and will file a separate tax return from the consolidated federal tax return of the Company’s Parent.

The combined net operating loss to be carried forward for Adit and ACM at June 30, 2010 is approximately $555,000.

The components of the Company’s deferred tax asset are as follows:


		June 30, 2010		December 31, 2009
Net operating loss carry forward tax affected	$	518,000	$	37,000
Valuation allowance		(518,000)		(37,000)
Net deferred tax asset	$	-	$	-

A reconciliation of the statutory income taxes rates and the effective rate is as follows:


	2010	2009
Tax at statutory rate (blended US and MX)	32%	31%
Valuation allowance	(32%)	(31%)
	-%	-%

< p style="MARGIN-TOP:0px; FONT-SIZE:11pt; FLOAT:left; MARGIN-BOTTOM:-2px; WIDTH:110px; TEXT-INDENT:48px">Note 7.

Related Party Transactions and Notes Payable, Related Party

Due to related parties current, net of due from related parties was $2,941,329 and $2,331,530 at June 30, 2010 and December 31, 2009 respectively.

In January 2007, Amermin, made the arrangements to purchase the Pilar, Don Roman and Las Nuvias properties listed in Note 2 (part of the Don Roman Grouping). These properties were assigned to AMM in January 2007. AMM makes payments to Amermin and Amermin makes payments related to th e original purchase agreements. At June 30, 2010, Amermin has paid the original note holder in full but AMM has not paid Amermin. At June 30, 2010, due to related parties, current consisted of:

- Pilar mining concession: $535,659 (inclusive of valued added tax)

- Don Roman concession: $211,826

- Other related party loans with Amermin: $705,001

- Less due from related parties $60,068

As of June 30, 2010 the Company’s Parent had loaned the Company $1,497,500, included in due to related parties. There are no terms to this intercompany payable and it is due on demand of the parent.

In March 2010, Adit acquired Technical Data pertaining to the Picacho Prospect, mentioned in Note 2 (f) above. Adit paid for the Company’s shares used in the acquisition by means of a note in the principal amount of $1,750,000. The note bears interest at 6% per year and is due and payable on March 31, 2012. At any time after July 1, 2010 The Company may convert the outstanding principal, plus accrued interest, into shares of Adit’s common stock. The Company will receive one share of Adit’s common stock for each $1.00 of principal and interest converted. This is an intercompany transaction that was eliminated during the consolidation of these financials.

During the six months ended June 30, 2010 an offic er of the Company loaned the Company $50,000. The note bears interest at 10% per year, and is due and payable on December 15, 2010. The Company may elect to extend the maturity of the note to June 15, 2011. The interest will increase to 12% beginning December 15, 2010. As further consideration for extending credit to the Company, the officer received a warrant that entitles him to purchase 50,000 shares of the Company’s restricted common stock at a price of $1.20 per share. The warrant may be exercised at any time on or prior to June 15, 2013. As of June 30, 2010 the debt discount associated with the notes is $25,244 (see Note 5).

Note 8.

Non-controlling Interest

In October 2009, the Company’s subsidiary, Adit initiated a private placement of its common stock for $0.75 per share up to $1,500,000. As of June 30, 2010 Adit had received $1,499,451 from the sale of 1,999,268 shares of its common stock subscribed under this private placement with independent third parties.

At June 30, 2010 the total non-controlling interest, consisting of shares sold per the private placement, issued for services, compensation and Technical Data for Picacho represents 10% of the total common shares outstanding or subscribed for Adit.


	Non-controlling interest at June 30, 2010
Combined Adit / ACM:
Private placement	$ 1,498,501
Finder’s fees	90,153
Technical data for Picacho	240,000
Officer compensation	301,000
Income statement pickup	(291,151)
Total	$ 1,838,503

Note 9.

Fair Value

In accordance with authoritative guidance, the table below sets forth the Company's financial assets and liabilities measured at fair value by level within the fair value hierarchy. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

Fair Value at June 30, 2010

& nbsp;

Total

Level 1

Level 2

Level 3

Assets:

None

Liabilities:

Total notes payable and related party note payable

1,945,148

Due to related parties, net

2,941,329

Total

4,886,477

Note 10.

Subsequent Events

Manag ement evaluated all activity of the Company and concluded the following disclosures are pertinent:

In July 2010, AMM entered into a joint venture agreement with third parties (“the Associates”); where the Associates will contribute 100% of the mining rights of the concession, “Mina Godinez”, and give AMM exclusive rights to manage, operate, explore and exploit the mining lot. The Associates will maintain title of the property; AMM will incur all the costs of constructions, buildings, access roads, any necessary improvements, the adequate machinery and equipment for the development of the mine and it will be its obligation to pay any fees or taxes derived from the concession. Any machinery or equipment used for the development of the mine will remain the exclusive property of AMM. Once production starts, AMM will receive 60% of the earnings and profits until is fully reimbursed for the costs; after that and once the mine is self-sufficient AMM will get 40% of the earnings and profits. AMM, also have the 1st right to purchase the property if deemed profitable enough. The duration of this agreement is subject to a 10 years term.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDI TION AND RESULTS OF OPERATION

Tara Minerals (“The Company”) was incorporated on May 12, 2006. During the period from its incorporation through June 30, 2010 the Company generated $37,775 in revenue, incurred $2,339,508 in exploration expenses and $14,485,532 in operating, general and administrative expenses. Included in operating, general and administrative expenses is a non-cash charge of $4,935,714 pertaining to the issuance of stock options, stock compensation and stock bonus plans to officers and directors of the Company.

Between December 2006 and February 2007, the Company raised $2,540,000 from the sale of 5,081,000 shares of its common stock to private investors.

In January 2008 the Company issued 1,200,000 shares of its common stock to an unrelated third party for mining equipment.

In 2008, the Company sold 1,119,167 Units at a price of $0.60 per Unit. Each Unit consisted of one share of the Company’s common stock and one warrant. Each warrant entitles the holder to purchase one share of the Company’s common stock at a price of $1.20 per share during the two year period following the sale of the Units. The warrants expire two years after their issuance. In October 2009, the warrant exercise price was amended so that holders’ could exercise the warrant at a price of $0.90 until October 23, 2009. After October 23, 2009 the warrant exercise price reverted to $1.20 per share. The warrant expiration date did not change. A total of 1,114,003 warrants for $1,101,138 were exercised as of August 16, 2010.

