10-Q

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, 2011

£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
incorporation 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  R    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 15, 2011, the Company had 63,641,921 outstanding shares common stock.

1

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	19
Item 4.  Controls and Procedures	22
PART II - OTHER INFORMATION
Item 1.  Legal Proceedings	23
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3.  Defaults Upon Senior Securities	23
Item 4.  [REMOVED AND RESERVED]	23
Item 5.  Other Information	23
Item 6.  Exhibits	23
SIGNATURES	24

2

PART 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 THREE AND SIX MONTHS ENDED

JUNE 30, 2011 AND 2010

AND

THE PERIOD FROM INCEPTION (MAY 12, 2006) THROUGH JUNE 30, 2011

3

TARA MINERALS CORP. AND SUBSIDIARIES

(A Subsidiary of Tara Gold Resources Corp.)

(An Exploration Stage Company)

CONDENSED CONSOLIDATED BALANCE SHEETS

		JUNE 30, 2011		DEC 31, 2010
		(Unaudited)
Assets
Current assets
Cash	$	439,628	$	157,579
Recoverable value added taxes, net of allowance for bad debt of  $1,358,736 and $1,366,533 at June 30, 2011 and December 31, 2010, respectively		179,092		170,494
Other receivables, net of allowance for bad debt of $3,086 and $4,692 at June 30, 2011 and December 31, 2010, respectively		121,629		104,828
Prepaid Assets		224,500		-
Total current assets		964,849		432,901
Property, plant, equipment mine development and land, net of accumulated depreciation of $421,504 and $295,925 at June 30, 2011 and  December 31, 2010, respectively		6,863,227		8,101,786
Mining deposits		29,830		53,368
Deferred tax, non-current portion		2,930,982		2,930,982
Goodwill		12,028		12,028
Other assets		155,078		157,870
Total Assets	$	10,955,994	$	11,688,935
Liabilities and stockholders’ equity
Current liabilities
Accounts payable and accrued expenses	$	566,502	$	680,221
Notes payable, current portion		209,964		824,001
Notes payable related party		100,000		100,000
Due to related parties, net of due from of $40,440 and $69,143 at June 30,     2011 and December 31, 2010, respectively		3,192,564		3,465,232
Total current liabilities		4,069,030		5,069,454
Notes payable, non-current portion		92,316		1,068,350
Total liabilities		4,161,346		6,137,804
Commitments and contingencies		-		-
Iron Ore Property financial instrument		570,000		-
Stockholders’ equity
Common stock: $0.001 par value; authorized 200,000,000 shares; issued and outstanding 63,641,921 and 57,236,288 shares at June 30, 2011 and December 31, 2010, respectively		63,642		57,236
Additional paid-in capital		28,747,934		24,515,978
Common stock payable, net of stock receivable of $0 and $212,744 at June 30, 2011 and December 31, 2010, respectively		191,000		1,129,696
Other comprehensive loss		(278,990)		(246,253)
Accumulated deficit during exploration stage		(25,038,221)		(21,962,357)
Total Tara Minerals stockholders’ equity		3,685,365		3,494,300
Non-controlling interest		2,539,283		2,056,831
Total equity		6,224,648		5,551,131
Total liabilities and stockholders’ equity	$	10,955,994	$	11,688,935

See Accompanying Notes to these Condensed Consolidated Financial Statements.

4

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)

		THREE MONTHS ENDED JUNE 30, 2011		THREE MONTHS ENDED JUNE 30, 2010		SIX MONTHS ENDED JUNE 30, 2011		SIX MONTHS ENDED JUNE 30, 2010		FROM INCEPTION (MAY 12, 2006) TO  JUNE 30, 2011
Mining revenues	$	-	$	37,775	$	-	$	37,775	$	160,421
Cost of revenue		-		-		-		-		658,007
Gross margin		-		37,775		-		37,775		(497,586)
Exploration expenses		465,150		292,679		1,388,154		1,888,650		3,861,863
Operating, general, and administrative expenses		960,717		2,570,705		1,656,203		9,685,754		22,028,543
Net operating loss		(1,425,867)		(2,825,609)		(3,044,357)		(11,536,629)		(26,387,992)
Non-operating (income) expense
Interest (income)		(6,528)		(6,142)		(13,079)		(12,836)		(148,719)
Loss on conversion of note payable		-		-		-		-		783,090
Interest expense		63,817		34,694		69,127		34,915		2,157,927
Gain on debt extinguishment		-		(6,138)		-		(6,138)		(6,138)
Loss on disposal or sale of assets		-		-		4,260		-		4,260
Other (income)		(162)		(27)		(11,253)		(1,056)		(791,288)
Total non-operating (income) expense		(57,127)		22,387		(49,055)		14,885		1,999,132
Loss before income taxes		(1,482,994)		(2,847,996)		(3,093,412)		(11,551,514)		(28,387,124)
Income tax benefit		-		-		-		-		(2,930,982)
Less: non-controlling interest		11,178		291,154		17,548		291,154		417,921
Net loss attributable to Tara Minerals’ shareholders		(1,471,816)		(2,556,842)		(3,075,864)		(11,260,360)		(25,038,221)
Other comprehensive loss:
Foreign currency translation		2,650		(64,400)		(32,737)		(69,277)		(278,990)
Comprehensive loss	$	(1,469,166)	$	(2,621,242)	$	(3,108,601)	$	(11,329,637)	$	(25,317,211)
Net loss per share, basic and diluted	$	(0.02)	$	(0.05)	$	(0.05)	$	(0.22)
Weighted average number of shares, basic and diluted		61,297,513		53,998,455		59,436,159		52,954,278

See Accompanying Notes to these Condensed Consolidated Financial Statements.

5

.

TARA MINERALS CORP. AND SUBSIDIARIES

(A Subsidiary of Tara Gold Resources Corp.)

(An Exploration Stage Company)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

		SIX MONTHS ENDED JUNE 30, 2011		SIX MONTHS ENDED JUNE 30, 2010		FROM INCEPTION (MAY 12, 2006) THROUGH JUNE 30, 2011
Cash flows from operating activities:
Net loss attributable to Tara Minerals’ shareholders	$	(3,075,864)	$	(11,260,360)	$	(25,038,221)
Adjustments to reconcile net loss to net cash used in operating  activities:
Allowance for doubtful accounts		(9,403)		493,696		1,982,531
Depreciation		138,121		83,695		434,046
Stock based compensation and stock bonuses		529,738		3,642,041		8,464,942
Common stock issued for services		-		4,109,748		5,371,684
Cancellation of shares for settlement		-		-		(750,000)
Non-controlling interest in net loss of consolidated subsidiaries		(17,548)		(270,147)		(417,911)
Non-controlling interest - stock issued to third parties of subsidiaries		-		-		348,549
Expense of mining deposit upon note modification		-		-		6,000
Accretion of beneficial conversion feature and debt discount		-		31,924		1,983,575
Exploration expenses paid with parent and subsidiary common            stock		1,059,184		1,224,375		2,283,559
Gain on debt extinguishment		-		(6,138)		(6,138)
Loss on conversion of debt to common stock		-		-		783,090
Accrued interest converted to common stock		-		-		84,438
Deferred tax asset, net		-		-		(2,930,982)
Loss on disposal or sale of assets		4,260		-		4,260
Rent expense reclassified from capital lease		12,207		-		12,207
Changes in current operating assets and liabilities:
Recoverable value added taxes		(190,150)		(170,346)		(1,243,758)
Other receivables		(7,964)		(42,783)		(117,484)
Prepaid expenses		16,500		-		16,500
Other assets		(172,208)		(44,051)		(330,079)
Accounts payable and accrued expenses		(114,247)		224,904		585,093
Net cash used in operating activities		(1,827,374)		(1,983,442)		(8,474,099)
Cash flows from investing activities:
Acquisition of land		-		-		(19,590)
Purchase of mining concession		(30,060)		(25,149)		(860,230)
Deposits toward mining concessions		(6,462)		(398)		(37,462)
Acquisition of property, plant and equipment		-		(229,622)		(2,588,049)
Cash included in business acquisition		-		-		2,037
Business acquisition goodwill		-		-		(3,758)
Payments made for construction in progress		-		-		-
Proceeds from disposal/sale of assets		29,128		-		29,128
Net cash provided (used in) investing activities		(7,393)		(255,169)		(3,477,924)
Cash flows from financing activities:
Cash from the sale of common stock		1,239,744		978,905		7,938,032
Proceeds from notes payable, related party		-		50,000		150,000
Proceeds from notes payable		-		380,103		480,000
Payments towards notes payable		(102,523)		(711,452)		(1,292,986)
Payment towards equipment financing		-		-		(201,438)
Change in due to/from related parties, net		(362,668)		162,490		2,566,132
Common stock receivable		125,000		-		(87,744)
Non-controlling interest – cash from sale of sale of common stock of subsidiaries		500,000		260,482		2,368,645
Iron Ore Property financial instrument		750,000		-		750,000
Net cash provided by financing activities		2,149,553		1,120,528		12,670,641

6

Effect of exchange rate changes on cash		(32,737)		(69,277)		(278,990)
Net increase (decrease)		282,049		(1,187,360)		439,628
Cash, beginning of period		157,579		1,230,376		-
Cash, end of period	$	439,628	$	43,016	$	439,628
Supplemental Information:
Interest paid	$	273	$	25,649	$	182,740
Income taxes paid	$	-	$	-	$	-
Non-cash Investing and Financing Transactions:
Purchase of mining concession paid by debt to related party plus capitalized interest(negative movement due to note modification)	$	163,793	$	-	$	1,445,448
Purchase of or (reduction) in purchase of concession paid with notes payable plus capitalized interest	$	(1,310,974)	$	(3,324,485)	$	986,771
Recoverable value-added taxes incurred through additional debt and due to related party, net of mining concession modification	$	(215,557)	$	(508,814)	$	1,361,186
Beneficial conversion value for convertible debt	$	-	$	-	$	1,695,000
Conversion of debt to common stock, plus accrued interest	$	-	$	-	$	2,309,438
Purchase of mining equipment with common stock	$	-	$	-	$	600,000
Acquisition of property and equipment through debt	$	48,491	$	1,044,375	$	1,259,938
Receivable reclassified to mining deposit	$	-	$	28,368	$	28,368
Construction in progress reclassified to property plant and equipment	$	-	$	2,163,485	$	2,163,485
Warrants with debt	$	-	$	191,546	$	191,546
Beneficial conversion feature on financial instrument	$	180,000	$	-	$	180,000
Stock Payable for prepaid expenses	$	(66,000)	$	-	$	(66,000)
Business Combination of American Copper Mining:
Cash	$	-	$	-	$	(2,037)
Due from related parties		-		-		1,989
Goodwill (from net assets)		-		-		8,270
Accounts payable and accrued expenses		-		-		12,071

See Accompanying Notes to these Condensed Consolidated Financial Statements.

7

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, 2010. Significant accounting policies disclosed therein have not changed, except as noted below.

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 the United States of America and 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 87% of the common stock of Adit Resources Corp., 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 Resources Corp. (“Adit”) was organized in June 2009 and ACM was purchased in June 2009.  The Company currently has limited operations and, in accordance with the Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) Development Stage Entities Topic, is considered an Exploration Stage Company.

Tara Minerals Corp. is a subsidiary of Tara Gold Resources Corp. (“Tara Gold” or the “Company’s Parent).

Unless otherwise indicated, all references to the Company include the operations of its subsidiaries, and all references to Adit include the operation of its subsidiary.

The accompanying Condensed Consolidated Financial Statements and the related footnote information are unaudited.  In the opinion of management, these financials statements include all normal recurring adjustments necessary for a fair presentation of the condensed consolidated balance sheets of the Company at June 30, 2011 and December 31, 2010, and the condensed consolidated statements of operations for the three and six months ended June 30, 2011 and 2010. 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 re-measured 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 re-measurement gain or loss is recorded as other comprehensive 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.

8

Relevant exchange rates used in the preparation of the financial statements for the subsidiary are as follows for the six months ended June 30, 2011.  Mexican pesos per one U.S. dollar.  

	June 30, 2011
Current exchange rate	Ps.	11.7748
Weighted average exchange rate for the six months ended	Ps.	11.9044

The Company’s significant accounting policies are:

Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Recoverable Value-Added Taxes (IVA) and Allowance for Doubtful Accounts

Each period receivables are reviewed for collectability.  When a receivable is determined to not be collectable, the Company allows for the receivable until the Company is either assured of collection or assured that a write off is necessary.  The Company has recorded an allowance of $1,358,736 and $1,366,533 as of June 30, 2011 and December 31, 2010, respectively, for its receivables for IVA taxes paid by the Company’s Mexican subsidiaries based upon the determination that the Mexican government may not pay the complete refund of these taxes.

Reclassifications

Certain reclassifications, which have no effect on net loss, have been made in the prior period financial statements to conform to the current presentation.  

Purchase of Technical Data

Technical data, including engineering reports, maps, assessment reports, exploration samples certificates, surveys, environmental studies and other miscellaneous information, may be purchased for our mining concessions. When purchased for concessions without proven reserves the cost is considered research and development pertaining to a developing mine and in accordance with the Research and Development (R&D) Topic of the FASB ASC and is expensed when incurred.

Financial Instruments

The Company periodically enters into financial instruments. Upon entry, each instrument is reviewed for debt or equity treatment. In the event that the debt or equity treatment is not readily apparent, FASB 480-10-S99 is consulted for temporary treatment, once a triggering event of any such instruments happen that remove the temporary element the Company appropriately reclassifies the instrument to debt or equity.

9

Recently Adopted and Recently Issued Accounting Guidance

Adopted

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 that 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 its consolidated financial statements, as the Company does not currently have any such arrangements with its customers.

Issued

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, mine development and land

	June 30, 2011	December 31, 2010
	(Unaudited)
Land	$ 19,590	$ 19,590
Mining concessions:
Pilar	710,172	710,172
Don Roman	521,739	521,739
Las Nuvias	100,000	100,000
Centenario (a)	635,571	1,946,545
Pirita	249,909	246,455
Picacho	1,250,000	1,250,000
La Palma (b)	80,000	-
La Verde (c)	60,000	-
Picacho Fractions (d)	163,793	-
Mining concessions	3,771,184	4,774,911
Property, plant and equipment	3,493,957	3,603,210
	7,284,731	8,397,711
Less – accumulated depreciation	(421,504)	(295,925)
	$ 6,863,227	$ 8,101,786

Pilar, Don Ramon, Las Nuvias, Centenario, La Palma and La Verde properties are geographically located in Mexico and are known as the Don Roman Groupings.

10

The Picacho and Picacho Fractions properties are geographically located in Mexico and are known as the Picacho Groupings.

a.

In November 2008, the Company acquired eight mining concessions known as “Centenario” from an independent third party. The properties approximate 5,400 hectares and were purchased for $1,894,050, including $247,050 in value added taxes.

In June 2009, the Company 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 another 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 of $127,000, 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 $251,257 of value added tax.

In March 2011, the Company and the note holder agreed to reduce the purchase price of the Centenario concession to $635,571. These changes resulted in the following: 1) decrease debt by $1,310,974; and 2) decrease recoverable value added taxes by $218,309. At March 31, 2011 the amended purchase price was paid in full.  

In March 2011, the Company purchased technical data pertaining to Centenario from the former owner in consideration for 416,100 shares of the Company’s common stock and $100,000 cash. The parties agreed that the value of the stock for the technical data was $2.00 per share for the Company’s common stock.  The Company has accounted for the shares at their fair market value as follows:  416,100 shares of the Company’s common stock valued at $0.85.  All fair market values were determined based on contemporaneous stock issuances for cash or if the stock was quoted on an exchange, it’s closing stock price. All stock was issued April 2011.

b.

On March 2011, the Company executed an agreement to acquire six mining concessions known as “La Palma” from an independent third party. The properties approximate 2,104 hectares, and were purchased for a total of $92,800, including $12,800 in value added taxes. The Company paid $50,000 as a deposit for the concession mining deposit which was applied to the effective price of the property.  The remaining balance of $42,800 was due and paid during the second quarter of 2011. The six concessions acquired were La Palma, Choix, El Pino, La Verde 3, La Verde 4 and La Verde 6.  

In March 2011, the Company purchased technical data pertaining to the La Palma from the former owner for 460,000 shares of the Company’s common stock. The parties agreed that the value of the stock for the technical data was $2.00 per share for the Company’s common stock.  The Company has accounted for the shares at their fair market value as follows:  460,000 shares of the Company’s common stock valued at $0.85.  All fair market values were determined based on contemporaneous stock issuances for cash or if the stock was quoted on an exchange, it’s closing stock price. All stock was issued April 2011.

La Palma and La Verde properties are part of the “Don Roman Groupings”.

c.

On April 2011, the Company executed an agreement to acquire two mining concessions known as “La Verde” from an independent third party. The properties approximate 127 hectares, and were purchased for a total of $69,600, including $9,600 in value added taxes. AMM paid $30,000 as a deposit for the concession mining deposit which was applied to the effective price of the property and the remaining balance was paid during the second quarter of 2011. The two concessions acquired were La Verde 5 and Mina El Rosario.

11

In April 2011, the Company purchased technical data pertaining to the La Verde from the former owner for 370,000 shares of the Company’s common stock. The parties agreed that the value of the stock for the technical data was $2.00 per share for the Company’s common stock.  The Company has accounted for the shares at their fair market value as follows:  370,000 shares of the Company’s common stock valued at $0.85.  All fair market values were determined based on contemporaneous stock issuances for cash or if the stock was quoted on an exchange, it’s closing stock price. All stock was issued April 2011.

La Palma and La Verde properties are part of the “Don Roman Groupings”.

d.

On May 2011, the Company executed an agreement to acquire three mining concessions knows as “Picacho Fractions I, II and III” from Tara Gold. The properties approximate 3,823 hectares, and the acquisition price of the properties was $190,000 including $26,207 in value added taxes. Full amount was financed for an interest rate of  3.25%  plus LIBOR.

Picacho and the Picacho Fractions are known as the Picacho Groupings

Note 3.

Other assets, current and non-current

In September 2010, Tara Minerals signed an agreement to purchase three real estate properties for a price of $1,000,000. In order to hold these properties Tara Minerals made a cash deposit of $60,000. Tara Minerals is obligated to pay all the expenses, fees and general expenditures relating to the sale, which expenses, up to a maximum of $500,000, which are deductible from the sales price.  In March 2011, Tara Minerals received notification from Pacemaker Silver Mining S.A. de C.V. a wholly-owned Mexican subsidiary of El Tigre, indicating that they also had surface rights related to being able to work claims they held mining rights too. Although this is does not effect our specific right to the tailing piles, there could be an issue as to who would have specific areas and specific times.   Until the difference can be determined, the deposit has been expensed in 2011.

In May 2011, the Company paid $66,667 towards a $100,000 advanced to the Iron Ore Project Vendor, against future royalty payments (See Note 6).

In May 2011, the Company advanced $175,000 to a subcontractor for improvements needed at the Iron Ore Project site; the advance will be expensed over a six-month period beginning in July 2011.

Note 4.

Notes Payable

The following table represents the outstanding balance of loans and capital leases for the Company as of June 30, 2011 and December 31, 2010.

	June 30, 2011	December 31, 2010
	(Unaudited)
Mining concession	$ 173,910	$ 1,699,737
Auto loans	128,370	119,766
Equipment	-	72,848
	302,280	1,892,351
Less – current portion	(209,964)	(824,001)
Total – non-current portion	$ 92,316	$ 1,068,350

During the six months ended June 30, 2011, one of the vehicles purchased in 2010 was stolen, the insurance claim was processed and the note payable and the fixed asset removed from the AMM’s books. AMM defaulted on an equipment capital lease entered into on July 21, 2010, the equipment was capitalized as an asset and the asset and related debt were removed and payments were reclassified as treating payments similar to an operating lease.

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AMM financed the purchase of one truck to be used in operations for $48,491; the note payable has a 13.5% interest rate and a maturity date of June 1^st, 2015 or a term of forty eight months.

The five year maturity schedule for notes payable is presented below:

Due on or before	June 30, 2012	June 30, 2013	June 30, 2014	June 30, 2015	June 30, 2015	Total
Pirita (See Note 2)	$ 173,910	$ -	$ -	$ -	$ -	$ 173,910
Auto Loans	36,055	25,203	45,306	21,807	-	128,370
Total – non-current portion	$ 209,964	$ 25,203	$ 45,306	$ 21,807	$ -	$ 302,280

Note 5.

Related Party Transactions

Due to related parties, net of due from related parties was $3,192,564 and $3,465,232 as of June 30, 2011 and December 31, 2010, respectively.

The Company is a subsidiary of Tara Gold Resources Corp. In January 2007, another subsidiary of Tara Gold Resources Corp., Corporacion Amermin, S.A. de C.V. (“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 the Company’s subsidiary AMM as of January 2007. AMM makes payments to Amermin and Amermin made payments related to the 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, 2011, due from related parties is $78,293 and due to related parties, includes:

- Pilar mining concession: $535,237 (inclusive of valued added tax)

- Don Roman concession: $211,826

- Due to Amermin: $888,032

- Other related party: $120,333

As of June 30, 2011, Tara Gold had loaned the Company $1,497,566 which amount is included in Due to Related Parties. There are no terms to this related party payable and it is due on demand.

In September 2010, Tara Gold entered into a tentative agreement with Tara Minerals which provided that Tara Minerals would acquire all of the outstanding shares of Tara Gold by exchanging one Tara Mineral share for two Tara Gold shares.  In 2011 this agreement was cancelled and Tara Gold announced it would begin to distribute all of its shares in Tara Minerals to its shareholders. In May 2011, the first distribution, at a rate of one Tara Minerals common share for every 20 outstanding shares of Tara Gold, was made. Additional distributions will be announced over the next 24 months until all Tara Minerals shares, held by Tara Gold, are distributed to Tara Gold shareholders.