In 2008 and 2009, the Company sold 2,800,000 Units at a price of $0.20 per Unit. Each Unit consisted of one share of the Company’s common stock and one warrant. Each warrant entitles the holder to purchase one share of the Company’s common stock at a price of $0.40 per share during the two year period following the sale of the Units. The warrants expire two years after their issuance. A total of 490,000 warrants for $196,000 were exercised as of August 16, 2010.

In 2010, the Company issued 1,250,000 shares of common stock for investor relation and banking services valued at $2,687,500 or $2.15 a share, with warrants to purchase 750,000 common shares, vesting throughout 2010 with a total warrant value of $2,684,028.

In 2010, the Company issued warrants to purchase 430,000 shares of the Company’s restricted common stock at a price of $1.20 per s hare for further consideration for a $50,000 loan from a related party and $380,000 in loans from unrelated parties. The warrants may be exercised at any time on or prior to June 15, 2013. No warrants have been exercised as of August 16, 2010.

In 2010, the Company sold 131,053 Units at a price of $2.00 per Unit. Each Unit consisted of one share of the Company’s common stock and one warrant. Each warrant entitles the holder to purchase one share of the Company’s common stock at a price of $3.00 per share. No warrants have been exercised as of August 16, 2010.

The Company anticipates that its capital requirements during the twelve months ending June 30, 2011 will be:


Property payments and taxes – Pilar de Mocoribo property		$ 535,659
Property payments and taxes – Pirita property		141,625
Exploration and Development – Don Roman Groupings		1,000,000
Exploration and Development - Picacho Prospect		500,000
Exploration and Development – Centenario		300,000
Property payments and taxes – Centenario	< p style="PADDING-RIGHT:0px; PADDING-LEFT:0px; FONT-SIZE:11pt; PADDING-BOTTOM:0px; MARGIN:0px; PADDING-TOP:0px">	526,088
General and administrative expenses		350,000
Total		$ 3,353,372

In the second quarter of 2010, the Company continued extracting material from its Don Roman mine to process and produce lead / silver and zinc concentrates for sale to a third party. During the first quarter, the Company spent time and

resources refining its recovery and concentrate production process, including the addition of a concentrate dryer, so that in April 2010 it was able to begin shipping high quality concentrates to a third party buyer. The Company believes that it is making steady progress towards consistent quality production of marketable concentrates and that both cash on hand and revenue from mining activities will satisfy its working capital needs for 2010.

The Company’s future plans will be dependent upon the amount of capital available to it and the amount of cash provided by its operations.

The Company anticipates that it will need to hire 10 to 15 new employees during the twelve-month period ending June 30, 2011 primarily to run mining operations.

The Company d oes not have any commitments or arrangements from any person to provide it with any additional capital.

See Note 1 to the financial statements included as part of this report for a description of the Company’s accounting policies and recent accounting pronouncements.

ITEM 4T. CONTROLS AND PROCEDURES

Francis Richard Biscan, Jr., the Company’s Principal Executive Officer and David Bizzaro, the Company’s Principal Financial Officer, have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934) as of the end of the period covered by this report, and in their opinion the Company’s disclosure controls and procedures are effective.

There were no changes in the Company’s internal controls over financial reporting that occurred during the period that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II

OTHER INFORMATION

ITEM 1. LEG AL PROCEEDINGS

None.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Note 4 to the financial statements included as part of this report lists all unregistered sales of the Company’s securities during the six months ended June 30, 2010. The Company relied upon the exemption provided by Section 4(2) of the Securities Act of 1933 with respect to the sale of these shares. The persons who acquired these shares were all provided with information concerning the Company prior to the purchase of their shares. The certificates representing the shares of common stock bear legends stating that the shares may not be offer ed, sold or transferred other than pursuant to an effective registration statement under the Securities Act of 1933 or pursuant to an applicable exemption from registration. The shares are “restricted” securities as defined in Rule 144 of the Securities and Exchange Commission.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. [REMOVED AND RESERVED]

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

(a)

Exhibits


10.1	Joint Venture Agreement – Godinez Project
31.1	Rule 13a-14(a) Certifications –CEO
31.2	Rule 13a-14(a) Certifications – CFO
32.1	Section 1350 Certifications

&n bsp;

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on August 16, 2010.

TARA MINERALS CORP.

By: /s/ Francis Richard Biscan Jr.

Francis Richard Biscan, Jr.,

President and Principal Executive Officer

By: /s/ David Bizzaro

David Bizzaro,

Principal Financial and Accounting Officer

EX-10.1 2 proyectogodnez.htm AGREEMENT At the city of Los Mochis, Municipality of Ahome, State of Sinaloa, Republic of Mexico on the 1st day of the month of July of the year 2010 (two thousand and ten), there appeared before me, on one hand, the Mercantile Society named <font style='font-family:Arial Unicode MS,Times New Roman'>“</font>AMERICAN METAL MINING

At the city of Los Mochis, Municipality of Ahome, State of Sinaloa, Republic of Mexico on the 1^st day of the month of July of the year 2010 (two thousand and ten), there appeared before me, on one hand, the Mercantile Society named “AMERICAN METAL MINING”, S. A. DE C. V., that here following will be named “THE ASSOCIATING PARTY”, legally represented in this act by its sole administrator, Mr. RAMIRO TREVIZO LEDEZMA; and on the other hand, Messrs., CELERINO GODÍNEZ APODACA, SERGIO ESTEBAN BETANCOURT PINTADO, HILARIO GUEVARA GALVÁN, SERGIO GODÍNEZ CARRIÓN AND RUBÉN GRANDE GARCÍA, who here following will be name THE ASSOCIATES”, all of them represented by the first named individual being Mr. CELERINO GODÍNEZ APODACA who also appears per his own right and who here following will be named the “CO-ASSOCIATE” with the purpose of celebrating an PARTICIPATION ASSOCIATION CONTRACT, as per the following previous facts, declarations and clauses.