On May 2011, the Company acquired three mining concessions knows as “Picacho Fractions I, II and III” from another subsidiary of Tara Gold, Corporacion Amermin, S.A. de C.V. (“Amermin”). The acquisition price of the properties was $190,000 including $26,207 in value added taxes, financed at 3.25% plus LIBOR.

Note 6.

Iron Ore Project and Related Financial Instrument

In May 2011, the Company reached an agreement for the right to mine the 3,233 hectare Tania Iron Ore project located in Manzanillo, State of Colima, Mexico. The Company has the right to remove 6 million tonnes of salable concentrate from the property, with perpetual renewal rights, extending through the life of the property. The Company will pay the vendor $6 per salable tonne for the first 500,000 tonnes removed from the property and $7 per tonne thereafter. A total of $100,000 will be advanced to the vendor against future royalty payments. As of June 30, 2011 the Company advanced $66,667.  

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The Company raised $750,000 through a financial instrument to fund the project. A portion of the funds will be used to secure appropriate environmental permits, export permits, and recovery process engineering. The financial instrument has no repayment requirement, except if the Iron Ore Project generates revenue, interest rate or term. As the Company’s common stock has not been issued nor is this a debt instrument, in accordance with our accounting policy we have treated this as temporary financing until such time as something changes requiring debt or permanent equity treatment. The beneficial conversion feature calculated for the conversion feature of this instrument is $180,000, once a triggering event takes place the beneficial conversion feature accounting will follow the treatment of debt or equity.

Note 7.

Stockholders’ Equity

The authorized common stock of the Company consists of 200,000,000 shares with par value of $0.001.

March 2011, the Company issued 1,012,977 shares of common stock valued at $1,215,572 or $1.20 a share to convert loans from unrelated parties.

March 2011, the Company issued 105,722 shares of common stock valued at $126,866 or $1.20 a share to convert a loan from a related party.

March 2011, the Company issued 125,000 shares of common stock for warrants exercised, for $50,000 or $0.40 a share for warrants exercised for cash.

April 2011, the Company issued 100,000 shares of common stock to an Officer of the Company, valued at $100,000 or $1.00 a share for payment  on behalf of Tara Gold for services rendered.

April 2011, the Company issued 416,100 shares of common stock valued at $353,685 or $0.85 a share for the purchase of Centenario’s technical data. See Note 2 above.

April 2011, the Company issued 460,000 shares of common stock valued at $391,000 or $0.85 a share for the purchase of La Palma’s technical data. See Note 2 above.

April 2011, the Company issued 370,000 shares of common stock valued at $314,500 or $0.85 a share for the purchase of La Verde’s technical data. See Note 2 above.

April 2011, the Company issued 280,000 shares of common stock valued at $112,000 or $0.40 a share for warrants exercised for cash.

May 2011, the Company issued 792,500 shares of common stock valued at $317,000 or $0.40 a share for warrants exercised for cash.

In May 2011, the Company sold, in a private offering of 1,643,334 units for $493,000 in cash, or $0.30 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 $1.00 per share at any time on or before May 1^st, 2012.

May 2011, the Company issued 1,100,000 shares of common stock valued at $55,000 or $0.050 a share for cash to Officers of the Company that exercised non-qualified stock options.

In May 2011, the Company increased its authorized capitalization to 200,000,000 shares of common stock.

Common Stock Payable

At June 30, 2011, common stock payable consists of:

·

125,000 shares payable, valued at $125,000 for  cash and

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·

100,000 shares payable, valued at $66,000 for prepaid services.

Note 8.

 Stock Compensation

In January 2010, under its Incentive Stock Option Plan the Company granted two of its officers’ options for the purchase of 750,000 shares of common stock. In May 2011, the options were cancelled and the Company concurrently granted new Incentive Stock Options to the officers; under this new grant the officers have the option to purchase 750,000 shares of common stock, exercisable at a price of $0.58 per share and vest at various dates until May 2013. The options expire at various dates beginning May 2013.  In accordance with the Stock Compensation Topic, FASB ASC 718-20-35, the Company has analyzed the cancellation of the award accompanied by the concurrent grant of a replacement award and determined that there was no further incremental compensation cost. As of June 30, 2011 options that vested in 2011 associated with this transaction were valued at $493,384.

In September 2010, the Company granted options for 200,000 shares of common stock to an unrelated third party for investor relations services. The options have an exercise price of $1.00 per share, vest between September 2010 and March 2011 and expire two years from the date of vesting. As of June 30, 2011 options that vested in 2011 were valued at $36,353.

In May 2011, the Company sold, in a private offering of 1,643,334 units for $493,000 in cash, or $0.30 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 $1.00 per share at any time on or before May 1^st, 2012.

The fair value of each option 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 agreements and represents the period of time that management anticipates option 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.

	2011	2010
Expected volatility	163.11%	208.37% - 319.79%
Weighted-average volatility	163.11%	159.17%
Expected dividends	0	0
Expected term (in years)	2.00	0.75 – 4.50
Risk-free rate	0.58%	0.30% - 2.37%

A summary of option activity under the Plan as of June 30, 2011 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, 2010	4,630,000	$ 0.49
Granted	750,000	0.58
Exercised	(1,100,000)	0.05
Forfeited, expired or cancelled	(750,000)	(1.57)
Outstanding at June 30, 2011	3,530,000	$ (0.11)	3.0	$ 3,608,200
Exercisable at June 30, 2011	2,320,000	$ 0.09	3.5	$ 3,132,600

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Nonvested Options	Options	Weighted -Average Grant-Date  Fair Value
Nonvested at December 31, 2010	1,475,000	$ 1.37
Granted	750,000	0.58
Vested	(390,000)	0.78
Forfeited, expired or cancelled	(625,000)	(1.57)
Nonvested at June 30, 2011	1,210,000	$ 0.29

A summary of warrant activity under the Plan as of June 30, 2011, and changes during the period then ended is presented below:

Warrants	Shares	Weighted- Average Exercise Price	Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at December 31, 2010	4,271,999	$ 0.73
Granted	1,653,334	0.30
Exercised	(1,197,500)	0.38
Forfeited, cancelled or expired	(5,000)	0.40
Outstanding at  June 30, 2011	4,722,833	$ 0.88	1.5	$4,253,773
Exercisable at June 30, 2011	4,722,833	$ 0.88	1.5	$ 4,253,773

Nonvested Warrants	Warrants	Weighted -Average Grant-Date  Fair Value
Nonvested at December 31, 2010	$ -	$ -
Granted	1,653,334	0.30
Vested	(1653,334)	(0.30)
Forfeited	-	-
Nonvested at June 30, 2011	-	$ -

Note 9.

Non-controlling Interest

On January 28, 2011, Adit, sold 500,000 units at a price of $1.00 per unit to Yamana Gold Inc.  Each unit consisted of one share of Adit’s common stock and one half warrant. Each full warrant entitles Yamana to purchase one share of Adit’s common stock at a price of $1.50 per share at any time on or before January 28, 2014.

In connection with the sale of the units, Adit also signed a letter of intent that grants Yamana an option to acquire up to a 70% interest in Adit’s Picacho gold/silver project.  A definitive agreement is expected to be completed August, 2011.  Upon completion of the definitive agreement, Adit will sell an additional 2,500,000 units to Yamana at a price of $1.00 per unit. The units will be identical to the units sold on January 28, 2011.  From the $3,000,000 received from Yamana, Adit will be required to spend $2,000,000 in exploration work on the Picacho project within 12 months of signing the definitive agreement.  

Yamana can earn a 51% interest in the project by spending an additional $5,000,000 on the project within 30 months of the date of the definitive agreement and paying Adit an additional $1,000,000. Yamana can increase its interest to 70% by spending an additional $9,000,000 on the project and paying Adit an additional $2,000,000.

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	Non-controlling interest at June 30, 2011	Non-controlling interest at December 31, 2010
	(Unaudited)
Combined Adit / ACM:
Private placement	$ 1,499,501	$ 1,499,501
Common stock for cash	500,000	-
Finder’s fees	95,215	95,215
Technical data for Picacho	240,000	240,000
Officer compensation	487,500	487,500
Officer options	134,978	134,978
Cumulative statement of operations pickup through December 31, 2010	(400,368)	(400,368)
Statement of operations pickup 2011	(17,548)	-
AMM non-controlling interest	5	5
Total non-controlling interest	$ 2,539,283	$ 2,056,831

Note 10.

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, 2011 (Unaudited)
	Total	Level 1	Level 2	Level 3
Assets:
None	$ -	$ -	$ -	$ -
Liabilities:
Total notes payable, related and unrelated	$ 402,280	$ 402,280	$ -	$ -
Due to related parties, net of due from	3,192,564	3,192,564	-	-
Iron Ore financial instrument	750,000			750,000
Total	$ 3,594,844	$ 3,594,844	$ -	$ -

	Fair Value at December 31, 2010
	Total	Level 1	Level 2	Level 3
Assets:
None	$ -	$ -	$ -	$ -
Liabilities:
Total notes payable, including related   party	$ 1,992,351	$ 1,992,351	$ -	$ -
Due to related parties, net of due from	3,465,232	3,465,232	-	-
Total	$ 5,457,583	$ 5,457,583	$ -	$ -

Note 11.

Subsequent Events

Management evaluated all activity of the Company through August 15, 2011 (the issue date of the Financial Statements) and concluded the following disclosures are pertinent:

a.

In August 8, 2011 the Company entered into an agreement with Carnegie Mining and Exploration, Inc. which provides Carnegie with the option to earn up to a 50% interest in the Company’s Don Roman and all of the Company’s iron ore projects located in Mexico, including the Company’s Tania Iron Ore project.

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As consideration for the option, Carnegie paid $100,000 to the Company and spent $150,000 toward bringing the Don Roman mine back into production.

In order to earn a 30% interest in the Don Roman project, Carnegie, no later than:

·

December 9, 2011, must spend $2,000,000 on the Don Roman project and achieve a Production Rate of at least 120 tones of ore throughput per day, and

·

No later than August 8, 2012, must spend $6,000,000 on the Don Roman project and achieve a Production Rate of at least 360 tones of ore throughput per day.

If Carnegie is able to achieve the required Production Rates with the expenditure of less than $2,000,000 or $6,000,000 (as the case may be) the amounts not spent by Carnegie, may, at Carnegie’s option, be paid to Tara Minerals or used to acquire additional mining concessions.

In order to earn a 50% interest in the Don Roman project, Carnegie, no later than August 8, 2013, must spend at least $5,000,000 on the Don Roman project and achieve and maintain a Production Rate of at least 600 tones of ore per day.

For purposes of the agreement between the Company and Carnegie, the term Production Rate means the tones which are being processed by the mill at the Don Roman site.

In Mexico, weight is denominated in tones. One tone is equal to 2,200 pounds.

If Carnegie spends at least $2,000,000 on the Don Roman project, Carnegie will be entitled to 50% of the net income from the Don Roman mine until Carnegie earns, or fails to earn, its 30% interest in the Don Roman project. If Carnegie fails to earn its 30% interest in the Don Roman project, Carnegie’s rights to any income from the Don Roman mine will terminate. If Carnegie earns it’s 30% interest in the Don Roman project, Carnegie will continue to be entitled to a 50% interest in the net income from Don Roman mine until Carnegie earns, or fails to earn its 50% interest in the Don Roman project. If Carnegie fails to earn its 50% interest in the Don Roman project, Carnegie will be entitled to a 30% interest in the net income from the Don Roman mine.  If Carnegie earns its 50% interest in the Don Roman project, Carnegie will continue to be entitled to a 50% interest in the net income from Don Roman mine.

Carnegie may earn a 50% interest in the Company’s iron ore projects in Mexico, including the Company’s Tania Iron Ore project, by spending $1,000,000 toward the projects by November 6, 2011. Any amounts spent by Carnegie on the iron ore projects will be credited toward the amount Carnegie is required to spend to obtain a 30% interest in the Don Roman project. If Carnegie spends the $1,000,000, but does not elect to acquire a 50% in the iron ore projects, then Tara Minerals will issue to Carnegie 1,000,000 shares of Tara Minerals common stock.

If Carnegie elects to earn its 50% interest in the iron ore projects, then Carnegie, if it spends at least $8,000,000 on the Don Roman project, will be entitled to 50% of the net income from the iron ore projects until Carnegie earns, or fails to earn, its 30% interest in the Don Roman project. If Carnegie fails to earn its 30% interest in the Don Roman project, Carnegie’s rights to any income from the iron ore projects will terminate. If Carnegie earns it’s 30% interest in the Don Roman project, Carnegie will continue to be entitled to a 50% interest in the net income from the Company’s iron ore projects regardless of whether Carnegie earns, or fails to earn, its 50% interest in the Don Roman project.

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ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

Tara Minerals was incorporated on May 12, 2006.  During the period from its incorporation through June 30, 2011 Tara Minerals generated revenue of $160,421 and incurred expenses of $658,007 in cost of sales; $3,861,863 in exploration expenses and $22,028,543 in operating and general administration expenses.  Included in operating and general and administrative expenses is a non-cash charge of $8,464,942 pertaining to the issuance of stock options and bonus plans.

Material changes of certain items in Tara Minerals’ Statement of Operation for the three months ended June 30, 2011, as compared to the same period last year, are discussed below.

Three Months Ended	June 30, 2011	June 30, 2010
Revenue	$ -	$ 37,775
Cost of revenue	-	-
Exploration expenses	465,150	292,679
Operating, general and administrative expenses	960,717	2,570,705
Net operating loss	$ (1,425,867)	$ (2,825,609)

During the three months ended June 30, 2011, exploration expenses increased from the prior period in 2010 due to beginning of exploration activities at the Tania Iron Ore project. For the three months ended June 30, 2011, exploration expenses consisted of $314,500 for the purchase of technical data for the La Verde property part of Don Roman Groupings, $1,000 for geological consulting, assaying, and field supplies for the Picacho Groupings, and $150,000 for mine and smelting operations and other various mine expenses for the Don Roman Groupings and Tania Project. As of June 30, 2010, exploration expenses consisted of $39,000 for geological consulting, assaying, and field supplies for the Picacho Groupings, $254,000 for mine and smelting operations and other various mine expenses for the Don Roman Groupings.

Material changes of certain items in Tara Minerals’ operating, general and administrative expenses for the three months ended June 30, 2011, as compared to the same period last year, are discussed below.

Three Months Ended	June 30, 2011	June 30, 2010
Bad debt expense	$ 97,921	$ 422,319
Depreciation expense	67,020	39,674
Investor relations expense	35,310	1,388,770
Compensation, officer employment contracts and bonuses	455,244	86,116
Professional fees	217,511	301,270
Repair and maintenance	2,739	19,832
Rent and rental of equipment	12,460	4,360

Bad debt expense decreased in the three months ended June 30, 2011 due to lower transaction volume, therefore the allowance and bad debt calculation was lower.  Depreciation expense increased as more plant and equipment was in service during the three months ended June 30, 2011 than 2010. The decrease in investor relations expense is due to fewer consultants needed, during 2010 the Company was expecting to start production and consultants were hired to handle investor relations and applied to enter Amex, at the time the Company decided not to go forward. During the three months ended June 30, 2011 investor relations expenses consisted of $16,500 paid with common stock and $14,250 in cash to consultants. During the three months ended June 30, 2010 investor relations expenses consisted 624,734 common shares issued for $1,193,550 and  $152,551 in cash for investor relations at the Tara Minerals level. During the three months ended June 30, 2011 compensation, officer employment contracts and bonuses consisted of options with a value of $311,000, and officers’ compensation of $144,000. As of June 30, 2010 compensation, officer employment contracts and bonuses consisted of $86,000. Professional fees decreased $108,000 in 2011 because fewer professionals and consultants were needed to start operations at the Don Roman Groupings in 2010. Repairs and maintenance decreased in the three months ended June 30, 2011 because the plant at Choix stopped operating and during 2010 the company was working on

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a program to track inventory and parts and is not being used in 2011. Rent and rental equipment increased during the three months ended June 30, 2011 due to rental of apartments in Manzanillo, Colima, where the Iron Ore Project is located at, for personnel and officers, the Company did not incurred in any rental of equipment expenses.

Material changes of certain items in Tara Minerals’ Statement of Operation for the six months ended June 30, 2011, as compared to the same period last year, are discussed below.

Six Months Ended	June 30, 2011	June 30, 2010
Revenue	$ -	$ 37,775
Cost of revenue	-	-
Exploration expenses	1,388,154	1,888,650
Operating, general and administrative expenses	1,656,203	9,685,754
Net operating loss	$ (3,044,357)	$ (11,536,629)

During the six months ended June 30, 2011, Tara Minerals had no revenue and exploration expenses declined due to activity ceasing at the Don Roman mine in the fourth quarter of 2010. For the six months June 30, 2011, exploration expenses consisted of $1,159,000 for the purchase of technical data for both the Centenario (part of the Don Roman Groupings) and La Verde and La Palma properties (part of the Don Roman Groupings), $16,000 for geological consulting, assaying, and field supplies for the Picacho Groupings, and $213,000 for mine and smelting operations and other various mine expenses for the Don Roman Groupings and Tania Project.  As of June 30, 2010, exploration expenses consisted of $1,224,000 for the purchase of technical data for the Picacho Groupings, $80,000 for geological consulting, assaying, and field supplies for the Picacho Groupings, $584,000 for mine and smelting operations and other various mine expenses for the Don Roman Groupings.

Material changes of certain items in Tara Minerals’ operating, general and administrative expenses for the six months ended June 30, 2011, as compared to the same period last year, are discussed below.

Six Months Ended	June 30, 2011	June 30, 2010
Bad debt expense	$ (52,802)	$ 443,038
Depreciation expense	137,099	83,695
Investor relations expense	92,303	4,401,263
Compensation, officer employment contracts and bonuses	815,900	3,730,615
Professional fees	361,673	471,172
Repairs and maintenance	10,946	35,292
Rent and rental of equipment	52,989	9,263

Bad debt expense decreased in the six months ended June 30, 2011 due to the renegotiation of an agreement which included IVA and caused an adjustment of IVA Receivables, allowance and bad debt expense. Depreciation expense increased as more plant and equipment was in service during the six months ended June 30, 2011 than 2010. The decrease in investor relations expense is due to fewer consultants needed, during 2010 the Company was expecting to start production and consultants were hired to handle investor relations and applied to enter Amex, at the time the Company decided not to go forward. For the six months ended June 30, 2011 Investor relations expenses consisted of $36,000 in options, $16,500 paid with common stock and $31,000 in cash to consultants. As of June 30, 2010 investor relations expenses consisted of  1,997,678 common shares issued for $4,108,610 for investor relations at the Tara Minerals level and 28,110 common shares issued for $21,083 for investor relations at the Adit level, the remainder was paid in cash. During the six months ended June 30, 2011 compensation, officer employment contracts and bonuses consisted of options with a value of $493,000, and officers’ compensation of $312,870. During the six months ended June 30, 2010 compensation, officer employment contracts and bonuses consisted of 2,450,000 options for $3,406,000, $157,000 for stock bonuses and officers’ compensation of $167,000. Professional fees decreased $133,000 2011 because fewer professionals and consultants were needed to start operations at the Don Roman Groupings in 2010. Repairs and maintenance decreased in the six months ended June 30, 2011 because the plant at Choix stopped operating; therefore the Company spent less on repairs and maintenance of machinery and other plant and mining equipment. During the six months ended June 30, 2010 the company was working on a program to track inventory and parts that is not being used in

20

2011; the plant at Choix was operating and more repairs and maintenance expenses were incurred. Rent and rental equipment increased during the six months ended June 30, 2011 due to rental of apartments in Manzanillo, Colima, where the Iron Ore Project is located at, for personnel and officers, rent of the offices in Chihuahua; the Company defaulted on an equipment capital lease entered into on July 21, 2010, the equipment was capitalized as an asset and the asset and related debt were removed and payments were reclassified as treating payments similar to an operating lease during the first quarter of 2011.

The following is an explanation of Tara Minerals’ material sources and (uses) of cash during the six months ended June 30, 2011 and 2010:

	June 30,
	2011	2010
Net cash (used) provided in operating activities	$ (1,827,375)	$ (11,260,360)
Acquisition of property, plant and equipment	-	(229,622)
Purchase of mining properties	(30,060)	(25,149)
Payments made for mining deposits	(6,462)	(398)
Sale of common stock	1,239,744	978,905
Loans from unrelated and related parties	-	430,103
Repayment of loans	(102,523)	(711,451)
Sale of common stock of subsidiaries	500,000	260,482
Change in due to/from related parties, net	(362,668)	162,490
Shares subscribed	125,000	-
Cash on hand at beginning of period	439,628	43,016

Tara Minerals does not know of any trends, events or uncertainties that have had, or are reasonably expected to have, a material impact on its sales, revenues or income from continuing operations, or liquidity and capital resources.

Tara Minerals anticipates that its capital requirements during the twelve months ending August 15, 2012 will be:

Exploration and Development – Don Roman Groupings	$ 1,500,000
Exploration and Development -  Picacho Groupings	2,500,000
Exploration and Development – Tania Iron Ore Project	750,000
Property taxes	95,000
General and administrative expenses	400,000
Total	$ 5,245,000

Tara Minerals will need to obtain additional capital if it is unable to generate sufficient cash from its operations or find joint venture partners to fund all or part of its exploration and development costs.