PREVIOUS FACT

I. “THE ASSOCIATES” CELERINO GODÍNEZ APODACA, SERGIO ESTEBAN BETANCOURT PINTADO, HILARIO GUEVARA GALVÁN, SERGIO GODÍNEZ CARRIÓN AND RUBEN GRANDE GARCÍA are the legitimate title Holders of the mining Rights derived from the concession described following (the “CONCESSION”), each one of them owning 20% of the rights described, that is:


Lot	GODÍNEZ
Title	234,937
File	095/13234
Surface	700.0000 Hectares
Location	Municipality of El Fuerte, State of Sinaloa
Issued	14^th September 2009
Standing	14^th September 2009 to 14^th September 2059
Inscription	Act 277, page 139, Volume 378 of the Book of Mining Concessions

II. Because of the convenience to both parties’ interests, the have decided to grant this present participation in association contract with the purpose that the CONCESSION be managed, operated, explored and exploited by the ASSOCIATING PARTY and that profits, earnings and benefits, as well as of the losses derived from such activities be split among the parties heeding to the terms and conditions described following:

DECLARATIONS

I. The ASSOCIATING PARTY declares through its legal representative and under oath of stating the truth that:

1. It is a Mexican Mercantile Society, specifically a Stock company with Varying amount of Capital duly established and operating in agreement with the applicable and current legislation in the United States of Mexico as evinced in Public Writ number 17,227 granted on the 4^th December 2006 before testimony of Mr. EUGENIO FERNANDO GARCÍA RUSSEK, attorney and applicant to the post of Notary Public and ascribed to Public Notary number 28 of the Morelos Judicial District, State of Chihuahua and acting as Public Notary per license of the office’s Title Holder Mr. FELIPE COLOMO CASTRO, attorney; public instrument duly inscribed in the Public Registry of Commerce of said District under electronic mercantile folio number 23,327*10.

2. They enjoy the powers, mandates and the necessary and sufficient faculties to grant this present contract as is evinced in the described Public Instrument in the above indicated numeral, and same that have not been limited, restrained, suspended or revoked.

3. To be duly inscribed in the Federal Taxpayers Registry with Fiscal identification certificate number AMM-061204-4R7 and being to date current in its income tax payments and other contributions that have corresponded in agreement with the applicable and current Fiscal Legislation.

4. The possibility of developing all kinds of mining activities has been contemplated within its social purpose such as the ones integrating the object of this present contract.

5. To be duly inscribed before the competent federal authorities in order to carry out all kinds of mining activities, as well to become title holder of the rights derived from the concessions granted in this matter.

6. It enjoys the required authorizations to grant this present contract on the part of the company’s shareholders on having complied with any of the applicable statutory or corporate requirements.

7. In enjoys the material resources, among others, the necessary machinery and adequate equipment, as well as the necessary human resources and the needed economic and capital required in order to comply in whole with the obligations it undertakes by virtue of the grant of this present contract; and,

8. It is the wish of the company he represents to grant this present contract with the purpose that the CONCESSION be managed, operated, explored and exploited by its representative under the scheme of Associate Participation with the ASSOCIATES and CO-ASSOCIATE, heeding in every instance to the terms and conditions included following:

II. Mr. SERGIO ESTEBAN BETANCOURT PINTADO, through the offices of his general proxy and under oath of stating the truth, declares that:

1. He is a Mexican citizen, of age, in full enjoyment of his mental and physical capacities and enabled to exercise trade (commerce) and in consequence he enjoys the personality and required capacity to grant this present contract.

2. To be married in civil court under the bond of joint sharing of goods with MARÍA ROSALBA PEREDA CORRALES on the 8^th June 1992 at the city of Mazatlán, Sinaloa.

3. Its representative CELERINO GODÍNEZ APODACA enjoys the powers, mandates and the sufficient and necessary faculties in order to grant this present contract in his name and is evinced in Public Writing number 15,504 granted on the 11^th May 2010 before testimony of Mr. JAIME HUMBERTO CECEÑA IMPERIAL, attorney and Public Notary number 143 of the city of Los Mochis, Municipality of Ahome, Sinaloa, instrument by virtue of which is accredited the grant in his favor of a general power for litigation and collection, for acts of administration and of dominion, limiting the exercise of same to the rights that the grantor owes on the CONCESSION, and same that to date have not been revoked, limited, suspended or restrained in any manner whatsoever.

4. Under the terms of the applicable and current civil legislation and taking into consideration that MARÍA ROSALBA PEREDA CORRALES appeared before the grant of the before stated Public Writ authorizing him for all purposes that may arise, there will be no need for approval or ratification of any kind by the part of this latter regarding the manner in which CELERINO GODÍNEZ APODACA exercises such poers, mandates and faculties that were granted as his wife’s representative.

5. To be duly inscribed in the Federal Taxpayers Registry with Fiscal identification certificate number _______________ and being to date current in its income tax payments and other contributions that have corresponded in agreement with the applicable and current Fiscal Legislation

6. He is duly authorized on the part of the competent fiscal authorities to issue in favor of the ASSOCIATING PARTY the vouchers corresponding to the counterclaims received as derived from the execution of this present instrument under the terms of the following clauses.

7. As of the date of this present act he has not subscribed any agreement or contract whose objects be directly or indirectly the mining rights of which he is title holder regarding the CONCESSION and thus the signing of this instrument does not imply non compliance in any way on his part of injury to any third party, in addition of accounting for the legitimacy to make use of them freely in order to integrate them to this present association in participation.

8. In so far as he is in the knowledge of, the CONCESSION is free to date on the payment of rights and of any other contribution that might have corresponded in agreement with the Mining Law and its Ruling, as well as having complied with the obligations that such legislation imposes on title holders of mining concessions, and,

9. It is his will to grant this present contract with the purpose that the CONCESSION be managed, operated, explored and exploited by the ASSOCIATING PARTY under the scheme of Associate partnership and rendering for such a purpose the exclusive rights he detents to carry out the mentioned activities heeding to the terms and conditions described following.

III. Mr. HILARIO GUEVARA GALVÁN, through the offices of his general proxy and under oath of stating the truth, declares that:

2. To be married in civil court under the bond of joint sharing of goods with SARA SULIM MADERO RAMÍREZ on the 10^th February 2005 at the city of Mazatlán, Sinaloa.

4. Under the terms of the applicable and current civil legislation and taking into consideration that SARA SULIM MADERO RAMÍREZ appeared before the grant of the before stated Public Writ authorizing him for all purposes that may arise, there will be no need for approval or ratification of any kind by the part of this latter regarding the manner in which CELERINO GODÍNEZ APODACA exercises such powers, mandates and faculties that were granted as his wife’s representative.

IV. Mr. SERGIO GODÍNEZ CARRIÓN, through the offices of his general proxy and under oath of stating the truth, declares that:

2. To be married in civil court under the bond of joint sharing of goods with CARMEN LINA GUTIÉRREZ MEDINA on the 19^h December 1993 at the city of Mazatlán, Sinaloa.

4. Under the terms of the applicable and current civil legislation and taking into consideration that CARMEN LINA GUTIÉRREZ MEDINA appeared before the grant of the before stated Public Writ authorizing him for all purposes that may arise, there will be no need for approval or ratification of any kind by the part of this latter regarding the manner in which CELERINO GODÍNEZ APODACA exercises such powers, mandates and faculties that were granted as his wife’s representative.

for the legitimacy to make use of them freely in order to integrate them to this present association in participation.

V. Mr. RUBÉN GRANDE GARCÍA, through the offices of his general proxy and under oath of stating the truth, declares that:

2. To be married in civil court under the bond of joint sharing of goods with SANDRA YADIRA ALEMÁN TRUJILLO on the 10^h December 1999 at the city of Mazatlán, Sinaloa.

4. Under the terms of the applicable and current civil legislation and taking into consideration that SANDRA YADIRA ALEMÁN TRUJILLO appeared before the grant of the before stated Public Writ authorizing him for all purposes that may arise, there will be no need for approval or ratification of any kind by the part of this latter regarding the manner in which CELERINO GODÍNEZ APODACA exercises such powers, mandates and faculties that were granted as his wife’s representative

6. He is duly authorized on the part of the competent fiscal authorities to issue in favor of the ASSOCIATING PARTY the vouchers corresponding to the counterclaims

received as derived from the execution of this present instrument under the terms of the following clauses.

VI. Mr. CELERINO GODÍNEZ APODACA, per his own right and under oath of stating the truth, declares that:

2. To be duly inscribed in the Federal Taxpayers Registry with Fiscal identification certificate number _______________ and being to date current in its income tax payments and other contributions that have corresponded in agreement with the applicable and current Fiscal Legislation

3. He is duly authorized on the part of the competent fiscal authorities to issue in favor of the ASSOCIATING PARTY the vouchers corresponding to the counterclaims received as derived from the execution of this present instrument under the terms of the following clauses.

4. As of the date of this present act he has not subscribed any agreement or contract whose objects be directly or indirectly the mining rights of which he is title holder regarding the CONCESSION and thus the signing of this instrument does not imply non compliance in any way on his part of injury to any third party, in addition of accounting for the legitimacy to make use of them freely in order to integrate them to this present association in participation.

5. In so far as he is in the knowledge of, the CONCESSION is free to date on the payment of rights and of any other contribution that might have corresponded in agreement with the Mining Law and its Ruling, as well as having complied with the obligations that such legislation imposes on title holders of mining concessions, and,

6. It is his will to grant this present contract with the purpose that the CONCESSION be managed, operated, explored and exploited by the ASSOCIATING PARTY under the scheme of Associate partnership and rendering for such a purpose the exclusive rights he detents to carry out the mentioned activities heeding to the terms and conditions described following.

VII. Mr. GUADALUPE NÁVAREZ COTA in his personality as CO-ASSOCIATE and under oath of stating the truth declares that:

2. To be married in civil court under the bond of separation of goods with ROSARIO MONTIEL MONTIEL DE NÁVAREZ on the 22nd November 1974 in this city.

3. To be duly inscribed in the Federal Taxpayers Registry with Fiscal identification certificate number NACG-551028-D4A and being to date current in its income tax payments and other contributions that have corresponded in agreement with the applicable and current Fiscal Legislation

4. He is duly authorized on the part of the competent fiscal authorities to issue in favor of the ASSOCIATING PARTY the vouchers corresponding to the counterclaims received as derived from the execution of this present instrument under the terms of the following clauses.

5. It Is his free will to subscribe this present contract heeding in every instance with the terms and conditions described following.

VIII. All PARTIES declare through the offices of their legal representatives and per their own right, under oath of stating the truth that they appear to the granting of this present contract in good faith, free of any deceit, error, violence or any other vitiation in their consent with the purpose of committing themselves to its compliance; likewise, and indicatively, the ASSOCIATE PARTY and the ASSOCIATES that for all effects of compliance and execution of this present contract, they acknowledge Mr. GUADALUPE NÁVAREZ COTA as CO-ASSOCIATE; and, on the other hand, the following named ASSOCIATES SERGIO ESTEBAN BETANCOURT PINTADO, HILRIO GUEVARA GALVÁN, SERGIO GODÍNEZ CARRIÓN AND RUBÉN GRANDE GARCÍA, declare, all of them being represented by Mr. CELERINO GODÍNEZ APODACA as general proxy and this latter per his own right, that they are nearing the closure of establishing a mercantile society as a company that will be named &# 147;MINA GODÍNEZ, S. A. DE C. V.”, or in another guise, agreeing with the permit to be granted from competent authorities in which will be included as partner of the same corporation of private right Mr. GUADALUPE NÁVAREZ COTA precisely, in such a manner that same company be recognized by the ASSOCIATING PARTY and the ASSOCIATES as ASSOCIATE or CO-ASSOCIATE of the private individuals as of today ASSOCIATED: SERGIO ESTEBAN BETANCOURT PINTADO, HILARIO GUEVARA GALVÁN, SERGIO GODÍNEZ CARRIÓN AND RUBÉN GRANDE GARCÍA, all of these gentlemen represented by Mr. CELERINO GODÍNEZ APODACA and this latter per his own right.