In 2011, Tara Minerals has sought to expand and advance the Don Roman Groupings project by acquiring additional highly prospective mineral claims; and by opening up the project to numerous parties that have expressed an interest in the possibility of becoming an operating partner in the further development of the Don Roman Groupings.  In April 2011, the Company signed a Letter of Intent (LOI) that would provide the capital and expertise to restart the operations at Don Roman and explore the full potential of the land package we have assembled.

In August, a Definitive Agreement was signed that included an option for Carnegie mining to earn a 50% interest in the Don Roman Groupings and an additional option to earn an interest in all Iron Ore properties located in Mexico, which Tara Minerals controls or may control through this Joint Venture. The company believes this relationship to be strategic and should serve to develop Don Roman along with our Iron Ore prospects in an aggressive manor. Development aimed at near term production and cash flow remains the Joint Venture’s objective, with expansion of production accomplished in Phases. It will also be a priority of the Joint Venture to begin to prove our resources under professional guide lines such as NI43-101 standards.

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As of August 15, 2011 Tara Minerals was reviewing the Pirita property for continued inclusion as part of the Company’s mining property portfolio.  No payments toward this property have been made in 2011 and the Company may decide to terminate the purchase agreement and return the property due to its current focus as described above.

Tara Minerals’ future plans will be dependent upon the amount of capital available to Tara Minerals, the amount of cash provided by its operations, and the extent to which Tara Minerals is able to have joint venture partners pay the costs of exploring and developing its mining properties.  

Tara Minerals does not have any commitments or arrangements from any person to provide Tara Minerals with any additional capital.  If additional financing is not available when needed, Tara Minerals may continue to operate in its present mode or Tara Minerals may need to cease operations.  Tara Minerals does not have any plans, arrangements or agreements to sell its assets or to merge with another entity.

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

ITEM 4.   CONTROLS AND PROCEDURES

Francis Richard Biscan, Jr., the Company’s Principal Executive Officer and Lynda R. Keeton-Cardno, the Company’s Principal Financial and Accounting 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.

22

PART II

OTHER INFORMATION

ITEM 1.      LEGAL PROCEEDINGS

None.

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

Note 7 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, 2011.  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 offered, 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	Acquisition Agreement –La Verde’s technical data
10.2	Subcontractor Agreement – Tania Iron Ore Project
10.3	Royalty Units – Term Sheet
10.4	Employment Agreement – Francis Biscan
10.5	Employment Agreement – Lynda R. Keeton
10.6	Transfer Agreement between ACM and Amermin – Picacho Fractions properties
10.7	Royalty Units – Subscription Agreements
10.8	Carnegie Agreement - Don Roman Property
10.9	Schedule E to the Carnegie Agreement - Don Roman Property
31.1	Rule 13a-14(a) Certifications –CEO
31.2	Rule 13a-14(a) Certifications – CFO
32.1	Section 1350 Certifications
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Label Linkbase Document
101.PRE	XBRL Taxonomy Presentation Linkbase Document

23

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 15, 2011.

TARA MINERALS CORP.

By:   /s/ Francis Richard Biscan Jr.

 Francis Richard Biscan, Jr.,

President and Principal Executive Officer

By:   /s/ Lynda R. Keeton-Cardno

 Lynda R. Keeton-Cardno,

Principal Financial and Accounting Officer

24

EX-10.1

SALES PURCHASE CONTRACT OF MINING PROSPECTING TECHNICAL INFORMATION SUBSCRIBED ON ONE HAND BY A) CORPORACIÒN KEDAH, S. A. DE C. V., REPRESENTED IN THIS ACT BY HÉCTOR MANUEL CERVANTES SOTO IN HIS PERSONALITY AS SOLE ADMINISTRATOR AND LEGAL REPRESENTATIVE (THE VENDOR) AND, ON THE OTHER HAND BY, B) TARA MINERALS CORP., REPRESENTED IN THIS ACT BY RICHARD BISCAN, JR., IN HIS PERSONALITY AS LEGAL REPRESENTATIVE, JOINTLY NAMED (THE PARTIES), AND AMERICAN METAL MINING, S. A. DE C. V., BEING PRESENT REPRESENTED IN SUCH AN ACT BY RAMIRO TREVIZO GONZÀLEZ IN HIS PERSONALITY AS GENERAL PROXY (“AMM”), SUBJECTED TO THE FOLLOWING PREVIOUS RECORDS, DECLARATIONS AND CLAUSES.

PREVIOUS RECORDS

I.

The VENDOR is in the owner ship of certain technical information related with the mining Project known as “La Verde” (the INFORMATION), and same that is integrated by the 2 (two) mining lots described following and to date still pending of being registered before competent authorities and title holding belongs to AMM (the FUTURE CONCESSIONS)  

Lot:	MINA EL ROSARIO
File :	095/13646
Surface:	54.2402 Hectares.
Location:	Municipality of Choix, State of Sinaloa.

Lot:	LA VERDE 5
File:	095/13521
Surface:	72.7999 Hectares.
Location:	Municipality of Choix, State of Sinaloa.

1

SALESPURCHASE CONTRACT OF PROSPECTING MINING TECHNICAL INFORMATIONSUBSCRIBED BETWEEN CORPORACIÒN KEDAH, S. A. DE C. V. AND TARA MINERALS CORPORATION

III.

For purposes of clarity and certainty, a detailed description of the INFORMATION attached to this present writing as Annex I.

IV.

It being that the PURCHASER is proprietor of 99.99 ((ninety nine point ninety nine per cent) of the AMM’s social capital, and taking into consideration that the INFORMATION is necessary in order to carry out prospecting and promotion adequately regarding the FUTURE CONCESSIONS, upon the corresponding registry being duly granted by the competent authority, in past days the VENDOR stated his will to acquire them.

V.

The VENDOR estimated the PURCHASER’S proposal as feasible because it benefits his interests, and;

VI.

Having had the opportunity of agreeing regarding the terms and conditions included in this present contract, PARTIES decided to go ahead in its preparation and subscription for purposes of clarity and certainty.

DECLARATIONS

I.

The VENDOR declares through the offices of his 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 of the United States of Mexico as witnessed in Public Writ number 11,750 granted on the 23^rd  July 2009 before testimony of Jorge Mazpùlez Pèrez, Attorney at Law and Public Notary number 14 for the Morelos Judicial District, State of Chihuahua, and instrument that was correctly inscribed in the Public Registry of Property and Commerce of said district under electronic mercantile folio number 25,362*10 as of the 18^th August 2009 and reason why it enjoys the personality and necessary as well as sufficient capacity to intervene in this present judicial act;

2

SALESPURCHASE CONTRACT OF PROSPECTING MINING TECHNICAL INFORMATIONSUBSCRIBED BETWEEN CORPORACIÒN KEDAH, S. A. DE C. V. AND TARA MINERALS CORPORATION

2.    Its representative enjoys the faculties, the sufficient and necessary powers and mandates to subscribe this present contract in the VENDOR’S representation as already proven in the before indicated numeral, and same that have not been limited, restrained, suspended or revoked to date.

3.

To be the legitimate proprietor of the INFORMATION.

4.

To date there does not exist a current contract or agreement of any kind that includes in its object the INFORMATION either directly or indirectly, reason why the subscription of this present instrument does not imply non compliance whatsoever on the part of the VENDOR to engagements previously acquired nor does it affect any right previously granted in favor of third parties, situation that guarantees as of now in favor of the PURCHASER all legal aspects that may arise, and;

5.

It is his will to sell in favor of the PURCHASER the totality of the INFORMATION heeding in every instance to the terms and conditions of this present contract.

II.

The PURCHASER declares through the offices of his legal representative and under oath of stating the truth, that:

1.

It is an American corporation, duly established and operating in agreement with the applicable and current legislation of its place of constitution and residence, reason why it enjoys the personality, the sufficient and necessary capacity to intervene in this present judicial act;

3

SALESPURCHASE CONTRACT OF PROSPECTING MINING TECHNICAL INFORMATIONSUBSCRIBED BETWEEN CORPORACIÒN KEDAH, S. A. DE C. V. AND TARA MINERALS CORPORATION

2.   Its representative enjoys the faculties, the sufficient and necessary powers and mandates to subscribe this present contract in the PURCHASER’S representation as already proven in the before indicated numeral, and same that have not been limited, restrained, suspended or revoked to date.

3.

As it has been established already, to date he is the proprietor of 99.99 % (ninety nine point ninety nine per cent) of AMM’S social capital, and;

4.

Because it so suits his interests regarding the FUTURE CONCESSIONS, it is his will to buy from the VENDOR the totality of the INFORMATION heeding in every instance to the terms and conditions of this present contract.

II.

AMM declares through the offices of 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 of the United States of Mexico as witnessed in Public Writ number 17,227 granted on the 4^th  December 2006 before testimony of Eugenio Fernando Garcìa Russek, Attorney at Law and applicant to the position of Public Notary and ascribed to Public Notary number 28 for the Morelos Judicial District, State of Chihuahua, per license of the office’s Title Holder Felipe Colomo Castro, and instrument that was correctly inscribed in the Public Registry of Property and Commerce of said district under electronic mercantile folio number 23,327*10 as of the 22^nd  December 2006 and reason why it enjoys the personality and necessary as well as sufficient capacity to intervene in this present judicial act;

4

SALESPURCHASE CONTRACT OF PROSPECTING MINING TECHNICAL INFORMATIONSUBSCRIBED BETWEEN CORPORACIÒN KEDAH, S. A. DE C. V. AND TARA MINERALS CORPORATION

2.  Its representative enjoys the faculties, the sufficient and necessary powers and mandates to subscribe this present contract in AMM’S representation as already proven in Public Writ number 22,497, granted on the 10^th June 2008 before testimony of Mrs. Elsa Ordòñez Ordòñez, applicant to the office of Notary Public and ascribed to Public Notary number 28 of the Morelos Judicial District and acting per license of the office’s Title Holder Felipe Colomo Castro, and instrument that was correctly inscribed in the Public Registry of Property and Commerce of said district under mercantile electronic folio number 23,327*10 as of the 19^th June 2008 and same that have not been limited, restrained, suspended or revoked to date, and;

3.

It is his will to appear during the subscription of this present contract with the specific purpose of granting in guarantee in favor of the VENDOR the rights derived of the FUTURE CONCESSIONS, heeding in every instance to the terms and conditions included following.

II.

Both PARTIES declare, as well as AMM through the offices of their respective legal representatives and under oath of stating the truth, that they assist to the subscription of this present document in good faith, free of deceit, error, violence or any other vitiation in their consent with the purpose of committing themselves to the following:

CLAUSES

FIRST. OBJECT: By virtue of the subscription of this contract the VENDOR commits himself and sells in this same act in favor of the PURCHASER the totality of the INFORMATION related directly with the mining project known as “El Rosario”, same to be integrated by the FUTURE CONCESSIONS once its registry is granted by competent authorities. On his part, the PURCHASER commits himself to buy and in this same act buys from the PURCHASER the object described, committing himself to pay a certain and determined price per the following clauses.

5

SALESPURCHASE CONTRACT OF PROSPECTING MINING TECHNICAL INFORMATIONSUBSCRIBED BETWEEN CORPORACIÒN KEDAH, S. A. DE C. V. AND TARA MINERALS CORPORATION

SECOND. PRICE: For the sale of the INFORMATION, the PURCHASER obliges himself to pay in favor of the VENDOR the total amount of $740,000.00 Dollars (Seven hundred and forty thousand Dollars 00/100 in United States Currency) (The PRICE).

THIRD. MANNER, TIME AND PRICE PAYMENT: PARTIES agree that the PRICE be paid upon the date of signature of this present contract through the issuance and delivery in favor of the VENDOR within the following fifteen (15) able days the amount of 370,000 (three hundred and seventy thousand) PURCHASER common shares, THAT IS, Tara Mineral Corp., (TARM), same that will be issued subject to Rule 144 of the Securities Act of 1933, of forceful application in the stock market in which the described shares are exchanged, among other applicable and current legal disposition (the SHARES).

Regarding the SHARES it is expressly convened that the corresponding title will be delivered in favor of the VENDOR as soon as possible once the issuance of the corresponding paper work is completed before the respective stock authority.

The VENDOR accepts that 185,000 (one hundred and eighty five thousand) of the shares can be exercised and, consequently, sold in the corresponding stock market within a time lapse of 6 (six) months as of the date of issuance and delivery of the respective title in his favor, and the remaining SHARES, that is 185,000 (one hundred and eighty five thousand) can be exercised and sold within a time limit of 12 (twelve) months as of the date of issuance and delivery of the corresponding title.

On his part, the PURCHASER commits himself to guarantee and in this act guarantees that the stock value of the SHARES upon the date of their exercise and sale on the part of the VENDOR must be $2,00 Dollars (Two Dollars 00/100 in United States Currency), each.

It is expressly agreed that, in case the stock market value of the SHARES as of the date of their exercise and sale by the VENDOR be less than $2.00 dollars (Two Dollars United States Currency), each, the PURCHASER should issue in favor of the VENDOR an amount of shares required that, as derived from their sale, this latter may factually collect the total amount of $740,000.00 Dollars (Seven hundred and forty thousand Dollars United States Currency), same that will be issued per

6

SALESPURCHASE CONTRACT OF PROSPECTING MINING TECHNICAL INFORMATIONSUBSCRIBED BETWEEN CORPORACIÒN KEDAH, S. A. DE C. V. AND TARA MINERALS CORPORATION

Rule 144 of the Securities Act of 1933, of forceful application in the stock market in which the described shares are exchanged, among other applicable and current legal dispositions.

Finally, PARTIES agree that the VENDOR will be the only responsible of instituting the paper work for the sale of the SHARES at the proper time, assuming the respective cost, and notifying the PURCHASER in all opportunity of the corresponding stock value in order to go ahead, as applicable, with the terms of the foregoing paragraphs without harm of respecting the right of preference contemplated in the following Sixth clause.

FOURTH. DELIVERY OF THE INFORMATON:  The VENDOR delivers upon this same date in favor of the PURCHASER the totality of the INFORMATION, duly supported and backed regarding their nature.

Consequently, the VENDOR obliges himself to safe keep in total confidence as of this date anything regarding the INFORMATION, as well as to destroy the whole of the support and back up it keeps regarding same.

FIFTH. GUARANTEE: With the purpose of guaranteeing the validity and exchange of the SHARES by virtue of the subscription of the contract, AMM constitutes a specific guarantee in favor of the VENDOR regarding 100 % (one hundred per cent) rights that to date it holds regarding the FUTURE CONCESSIONS.

The VENDOR expressly accepts acknowledging the reach of the guarantee described. Consequently, for as long as the SHARES are valid and legally recognized in the corresponding stock market and same can be exercised and sold after the time lapse of the 12 (twelve) months before indicated, it will be understood that payment obligation on the part of the PURCHASERhas been satisfied in full. In such a lieu, the PURCHASER will not be held responsible of the impossibility of the sale of the SHARES in the stock market for reason attributable to the VENDOR o to any other person related with this latter, but only on the validity, legality and exchangeability of them, as has been set down.

7

SALESPURCHASE CONTRACT OF PROSPECTING MINING TECHNICAL INFORMATIONSUBSCRIBED BETWEEN CORPORACIÒN KEDAH, S. A. DE C. V. AND TARA MINERALS CORPORATION

SIXTH. RIGHT PREFERENCE: By virtue of the subscription of this contract, the VENDOR grants in favor of the PURCHASER a right of preference to acquire 100 % (one hundred per cent) of the SHARES once these have been legally exercised and sold in the corresponding stock exchange.

To such an effect, the VENDOR commits himself as of this moment to notify in writing and in all opportunity the PURCHASER of his intention of selling part or the whole of the SHARES. The PURCHASER will enjoy a time of grace of 30 (thirty) natural days to exercise the right described. In case the PURCHASER decides not to exercise his right of preference o just does not answer in writing the VENDOR’S notification of this latter’s intent of sale within the described time lapse, he will be free to go ahead and sell the SHARES in the corresponding stock market, paying attention to the adjustment process of the number of shares and the guaranteed price per share as described in the previous Third Clause.

SEVENTH. CONFIDENTIALITY: PARTIES commit themselves expressly to keep in a confidential character the whole of past, present and future information related with this instrument, and extending same confidentiality responsibility to subjects to whom such confidential information is disclosed.

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 information. In such cases, PARTIES must hold these people equally responsible, committed and in solidarity regarding the confidential obligations imposed upon the subjects such 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 to date or in the future become of public domain if and ever such consideration did not stem from a non compliance by any of the PARTIES to the stipulations set down in this clause; or 3. Information that must be rereleased to  per law or and administrative or judicial mandate by competent authorities, including those of the stock exchange.

8

SALESPURCHASE CONTRACT OF PROSPECTING MINING TECHNICAL INFORMATIONSUBSCRIBED BETWEEN CORPORACIÒN KEDAH, S. A. DE C. V. AND TARA MINERALS CORPORATION

PARTIES agree that the duration of the obligations contracted by virtue of this present clause will subsist indefinitely, even after the termination of this present instrument.

EIGHTH. NON COMPLIANCE AND CANCELLATION: PARTIES convene that, in case on of them does not comply with any of the obligations assumed by virtue of the subscription of this present instrument, these latter will be in their right to request the forceful compliance to the obligation omitted, on one hand, or the cancellation of this present contract on the other, as well as payment of an indemnity for harms and damages in both cases.

The before stated, without harm of a possible execution of the specific guarantee granted in favor of the VENDOR under the terms o the Fifth previously mentioned clause.

NINTH. ADDRESSES AND CONTACT TELEPHONES: PARTIES agree in indicating as their addresses and contact telephones for any and all purposes regarding the execution and compliance of the terms and conditions of this present instrument, and well as to deliver announcements, notifications and other communications related with same, the following:

VENDOR
Av. Independencia 2812
Col. Santa Rosa, C. P. 31050
Ciudad de Chihuahua, Chihuahua
Phone: 52-614-415-1971 PURCHASER
2162 Acorn Court
Wheaton, C. P. 60187
Illinois, E. U. A.
Phone: 01-630-462-0493

9

SALESPURCHASE CONTRACT OF PROSPECTING MINING TECHNICAL INFORMATIONSUBSCRIBED BETWEEN CORPORACIÒN KEDAH, S. A. DE C. V. AND TARA MINERALS CORPORATION

AMM:

Calle California 5101, local 206

Edificio Ejecutivo Vèrtice

Col. Hacienda de Santa Fe, C. P. 31214

Ciudad de Chihuahua, Chihuahua

Phone 52-614-200-8483

TENTH. ANNOUNCEMENTS, NOTIFICATION AND COMMUNICATIONS: PARTIES convene that any announcement, notification or communication necessary to surrender to their counterparts, must be done in writing.

Sending of such documents can be carried out via two means: 1. Per ordinary couriers service delivered on hand or by certificate mail with acknowledgement of receipt, or; 2. By electronic mail. In this letter case, forwarding will only be considered valid and legally accomplished when reception of the respective electronic mail is confirmed likewise, electronically, within the following three (3) natural days in an expressed manner through an answering and confirmation service sent back by the addressee.

ELEVENTH. CONTACT PERSONNEL: PARTIES agree that the totality of announcements, notification or communications necessary to be issued as derived from the terms and conditions of this present instrument must be forwarded indistinctly to the following persons:

VENDOR
HECTOR MANUEL CERVANTES SOTO
AGUSTÌN CERÒN GUEDEA PURCHASER

RICHARD BISCAN, JR.

10

SALESPURCHASE CONTRACT OF PROSPECTING MINING TECHNICAL INFORMATIONSUBSCRIBED BETWEEN CORPORACIÒN KEDAH, S. A. DE C. V. AND TARA MINERALS CORPORATION

AMM

RAMIRO TREVIZO LEDEZMA

RAMIRO TREVIZO GONZÀLEZ

In case it is their will to change the personnel contacts, PARTIES agree in notifying their counterparts of such a fact at least 5 (five) natural days in advance before the factual date of change of contact personnel. Not complying to the obligation described herein will imply that announcements, notification or communications sent and delivered in the name of the original addressees of the PARTY carrying out the change, will hold all legal effects in favor of the PARTY not having been advised in all opportunity as of the date of delivery and for as long as the non compliance subsists.

TWELFTH. TOTALITY OF THE CONTRACT: PARTIES  accept that this present agreement contains the totality of the agreements between them regarding the object and leaving without effect as well as cancelling the whole of agreements, reports, negotiations, correspondence, commitments and communications carried out previously between them either in writing o verbally.

THIRTEENTH. SEPARATE SCORES: PARTIES  and AMM expressly agree that this present contract will be considered subscribed and valid, for all legal effects that may arise, even though same be signed in separate scores by each, and the corresponding granting of consent will simply be acknowledged through the reception by any electronic means of an ordinary copy of the instrument duly signed, without harms that afterwards it be integrated in one single copy with the autograph signature of the PARTIES and AMM for purposes of  better formality.

FOURTEENTH. APPLICABLE LAW: This present instrument will abide and will be interpreted in agreement with the applicable and current legal disposition of the United States of Mexico.

FIFTEENTH. JURISDICTION: In case controversies may arise in relation with the validity, intention, interpretation, execution or compliance of this contract, PARTIES

11

SALESPURCHASE CONTRACT OF PROSPECTING MINING TECHNICAL INFORMATIONSUBSCRIBED BETWEEN CORPORACIÒN KEDAH, S. A. DE C. V. AND TARA MINERALS CORPORATION

expressly agree to submit same before the competent courts of law of the Morelos Judicial District in the City of Chihuahua, State of Chihuahua, surrendering as of this moment any other jurisdiction or privilege that might correspond to them by reason of their present or future domiciles, or by any other circumstance.

BOTH PARTIES IN THE KNOWLEDGE OF THE FORCE AND LEGAL REACH OF THIS PRESENT CONTRACT, SUBSCRIBE IT AT ADDRESSES AND ON DATES INDICATED FOR SUCH A PURPOSE.