CLAUSES

FIRST. PARTNERSHIP IN ASSOCIATION: Under the terms of the disposition of article 252 of the General Law of Mercantile Societies, among other applicable and current legal dispositions, by virtue of the granting of this present contract PARTIES agree in establishing a mercantile relationship under the scheme of PARTNERSHIP IN ASSOCIATION by means of which a specific mercantile negotiation will be set up and which will consist in the administration, operation, exploration and exploitation of the CONCESSION, among other possible mining activities under the terms of the applicable legislation (the “ACTIVITIES”) and proportioning to such a purpose the rights, goods and described resources in the following clauses and sharing profits, earning and losses derived by carrying out the ACTIVITIES as established following.

Agreeing with the prescription of article 253 of the General Law of Mercantile Societies, the described association will not have a judicial personality or social name or any denomination by which it can be identified.

Also, in this act, on one hand, the associates SERGIO GODÍNEZ CARRIÓN and RUBÉN GRANDE GARCÍA, all of them represented by Mr. CELERINO GODÍNEZ APODACA as general proxy and this latter per his own right, through the offices of their legal representative, commit themselves in all due opportunity in notifying the ASSOCIATING PARTY everything pertaining to the legal existence of the mercantile negotiation or company that will be established by them in Public Writ and that will be named “MINA GODÍNEZ, S. A. DE C. V.”, or named as permitted by competent authorities and in which Mr. GUADALUPE NÁVAREZ COTA will also be included as partner; such corporation to be established will intervene as CO-ASSOCIATE of the afore mentioned ones private individuals today named as ASSOCIATES; and on the other hand, in this act the ASSOCIATING PARTY will commit itself to recognize such mercantile negotiation to be established as CO-ASSO CIATE of the before named ASSOCIATES for all purposes of this present contract and without harm that the ASSOCIATING PARTY and ASSOCIATES acknowledge him as well in a complementary agreement.

SECOND. CONTRIBUTION OF RIGHTS, GOODS, SERVICES AND RESOURCES: With the purpose of being able to carry out the ACTIVITIES regarding the CONCESSION, by virtue of the granting of this present contract, parties agree expressly in contributing the following rights, goods, services and resources (the CONTRIBUTIONS).

1. In effect as of the date of the granting of this contract, the ASSOCIATES contribute in favor of the ASSOCIATING PARTY free of any lien, attachment, burden or limitation the contributions corresponding to each under the terms of the previous facts afore mentioned, 100% (one hundred per cent) of the mining rights derived from the CONCESSION, same that include the exclusive rights to manage, operate, explore and exploit the respective mining lot (the LOT), and,

2. During the current status of this contract the ASSOCIATING PARTY will contribute at his cost and risk, per himself o through any third party, the totality of the works, constructions, buildings, access roads and any necessary improvement at LOT for the

due development of the ACTIVITIES. Furthermore, the ASSOCIATING PARTY commits itself to contribute at his cost and risk, the necessary machinery and the adequate equipment for the purpose in mention. Likewise, the ASSOCIATING PARTY will set up at LOT and will make use of the totality of the machinery and equipment deemed convenient for the development of the activities.

THIRD. TRANSFER OF PROPERTY AND RIGHTS: Under the terms of article 257 of the General Law of Mercantile Societies, parties agree expressly that regarding the CONTRIBUTIONS surrendered by each in order to carry out the ACTIVITIES, under to supposition will it be considered same as transfers of property or of rights in favor the counterpart or of any third party. Consequently, during the duration of this present contract the ASSOCIATES will continue as the legitimate title holders of the mining rights derived from the CONCESSION, and the totality of the works, constructions and improvements, as well as the machinery and equipment used for the development of the ACTIVITIES will remain the exclusive property of the ASSOCIATING PARTY.

Likewise, for all legal purposes parties expressly agree that in the supposition it becomes necessary the contribution of other rights or goods in the future in order to carry out the ACTIVITIES, be these related with mobile goods or real estate, the party proportioning such goods will keep property on same.

FOURTH. REPARATION IN CASE OF EVICTION: Parties commit themselves to each other to answer for any reparation in case of eviction for the CONTRIBUTIONS carried out by virtue of this contract.

FIFTH. ADMINISTRATIVE OBLIGATION: For as long as this contract lasts parties expressly commit themselves to keep current and in good condition the CONTRIBUTIONS or any other future contribution carried out by them and complying to such a purpose with the totality of administration paper work required as well as payment of taxes, rights or corresponding contributions in agreement with the applicable and current legislation.

Likewise, the ASSOCIATING PARTY through its legal representative commits itself to surrender a written report addressed to the ASSOCIATES or CO-ASSOCIATES in relation to the ACTIVITIES described in the first paragraph of the first clause, every three months and giving notice of such at the conventional address indicated for such a purpose and which is located on Calle 10, number 1831, Colonia Rubén Jaramillo of this city of Los Mochis, Ahome, Sinaloa.

SIXTH. PAYMENT OF MINING RIGHTS: As of the onset of the granting and ratification of this present contract before Public Notary and that for such a purpose Mr. JAIME HUMBERTO CECEÑA IMPERIAL, attorney, is named, in residence and in exercise within this Municipality of Ahome, Sinaloa, and for as long as the contract remains current, it will be the ASSOCIATING PARTY’S obligation to cover for the required rights with the purpose of keeping the rights updated that are derived from the CONCESSIONS in favor of the ASSOCIATES and CO-ASSOCIATES, heeding with the disposition of the applicable and current legislation. In case it be required, the ASSOCIATING PARTY must deliver to the ASSOCIATES and CO-ASSOCIATES within a reasonable lapse of time as of the date of the respective request, ordinary copy

of the documentation that accredits and proves compliances to the described obligations.

SEVENTH: FREEDOM OF DISCRETION DURING THE EXECUTION OF ACTIVITIES: It is expressly agreed by the parties that during the execution of the totality of ACTIVITIES, the ASSOCIATING PARTY will enjoy full technical, industrial, economic and commercial autonomy. Thus, it will have the liberty to chose to its own criterion the type, manner and order of process and systems implementation required for such a purpose.

However, the ASSOCIATING PARTY agrees with the ASSOCIATES and the CO-ASSOCIATES in naming overseer of such ACTIVITIES Messrs. CELERINO GODÍNEZ APODACA and GUADALUPE NÁVAREZ COTA; and authorizing them to intervene periodically in same every three months or when judged necessary on request by any of the parties.

EIGHTH. ACCESS TO SURFACE: The ASSOCIATES and the CO-ASSOCIATES expressly commit themselves to collaborate in a reasonable manner with the ASSOCIATING PARTY in obtaining the free and full access to the surface covering the CONCESSION in so far as such a right is indispensable to the due execution of the ACTIVITIES within the LOT.

NINTH. WORKS, CONSTRUCTIONS AND IMPROVEMENTS AT LOT: The ASSOCIATES and CO-ASSOCIATES expressly authorize that works, constructions, improvements and machinery implemented for carrying out the ACTIVITIES, be these goods property of the ASSOCIATING PARTY or of third parties hired by this latter to withdraw them at any time during the duration of this contract and extending such permit 90 natural days after termination of same if and ever such withdrawal does not represent any risks or danger in safety on the works carried out, in which case they must remain in place. It is especially agreed that permanent works of support and in general those undertakings to achieve safety and stability at mine cannot be withdrawn per the provisions of the Mining Law, its Ruling and other applicable and current legal dispositions.

TENTH. ADMINISTRATION, OPERATION, EXPLORATION AND EXPLOITATION OF CONCESSION: For as long as the duration of this present contract parties agree that the activities concerning the administration, operation, exploration and exploitation at CONCESSION will be undertaken by the ASSOCIATING PARTY heeding in every instance to the rules of operation and administration that for such a purpose they determine per common agreement after this date without harming the arrangement set in the fifth clause, last paragraph and seventh clause, last paragraph of this present contract.

ELEVENTH. INVESTMENT IN THE UNDERTAKING OF ACTIVITIES: The ASSOCIATING PARTY will have the right to incur in expenses and to carry out the investments it deems pertinent for the development of the ACTIVITIES.

Regardless of the freedom of criterion granted, the ASSOCIATING PARTY must invest in the before mentioned concepts, at least, in the amount indicated by the applicable and current legal dispositions for such a purpose during each year of duration

of this present contract bearing in mind the date of issuance of the mining concession title and the surface covered by the LOT of the CONCESSION in question.

TWELFTH. SUSPENSION OF INVESTMENT: If at any moment during the current status of this present contract it is deemed inconvenient by the parties to continue with the development of the ACTIVITIES, in common agreement they will decide the suspension or advanced termination of the contract.

THIRTEENTH. PRODUCTION AND BENEFICIAL USE OF MINERAL: It is expressly stipulated that during the current status of this contract, the ASSOCIATING PARTY can extract the amounts of mineral it needs to perform all types of sampling and metallurgical tests with the purpose of evaluating the mining potential of the CONCESSION, and, naturally, by previous written consent that will be granted by the ASSOCIATES and the CO-ASSOCIATES.

In this sense, parties convene that during the current standing of this present contract, production processes of the amounts of mineral extracted from the CONCESSION, be it to carry out sampling and metallurgical testing or for the purpose of trade, will be done at the mining nit known as “MESA DURA” of which the ASSOCIATING PARTY is title holder. The totality of expenditures and costs incurred in by the production processes of the mineral extracted, will be charged to the ASSOCIATING PARTY and same must be reimbursed to this latter as per the stipulation set in the following clause.

FOURTEENTH. EARNINGS, PROFITS AND RE-INVESTMENT. PLACE OF PAYMENT OF EARNINGS AND PROFITS: Parties expressly agree that earnings and profits derived from the execution of the ACTIVITIES carried out by the ASSOCIATING PARTY on the CONCESSION during the standing of this present contract, will be destined complying to the following rules:

1. With the purpose of recovering the amount of the investment carried out by the ASSOCIATING PARTY, parties agree that earnings and profits derived from the development of the ACTIVITIES regarding the CONCESSION, 60% (sixty per cent) be paid on a monthly basis in favor of the ASSOCIATING PARTY until full reimbursement is reached.

2. Once the total reimbursement is reached as well as the COST OF PRODUCTION and having covering for the remaining expenses, contributions and related taxes, earnings derived from the development of the ACTIVITIES will be split in the following manner:


SUBJECTS	PARTICIPATION
The Associating Party	40%
Celerino Godínez Apodaca (Associate)	8%
Sergio Esteban Betancourt Pintado (Associate)	8%
Hilario Guevara Galván (Associate)	8%
Sergio Godínez Carrión (Associate)	8%
Rubén Grande García (Associate)	8%
Guadalupe Návarez Cota (Co-Associate)	20%

3. For such a purpose, both the CO-ASSOCIATE as the ASSOCIATES will have the right to reasonably request from the ASSOCIATING PARTY information related with the development of the ACTIVITIES, information that cannot be withheld. Such request must be done in writing under whatever circumstance and delivered to the ASSOCIATING PARTY that within the following 15 (fifteen) able days of receipt the latter may gather the information requested in order to render it to the requesting party.

4. Regarding the payment of earnings and profits described, the ASSOCIATING PARTY commits itself to pay in favor of the ASSOCIATES and the CO-ASSOCIATES the amount that periodically correspond to them, at least every six months according to the payments received derived from the trade and sale of the extracted mineral of the CONCESSION, and place of payment of such earnings and profits must done to the ASSOCIATES and the CO-ASSOCIATES precisely at the address located which is Calle 10, number 1831, Colonia Rubén Jaramillo of this city of Los Mochis, Ahome, Sinaloa.