VENDOR CORPORACIÒN KEDAH, S.A. DE C.V. Represented in this act by: HECTOR MANUEL CERVANTES SOTO	PURCHASER Represented in this act by: RICHARD BISCAN, JR.
AMM: AMERICAN METAL MINING, S. A. DE C. V. Represented in this act by: RAMIRO TREVIZO GONZÀLEZ Location:________________________________ Date____________________________________

Annex I

Description of the information

(To be included and attached)

12

SALESPURCHASE CONTRACT OF PROSPECTING MINING TECHNICAL INFORMATIONSUBSCRIBED BETWEEN CORPORACIÒN KEDAH, S. A. DE C. V. AND TARA MINERALS CORPORATION

EX-10.2

RENDERING OF SERVICES CONTRACT CELEBRATED ON ONE HAND BY A) AMERICAN METAL MINING, S. A. DE C. V:, REPRESENTED IN THIS ACT BY MR. RAMIRO TREVIZO LEDEZMA IN HIS PERSONALITY AS LEGAL REPRESENTATIVE (HENCEFORTH KNOWN AS THE “CLIENT”) AND ON THE OTHER BY MACO PBB, S. A. DE C. V., REPRESENTED IN THIS ACT BY MR. CARLOS ALBERTO MARTÍNEZ IN HIS PERSONALITY AS LEGAL REPRESENTATIVE (HENCEFORTH KNOWN AS THE “LENDER”) IN ACCORDANCE WITH THE FORTHCOMING STATED PREVIOUS RECORDS, DECLARATIONS AND CLAUSES.

CLAUSES

I.

In recently past days, the CLIENT subscribed a transfer of mining rights contract   with different people in order to acquire 100 % of the rights derived from the   concession named “TANIA”, described in detailed in the table immediately below   (the “CONCESSION”):

Title	n/d
File	102/00407
Surface	3,233-01-47 Hectares
Locaton	Pedro Núñez Ejido, Municipality of Manzanillo, Stateof Colima.

II.

The CLIENT requires the support of people involved in mining expertise,

specifically in the process of diverse mineral materials to be extracted from the   location comprising the CONCESSION in order to obtain concentrate from such   material;

III.

The CLIENT estimates that the LENDER accounts with the necessary and

sufficient materials as well as human resources in order to completely comply with   the obligations he contracts by the subscription of this instrument;

IV.

The LENDER considers that the CLIENT satisfies the economic resources

required and, additionally, the solvency and liquidity in order to satisfy completely   the obligations he contracts by the subscription of this present contract, and;

V.

By virtue of the before stated, PARTIES have decided to subscribe this present

contract in writing.

DECLARATIONS

1

RENDERING OF SERVICES CONTRACT SUBSCRIBED BETWEEN AMERICAN METAL MNING, S. A. DE C: V: AND MACO PBB MEXICO, S. A: DE C: V: ON THE 4^TH MAY 2011.

I.

The CLIENT declares through the offices of his 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 in operation in agreement with the   applicable and current legislation of the United States of Mexico, as witnessed in   Public Writ number 17,227, granted on the 4^th December 2006 before testimony of   Mr. Eugenio Fernando García Russek, Attorney at Law and applicant to the office   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 at Law, and instrument that was   duly inscribed before the Public Registry of Property and Commerce of said district   under electronic mercantile folio number 23,327*10 as of the 22^nd December 2006,   and reason why he enjoys the sufficient and necessary capacity to intervene in this   present judicial act;

2.  Its representative enjoys the faculties, powers, the sufficient and necessary

mandates in order to subscribe this present contract in representation of the   LENDER as indicated in this present instrument in its before stated numeral, same   that have not been restrained, limited, suspended or revoked to date;

3. It accounts with the sufficient and necessary economic resources, as well as with   the corresponding solvency and liquidity in order to completely satisfy the   obligations he contracts by virtue of this present contract;

4. To be duly inscribed in the Federal Taxpayers Registry with Fiscal Identification   Card number AMM-061204-4R7 and being to date current in his income tax   payments and other contributions and taxes that might have corresponded in   accordance with the applicable and current legislation concerning fiscal matters.

5. It is the will of its Administration Board to subscribe this present instrument

with the purpose that the LENDER undertakes all of the necessary activities to   adequately process the mineral material mentioned above.

II.

The LENDER declares through the offices of his legal representative and

under oath of stating the truth, that:

1. It is a mercantile society, specifically a Stock Company with Varying Amount of   Capital, duly established and in operation in agreement with the applicable and   current legislation of the United States of Mexico, as witnessed in Public   Writing   number 45256 granted on the 4^th May 2011 before testimony of Mr. Jesús Orlando   Padilla Becerra, Attorney at Law Public Notary number 30 of the State of Mexico   and instrument that was duly inscribed before the Public Registry of Property and   Commerce of said district under electronic mercantile folio number (__________)   as of the (_________).

2

RENDERING OF SERVICES CONTRACT SUBSCRIBED BETWEEN AMERICAN METAL MNING, S. A. DE C: V: AND MACO PBB MEXICO, S. A: DE C: V: ON THE 4^TH MAY 2011.

2. Its representative enjoys the faculties, powers, the sufficient and necessary

mandates in order to subscribe this present contract as evinced in Public Writing   number 45256, granted on the 4^th May 2011 before testimony of Mr. Jesús Orlando   Padilla Becerra, Attorney at Law and Public Notary number 30 of the State of   Mexico, instrument that is duly inscribed in the Public Registry of Property and   Commerce of said district under electronic mercantile folio number (_____) as of   the (____) of May 2011, and same that have not been limited, suspended or revoked   in any manner whatsoever to date;

3. That it in effect accounts with the necessary, sufficient human and material

resources to comply with the obligation he contracts by virtue of this contract and,   additionally, with the experience required in the mining field;

4. That he knows the location where the undertaking will be carried out object of   this present contract having already inspected them thoroughly and, consequently,   having become familiar with the properties and characteristic of same as well as   with factors that will intervene in the execution of same labors;

5. He is aware and understands the applicable and current legal dispositions in

mining  matters of the United States of Mexico, as well as with the studies, projects,   prints, specifications, work programs, budgets and other adjoined documents to this   present contract as Annexes;

6. To be duly inscribed in the Federal Taxpayers Registry with Fiscal Identification   Card (_____) and being to date current in his income tax payments and other   contributions and taxes that might have corresponded in accordance with the   applicable and current legislation concerning fiscal matters, and;

7. It is the will of its Administration Board to subscribe this present instrument

with the purpose of undertaking the necessary activities for the adequate execution   of the services in favor of the CLIENT.

III.

Both PARTIES declare, through their respective legal representatives, under oath   of stating the truth that they assist to the subscription of this contract per their own  and free will, free of deceit, violence, error, harm or any other vitiation in their   consent in order to commit themselves with the following:

CLAUSES

FIRST. OBJECT:  The CLIENT entrusts the LENDER and the LENDER accepts to carry out at location covering the CONCESSION the services of extraction and process of materials and minerals obtained from same that the CLIENT will indicate, specifically the iron metal, among others (the SERVICES) in exchange for a unit price payment per ton indicated in the Third Clause of this instrument as per the terms and conditions set down in the forthcoming clauses:

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SECOND. QUALITY OF CONCENTRATE:  In order that the CLIENT is in the possibility f paying the unit price per ton indicated in the following clause, each concentrate ton of the processed mineral material by the LENDER must have a minimum of 60 & (sixty per cent) of iron ore, in the understanding that if said concentrate does not meet the referred to percentage, the CLIENT will not be obliged to pay for it, a risk imputable to the LENDER due to the low mineral concentrate encountered at lot.

In the event the concentrate does not meet the described specifications in the above written paragraph, the LENDER commits itself to process it once more in order to increase the required characteristics by the CLIENT and specified in this instrument, risk not imputable to the LENDER due to the low mineral concentrate found at lot.

THIRD. TERMS AND CONDITIONS: In order to describe the manner in which the SERVICES must be rendered by the LENDER in favor of the CLIENT, there follows the principal terms and conditions applicable to this present contract:

1. The LENDER commits himself to put in use for the rendering of the SERVICES   the totality of machinery and equipment necessary for the purpose, taking charge of   locating them at the site of the CONCESSION or at any other location as is   convenient for the correct rendering of the SERVICES, as well as to withdraw   stated machinery and equipment upon finishing the works. The list of machinery   and equipment that the LENDER must use for the rendering of the SERVICES is   adjoined to this instrument and Annex I.

2. SERVICES will include cutting into the natural terrain, understanding that this   land excavation will be in a determined environment with the purpose of ripping the   land’s over load and reducing the level enabling the conformation of an adequate   support platform for such an effect. Likewise, it will include the removal of the   overburden in the natural terrain should there be the need of, as well as the removal,   the load and hauling of the material, rocks and land as debris generated by the   execution of the SERVICES; this will include the yard explanade, the engineering   and maintenance of the lot’s access roads.

3. The CLIENT commits himself to receive and pay the totality of the concentrate   of the processed mineral material due to the execution of the SERVICES, if and   ever it complies to the specification agreed upon in this present document.

4.  The LENDER will deliver to the CLIENT the concentrate at the site of the

CONCESSION as process goes along. However the before stated, the LENDER   will only be able to carry out payment as per the Sixth Clause of this contract per   each 10,000 (ten thousand) tons delivered to the CLIENT.

5. In case the CLIENT needs a modification to the specifications of the concentrate,   he will solicit such to the LENDER at least 72 (seventy two) hours in advance from   the date he requires. In this case, the unit price previously convened may be   modified by the PARTIES.

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FOURTH. COUNTERCLAIM: The CLIENT commits himself to pay to the LENDER for the rendering of SERVICES, per each ton of iron ore concentrate delivered as per the before set specification the amount indicated following:

Product	Type/tma	Quality	Unit measure	Unit Price – USA Dollars per ton
Mineral material	Iron ore sands	60% minimum iron ore	ton	$7.75 Dollars

The totality of the works or services entrusted in this contract to the LENDER amount to an important value of: $23,250,000.00 (twenty three million two hundred and fifty thousand Dollars 00/100 in United States Currency), if and ever the deposit merits the volume and mineral quality and, if and ever it gathers the requirements of economic feasibility to both parties.

On the other hand, PARTIES convene that the unit price before mentioned can be reviewed each 90 (ninety) days during the duration of this present contract.

FIFTH. ADVANCE: The CLIENT obliged himself to surrender as of this date an advance of $175,000.00 Dollars (One hundred and seventy five thousand Dollars 00/100 in United States Currency) in the understanding that it must be applied by the LENDER for office construction, buildings, warehouses and installations, and be it the case, for moving machinery and construction equipment necessary for the rendering of services object of this present contract.

The amount of the advance will be charged to the COUNTERCLAIM to be paid by the CLIENT and will amortized during the first 6 (six) months of duration of this present contract, applying at least 20 % (twenty per cent) to the import of each estimate carried out due to the execution of the SERVICES rendered by the LENDER to such an effect.

In case there be a balance lack to be amortized, this must be liquidated at final estimate, that is, the last to be presented for payment on the part of the LENDER.

SIXTH. ESTIMATES: The LENDER expressly agrees that in addition to the advance amount referred to in the Fifth Clause, the remaining COUNTERCLAIM must be paid in agreement with the terms and conditions before stated, that is, per each 10,000 (ten thousand tons) of iron ore concentrate delivered to the CLIENT in agreement with the unit price set down in the Fourth Clause of this instrument.

In order for the CLIENT to be in the possibility of knowing the quality of the iron ore concentrate and is able to pay the described estimates in favor of the LENDER according to the counterclaim indicated in this contract, PARTIES agree that the CLIENT will

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submit said concentrate to a specialized lab in the matter and of his choice, and payment for said estimates must be done once the lab certificate has been issued certifying the ore’s quality as per the previous Second Clause, in the understanding that the cost of such a certificate will be paid by the CLIENT.

SEVENTH. MANNER AND PLACE OF PAYMENT:  The portion of the paid COUNTERCLAIM in cash, will be carried out by the CLIENT in favor of the LENDER through the means of a bank deposit or electronic transfer of funds to bank account number 8005467, Branch 573, CLABE number 0021 8005 7380 0546 76 of Banamex Banking Institution within the following 5 (five) able days of the date in which the specified amount to be paid if made known.

Against payment of any amount, the LENDER must issued and deliver to the CLIENT the corresponding vouchers heeding in every instance to the applicable and current fiscal dispositions.

EIGHTH. TERM OF EXECUTION: The LENDER obliges himself to begin the undertakings object of this present contract within 21 (twenty one) able days following the signature of this present instrument, on one hand or payment of the corresponding advance on the other, in the understanding that commencement will begin as of the last matter that takes place. Considering the nature of the SERVICES, the LENDER commits himself to end the SERVICES as becomes convenient to the CLIENT.

NINTH. DURATION: This present contract will begin to be in effect as of the date of its subscription and will remain current until the date of the termination of the SERVICES and the corresponding end payment. Non the less, depending upon the nature and difficulty of the works object of this contract as well as by the entrustment on the part of the CLIENT of additional or different works, the duration of same can be extended both PARTIES agreeing.

TENTH. DOCUMENTATION AND ADMINISTRATIVE PERMITS: The whole of permits, authorizations or whatever other similar administrative document must be obtained by the CLIENT and submitted to the LENDER in ordinary copy in order to allow the beginning of the SERVICES.

ELEVENTH. QUALITY OF SERVICES: PARTIES convene that the execution of the totality of the SERVICES object of this contract be carried out to the CLIENT’S satisfaction.

TWELFTH. RECEIVING CONCENTRATE: The LENDER will solicit from the CLIENT for this latter to deliver the concentrate sent to him for process as soon as

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possible. The CLIENT will undergo reception of concentrate in order to ship it to the corresponding certification lab.

THIRTEENTH. SUBCONTRACTING: For the execution of the SERVICES the LENDER will make use of its own working force. However, in order to proceed to a partial subcontract of the works object of this present instrument, (will be) per the exclusive criterion of the LENDER for the execution of the SERVICES. In any case, the LENDER will answer to the CLIENT for the works carried out by such individuals, and holding to himself to (claim) against them in case of an undue execution of the works that might have been entrusted to them.

FOURTEENTH. LABOR RELATIONS: The LENDER will be the responsible entity for the obligations derived from the applicable and current legal dispositions in labor matters and of social security, expressly accepting to answer to all the claims that his work force could present against him or against the CLIENT related to the works object of this contract.

When the LENDER should entrust the execution of the mentioned works to any individual or corporation employing people in the development of its activities, (either of these latter) will be the only responsible entity for the obligations derived from the applicable and current legal dispositions in labor matters and of social security, and be subject to expressly accept all the claims that their workers could put up against the CLIENT or the LENDER in relation to the works object of this present instrument.

In case, the LENDER commits himself to safeguard the CLIENT and peacefully protect him from any claim that by reason of this contract his own workers might intend on one hand or the subcontractor’s workers to whom he has partially or in total entrusted the works object of this contract on the other.

FIFTEENTH. SERVICE SUPERINTENDENT: The LENDER commits himself to name, in advance of the beginning of the works object of this present contract, a representative who will remain per possible means at the site of such labors and who will act as construction superintendent, individual who will enjoy the powers, the widest and sufficient faculties for decisions in anything related with the compliance of this instrument. Per criterion of the LENDER, the said superintendent could be his worker on one hand or any (third party) service render on the other. The CLIENT, in case of experiencing any kind of incompetence on the part of the nominated superintendent can request he be replaced at any time during the execution of the SERVICES.

SIXTEENTH. MATERIALS AND EQUIPMENT: The LENDER commits himself that the machinery and equipment put to use in the works object of this present contract comply with the established standards, applicable and current, in the construction field as well as with the particular specifications of the project being part of this instrument, and vying in every instance they be of the best possible quality available.

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SEVENTEENTH. EQUIPMENT AND WORK SUPERVISION: The CLIENT will be endowed to verify at any moment if the work object of this contract is being carried out by the LENDER in conformity with the dispositions, the specifications and the corresponding work program set down in the project be it personally or through the offices of a third party he names.

EIGHTEENTH. LENDER’S CIVIL RESPONSIBILITY: Taking into consideration that during the execution of the SERVICES mechanical instruments will be used as well as dangerous substances and instruments per themselves due to the speed they carry either by their explosive or flammable nature, or by the energy of the electric current they bear or by any other analogue reason, in conformity with the dispositions of the applicable articles of the Civil Code of the Federal District, the LENDER will be obliged to answer for the damages caused by the materials he uses, his workers or the persons he subcontracts, independently that such individuals act illegitimately or not, unless it is proven that the damage occurred by the fault or the inexcusable negligence of the victim; also, the LENDER will have to answer and to repair the whole of the damages caused by his workers to the goods of the CLIENT, or to his subcontractors, the buildings, housing, roads, real estate or any other mobile good of nearby neighbors to the CLIENT’S site, as well to the infrastructure already built in the developed land located in the CLINET’S premises as could be retainer walls, yards, fences, hydraulic systems or any other kind of infrastructure already built at the moment of carrying out works on the part of the LENDER.

Consequently, the LENDER commits himself to safeguard and peacefully protect the CLIENT from any claim that by reason of the execution of the works object of this present contract his own workers might intend, or the subcontractor’s workers to whom he partially or in total entrusted carrying out same works per concept of damages.

In any case, the LENDER keeps to himself the right to (claim) against his own workers or of the subcontractor’s workers to whom he entrusted the execution the object of this present instrument when he pays for the damages they caused among themselves or to third parties.

NINETEENTH. CONFIDENTIALITY: PARTIES commit themselves expressly to kept in a confidential character the totality of past, present and future information related with this present instrument and extending same obligation to any individual or corporation it is disclosed to.

The PARTY recipient of confidential information must limit access to it to his representatives or employees who, under a justified and reasonable cause might request access to it. In such cases, PARTIES must commit such entities to the confidentiality obligations agreed upon in this instrument.

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 instrument; 2. Information that is considered as of date or in th

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future as public domain if and ever such consideration did not stem from the non compliance of any of the PARTIES to the stipulations in this clause, or; 3. Information that has to be disclosed per law or an administrative or judicial mandate by competent authorities.

PARTIES agree that the duration of the obligations contracted by virtue of this present clause will subsist indefinitely, even after the termination of this present contract.

In case of non compliance, PARTIES reserve to themselves those actions that per law correspond to them, both administrative and judicial, in order to claim indemnity for harms and damages, as well as to present any sanction be it the case.

TWENTIETH. ADVANCE TERMINATION: PARTIES agree that only the CLIENT is the one able to desist from the execution of the SERVICES on one hand or to suspend same in a temporary manner on the other, in whole or partially, and notifying in writing at least 15 (fifteen) natural days prior its counterpart only after covering in favor of the LENDER all non recoverable expenses and works carried out, if and ever these are reasonable, are duly proven and related with the execution of the SERVICES.

TWENTY FIRST. GUARANTEE: In order to guarantee the correct application of the amount extended as advance, as well as the compliance of this contract, the LENDER must subscribe upon the date of signature of this present contract a promissory note in favor of the CLIENT for the amount of $175,000.00 Dollars (one hundred and seventy thousand Dollars 00/100 in United States Currency) and which was subscribed with an expiration dateline of the 1^st January 2012 (1/1). This guarantee will remain in effect until the totality of the advance is returned.

TWENTY SECOND. CANCELLATION OF CONTRACT:  PARTIES convene that the CLIENT can cancel this present contract in case of non compliance on the part of the LENDER. Such cancellation will bear full rights without the need of a judicial declaration it being sufficient that any of the below indicated cause may arise:

1. If the works object of this present contract are not begun on the stated date of

commitment, if and ever to the CLIENT’S judgment the delay cannot be   reprogrammed;

2. If the SERVICES are stopped without any justification or reparation is denied or   a reposition of any portion of them that might have considered flawed by the   CLIENT;

3. If the works are not carried out in conformity with the stipulation of this

instrument and it Annexes;

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4.  If the work schedule does not meet the program and per the CLIENT’S

judgment this delay can impair a satisfactory conclusion of the works within the   stipulated date line.

5. If it does not in all opportunity cover the workers’ salaries and other labor

benefits and of social security on one hand and, on the other, stops paying the   entrusted service renderers;

6. In general, for non compliance or violation on the part of the LENDER to any of   the obligations derived from this present contract as well as from the applicable and   current legal dispositions.

Likewise, PARTIES convene that the LENDER can cancel this present instrument    in case of non compliance to any of the obligations set down herein, on the part of   the CLIENT, such as payment of the amounts per advance concepts, advance   estimates, administrative paper work and discharge, be it the case, in full right,   without the need of a judicial declaration.

TWENTY THIRD. CANCELLATION PROCEDURE: In case of non compliance or of violation by any of the PARTIES to any of the stipulations of this present contract, they can chose to demand compliance to same and of the conventional penalties agreed upon, declare cancellation of this instrument as per the following procedure:

1. If any of the PARTIES considers that the other has incurred in any of the causes   of cancellation consigned in this contract, he will so advise its counterpart that this   latter may expose regarding what is within his right within a term of 10 (ten) able   days as of the date of reception of the respective notification, and;

2. If the time term lapses on the part of the non compliant and it does not state

arguments in his defense on one hand, or if after analyzing the reasons invoked it   does not produce proof, the other part considering same are not satisfactory, within   the following 15 (fifteen) able days it will declare cancellation of the contract and   will communicate so stating its arguments.