5. Also, the ASSOCIATING PARTY for the purpose of payments of earnings and profits recognizes as creditors and debtors in solidarity the ASSOCIATES and CO-ASSOCIATES for purposes of this present contract under the terms of articles 1987, 1988 and 1989 of the Federal Civil Code.

FIFTEENTH. CONDUCT: Heeding the disposition of article 256 of the General Law of Mercantile Societies, the ASSOCIATING PARTY commits itself to an action of conduct always on its own name and reason why there will not exist any relationship between third parties and the ASSOCIATES and CO-ASSOCIATES.

SIXTEENTH. EXCLUSIVITY AND PREFERENCE RIGHTS: During the standing of this present contract the ASSOCIATES expressly commit themselves to abstain of disposing by any possible legal manner of the mining rights that correspond to them from the CONCESSION in the understanding that if be their wish to dispose of same, the ASSOCIATING PARTY will enjoy the right of absolute preference to acquire them.

SEVENTEENTH. DURATION AND ADVANCED TERMINATION: Parties convene that the duration of this present contract is subject to a 10 years term as of the date of signature and ratification of same and the advanced termination of same will be subject to the previous agreement taken by both parties.

The advanced termination of this contract will not liberate any of the parties from complying to the obligations that must be complied with prior to the effective date of termination.

EIGHTEENTH. NON COMPLIANCE AND CANCELLATION: Parties convene that in case that any of them does not comply with any of the obligations assumed by virtue of the granting of this present contract, the party or parties harmed will have the right to forcefully oblige compliance to the obligations not complied with on one hand, and on the other, the cancellation of the contract as well as the payment of an indemnity for harms and damages in both cases.

Parties agree that in the supposition that any of the ASSOCIATES or CO-ASSOCIATES cede, transfer, lien, burden or limit in any way, either totally or partially

the rights the first ones own regarding the CONCESSION, this present contract will terminate in advance per judicial order. In this case, the ASSOCIATE disposing of the mining rights he own on the CONCESSION must pay in favor of the ASSOCIATING PARTY the amount equivalent to 10% (ten per cent) of the counterclaim convened in the operation of transfer of right that took place.

The termination of this contract per the reasons given will not liberate any of the parties from complying to the obligations that should have been carried out prior to the date of cancellation.

NINETEENTH. LIQUIDATION AND DISSOLUTION: Parties convene that upon the termination of this present contract, the Partnership in Association that was established will be liquidated and dissolved heeding the provision set in articles 234 to 249 of the General Law of Mercantile Societies.

TWENTIETH. CONFIDENTIALITY: PARTIES expressly commit themselves to keep in a confidential manner the totality of past, present and future information related with this instrument, and extending same obligation when disclosed to any private person or corporation.

The PARTY recipient of confidential information must limit access to it to its representatives or employees who, under a justified and reasonable cause, should request access to such and information. In such cases, PARTIES must extend same confidentiality obligation to the persons confidential information is disclosed to.

For purposes of this present clause, the following will not be considered confidential information: 1. Information legitimately known and obtained by the recipient PARTY prior to the subscription of this agreement; 2. Information that is to date or in the future considered as public domain, if and ever such consideration did not derive from a non compliance by any of the PARTIES to the stipulation of this clause, or; 3. Information that must be disclosed to per law or an administrative or judicial mandate from competent authorities, including those of the Stock Exchange, both in the United States of Mexico or abroad.

In case of not complying PARTIES expressly reserve to themselves the actions that per law correspond to them, both in administration and judiciary, in order to claim indemnity for damages and harms caused, as well as the application of sanctions that may take place.

TWENTY FIRST. FISCAL OBLIGATIONS: Upon being registered and inscribed before the Federal Taxpayers Registry, as well as being to date in their income tax payments and other contributions corresponding to them to date, PARTIES agree that each will defray in separate tax payments that individually pertain to each in compliances to the terms and conditions of this present instrument, complying thus with the applicable and current fiscal legislation, and committing themselves to liberate their counterpart of any fiscal responsibility that might be imputed contrary to this clause by competent authorities.

TWENTY SECOND. LABOR RELATIONS: In order to comply with the obligations that each PARTY contracts by virtue of the subscription of this contract, they state that

they will act as completely independent entities, and thus, under no reason will it be understood that there exists a labor relationship between them and, in consequence disregarding the possibility of applying the labor legislation and of the current legislation of social security and under no assumption will they be able to hire employees or workers in the name or representation of their counterparts.

In relation to their own workers and employees, PARTIES state that there does not exist a labor relationship between workers and employees of the ASSOCIATING PARTY with those of the ASSOCIATES and CO-ASSOCIATES nor of this latter with the former; Thus, PARTIES state being the employers of their own workers and employees complying in this manner with the current and applicable labor and social security legislation to be complied with in favor of such subjects.

Consequently, PARTIES commit themselves to free their counterpart of any labor and social security responsibility that might be imputed against them contrary to this clause in relation to their own workers and employees under the terms of the applicable and current labor and social security legislation.

TWENTY THIRD. PARTIES’ CONVENTIONAL ADDRESSES: The ASSOCIATING PARTY agrees to indicate as its conventional address for anything referring to notifications among which are, in addition to others, those for notifications of law suits, filing for same and which is Calle California 5101, Suite 206 Colonia “Haciendas Santa Fe” of the city of Chihuahua, State of Chihuahua and the ASSOCIATES and CO-ASSOCIATES jointly state as their conventional address Calle 10, number 1831, Colonia “Rubén Jaramillo” of this city of Los Mochis, Ahome, Sinaloa.

TWENTY FOURTH. MODIFICATIONS: The terms and conditions of this present contract can only be modified by virtue of modifying agreements between the parties. To such agreements must be added as annexes ordinary copy of this contract always vying for a complete interpretation of the terms and conditions that the parties agreed on.

TWENTY FIFTH. APPLICABLE LAW: This present contract will abide by and will be interpreted in accordance with the General Law of Mercantile Societies, the Code of Commerce and the Federal Civil Code and thus, is considered a mercantile contract.