TWENTY FOURTH. FORTUITOUS EVENT OR FORCE MAJEURE:  When due to a fortuitous event or of case majeure it becomes impossible to continue with the works’ execution, the LENDER may stop the SERVICES temporarily, or, chose for an advance termination.. In this last case, it must put its request before the CLIENT immediately after the occurrence of the causes of origin, and he will resolve how to proceed within 15 (fifteen) able days following the reception of same. In case of a negative answer on the part of the CLIENT, it will become necessary for this latter to obtain the corresponding declaration from the competent judicial authority.

In the event the temporary suspension is granted, the corresponding modifications must be established through the means of an agreement concerning the approved work program as well as the measures that must be implemented to safeguard the works and materials.

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Likewise, in such an agreement the time terms of suspension must be made known as well as the renewal of works and work termination without modifying the established dateline in the contract.

TWENTY FIFTH. FISCAL OBLIGATIONS: On being approved and registered before the Federal Taxpayers Registry, PARTIES convene that each on its own will defray and separately tax payments that individually correspond to each in order to comply with the terms and conditions of this present instrument, heeding the applicable and current fiscal legislation, committing themselves to safeguard their counterpart regarding any fiscal responsibility that might be wrongly imputed by competent authorities in accordance with this contract.

TWENTY SIXTH. ADDRESSES AND CONTACT TELEPHONES: PARTIES agree that in everything regarding the execution and compliance of the terms and conditions of this present contract, as well as to carry out notices, announcements and other communications related with same, they state their addresses and contact telephones to be:

The Client
Calle California 5101, interior 206 Col. Haciendas Santa Fe C. P. 31215 Chihuahua, Chih.
Phone: 01-614-200-8403 The Lender
Av. Jorge Jiménez Cantú Mz. 1 it s/n Col. Bosques Esmeralda C. P. 52930 Atizapán de Zaragoza, Estado de México
Phone: 01-55-5308-7452

In case it is their will to change addresses, PARTIES agree in notifying their counterparts of such a circumstance at least five (5) natural days in advance of the date in which the addresses are changed. Not complying to the obligation herein described will imply that the announcements, notifications or communications sent and delivered at the original address of the PARTY carrying the change of address, will bear full legal effects in favor of the PARTY that was not notified in all opportunity as of the date of delivery and for as long as the non compliance subsists.

TWENTY SEVENTH: NOTIFICATIONS AND COMMUNICATIONS: PARTIES agree that any announcement, notification or communication necessary to their counterparts know must be done in writing. The before stated does not means that telephone communications between them is not agreed upon or permitted but that the relevant communications must be carried out in writing for a better judicial understanding on both PARTIES.

Sending of said documents can be carried out via three means: 1. By ordinary courier delivered on hand or by certificate mail, both with acknowledgement of receipt; 2. Via Fax

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or; 3. By electronic mail. In this last case, sending will only be considered valid and legally carried out when the reception of the respective electronic mail is confirmed electronically within three (3) natural days following the sending expressly stating receipt, by means of a confirming answering message sent by the recipient.

PARTIES agree likewise that announcements, notifications and communications carried out in relation to this present instrument will bear their respective effects on the day of their reception. In case that such message include some kind of term, this latter will begin to be in effect on the day following confirmation of reception regardless it is an able or natural day.

TWENTY NINTH. CONTACT PERSONS: PARTIES agree that the totality of announcements, notifications or communications necessary to be carried out between them derived from the terms and conditions of this present instrument must be addressed indistinctly to the following persons:

The Client
RAMIRO TREVIZO LEDEZMA RAMIRO TREVIZO GONZÁLEZ The Lender
CARLOS ALBERTO MARTÍNEZ URIBE EDSEL COSÍO BARRAZA

In case it is their will to change contact persons, PARTIES agree in notifying their counterparts of such a circumstance at least five (5) natural days in advance of the date in which the persons are changed. Not complying to the obligation herein described will imply that that the announcements, notifications or communications sent and delivered to the name of the original addressees of the PARTY carrying the change of address, will bear full legal effects in favor of the PARTY that was not notified in all opportunity as of the date of delivery and for as long as the non compliance subsists.

THIRTIETH. ANNEXES AND TOTALITY OF CONTRACT: PARTIES accept expressly in obliging themselves in accordance to the terms and conditions established in this present instrument and adjoining annexes, same that on being signed make up part of same as if inserted verbatim.

Thus, PARTIES accept that this contract and its annexes contain the totality of agreements between them regarding its object and leaving without effect as well as canceling the whole of agreements, reports, negotiations, correspondence, commitments and communications carried out previously between them either in writing or verbally.

THIRTY FIRST. MODIFICATIONS: The terms and conditions of this present contract can only be modified by virtue of the subscription of modifying agreements between the PARTIES. To such agreements must be added, as annexes an ordinary copy of this

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instrument and its Annexes vying in all cases to reach a complete interpretation of the terms and conditions that the PARTIES might have agreed upon.

THIRTY SECOND. INDEPENDENCE OF THE CLAUSES: In case that one of the clauses of this present instrument is declared invalid by a competent authority, the clause of them contained in same will remain being valid without them being affected by the respective resolution in any way whatsoever.

THIRTY THIRD: APPLICABLE LEGISLATION: PARTIES commit themselves to strictly abide for the execution of the works object of this contract to each and all of the clauses it integrates and in a complementary manner to the dispositions set down in the Civil Code of the Federal District.

THIRTY FOURTH. INTERPRETATION AND JURISDICTION: Conflicts that might arise regarding the interpretation and compliance with this present contract must be resolved by common agreement by the PARTIES within a time lapse of 30 (thirty) natural days as of the date in which any of them notifies the other of the existence of conflicts.

In case the described conciliation is reached , PARTIES submit to the jurisdiction of the competent court of law of the Mexico City (Federal District), reason why as of this moment they renounce to the privilege that might correspond to them by reason of their present or future domiciles or by any other reason.

BOTH PARTIES IN THE KNOWLEDGE OF THE TERMS AND CONDITIONS OF THIS PRESENT CONTRACT , SIGN IT IN CONFORMITY IN EACH OF ITS PAGES IN DUPLICATE IN THE CITY OF MANZANILLO, STATE OF COLIMA, IN THE PRESENCE OF TWO WITNESSES WHO LIKEWISE SUBSCRIBE IT ON THE THIRD DAY OF MAY OF THE YEAR TWO THOUSAND AND ELEVEN, EACH PARTY KEEPING A COPY OF THE CONTRACT.

THE CLIENT
AMERICAN METAL MINING, S.A. DE C. V., Represented in this act by: RAMIRO TREVIZO LEDEZMA THE LENDER
MACO PBB MÉXICO, S. A. DE C. V., Represented in this act by: CARLOS ALBERTO MARTÍNEZ URIBE

WITNESSES

Tzetzangari Ibarra Junquera
Elizabeth Rubí Rubio Campos

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Annex I

Equipment, machinery, vehicles and other

4 – MAQ 320H

1 – MAQ D8

1 – 12 X 36 screen with electrostatic equipment

2 – Electromagnetic bins

1 – Backhoe

2 – 4 X 4 Raptors

1 – Weighing machine

4 – ATHD ALLU SIS

1 – MAQ 966

1 – Camp set up

1 – Scraper

_____________________________________________________

(In last page there follows a signed promissory note of payment)

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RATIFICATION OF SIGNATURES

The undersigned, René Manuel Tortolero Santillana, Attorney at Law, title holder of Notary Public number 4 of this demarcation, verify and---------------------------------------

Certify

that the signatures written at the bottom of this present contract are authentic and pertain to Messrs., Ramiro Trevizo Ledezma and Carlos Alberto Martínez Uribe as they were written in my presence and they stated that such signatures are the one they use in all of they acts public as private------------------------------------------------------------------------------------------

I, Public Notary, so certify and give faith thereof, that I know the appearing parties who in my concept enjoy the civil capacity to contract and to commit themselves according to law-

Reason was taken in the Certifications Book of this Notary Public in my charge in the city and port of Manzanillo, State of Colima on the 4^th day of the month of May 2011-------------

I so give faith---------------------------------------------------------------------------------------------

THE CLIENT
AMERICAN METAL MINING, S. A. DE C. V., Represented in this act by:
RAMIRO TREVIZO LEDEZMA THE LENDER
MACO PBB MÉXICO S. A. DE C. V., Represented in this act by:
CARLOS ALBERTO MARTÍNEZ URIBE

BEFORE ME

RENÉ MANUEL TORTOLERO SANTILLANA

OFFICE TITLE HOLDER

PUBLIC NOTARY NUMBER 4

MANZANILLO, COLIMA

###

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EX-10.3

TARA MINERALS CORPORATION

MANZANILLIO IRON ORE DISTRICT

PARTICIPATING ROYALTY UNITS FOR PALOMA PROSPECT

TERM SHEET

Offering:

15 Units

Price Per Unit:

$100,000 U.S.

Royalties:

With regards to the Paloma Iron Sands Project in Manzanillo; a Royalty of $0.30 per metric tonne sold, per Unit, until $100,000 has been paid with respect to each Unit.  Thereafter, $0.15 per metric tonne sold, per Unit. Payments will be applied to the Principle balance first.

Royalty payments will be made at the end of each calendar quarter, and will be based upon the tons of ore sold and paid for during that quarter.  It is expected that payments to investors will be made within 15 days of the end of each calendar quarter.

Royalty payments will stop when Tara Minerals’ interest in the project, together with the interest in project held by any affiliates of Tara Minerals, is less than 50%.  At such time, Tara Minerals will;

In the case of a buyout; pay $200,000 to each Unit holder, less the amount of royalty payments paid to the Unit holder OR pay 10% of the sale price of the Paloma Iron Ore rights, with each Unit representing 1/15^th of 10% or 0.66% per Unit

Royalty payments will be reduced by any IVA taxes or ISR taxes imposed by the Mexican government on the sale of the iron ore.  Currently these taxes are 16% & 30% respectively.  Royalty payments will be adjusted for any future increases or decreases in these taxes.

Conversion rights:

The Unit holders will have the option, at any time on or before April 30, 2013, to convert their Units original principle amount into shares of Tara Minerals common stock.  The number of shares issuable upon the conversion of the Units will be determined by dividing the dollar amount of the Unit to be converted by the Conversion Price.  Initially, the Conversion Price will be $0.50. The Conversion Price will be adjusted for any stock splits, stock dividends or similar recapitalizations.

Conversion of Units may only occur in increments of $25,000 and can only be made at the end of each calendar quarter.  To the extent that the entire Unit is not converted, the royalty payment to the investor will be proportionately reduced.  

Offering Expiration:

There is no minimum number of Units which are required to be sold in this offering.  This offering may be terminated by Tara Minerals at any time and without notice.

Taxes:

Taxes may be due on royalty payments.  Tara Minerals will not be responsible for any Mexican or U.S. taxes owed by any investor in this offering.

Rick Factors

An investment in the project carries significant risks, including those outlined below.  

As of March 31, 2011 Tara Minerals did not have any agreements with any person relating to mining iron ore from the Paloma Iron Ore prospect.  Agreements for minerals rights are advanced, but not fully executed. Acquisitions being considered will not necessarily have any proven iron ore reserves (As defined by NI43-101).  Tara Minerals would initially prefer to mine ore from claims, which are located closer to the port city of Manzanillo, as they would likely require less capital to initiate production.

Tara Minerals has only reached verbal agreements with the minerals rights owner relating to mining ore from the Paloma Iron Ore project, and Tara Minerals has limited knowledge of the quality or grade of the ore which exists on this project, or the extent of any iron ore reserves, on any property that Tara Minerals may subsequently mine. Consequently, the ore reserves on any property mined by Tara Minerals may be insufficient to repay the investors’ capital contributions, or to allow the investors to earn any profit on their investments.

As of March 31, 2011 Tara Minerals did not have any agreements with:

·

any contractor to mine, crush or haul any iron ore to Manzanillo;

·

any person relating to the purchase of any iron ore which may be mined in connection with the project.  

The projections of the revenues and expenses associated with the Paloma project are estimates only and are not based upon reserves studies or agreements with any owner of any mining claim, any mining contractor, Manzanillo port authorities or any other person.  

Although Tara Minerals plans to hire an experienced contractor to operate the project in Mexico, Tara Minerals will provide oversight at the location of the project’s operations.  Since it would not be practical for Tara Minerals’ officers to oversee the development of the project directly, a team of Tara Minerals personnel will oversee and provide timely feedback and the progress reporting necessary to monitor the development of the project.  Officers will not necessarily devote their full time to the project as the exploration and development of other properties owned by Tara Minerals or Tara Gold Resources (the parent company of Tara Minerals) may take precedence over the Manzanillio iron ore districts development under certain circumstances.

There are no minimum number of Units that are required to be sold in this offering.  Tara Minerals estimates that it will need a minimum of $500,000.00 in order to acquire property rights and begin operations.  Consequently, if less than 5 Units are sold, Tara Minerals will need to find other sources of capital so that mining operations may begin.  If Tara Minerals is unable to locate the capital required, Tara Minerals will use the amounts received from investors in this offering for securing rights to Iron Ore properties, in anticipation of completing the necessary capital raise or finding a development partner..  In such a case, it is likely that an investment, as it relates to the Royalty outlined in this investment may be delayed or diluted.  

Tara Partic. Royalty Units Term Sheet 4-1-11

EX-10.4

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of this 1st day of January, 2011, between Tara Minerals Corp.  a Nevada corporation (the "Company"), and  Francis R. Biscan Jr., an individual (the "Executive"),

RECITALS

WHEREAS, the Executive is desirous of being employed by the Company.

NOW, THEREFORE, in consideration of the mutual agreements herein made, the Company and the Executive do hereby agree as follows:

1. Recitals.  The above recitals are true, correct, and are herein incorporated by reference.

2. Employment.    Subject to the terms and conditions of this Agreement, the Company hereby employs the Executive for the Term (as hereinafter defined), as its Principal Executive Officer and President. The Executive hereby accepts such employment, upon the terms and conditions hereinafter set forth. The Executive will report to the Company’s Board of Directors. It is understood that the Executive has been, and will continue to be, engaged in other business activities, and will manage his own time to fulfill the executive responsibility.

3. Duties During Employment Period.  During the "Term" (including any renewals thereof) as defined in Section 5 of this Agreement, the Executive shall:

A. Diligently devote the Executive's time and efforts to the business affairs of the Company and subsidiaries.  The Executive shall have such duties and powers that are commensurate and consistent with those of a Chief Executive Officer and Director, subject to the authority and directions of the Company's Board of Directors; and

B. Devote attention and render services to the Company and shall be employed by the Company according to the terms and conditions of this Agreement.

4. Compensation and Benefits

A. Salary.  The Executive shall be paid a base salary (the "Base Salary"), payable monthly, in arrears, at an annual rate of $ 224,000.00    .

B. Bonus.  As additional compensation, the Executive shall be entitled to receive a bonus ("Bonus") for each fiscal year during the Term, and each Renewal Term, in the amount as to be determined by the Company’s Board of Directors.  

C. Employee Benefits.  The Executive shall be entitled to participate in all benefit programs of the Company currently existing, or hereafter made available to executives and/or other executive employees, including, but not limited to, pension and other retirement plans, including any 401K Plan, group life insurance, dental, hospitalization, surgical and major medical coverage, sick leave, salary continuation, and holidays, long-term disability, and other fringe benefits.

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  Should the Company decide not to provide, or is unable to obtain group plans, the Company will reimburse the Employee for individual health, dental and optical insurance in an amount not to exceed $ 750.00   per month.

D. Vacation.  During each year of the Term, and each year of any Renewal Term, the Executive shall be entitled to     5      weeks of vacation time to be utilized or paid for each year, or accrue and carry over into the following year; provided, however, that the Executive shall evidence reasonable judgment with regard to appropriate vacation scheduling.

E. Business Expense Reimbursement.  The Executive shall be entitled to receive proper reimbursement for all reasonable, out-of-pocket expenses incurred directly by the Executive (in accordance with the policies and procedures established by the Company for its executive officers) not less than $1,000.00 per month, including first class accommodations in performing services hereunder.

F. Cellular Telephone. The Company shall provide the Executive with a cellular telephone and a GSM phone that operates in the countries served by the Company, and the Company shall also be responsible for all costs and expenses in connection with such telephones, including, but not limited to, monthly service charges and maintenance, usage charges and long distance, whether these be incurred for personal or Company business.

G. Stock.  The Executive shall receive options as may be determined, from time to time, by the Company’s Board of Directors. The Executive shall have the right to sell or transfer any or all of the options, or the shares issuable upon the exercise of the options.   

5. Term.   The term of employment hereunder will commence on the Effective Date and end ___3_yrs_ from such Effective Date (the “Term"), unless terminated pursuant to Section 6, of this Agreement, provided that the Executive and the Company may, upon mutual written consent, renew this Agreement for such duration as may be mutually agreed upon by the parties ("Renewal Term"). For purposes of this Agreement, “Effective Date” shall mean January 1, 2011.

6. Termination of Employment.  

A. Death.  In the event of the death of the Executive during the Term or Renewal Term of this Agreement, salary shall be paid to the Executive's designated beneficiary, or, in the absence of such designation, to the estate or other legal representative of the Executive for a period of   1yr  from and after the date of death.  The Company shall also be obligated to pay to the Executive's estate or heirs, as the case may be, any accrued or bonus authorized by a resolution of the Company’s directors. Other death benefits will be paid in accordance with the terms of the Company's benefit programs and plans pertaining to the Company’s employees generally.

B. Disability.

1. In the event of the Executive's disability, as hereinafter defined, the Executive shall be entitled to receive the Executive's salary for a period, at the annual rate in effect immediately prior to the commencement of disability, for      1yr    from the date on which the disability has deemed to occur as hereinafter provided below.  Any amounts provided for in this Section 6B shall be offset by any other

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disability benefits provided to the Executive by the Company, including the benefits contemplated by Section 4H

2. "Disability," for the purposes of this Agreement, shall be deemed to have occurred in the event   i) the Executive is unable by reason of sickness or accident to perform the Executive's duties under this Agreement for a cumulative total of twelve (12) weeks within any one calendar year; or

ii) the Executive is unable to perform Executive's duties for ninety (90) consecutive days; or

iii) the Executive has a guardian appointed by a court of competent jurisdiction.  Termination due to disability shall be deemed to have occurred upon the first day of the month following the determination of disability as defined above.

Anything herein to the contrary notwithstanding, if, following a termination of employment hereunder due to disability as provided above, the Executive becomes re-employed by a third party, whether as an executive or as a consultant, any salary, annual incentive payments or other benefits earned by the Executive from such employment shall offset any salary continuation due to the Executive hereunder commencing with the date of re-employment.

C. Termination by the Company for Cause

1. Nothing herein shall prevent the Company from terminating employment for "Cause" as hereinafter defined.  If terminated for Cause, the Executive shall receive salary only for the period ending with the date of such termination as provided in this Section 6C.  Any rights and benefits the Executive may have in respect of any other compensation shall end on the date the Employee is terminated for Cause.

2. "Cause" shall mean:

(a) committing or participating in an injurious act of fraud, gross neglect, intentional misrepresentation, or embezzlement against the Company; or

(b) committing or participating in any other injurious act or omission wantonly or willfully against the Company, monetarily or otherwise.

(c)

commission of a felony or a crime of moral turpitude.

(d)  the refusal to follow the lawful instructions of the Company’s Board of Directors.

(e) any material breach by the Employee of this Agreement.

D. Termination Other than for Cause.  

The foregoing notwithstanding, the Company may terminate the Executive's employment for whatever reason it deems appropriate; provided, however, that in the event such termination is not based on Cause, as provided in Section 6C above, or if Executive's employment is terminated under Sections 6F or 6G hereof, the Company shall continue to be obligated to pay to Executive all salary through the Term, or Renewal Term if any, of this Agreement and any bonuses authorized by a resolution of the Company’s directors and all stock options granted to the executive shall be immediately exercisable .

E. Voluntary Termination.

 In the event the Executive terminates the Executive's employment on the Executive's own volition (except as provided in Section 6F and/or Section 6G) prior to the expiration of the Term or Renewal Term of this Agreement), such termination shall constitute a voluntary termination and in such event the Executive shall be limited to the same rights and benefits as provided in Section 6C.

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F. Constructive Termination of Employment.

  A termination by the Company without Cause under Section 6D shall be deemed to have occurred upon the occurrence of one or more of the following events without the express written consent of the Executive:

1. a significant change in the nature or scope of the authorities, powers, functions, duties or responsibilities attached to Executive's position as described in Section 3;

2. a change in Executive's principal office to a location more than 60 miles from the Executive’s place of employment on the Effective Date.

3. A material breach of this Agreement by the Company;

4. A material reduction of the Executive's benefits under any employee benefit plan, program or arrangement (for Executive individually or as part of a group) of the Company, which reduction shall not apply to similarly situated employees of the Company; or

G. Termination Following a Change of Control.

1. In the event that a "Change in Control," as hereinafter defined, shall occur at any time during the Term or Renewal Term hereof, the Executive shall have the right to terminate the Executive's employment under this Agreement upon thirty (30) days written notice given at any time within one (1) year after the occurrence of such event.

2. For purposes of this Agreement, a "Change in Control" of the Company shall mean a change in control:

a)

the occurrence of any of the following:

i) any person, group or organization, other than the Executive, is or becomes the beneficial owner, directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the combined voting power of the Company's outstanding securities then having the right to vote at elections of directors; or

ii) the individuals who at the Effective Date of this Agreement constitute the Board of Directors cease for any reason to constitute a majority thereof unless the election, or nomination for election, of each new director was approved by the Executive; or

iii) the business or over fifty percent (50%) of the business revenues of the Company for which the Executive's services are principally performed is/ are sold or otherwise disposed of by the Company (including the stock of a subsidiary of the Company).

Anything herein to the contrary notwithstanding, this Section 6G2 will not apply where the Executive gives the Executive's explicit written waiver stating that for purposes of this Section 6G2 a Change in Control shall not be deemed to have occurred.  The Executive's participation in any negotiations or other matters in relation to a Change in Control shall in no way constitute such a waiver which can only be given by an explicit written waiver as provided in the preceding sentence.

7. Non-Disclosure of Confidential Information, Non-Compete.

A. Executive acknowledges that the Company's trade secrets, private or secret processes, as they exist from time to time, business records and plans, inventions, acquisition strategy, price structure and pricing, discounts, costs, computer programs and listings, source code and/or subject code, copyright, trademark, proprietary information, formulae, protocols, forms, procedures, methods for operating the Company's business, acquisitions, practices, plans and information pertaining to the Company’s properties, and other information of a confidential nature not known publicly (collectively, the "Confidential Information") are valuable, special and unique assets of the Company, access to and knowledge of which have been gained by the Executive by virtue of

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Executive's association with the Company.  In light of the highly competitive nature of the industry in which the Company's business is conducted, Executive agrees that all Confidential Information, heretofore or in the future obtained by Executive as a result of Executive's association with the Company, shall be considered confidential.

B. The Executive agrees that the Executive shall:

1) hold in confidence and not disclose or make available to any third party any such Confidential Information obtained directly or constructively from the Company, unless so authorized in writing by the Company;

2) exercise all reasonable efforts to prevent third parties from gaining access to the Confidential Information;

3) take such protective measures as may be reasonably necessary to preserve the confidentiality of the Confidential Information.

C. Excluded from the Confidential Information, and therefore not subject to the provisions of this Agreement, shall be any information which the Executive can show:

1) at the time of disclosure, is in the public domain; or

2) after the disclosure, enters the public domain by way of printed publication through no fault of the Executive; or

3) was in his possession at the time of disclosure and which was not acquired directly or indirectly from the Company; or

4) was acquired, after disclosure, from a third party who did not receive it from the Company, and who had the right to disclose the information without any obligation to hold such information confidential.  

D. Upon written request of the Company, Executive shall return to the Company all written materials containing Confidential Information.  

E. Executive agrees that he will not, during the term of this Agreement and for a period of     6     months    from and after the date of termination of this Agreement, directly or indirectly, (i) knowingly acquire or own in any manner any interest in any entity which competes for properties with the Company, or any of its subsidiaries or affiliates, (ii) be employed by or serve as an employee, agent, officer, or director of, or as a consultant to, any entity which competes for properties with the Company or its subsidiaries or affiliates, or (iii) acquire, directly or through an entity affiliated with the Executive, an interest in any property which is located within    2.486   miles or    4    Kilometers of any property owned by the Company or which is under consideration by the Company.  The foregoing provisions of this Section 7E shall not prevent the Executive from acquiring and owning not more than 5% of the equity securities of any entity whose securities are listed for trading on a national securities exchange or are regularly traded in the over-the-counter securities market.

8. Covenants as Essential Elements of this Agreements; Survival of Covenants.

It is understood by and between the parties hereto that the foregoing covenants by Executive contained in Section 7 of this Agreement shall be construed to be agreements independent of any other element of Executive's relationship with the Company.  The existence of any other claim or cause of action, whether predicated on any other provision in this Agreement, or otherwise, as a result of the relationship between the parties, shall not constitute a defense to the enforcement of the covenants in Section 7 of this Agreement against Executive.

9. Remedies and Enforcement.

A. Executive acknowledges and agrees that the Company's remedy at law for a breach of any of the provisions of Section 7 herein would be inadequate and the breach shall be per

5

se deemed as causing irreparable harm to the Company.  In recognition of this fact, in the event of a breach by Executive of any of the provisions of Section 7, Executive agrees that, in addition to any remedy at law available to the Company, including, but not limited to monetary damages, the Company, without posting any bond, shall be entitled to obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available to the Company.

B. It is further expressly understood and agreed that the provisions of this Agreement shall apply whether this Agreement is terminated by Company or Executive or upon its expiration or termination.

C. Nothing herein contained shall be construed as prohibiting Company or Executive from pursuing any other remedies available to it/ him for any breach or default of this Agreement.

10. Arbitration-Attorneys' Fees.

Any claims or disputes in any way involving this Agreement will be settled through binding arbitration in Chicago, Illinois in accordance with the Commercial Arbitration Rules of the American Arbitration Association. In connection with any such arbitration proceeding, or any litigation arising out of the enforcement of this Agreement or for its interpretation, the prevailing party shall be entitled to recover its costs, including reasonable attorneys' fees,  The Company will advance to the Executive of $10,000.00, if the Company commences an arbitration or legal proceeding as a result of this Agreement to cover Executive's legal costs and will continue to fund Executive's legal defense fees to the extent required to defend against the Company's actions. In addition, the Company agrees to pay for any and all legal work or representation required to defend and or settle any claims made by or against Executive as a result of his employment with the Company, while this Agreement is in effect or any time thereafter.

11. Freedom to Contract.  

The Executive represents and warrants that the Executive has the right to negotiate and enter into this Agreement, and that this Agreement does not breach, interfere with or conflict with any other existing contractual agreement

12. Effect on Prior Agreements.  

This Agreement supersedes any and all prior oral or written agreements, concerning the subject matter hereof, in their entirety between the parties, which shall be void and of no further force and effect after the date of this Agreement.

13. Notices.

 All notices, requests, consents and other communications, required or permitted to be given hereunder, shall be in writing and shall be deemed to have been duly given if delivered personally or sent by prepaid electronic transmission or mailed first class, postage prepaid, by registered or certified mail or delivered by an overnight courier service (notices sent by electronic transmission, mail or courier service shall be deemed to have been given on the date sent), as follows (or to such other address as either party shall designate by notice in writing to the other):

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If to the Company:

Tara Minerals Corp.

2162 Acorn Court

Wheaton, IL 60189

If to the Executive:

Francis R. Biscan, Jr.

2162 Acorn Court

Wheaton, IL 60189

14. Waiver.  

Unless agreed in writing, the failure of either party, at any time, to require performance by the other of any provision hereunder shall not affect its rights thereafter to enforce the same, nor shall a waiver by either party of any breach of any provision hereof be taken or held to be a waiver of any other preceding or succeeding breach of any term or provision of this Agreement.  No extension of time for the performance of any obligation or act shall be deemed to be an extension of time for the performance of any other obligation or act hereunder.

15. Complete Agreement.

This Agreement contains the entire agreement between the parties hereto with respect to the contents hereof and supersedes all prior agreements and understandings between the parties with respect to such matters, whether written or oral.  Neither this Agreement nor any term or provision hereof may be changed, waived, discharged or amended in any manner other than by an instrument in writing, signed by the party against which the enforcement of the change, waiver, discharge or amendment is sought.

16. Counterparts.  

This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which shall constitute one agreement.

17. Binding Effect/Assignment.  

This Agreement shall be binding upon the parties hereto, their heirs, legal representatives, successors and assigns.  This Agreement shall not be assignable by the Executive but shall be assignable by the Company in connection with the sale, transfer or other disposition of its business or to any of the Company's affiliates controlled by or under common control with the Company, with the written approval of Executive.

18. Governing Law, Venue, Waiver of Jury Trial.   

The parties agree that this Agreement shall be deemed made and entered into in the State of Nevada and shall be governed and construed under and in accordance with the laws of the State of Nevada without giving effect to any principles of conflicts of law.  Company and Executive acknowledge and agree that  the Judicial Circuit, shall be the exclusive venue and proper forum in which to adjudicate any case or controversy arising either, directly or indirectly, under or in connection with this Agreement in these courts, they will not contest or challenge the jurisdiction or venue of these courts. The parties

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further agree and hereby waive and release any right to a trial by jury in any action arising out of the interpretation, enforcement or breach of this Agreement.

19. Headings.

The headings of the sections are for convenience only and shall not control or affect the meaning or construction or limit the scope or intent of any of the provisions of this Agreement.

20. Survival.  

Any termination of this Agreement shall not affect the ongoing provisions of this Agreement which shall survive such termination in accordance with their terms.

21. Severabililty.

Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

22. Construction.  

This Agreement shall be constructed within the fair meaning of each of its terms and not against the party drafting the document.

23. Service Restriction.

Nothing in this Agreement will prevent or restrict Executive from serving on the Board of Directors of any public or private companies and receive compensation from such service.

THE PARTIES TO THIS AGREEMENT HAVE READ THIS AGREEMENT, UNDERSTAND ITS TERMS AND CONDITIONS, HAVE HAD THE OPPORTUNITY TO CONSULT WITH INDEPENDENT COUNSEL OF THEIR OWN CHOICE AND AGREE TO BE BOUND BY ITS TERMS AND CONDITIONS.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

TARA MINERALS CORP.

By ____________________________

Authorized Officer

______________________________

Francis R. Biscan Jr.

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EX-10.5

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of this 1st day of January, 2011, between Tara Minerals Corp.  a Nevada corporation (the "Company"), and  Francis R. Biscan Jr., an individual (the "Executive"),

RECITALS

WHEREAS, the Executive is desirous of being employed by the Company.

NOW, THEREFORE, in consideration of the mutual agreements herein made, the Company and the Executive do hereby agree as follows:

1. Recitals.  The above recitals are true, correct, and are herein incorporated by reference.

2. Employment.    Subject to the terms and conditions of this Agreement, the Company hereby employs the Executive for the Term (as hereinafter defined), as its Principal Executive Officer and President. The Executive hereby accepts such employment, upon the terms and conditions hereinafter set forth. The Executive will report to the Company’s Board of Directors. It is understood that the Executive has been, and will continue to be, engaged in other business activities, and will manage his own time to fulfill the executive responsibility.

3. Duties During Employment Period.  During the "Term" (including any renewals thereof) as defined in Section 5 of this Agreement, the Executive shall:

A. Diligently devote the Executive's time and efforts to the business affairs of the Company and subsidiaries.  The Executive shall have such duties and powers that are commensurate and consistent with those of a Chief Executive Officer and Director, subject to the authority and directions of the Company's Board of Directors; and

B. Devote attention and render services to the Company and shall be employed by the Company according to the terms and conditions of this Agreement.

4. Compensation and Benefits

A. Salary.  The Executive shall be paid a base salary (the "Base Salary"), payable monthly, in arrears, at an annual rate of $ 224,000.00    .

B. Bonus.  As additional compensation, the Executive shall be entitled to receive a bonus ("Bonus") for each fiscal year during the Term, and each Renewal Term, in the amount as to be determined by the Company’s Board of Directors.  

C. Employee Benefits.  The Executive shall be entitled to participate in all benefit programs of the Company currently existing, or hereafter made available to executives and/or other executive employees, including, but not limited to, pension and other retirement plans, including any 401K Plan, group life insurance, dental, hospitalization, surgical and major medical coverage, sick leave, salary continuation, and holidays, long-term disability, and other fringe benefits.

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  Should the Company decide not to provide, or is unable to obtain group plans, the Company will reimburse the Employee for individual health, dental and optical insurance in an amount not to exceed $ 750.00   per month.

D. Vacation.  During each year of the Term, and each year of any Renewal Term, the Executive shall be entitled to     5      weeks of vacation time to be utilized or paid for each year, or accrue and carry over into the following year; provided, however, that the Executive shall evidence reasonable judgment with regard to appropriate vacation scheduling.

E. Business Expense Reimbursement.  The Executive shall be entitled to receive proper reimbursement for all reasonable, out-of-pocket expenses incurred directly by the Executive (in accordance with the policies and procedures established by the Company for its executive officers) not less than $1,000.00 per month, including first class accommodations in performing services hereunder.

F. Cellular Telephone. The Company shall provide the Executive with a cellular telephone and a GSM phone that operates in the countries served by the Company, and the Company shall also be responsible for all costs and expenses in connection with such telephones, including, but not limited to, monthly service charges and maintenance, usage charges and long distance, whether these be incurred for personal or Company business.

G. Stock.  The Executive shall receive options as may be determined, from time to time, by the Company’s Board of Directors. The Executive shall have the right to sell or transfer any or all of the options, or the shares issuable upon the exercise of the options.   

5. Term.   The term of employment hereunder will commence on the Effective Date and end ___3_yrs_ from such Effective Date (the “Term"), unless terminated pursuant to Section 6, of this Agreement, provided that the Executive and the Company may, upon mutual written consent, renew this Agreement for such duration as may be mutually agreed upon by the parties ("Renewal Term"). For purposes of this Agreement, “Effective Date” shall mean January 1, 2011.

6. Termination of Employment.  

A. Death.  In the event of the death of the Executive during the Term or Renewal Term of this Agreement, salary shall be paid to the Executive's designated beneficiary, or, in the absence of such designation, to the estate or other legal representative of the Executive for a period of   1yr  from and after the date of death.  The Company shall also be obligated to pay to the Executive's estate or heirs, as the case may be, any accrued or bonus authorized by a resolution of the Company’s directors. Other death benefits will be paid in accordance with the terms of the Company's benefit programs and plans pertaining to the Company’s employees generally.

B. Disability.

1. In the event of the Executive's disability, as hereinafter defined, the Executive shall be entitled to receive the Executive's salary for a period, at the annual rate in effect immediately prior to the commencement of disability, for      1yr    from the date on which the disability has deemed to occur as hereinafter provided below.  Any amounts provided for in this Section 6B shall be offset by any other

2

disability benefits provided to the Executive by the Company, including the benefits contemplated by Section 4H

2. "Disability," for the purposes of this Agreement, shall be deemed to have occurred in the event   i) the Executive is unable by reason of sickness or accident to perform the Executive's duties under this Agreement for a cumulative total of twelve (12) weeks within any one calendar year; or

ii) the Executive is unable to perform Executive's duties for ninety (90) consecutive days; or

iii) the Executive has a guardian appointed by a court of competent jurisdiction.  Termination due to disability shall be deemed to have occurred upon the first day of the month following the determination of disability as defined above.

Anything herein to the contrary notwithstanding, if, following a termination of employment hereunder due to disability as provided above, the Executive becomes re-employed by a third party, whether as an executive or as a consultant, any salary, annual incentive payments or other benefits earned by the Executive from such employment shall offset any salary continuation due to the Executive hereunder commencing with the date of re-employment.

C. Termination by the Company for Cause

1. Nothing herein shall prevent the Company from terminating employment for "Cause" as hereinafter defined.  If terminated for Cause, the Executive shall receive salary only for the period ending with the date of such termination as provided in this Section 6C.  Any rights and benefits the Executive may have in respect of any other compensation shall end on the date the Employee is terminated for Cause.

2. "Cause" shall mean:

(a) committing or participating in an injurious act of fraud, gross neglect, intentional misrepresentation, or embezzlement against the Company; or

(b) committing or participating in any other injurious act or omission wantonly or willfully against the Company, monetarily or otherwise.

(c)

commission of a felony or a crime of moral turpitude.

(d)  the refusal to follow the lawful instructions of the Company’s Board of Directors.

(e) any material breach by the Employee of this Agreement.

D. Termination Other than for Cause.  

The foregoing notwithstanding, the Company may terminate the Executive's employment for whatever reason it deems appropriate; provided, however, that in the event such termination is not based on Cause, as provided in Section 6C above, or if Executive's employment is terminated under Sections 6F or 6G hereof, the Company shall continue to be obligated to pay to Executive all salary through the Term, or Renewal Term if any, of this Agreement and any bonuses authorized by a resolution of the Company’s directors and all stock options granted to the executive shall be immediately exercisable .

E. Voluntary Termination.

 In the event the Executive terminates the Executive's employment on the Executive's own volition (except as provided in Section 6F and/or Section 6G) prior to the expiration of the Term or Renewal Term of this Agreement), such termination shall constitute a voluntary termination and in such event the Executive shall be limited to the same rights and benefits as provided in Section 6C.

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F. Constructive Termination of Employment.

  A termination by the Company without Cause under Section 6D shall be deemed to have occurred upon the occurrence of one or more of the following events without the express written consent of the Executive:

1. a significant change in the nature or scope of the authorities, powers, functions, duties or responsibilities attached to Executive's position as described in Section 3;

2. a change in Executive's principal office to a location more than 60 miles from the Executive’s place of employment on the Effective Date.

3. A material breach of this Agreement by the Company;

4. A material reduction of the Executive's benefits under any employee benefit plan, program or arrangement (for Executive individually or as part of a group) of the Company, which reduction shall not apply to similarly situated employees of the Company; or

G. Termination Following a Change of Control.

1. In the event that a "Change in Control," as hereinafter defined, shall occur at any time during the Term or Renewal Term hereof, the Executive shall have the right to terminate the Executive's employment under this Agreement upon thirty (30) days written notice given at any time within one (1) year after the occurrence of such event.

2. For purposes of this Agreement, a "Change in Control" of the Company shall mean a change in control:

a)

the occurrence of any of the following:

i) any person, group or organization, other than the Executive, is or becomes the beneficial owner, directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the combined voting power of the Company's outstanding securities then having the right to vote at elections of directors; or

ii) the individuals who at the Effective Date of this Agreement constitute the Board of Directors cease for any reason to constitute a majority thereof unless the election, or nomination for election, of each new director was approved by the Executive; or

iii) the business or over fifty percent (50%) of the business revenues of the Company for which the Executive's services are principally performed is/ are sold or otherwise disposed of by the Company (including the stock of a subsidiary of the Company).

Anything herein to the contrary notwithstanding, this Section 6G2 will not apply where the Executive gives the Executive's explicit written waiver stating that for purposes of this Section 6G2 a Change in Control shall not be deemed to have occurred.  The Executive's participation in any negotiations or other matters in relation to a Change in Control shall in no way constitute such a waiver which can only be given by an explicit written waiver as provided in the preceding sentence.

7. Non-Disclosure of Confidential Information, Non-Compete.

A. Executive acknowledges that the Company's trade secrets, private or secret processes, as they exist from time to time, business records and plans, inventions, acquisition strategy, price structure and pricing, discounts, costs, computer programs and listings, source code and/or subject code, copyright, trademark, proprietary information, formulae, protocols, forms, procedures, methods for operating the Company's business, acquisitions, practices, plans and information pertaining to the Company’s properties, and other information of a confidential nature not known publicly (collectively, the "Confidential Information") are valuable, special and unique assets of the Company, access to and knowledge of which have been gained by the Executive by virtue of

4

Executive's association with the Company.  In light of the highly competitive nature of the industry in which the Company's business is conducted, Executive agrees that all Confidential Information, heretofore or in the future obtained by Executive as a result of Executive's association with the Company, shall be considered confidential.

B. The Executive agrees that the Executive shall:

1) hold in confidence and not disclose or make available to any third party any such Confidential Information obtained directly or constructively from the Company, unless so authorized in writing by the Company;

2) exercise all reasonable efforts to prevent third parties from gaining access to the Confidential Information;

3) take such protective measures as may be reasonably necessary to preserve the confidentiality of the Confidential Information.

C. Excluded from the Confidential Information, and therefore not subject to the provisions of this Agreement, shall be any information which the Executive can show:

1) at the time of disclosure, is in the public domain; or

2) after the disclosure, enters the public domain by way of printed publication through no fault of the Executive; or

3) was in his possession at the time of disclosure and which was not acquired directly or indirectly from the Company; or

4) was acquired, after disclosure, from a third party who did not receive it from the Company, and who had the right to disclose the information without any obligation to hold such information confidential.  

D. Upon written request of the Company, Executive shall return to the Company all written materials containing Confidential Information.  

E. Executive agrees that he will not, during the term of this Agreement and for a period of     6     months    from and after the date of termination of this Agreement, directly or indirectly, (i) knowingly acquire or own in any manner any interest in any entity which competes for properties with the Company, or any of its subsidiaries or affiliates, (ii) be employed by or serve as an employee, agent, officer, or director of, or as a consultant to, any entity which competes for properties with the Company or its subsidiaries or affiliates, or (iii) acquire, directly or through an entity affiliated with the Executive, an interest in any property which is located within    2.486   miles or    4    Kilometers of any property owned by the Company or which is under consideration by the Company.  The foregoing provisions of this Section 7E shall not prevent the Executive from acquiring and owning not more than 5% of the equity securities of any entity whose securities are listed for trading on a national securities exchange or are regularly traded in the over-the-counter securities market.

8. Covenants as Essential Elements of this Agreements; Survival of Covenants.

It is understood by and between the parties hereto that the foregoing covenants by Executive contained in Section 7 of this Agreement shall be construed to be agreements independent of any other element of Executive's relationship with the Company.  The existence of any other claim or cause of action, whether predicated on any other provision in this Agreement, or otherwise, as a result of the relationship between the parties, shall not constitute a defense to the enforcement of the covenants in Section 7 of this Agreement against Executive.

9. Remedies and Enforcement.

A. Executive acknowledges and agrees that the Company's remedy at law for a breach of any of the provisions of Section 7 herein would be inadequate and the breach shall be per

5

se deemed as causing irreparable harm to the Company.  In recognition of this fact, in the event of a breach by Executive of any of the provisions of Section 7, Executive agrees that, in addition to any remedy at law available to the Company, including, but not limited to monetary damages, the Company, without posting any bond, shall be entitled to obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available to the Company.

B. It is further expressly understood and agreed that the provisions of this Agreement shall apply whether this Agreement is terminated by Company or Executive or upon its expiration or termination.

C. Nothing herein contained shall be construed as prohibiting Company or Executive from pursuing any other remedies available to it/ him for any breach or default of this Agreement.