TWENTY SIXTH. JURISDICTION AND COMPETENCE: In the event that they arise controversies related with the validity, interpretation, execution and compliance of this contract, parties expressly state to submit themselves to the competent judicial authorities of the Common Code of Law of the Judicial District of Ahome, with residence in the city of Los Mochis, Sinaloa, for all legal effects.

GRANTORS

“AMERICAN METAL MINING”, S. A. DE C. V. REPRESENTED BY ITS

SOLE ADMINISTRATOR, MR. RAMIRO TREVIZO LEDEZAMA.

“ASSOCIATING PARTY”

Signature

CELERINO GODÍNEZ APODACA, PER HIMSELF AND AS LEGAL

REPRESENTATIVE AND JUDICIAL PROXY OF MESSRS. SERGIO ESTEBAN BETANCOURT PINTADO, HILARIO GALVÁN, SERGIO GODÍNEZ CARRIÓN AND RUBÉN GRANDE GARCIA.

“ASSOCIATES”

Signature

GUADALUPE NÁVAREZ COTA

“CO-ASSOCIATE”

Signature

______________________________________________

Jaime Humberto Ceceña Imperial, Attorney

Public Notary Lumber 143

Blvd. Juan de Dios Bátiz N° 86 Ote. Int. 7 Altos C. P. 81200

Phone (668) 8-189381 Fax (668) 8-156780

notaria143@hotmail.com

Los Mochis, Ahoma, Sinaloa, México

At the city of Los Mochis, Municipality of Ahome, State of Sinaloa, United States of Mexico, on the 1^st day of the month of July of the year 2010, befote, JAIME HUMBERTO CECEÑA IMPERIAL, ATTORNEY AND Public Notary Lumber 143 in exercise and residing within the Municipality of Ahome and Notary Office located on Boulevard Juan de Dios Bátiz number 86-7 of this city, address where there appeared: Mr. RAMIRO TREVIZO LEDEZMA as legal representative and sole administrator of the company “AMERICAN METAL MINING, S.A. DE C.V.”, who by his general data states being a Mexican citizen, of age, married, native of Colonia Pacheco, Chihuahua, Chihuahua where he was born on the 4^th of September of the year 1956, and occupied in mining and his address being calle Obregón, Colonia Quintas del Sol, Chihuahua, Chihuahua and who identified himself with voters card folio number 0708062123849 issued by the Federal Elect ors Institute; Mr. CELERINO GODÍNEZ APODACA as legal representative and judicial proxy of Messrs. SERGIO ESTEBAN BETANCOURT PINTADO, HILARIO GUEVARA GALVÁN, SERGIO GODÍNEZ CARRIÓN AND RUBÉN GRANDE who per his general data states being a Mexican citizen, of age, bachelor, native of Palo Verde, El Fuerte, Sinaloa and accidentally in this city, identified himself with voters cars folio 092501202102 issued by the Federal Electors Institute and Mr. GUADALUPE NÁVAREZ COTA as Co-associate who per his general data states being a Mexican citizen, married, of age, native of this city where he was born on the 28^th October 1955 and his occupation being a contractor and addressed at calle Río Fuerte number 1966, Fraccionamiento Viñedos of this city, identified himself with voters card folio numner 0000043365688 issued by the Federal Electors Institute, and all of whom I give faith of knowing them personally as well as their legal capacity for contracting an d oblige themselves, states that on this date they ratify in whole the contents and signatures of this present contract which consists of a PARTNERSHIP IN ASSOCIATION CONTRACT written of sixteen useful pages and that having been edited as per their intentions and wishes, they acknowledge as their own the signatures at bottom as being the ones they use in all formal acts and in

ratification of the above they sign it again in my presence as Public Notary and so I GIVE FAITH.

Signature

RAMIRO TREVIZO LEDEZMA

Sole Administrator of the company named

“AMERICAN METAL MINING”

“Associating Party”

Signature

CELERINO GODÍNEZ APODACA

As Legal Representative and Judicial Proxy of

Messrs. Sergio Esteban Betancourt Pintado, Hilario

Guevara Galván, Sergio Godínez Carrión and

Rubén Grande García.

“Associates”

Signature

GUADALUPE NÁVAREZ COTA

“Co-Associate”

BEFORE ME

Signature

(Seal)

JAIME HUMBERTO CECEÑA IMPERIAL

Attorney and Public Notary Lumber 143

________________________________________________________

EX-31.1 3 f10jun10qex311.htm CERTIFICATION EXHIBIT 31

EXHIBIT 31.1

CERTIFICATIONS

I, Francis Richard Biscan, certify that;

I have reviewed this quarterly report on Form 10-Q of Tara Minerals Corp.;

Based on my knowledge, this report, does not cont ain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, no misleading with respect to the period covered by the report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer (s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is make known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provided reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the re gistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant ’s internal control over financial reporting.

Date August 16, 2010

/s/ Francis Richard Biscan

Francis Richard Biscan,

Principal Executive Officer

EX-31.2 4 f10jun10qex312.htm CERTIFICATION EXHIBIT 31

EXHIBIT 31.2

CERTIFICATIONS

I, David A. Bizzaro, certify that;

I have reviewed this quarterly report on Form 10-Q of Tara Minerals Corp.;

Based on my knowledge, this report, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, no misleading with respect to the period covered by the report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 16, 2010

/s/ David A. Bizzaro

David A.Bizzaro

Principal Financial Officer

EX-32.1 5 f10jun10qex32.htm CERTIFICATION EXHIBIT 32

EXHIBIT 32.1

CERTIFICATION OF PERIODIC REPORT

TARA MINERALS CORP.

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

18 U.S.C. Section 1350

In connection with the transition report of Tara Minerals Corp. (the “Company”) on Form 10-Q for the quarter ended June 30, 2010 as filed with the Securities Exchange Commission on the date hereof (the “Report”), we, Francis Richard Biscan, th e Principal Executive Officer of the Company, and David A. Bizzaro, the Principal Financial Officer of the Company, certify pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the company.

Date: August 16, 2010

/s/ Francis Richard Biscan

Francis Richard Biscan,

Principal Executive Officer

Date: August 16, 2010

/s/ David A. Bizzaro

David A. Bizzaro,

Principal Financial Officer