10. Arbitration-Attorneys' Fees.

Any claims or disputes in any way involving this Agreement will be settled through binding arbitration in Chicago, Illinois in accordance with the Commercial Arbitration Rules of the American Arbitration Association. In connection with any such arbitration proceeding, or any litigation arising out of the enforcement of this Agreement or for its interpretation, the prevailing party shall be entitled to recover its costs, including reasonable attorneys' fees,  The Company will advance to the Executive of $10,000.00, if the Company commences an arbitration or legal proceeding as a result of this Agreement to cover Executive's legal costs and will continue to fund Executive's legal defense fees to the extent required to defend against the Company's actions. In addition, the Company agrees to pay for any and all legal work or representation required to defend and or settle any claims made by or against Executive as a result of his employment with the Company, while this Agreement is in effect or any time thereafter.

11. Freedom to Contract.  

The Executive represents and warrants that the Executive has the right to negotiate and enter into this Agreement, and that this Agreement does not breach, interfere with or conflict with any other existing contractual agreement

12. Effect on Prior Agreements.  

This Agreement supersedes any and all prior oral or written agreements, concerning the subject matter hereof, in their entirety between the parties, which shall be void and of no further force and effect after the date of this Agreement.

13. Notices.

 All notices, requests, consents and other communications, required or permitted to be given hereunder, shall be in writing and shall be deemed to have been duly given if delivered personally or sent by prepaid electronic transmission or mailed first class, postage prepaid, by registered or certified mail or delivered by an overnight courier service (notices sent by electronic transmission, mail or courier service shall be deemed to have been given on the date sent), as follows (or to such other address as either party shall designate by notice in writing to the other):

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If to the Company:

Tara Minerals Corp.

2162 Acorn Court

Wheaton, IL 60189

If to the Executive:

Francis R. Biscan, Jr.

2162 Acorn Court

Wheaton, IL 60189

14. Waiver.  

Unless agreed in writing, the failure of either party, at any time, to require performance by the other of any provision hereunder shall not affect its rights thereafter to enforce the same, nor shall a waiver by either party of any breach of any provision hereof be taken or held to be a waiver of any other preceding or succeeding breach of any term or provision of this Agreement.  No extension of time for the performance of any obligation or act shall be deemed to be an extension of time for the performance of any other obligation or act hereunder.

15. Complete Agreement.

This Agreement contains the entire agreement between the parties hereto with respect to the contents hereof and supersedes all prior agreements and understandings between the parties with respect to such matters, whether written or oral.  Neither this Agreement nor any term or provision hereof may be changed, waived, discharged or amended in any manner other than by an instrument in writing, signed by the party against which the enforcement of the change, waiver, discharge or amendment is sought.

16. Counterparts.  

This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which shall constitute one agreement.

17. Binding Effect/Assignment.  

This Agreement shall be binding upon the parties hereto, their heirs, legal representatives, successors and assigns.  This Agreement shall not be assignable by the Executive but shall be assignable by the Company in connection with the sale, transfer or other disposition of its business or to any of the Company's affiliates controlled by or under common control with the Company, with the written approval of Executive.

18. Governing Law, Venue, Waiver of Jury Trial.   

The parties agree that this Agreement shall be deemed made and entered into in the State of Nevada and shall be governed and construed under and in accordance with the laws of the State of Nevada without giving effect to any principles of conflicts of law.  Company and Executive acknowledge and agree that  the Judicial Circuit, shall be the exclusive venue and proper forum in which to adjudicate any case or controversy arising either, directly or indirectly, under or in connection with this Agreement in these courts, they will not contest or challenge the jurisdiction or venue of these courts. The parties

7

further agree and hereby waive and release any right to a trial by jury in any action arising out of the interpretation, enforcement or breach of this Agreement.

19. Headings.

The headings of the sections are for convenience only and shall not control or affect the meaning or construction or limit the scope or intent of any of the provisions of this Agreement.

20. Survival.  

Any termination of this Agreement shall not affect the ongoing provisions of this Agreement which shall survive such termination in accordance with their terms.

21. Severabililty.

Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

22. Construction.  

This Agreement shall be constructed within the fair meaning of each of its terms and not against the party drafting the document.

23. Service Restriction.

Nothing in this Agreement will prevent or restrict Executive from serving on the Board of Directors of any public or private companies and receive compensation from such service.

THE PARTIES TO THIS AGREEMENT HAVE READ THIS AGREEMENT, UNDERSTAND ITS TERMS AND CONDITIONS, HAVE HAD THE OPPORTUNITY TO CONSULT WITH INDEPENDENT COUNSEL OF THEIR OWN CHOICE AND AGREE TO BE BOUND BY ITS TERMS AND CONDITIONS.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

TARA MINERALS CORP.

By ____________________________

Authorized Officer

______________________________

Francis R. Biscan Jr.

8

EX-10.6

ONEROUS TRANSFER OF MINING RIGHTS CONTRACT CELEBRATED ON ONE HAND BY A) CORPORACIÓN AMERMIN, S. A. DE C. V., REPRESENTED IN THIS ACT BY MR. RAMIRO TREVIZO GONZÁLEZ IN HIS PERSONALITY AS LEGAL REPRESENTATIVES (THE PRINCIPAL) AND ON THE OTHER BY B) AMERICAN COPPER MINING, S. A. DE C. V., REPRESENTED IN THIS ACT BY RAMIRO TREVIZO GONZÁLEZ IN HIS PERSONALITY AS GENERAL PROXY (THE ASSIGNEE), JOINTLY NAMED THE “PARTIES” IN ACCORDANCE WITH THE FOLLOWING DECLARATIONS AND CLAUSES:

DECLARATIONS

I.

The APRINCIPAL through the offices of his Legal Representative and under oath  of stating the truth, declares that:

1. It is a Mexican mercantile society, specifically a Stock Company with Varying Amount of Capital, duly established and in operation according to the applicable and current legal dispositions in the United States of Mexico, as prescribed in articles 10 and 11 of the Mining Law and evinced in Public Writ number 9,311 granted on the 9th August 1995 before testimony of Mr. José R. Miller Hermosillo, Public Notary number 2 for the Morelos Judicial District of the State of Chihuahua and instrument that was duly inscribed in the Public Registry of Commerce of said judicial district under electronic mercantile folio number 21164*10 and reason it enjoys the required and sufficient personality to intervene in this present judicial act;

2. Its representative enjoys the mandates, powers and necessary and sufficient faculties to subscribe this present contract as evinced in Public Writ number 22,503 granted on the 12th June 2008 before testimony of Mrs. Elsa Ordóñez Ordóñez, Attorney and applicant to the office of Notary Public and ascribed to Notary Public number 28 of the Morelos Judicial District, State of Chihuahua, and acting as Notary per license of its Holder, Mr. Felipe Colomo Castro, Attorney, and instrument that was duly inscribed in the Public Registry of Property and Commerce under electronic mercantile folio number 21164*10 as of the 1^st July 2008, and same that to date have not been restrained, limited, suspended or revoked, and reason by which he enjoys the necessary capacity to sign this agreement.

3. It is duly inscribed in the Federal Taxpayers Registry under Identification Certificate CAM-950810-K77, and being to date current in its income tax payments and other contributions that have corresponded to it in accordance to the applicable and current fiscal legislation.

 4. To be the title holder of 100 % (one hundred per cent) of the mining rights derived of the three concessions granted on 3 (three) mining lots described in detail following (the CONCESSIONS):

1

Title	Lot	Surface	Location
230,553	Picacho Fracc. I	3,813.2627 Hectares	Bacoachi, Sonora  Arizpe, Sonora
230,554	Picacho Fracc. II	3.8639 Hectares	Bacoachi, Sonora  Arizpe, Sonora
230,555	Picacho Fracc. III	6.3448 Hectares	Bacoachi, Sonora  Arizpe, Sonora

5. To date the rights and other contributions that have corresponded to keep the

CONCESSIONS current and in good state have duly been paid for, in addition to   have fulfilled properly with the rest of the obligations of the Mining Law   and its   Rulings among other applicable and current legal dispositions it imposes on title   holders of this kind of administrative authorizations;

6. The CONCESSIONS are free of lien, of any burden, attachment or limitation in   ownership of whatever kind, and it is legally possible to make use of same as may   agreed upon, either partially or in total;

7. Making use of the rights derived from the CONCESSIONS under the terms of   this present instrument does not imply a non compliance to any commitments   acquired prior on the part of the corporation;

8. The Administrations Board of the corporation has authorized the celebration of   this present contract as it is in harmony with ends and the social object of said   corporation;

9. It is the will of its Administration Board to subscribe this present agreement with   the purpose of transferring in favor of the ASSIGNEE the title holding of the   mining rights derived from the CONCESSIONS, heeding in every instance to the   terms and conditions of this instrument.

II.

The ASSIGNEE declares through the offices of 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 in operation according to the applicable and current legal dispositions in the United States of Mexico, as prescribed in articles 10 and 11 of the Mining Law and evinced in Public Writ number 17,348 granted on the 18th December 2006 before testimony of Mr. Eugenio Fernando García Russek, at that time applicant to the exercise of Public Notary and ascribed to Public Notary number 28 per license of its Title Holder, Mr. Felipe Colomo Castro, Attorney, and instrument that was duly inscribed in the Public Registry of Commerce of said judicial district under electronic mercantile folio number

2

23,391*10 as of the 29^th January 2007, and reason it enjoys the required personality to subscribed this present contract;

2. Its representative enjoys the mandates, powers and necessary and sufficient faculties to subscribe this present contract as evinced in Public Writ number 17,348 and granted on the 18^th December 2006 in attention to the prescriptions of articles 10 and 11 of the Mining Law before testimony of Mr. Eugenio Fernando García Russek, at that time applicant to the exercise of Public Notary and ascribed to Public Notary number 28 per license of its Title Holder, Mr. Felipe Colomo Castro, Attorney, and instrument that was duly inscribed in the Public Registry of Commerce of said judicial district under electronic mercantile folio number 23,391*10 as of the 6th October 2009 by virtue of which the resolutions adopted during the ASSIGNE’S Ordinary Shareholders General Assembly were protocolized and celebrated on the 25^th June 2009, and same that to date have not been limited, restrained, suspended or revoked.

3. It has been registered in due manner before the Public Registry of Mines in its character of “Mining Society” with the purposes of enjoying the required legitimacy to be known publicly as title holder of all kinds f mining rights, bearing in mind that in its social object is expressly included the possibility of carrying out all kinds of activities in the mining field as is the case of this present agreement. Such paper work lies under Act 287, page 144 of Volume XL of the Book of Mining Societies as of the 4^th September 2009.

4. It is duly inscribed in the Federal Taxpayers Registry under Identification Certificate ACM-061220-TIA, and being to date current in its income tax payments and other contributions that have corresponded to it in accordance to the applicable and current fiscal legislation, and;

5. It is the will of its Administration Board to subscribe this present agreement with the purpose it be transferred to it the title holding of the mining rights derived from the CONCESSIONS, heeding in every instance to the terms and conditions of this instrument.

III.

PARTIES declare through the offices of their respective General Proxies, under oath of stating the truth, that they acknowledge the personality with which they appear in addition to assist to the subscription of this contract in good faith, free of any deceit, error, violence or any vitiation in their consent with the purpose of committing themselves to the following:

CLAUSES

FIRST—OBJECT: In attention with article 2,029 as well as with article 2,248 of the Federal Civil of complementary application in agreement with article 23, last paragraph of

3

the Mining Law, as well as with the 2^nd article of the Code of Commerce, by virtue of the subscription of this present contract, the PRINCIPAL onerously and definitely transfers in favor of the ASSIGNEE, free of any lien, burden, attachment or limitation of ownership of any kind, 100 % (one hundred per cent) of the mining rights derived from the CONCESSIONS, receiving in exchange as counterclaim the certain and determined price described in the forthcoming clauses.

SECOND—PRICE: As counterclaim for the transfer already described, the ASSIGNEE commits itself to pay in favor of the PRINCIPAL the amount of $190,000.00 Dollars (One hundred and ninety thousand Dollars 00/100 in American Currency), Value Added Tax included (the PRICE) heeding in every instance to the terms and conditions agreed upon in this instrument.

THIRD—ORDINARY INTERESTS: The ASSIGNEE commits itself to pay additionally to the PRICE per concept of ordinary interests, the rate resulting from the addition of 3.25 (three point twenty five) percentual points to the current LIBOR rate (London InterBank Offered Rate) per year, in the understanding that such interests must be estimated on unpaid balance as corresponds.

PARTIES agree that the ASSIGNEE will not pay any moratorium interests due to any delay in complying to one or more of the partialities stipulated in this present contract.

FOURTH—MANNER, TIME AND PLACE OF PAYMENT: The ASSIGNEE commits itself to pay the PRICE in favor of the PRINCIPAL as per the schedule of payments indicated following;

1. As of the sate of signature of this present instrument the amount of $5,000.00

Dollars (five thousand Dollars 00/100 in American Currency) Value Tax   Included;

2. The amount of $5,000.00

Dollars (five thousand Dollars 00/100 in American   Currency) Value Tax Included;

3. the amount of $5,000.00

Dollars (five thousand Dollars 00/100 in American   Currency) Value Tax Included;

4. The balance of the PRICE, that is, the amount of $175,000.00 Dollars (One

hundred and seventy five thousand Dollars in United States Currency) Value   Added   Tax included, at the latest on the 4^th May 2014.

Payment of PRICE that the ASSIGNEE will honor in favor of the PRINCIPAL must be done by means of nominal check issued to the name of this latter or by means of an electronic transfer of funds into bank account that to such an effect will be determined by the PRINCIPAL, the ASSIGNEE enjoying the option of selecting any of the means of payment before mentioned. In case the ASSIGNEE chooses to pay the PRICE through

4

nominal checks issued to the name of the PRINCIPAL, place of delivery of same will be at the address indicated by the latter as agreed upon in the Eleventh Clause.

FIFTH—ADVANCE PAYMENT: The ASSIGNEE can pay part or the whole of the PRICE in advance without having to incur in any additional amount for complying in advance to his obligations of debt. In this case, the interests will be adjusted as may proceed to the actual payment upon the date of payment.

SIXTH—SAFEKEEPING IN CASE OF EVICTION: The PRINCIPAL obliges itself to answer to the ASSIGNEE for the safekeeping in case of eviction from the CONCESSIONS as per the dispositions of article 2,283, Fraction III of the Federal Civil code among other applicable legal dispositions.

SEVENTH—ADMINISTRATIVE OBLIGATIONS: The ASSIGNEE expressly obliges itself to up keep the CONCESSIONS current complying to such an effect by carrying out the paper work and the payment of the corresponding rights, subjecting itself to the general dispositions and Mexican Official Standards of the Mining and Metallurgical Industry as per article 27 of the Mining Law, among other that are applicable, its Rulings and other applicable and current legislation.

EIGHTH—FORMALIZATION OF THE TRANSFER OF RIGHTS: PARTIES commit themselves to ratify before Notary Public or Public Broker this present document as soon as possible with the purpose that same be inscribed for purposes of publicity and opposition before third parties at the Public Registry of Mines, a dependency of the Secretary of the Economy under the terms of the Mining Law, its Rulings and other applicable and current legislation.

NINTH—EXPENSES: The whole of expenses, taxes, fees, rights and whatever other expenditure that must be taken for the subscription and ratification of this present contract, as well as for the paper work to inscribe it before the Public Registry of Mines will be covered by the ASSIGNEE.

TENTH—PROOF OF PAYMENT: Against the payment of partialities of the PRICE, the PRINCIPAL commits itself to issue and deliver as soon as possible in favor of the ASSIGNEE the vouchers meeting the requirements imposed by the applicable and current fiscal legislation.

ELEVENTH—DURATION: PARTIES agree that the duration of this present contract will begin as of this same date until the 31^st March 2014, date line to liquidate the totality of the PRICE.

TWELFTH—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

5

legislation, and committing themselves to liberate their counterpart of any fiscal responsibility that might be imputed contrary to this clause by competent authorities.

THIRTEENTH— ADDRESSES AND CONTACT TELEPHONES: PARTIES agree in making known as their addresses and contact telephones for anything referring to the execution and compliance of the terms and conditions of this present instrument, as well as to render announcements, notifications and whatever other communication needed relative with same, as follows:

PRINCIPAL
Calle California 5101 Despacho 206 Col. Haciendas de Santa Fe Ciudad de Chihuahua Estado de Chihuahua, México Phone: 614-200-8483 ASSIGNEE
Calle California 5101 Despacho 206 Col. Haciendas de Santa Fe Ciudad de Chihuahua Estado de Chihuahua, México Phone: 614-200-8483

In case of a change in address PARTIES agree in notifying their counterpart of such an event at least five (5) natural days prior of the date in which the change of address takes effect.

FOURTEENTH — ANNOUNCEMENTS, NOTIFICATIONS AND COMMUNICATIONS. PARTIES agree that any announcement, notification or communication necessary to have their counterpart know, must done in writing.

Sending of said documents can be carried out via three means: 1. By ordinary courier delivered on hand or by certificate mail, both with acknowledgement of receipt; 2. By electronic mail. In this last case, sending will only be considered valid and legally carried out when the reception of the respective electronic mail is confirmed electronically within three (3) natural days following the sending expressly stating receipt, by means of a confirming answering message sent by the recipient.

PARTIES agree likewise that announcements, notifications and communications carried out in relation to this present instrument will bear their respective effects on the day of their reception. In case that such message include some kind of term, this latter will begin to be in effect on the day following confirmation of reception.

FIFTEENTH— CONTACT PERSONS: PARTIES agree that the totality of announcements, notifications or communications necessary to be carried out between them derived from the terms and conditions of this present instrument must be addressed indistinctly to the following persons:

PRINCIPAL
RAMIRO TREVIZO GONZÁLEZ RAMIRO TREVIZO LEDEZMA ASSIGNEE
RAMIRO TREVIZO GONZÁLEZ RAMIRO TREVIZO LEDEZMA

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In case it is their will to change contact persons, PARTIES agree in notifying their counterparts of such a circumstance at least five (5) natural days in advance of the date in which the persons are changed. Not complying to the obligation described will imply that announcements, notifications and communications sent and delivered to the name of the original addressees of the PARTY having carried out the change, will bear all legal effects in favor of the PARTY that was not advised opportunely as of the date of delivery and for as long as the non compliance subsists.

SIXTEENTH—TOTALITY OF CONTRACT; PARTIES accept and expressly acknowledge that this present contract contains the totality of the agreements between them regarding the object, and leaving without effect as well as canceling the totality of the agreements, reports, negotiations, correspondence, commitments and communications carried out previously between them either in writing or verbally.

SEVENTEENTH—APPLICABLE LAW: This present instrument will abide and will be interpreted in agreement with the Mining Law, its Ruling and the Federal Civil Code among other applicable and current legal dispositions in the United States of Mexico.

EIGHTEENTH—JURISDICTION AND COMPETENCE: In case there may arise a controversy related to the validity, intention, interpretation, execution or compliance to this contract, PARTIES expressly agree to submit same before the competency of the courts of law of the Morelos Judicial District, in the City of Chihuahua, State of Chihuahua, surrendering as of this moment any other jurisdiction, competency or privilege that might correspond to them by reason of their present or future addresses, or by any other circumstance.

PARTIES BEING IN THE KNOWLEDGE OF THE FORCE AND LEGAL REACH OF THIS PRESENT CONTRACT, THEY SUBSCRIBE IT BEING TOGETHER IN THE CITY OF CHIHUAHUA, STATE OF CHIHUAHUA, ON THE TENTH OF MAY OF THE YEAR TWO THOUSAND AND ELEVEN.

PRINCIPAL
CORPORACIÓN AMERMIN, S. A. DE C. V. Represented in this act by: RAMIRO TREVIZO GONZALEZ ASSIGNEE
AMERICAN COPPER MINING S. A. DE C. V. Represented in this act by: RAMIRO TREVIZO GONZALEZ

###

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EX-10.7

Ex 10.8   

EX-10.8

OPTION AGREEMENT

made among

TARA MINERALS CORP.

and

AMERICAN METAL MINING, S.A. DE C.V.

 and

CARNEGIE MINING AND EXPLORATION INC.

August 8, 2011

ARTICLE 1  INTERPRETATION                                                               2

1.1 Definitions                                                                                              2

1.2 Included Words                                                                                       8

1.3 Headings                                                                                                8

1.4 References                                                                                             8

1.5 Currency                                                                                                8

1.6 Knowledge                                                                                             8

1.7 Schedules                                                                                               8

1.8 Severability                                                                                             8

ARTICLE 2  REPRESENTATIONS AND WARRANTIES                         9

2.1 Mutual Representations and Warranties                                                   9

2.2 Tara Mexico and Tara Corp. Representations and Warranties                   9

2.3 Survival of Representations and Warranties                                             11

ARTICLE 3  COVENANTS                                                                       11

3.1  Covenants of Tara                                                                                11

3.2  Covenants of CME                                                                               11

ARTICLE 4  OPTION                                                                               12

4.1  Grant of Options                                                                                   12

4.2  Consideration for the Grant of the Options                                              12

4.3  Holder of Concession during Option Period                                            12

4.4  Maintenance of First Option                                                                  12

4.5  Exercise of  First Option                                                                       14

4.6  Maintenance of Second Option                                                              14

4.7  Exercise of Second Option                                                                    15

4.8  Formation of Joint Venture                                                                    15

4.9  Grant and Exercise of Iron Ore Option                                                   16

4.10  Option Termination                                                                              16

ARTICLE 5  OPTION PERIODS’ RIGHTS AND OBLIGATIONS            17

5.1  CME’s Rights during the Option Periods                                                17

5.2  Obligations of Tara Mexico and Tara Corp. during Option Periods           17

5.3  Emergency Expenditures during the Option Periods                                18

5.4  Registered Title during the Option Periods                                              18

5.5  Abandonment during the Option Periods                                                 18

ARTICLE 6  MANAGEMENT COMMITTEE                                            18

6.1  Management Committee                                                                        18

6.2  Members                                                                                              18

6.3  Time of Meetings                                                                                  19

6.4  Notice and Place of Meetings                                                                19

6.5  Meeting via Telephone Conference                                                        19

6.6  Waiver of Notice                                                                                  19

6.7  Quorum                                                                                                19

6.8  Voting                                                                                                  20

6.9  Secretary and Records                                                                          20

6.10 Consent Resolutions                                                                             20

6.11  Binding Decisions                                                                                20

6.12  Costs of Representatives                                                                     20

6.13  Additional Rules                                                                                  20

ARTICLE 7  OPERATOR                                                                          21

7.1  Appointment as Operator                                                                       21

7.2  Status of Operator                                                                                 21

7.3  Qualifications of Operator                                                                      21

- 1 -

7.4  General Duties                                                                                     21

7.5  Duties and Obligations of Operator                                                        21

ARTICLE 8  OPERATION OF THE MINE                                               24

8.1  Operating Plan                                                                                     24

8.2  Approval and Amendment of Operating Plan                                         25

ARTICLE 9  REVENUE SHARING AND FUNDING

OF EXPENDITURES                                                                                25

9.1  Revenue Sharing                                                                                  25

9.2  Funding of Expenditures                                                                       25

ARTICLE 10  TRANSFERS                                                                      26

10.1  Limitations on Transfers                                                                     26

10.2  Exceptions                                                                                         26

10.3  Conditions of Transfers                                                                       26

ARTICLE 11  FORCE MAJEURE                                                             26

11.1  Events                                                                                               26

11.2  Effect of Intervening Events                                                               27

11.3  Obligation to Remove Intervening Events                                             27

11.4  Giving Notice                                                                                     27

ARTICLE 12  CONFIDENTIAL INFORMATION                                    27

12.1  Confidential Information                                                                     27

12.2  Information in Public Domain                                                              27

12.3  Press Release                                                                                    27

12.4  Confidentiality Agreement                                                                  28

ARTICLE 13  DISPUTE RESOLUTION                                                   28

13.1  Negotation Period                                                                              28

13.2  Jurisdiction and Venue                                                                       28

ARTICLE 14  NOTICE                                                                             28

14.1  Notice                                                                                               28

ARTICLE 15  GENERAL                                                                         29

15.1  Termination                                                                                       29

15.2  Entire Agreement                                                                              30

15.3  Expenses                                                                                          30

15.4   Area of Interest                                                                                30

15.5  Other Activities and Interests                                                             30

15.6  No Waiver                                                                                        30

15.7  Further Assurances                                                                           30

15.8  Manner of Payment                                                                           30

15.9  Enurement                                                                                         31

15.10  Special Remedies                                                                             31

15.11  No Strict Construction                                                                      32

15.12  Governing Law                                                                                32

15.13  Time of the Essence                                                                         32

15.14  Counterparts                                                                                    32

Schedule “A-1” Description of Concessions the Don Roman Project

Schedule “A-2” Description of the Iron Ore Properties

Schedule “B” Accounting Procedure

Schedule “C” List of Encumbrances

Schedule “D” Excluded Assets

Schedule “E” Form of Joint Venture Shareholders Agreement

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OPTION AGREEMENT

THIS AGREEMENT is made as of the August 8, 2011.

AMONG:

TARA MINERALS CORP., a corporation organized under the laws of the State of Nevada

(“Tara Corp.”)

AND:

AMERICAN METAL MINING, S.A. DE C.V., a corporation incorporated under the laws of Mexico,

(“Tara Mexico”, and together with Tara Corp., “Tara”)  

OF THE FIRST PART

AND:

CARNEGIE MINING AND EXPLORATION, INC., a corporation organized under the laws of Panama

(“CME”)

OF THE SECOND PART

WHEREAS:

A.

CME and Tara Corp. entered into a letter of intent (the “LOI”) dated June 24, 2011 which contemplates Tara Corp. and Tara Mexico granting CME or its designated subsidiary the sole and exclusive options to acquire up to an undivided fifty (50%) ownership interest in (i) mineral concessions known as the Don Roman Project located in the State of Sinaloa, Mexico as further described in Schedule “A-1” hereto   (the “Don Roman Project”) and iron ore concessions (the “Iron Ore Properties”) located in Mexico as further described in Schedule “A-2” hereto (collectively, the “Concessions”), and (ii) all the fixtures, tools, vehicles, machinery, equipment and supplies and all other property or rights of any, whether real or personal, of Tara, used directly in respect of the exploration, development and mining of the Concessions except for those listed in Schedule D (the “Assets”).

B.

Tara Mexico is the Holder of the concessions comprising the Don Roman Project and the Iron Ore Properties.

C.

CME, Tara Corp. and Tara Mexico wish to formalize the terms of the LOI by entering into this Option Agreement (“Agreement”).

NOW THEREFORE THIS AGREEMENT WITNESSES that for and in consideration of the sum of US$10.00 now paid by CME to Tara Mexico and Tara Corp., and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the Parties, the Parties agree as follows:

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ARTICLE 1   INTERPRETATION

1.1

Definitions

For the purposes of this Agreement, except as otherwise defined herein, the following capitalized words and phrases when used herein have the following meanings:

“Accounting Procedure” means the procedure attached to this Agreement as Schedule B.

“Affiliate” of a specified person means a person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by, or is under common Control with, the person specified.

“Area of Interest” shall have the meaning ascribed thereto in Section 15.4.

“Assets” has the meaning ascribed thereto in Recital A.

“Business Day” means a day on which banks in Las Vegas, Nevada and Mexico City, Mexico are open for business.

“Cash Consideration” shall have the meaning ascribed thereto in Section 4.2.

“CME” means Carnegie Mining And Exploration, Inc.

“Commercial Production” means, and is deemed to have been achieved, with respect to the Don Roman Project, when the concentrator processing ores, for other than testing purposes, has operated for a period of 30 consecutive production days at an average rate of not less than 75% of the specified Production Rate.

“concession” or “mineral concession” means concesion minera (mineral concession) within the meaning of the Ley Minera (Mineral Law) of the United States of Mexico, as amended from time to time.

“Confidentiality Agreement” means the confidentiality agreement made on December 21, 2011 between Tara and – Claridge Hanlon Resource Engineering/Springbok Development .

“Concessions” has the meaning ascribed thereto in Recital A.

“Concession Area” means the area lying within the Concessions as described in Schedule A.

“Control” means the right to exercise, directly or indirectly, more than 50% of the voting rights attributable to the shares or other ownership interest in any body corporate, limited liability company, partnership, joint venture or any other enterprise.

“Don Roman Project” has the meaning ascribed thereto in Recital A.

“Effective Date” means June 24, 2011.

“Encumbrance” means any mortgage, charge, pledge, hypothecation, security interest, assignment, lien (statutory or otherwise), charge, title retention agreement or arrangement, royalty, option to purchase or earn an interest, restrictive covenant or other encumbrance or adverse claim or interest of any nature.

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“Environmental Laws” means all laws imposing liability for or relating to the regulation of activities, materials, substances or wastes in connection with or for or to the protection of human health, safety, the environment or natural resources.

“Expenditures” means all items of outlay and expense whatsoever, direct or indirect, with respect to the Concessions or the acquisition, exploration, development or operation thereof, including without limitation:

(a)

in holding and maintaining the Concessions in good standing (including land maintenance costs and any monies expended as required to comply with applicable laws, regulations, and agreements such as for the completion and submission of assessment work and filings required in connection therewith), in curing title defects and in acquiring and maintaining surface and other ancillary rights;

(b)

in preparing for and in the application for and acquisition of environmental, operating, and other permits necessary or desirable to commence and complete exploration, development and mining activities;

(c)

in doing geophysical and geological surveys, drilling, assaying and metallurgical testing, including costs of assays, metallurgical testing and other tests and analyses to determine the quantity and quality of Minerals, water and other materials or substances;

(d)

in the preparation of work programs and evaluations and the presentation and reporting of data and other the results thereof including any program for the preparation of a preliminary assessment, preliminary feasibility study, feasibility study, or other evaluation with respect to the Concessions;

(e)

for all items in connection with the protection of the environment in relation to the Concessions including environmental remediation, rehabilitation;

(f)

in acquiring facilities, equipment, machinery, vehicles, and for the use thereof, and for all parts, supplies and consumables;

(g)

for salaries, wages, benefits and fringe costs including actual labour overhead expenses for employees assigned to exploration and development activities;

(h)

travelling expenses and fringe benefits (whether or not required by law) of all persons engaged in work with respect to and for the benefit of the Concessions,  including for their food, lodging and other reasonable needs;

(i)

payments to contractors or consultants for work done, services rendered or materials supplied;

(j)

in respect of the operation of a mine, including designing, equipping, improving, constructing, mining, milling, and concentrating;

(k)

all taxes levied against or in respect of the Concessions, or activities thereon, and the costs of insurance premiums and performance bonds or other security ; and

(l)

reasonable management fees or charges for administration or overhead as pre-approved by the Management Committee .

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“First Option” shall have the meaning ascribed thereto in Subsection 4.1(a).

“First Option Exercise Notice” shall have the meaning ascribed thereto in Subsection 4.5 (b).

“First Option Period” shall have the meaning ascribed thereto in Subsection 4.5 (a).

“Holder” means, as applicable, the registered holder, beneficial owner or lessor of the relevant concession.

“Holdings” shall have the meaning ascribed thereto in Section 10.1.

“Intervening Event” shall have the meaning ascribed thereto in Section 11.1.

“Iron Ore Commercial Production” means production of iron ore from the Iron Ore Properties at a rate of a minimum of 1,000 tonnes/day or (ii) production of saleable Product containing a minimum of 60% iron ore content from the Iron Ore properties.

“Iron Ore Expenditures” shall have the meaning ascribed thereto in Section 4.9 (a).

“Iron Ore Option” shall have the meaning ascribed thereto in Section 4.9 (a).

“Iron Ore Mineral Interest” shall have the meaning ascribed thereto in Subsection 15.4(b).

“Iron Ore Properties” means the iron ore held by Tara including the iron ore properties set out in Schedule “A-2” hereto, and the iron ore properties currently under negotiation by Tara and “Iron Ore Property” means any one of such Iron Ore Properties.

“Joint Venture Agreement” shall have the meaning ascribed thereto in Subsection 4.8.

“JVC” shall have the meaning ascribed thereto in Subsection 4.8.

“LOI” has the meaning ascribed thereto in Recital A.

“Management Committee” has the meaning ascribed to such term in Section 6.1.

“Mineral Interest” shall have the meaning ascribed thereto in Section 15.4.

“Minerals” means all ores and concentrates or other minerals (including, without limitation, gold, silver, copper, lead, zinc and iron) which are found on or under the Concession Area.

“Mining Operations” means the work done by the Operator in respect of feeding and operating the mill located in the Concession Area in accordance with the Operating Plan, including construction and mining, milling, concentrating, rehabilitation, reclamation, and environmental protection.

“Net Income” means for any period the cumulative gross proceeds and revenues derived from the Don Roman Project and if CME exercises the Iron Ore Option, the Iron Ore Properties, received by the Operator during such period from the sale of Product (but excluding, if applicable, any proceeds attributable to smelting or refining) plus any insurance proceeds, any government grants referable to the Concessions and any proceeds received by the Operator during such period from the sale or other disposition of any Products and Assets minus Operating Expenses.    

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“Operations” means every kind of work done or in respect to the production and the abandonment of the Concessions including, investigating, exploring, developing and maintaining the Concessions, preparing reports, estimates and studies, designing, equipping, improving, surveying, constructing, coring, mining, processing, rehabilitation, reclamation and environmental protection.

“Operating Expenses” for any period means the cumulative total of all costs, expenses, liabilities, obligations and charges incurred in connection with Mining Operations, including:

(i)

all costs attributable to the mining, milling, concentrating, production, smelting, refining, treating, processing, transportation, marketing, handling and delivering of Product;

(ii)

all costs of repairing and maintaining buildings, plants, equipment and facilities relating to producing operations;

(iii)

all taxes (excluding income taxes), rates, assessments, fees and duties (whether federal, provincial or municipal) levied or imposed upon the Project or payable on or in respect of or measured by the Products thereof, including all government and other royalties, mining duties or mining taxes (even though based on profits payable on or in respect of or measured by the Products of the Project) payable to any government authority;

(iv)

all costs for management and supervision at the Project and all costs of labour, including salaries, wages and benefits of whatsoever nature and the cost of technical personnel such as engineers, geologists and others who are employed or retained in connection with the production from or operation of the Project, whether located on-site or elsewhere;

(v)

the cost to operate and maintain equipment and facilities, including housing, for the use and welfare of employees at the Project;

(vi)

all sums payable for hospital and medical attention, accident benefits and other sums payable on account of death or injury to employees, and all sums payable as compensation for damages arising in any manner out of the production from or operation of the Project;

(vii)

all costs of consulting, legal, accounting and other professional fees relating to production from or the operation of the Project;

(viii)

all costs for pollution control, reclamation, rehabilitation or any other similar costs incurred or to be incurred as a result of any governmental regulations or requirements related to the Project;

(ix)

all costs of insurance placed or carried upon the Project or any part thereof or the Product produced therefrom or in compliance with requirements of compensation laws or for any other purpose;

(x)

all costs incurred or to be incurred relating to the termination of production from or the operation of the Project;

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(xi)

an amount to be established by estimating the cost of rehabilitation which will have to be spent after producing operations on the Project have terminated and charging a portion of the cost quarterly over a period of time commencing no sooner than five years prior to the estimated termination of producing operations on the Project;

(xii)

all costs and expenses directly and indirectly incurred by the Operator in marketing Product or incurred at the site in processing any ore to the state of its most advanced stage of handling or beneficiation, including assaying, representation charges, umpire fees, travel expenses, agency and sales fees and commissions;

(xiii)

costs in respect of definition drilling carried out for purposes of mineral resources or reserves definition, mining and the planning of production, it being understood that any costs in excess of 12% of the budget for operating expenses in any year shall be subject to the approval of the Management Committee; and

(xiv)

reserves for contingencies (not included in item (xi) hereof) that are confirmed by the auditors of the Operator to be reasonable;

but shall not include the Cash Consideration.

“Operating Plan” shall mean the operating plan described in Section 8.1, as approved by the Management Committee.

“ Operative Date ” means the date of this Agreement.

“Options” shall mean the First Option and the Second Option, collectively.

“Option Periods” means the First Option Period and the Second Option Period, collectively.

“Parties” means all of the parties to this Agreement.

“Party” means a party to this Agreement.

 “Permitted Encumbrances” means:  

A.

liens, privileges or other Encumbrances imposed by the law such as carriers' liens, warehousemen's liens, builders' liens and other liens, privileges or other charges of a similar nature, provided such liens, privileges and other charges relate to obligations not due or delinquent;

B.

undetermined or inchoate liens, privileges and other Encumbrances incidental to past or current Operations which have not at such time been filed or registered pursuant to the laws;

C.

liens for taxes, assessments, duties, fees, premiums, imposts, levies and other charges imposed by any regulatory authority with jurisdiction over the Concessions that are not at such date due or delinquent; and

D.

public or statutory obligations which are not due or delinquent;

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“Phase 1 Start-Up Expenditures” means the Start-Up Expenditures incurred during the Phase 1 Start-Up Period”.

“Phase 2 Start-Up Expenditures” means the Start-Up Expenditures incurred during the Phase 2 tart-Up Period”.

“Phase 3 Start-Up Expenditures” means the Start-Up Expenditures incurred during the Phase 3 Start-Up Period”.

“Phase 1 Start-Up Period” means the period starting on the Operative Date until the date that is 120 days from the Effective Date.

“Phase 2 Start-Up Period” means the period starting at the end of the Phase 1 Start-Up Period until the date that is twelve (12) months from the Operative Date.

“Phase 3 Start-Up Period” means the period starting at the end of the Phase 2 Start-Up Period until the date that is twenty-four (24) months from the Operative Date.

“ Preliminary Assessment ” or “PEA” means the preliminary economic assessment referred to in section 1.C of the LOI. .

 “Prime Rate” means  that interest rate published from time to time by the Wall Street Journal - Western Edition as the prime rate.

“Production Rate” means the tonnage of ore to be fed to the mill or total concentrates to be produced from the mines located in the Concession Area expressed in tonnes per day which for clarity shall not include the production of iron ore.

“Products” means all ores, minerals and mineral products located on, in or under or produced or derived from the Concession Area and includes all beneficiated and other mineral products produced or derived therefrom.

“Project” means the Concessions and the Assets, collectively.

“Second Option” shall have the meaning ascribed thereto in Subsection 4.1(b).

“Second Option Exercise Notice” shall have the meaning ascribed thereto in Subsection 4.6(a).

“Second Option Period” shall have the meaning ascribed thereto in Subsection 4.6 (a).

“Start-Up Expenditures” means the Expenditures spent on the Concessions after the Effective Date but prior to the exercise of the Second Option

“Start-Up Program and Budget” means the work program and budget contained in the PEA as approved by the Management Committee, consisting of (i) a plan specifying the activities to be undertaken in order to re-start Mining Operations in respect of the Project, together with a schedule for such activities, and (ii) a budget specifying an estimate of in the income to be received and the expenses to be incurred in carrying out that plan.

“Tara Corp.” means Tara Minerals Corp.

“Tara Mexico” means American Metal Mining, S.A. de CV.

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“Transfer” shall have the meaning ascribed thereto in Section 10.1.

1.2

Included Words

This Agreement will be read with such changes in gender or number as the context requires.

1.3

Headings

The headings to the Articles, Sections, Subsections and clauses of this Agreement are inserted for convenience only and are not intended to affect the construction hereof.

1.4

References

Unless otherwise stated, a reference herein to a numbered or lettered Article, Section, Subsection, clause or schedule refers to the Article, Section, Subsection, clause or schedule bearing that number or letter in this Agreement.  A reference to “this Agreement”, “hereof”, “hereunder”, “herein” or words of similar meaning, means this Agreement including the schedules hereto, together with any amendments thereof.

1.5

Currency

All dollar amounts expressed herein, unless otherwise specified, refer to lawful currency of the United States.

1.6

Knowledge

Where any representation or warranty contained in this Agreement is expressly qualified by reference to the knowledge or awareness of a Party, such Party confirms that it has made due and diligent inquiry of such persons as it considers necessary as to the matters that are the subject of the representation and warranty.

1.7

Schedules

The following schedules are attached to and incorporated into this Agreement by this reference:

A-1

Description of Don Roman Project

A-2

Description of ron Ore Properties
B

Accounting Procedure

C

List of Encumbrances

D

Excluded Assets
E

Form of Joint Venture Shareholders Agreement

1.8

Severability

If any provision of this Agreement is or becomes illegal, invalid or unenforceable, in whole or in part, the remaining provisions will nevertheless be and remain valid and subsisting and the said remaining provisions will be construed as if this Agreement had been executed without the illegal, invalid or unenforceable provision.

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ARTICLE 2 - REPRESENTATIONS AND WARRANTIES

2.1

Mutual Representations and Warranties

Each Party represents and warrants to the other Parties that, as of the date of this Agreement:

(a)

it is a body corporate duly incorporated or continued and duly organized and validly subsisting under the laws of its organizational jurisdiction;

(b)

it has full power and authority to carry on its business and to enter into and to perform its obligation under this Agreement;

(c)

all corporate authorizations have been obtained for the execution of this Agreement and for the performance of its obligations hereunder;

(d)

the execution and delivery of this Agreement, the consummation of the transactions hereby contemplated, and the performance of its obligations hereunder do not and will not conflict with, result in the breach of or accelerate the performance required by any agreement to which it is a party;

(e)

no consent or approval of any third party or governmental agency is required for its execution, delivery or performance of this Agreement except as provided herein;

(f)

its execution and delivery of this Agreement and performance of its obligations hereunder do not or will not violate or result in the breach of the laws of any jurisdiction applicable to it or pertaining thereto or of its organizational documents; and

(g)

this Agreement constitutes its legal, valid and binding obligation enforceable against it in accordance with its terms, except for the application of the laws of bankruptcy, insolvency , receivership and other similar laws of the applicable jurisdiction.

2.2

Tara Mexico and Tara Corp. Representations and Warranties

Each of Tara Mexico and Tara Corp., jointly and severally, represents and warrants to CME that, as of the date of this Agreement:

(a)

the Concessions are properly and accurately described in Schedules A-1 and A-2;

(b)

the Concessions have been duly and validly staked, located and recorded pursuant to all applicable laws and regulations in Mexico and are in good standing in the office of the Mining Department of Mexico;

(c)

Tara Mexico is the sole and exclusive legal and beneficial owner of a 100% interest in and to the Concessions free and clear of all Encumbrances other than those, if any, described in Schedule C;

(d)

Tara Corp. holds and is the beneficial owner of 9,999 common shares of Tara Mexico whose share capital consists of 10,000 issued and outstanding common shares;

(e)

it does not have notice or knowledge of any proposal to terminate or vary the terms of or rights attaching to the Concessions from any government or other regulatory authority, or

- 11 -

of any challenge to Tara Mexico’s right, title or interest in the Concessions by any government, regulatory authority or third party such as an ejido;

(f)

there are no agreements or contracts, and to the best of its knowledge there are no laws, regulations or other restrictions of any kind to which Tara Corp. or Tara Mexico is a party or subject that would prevent or restrict the execution, delivery or performance of this Agreement or result in any penalty, forfeiture, termination, or restriction on the business operations of Tara Mexico as a result of the execution, delivery or performance of this Agreement;

(g)

there are no outstanding rights, agreements or obligations, or understandings capable of becoming rights, agreements or obligations, to acquire any right, title or interest in or to the Concessions or to grant any interest in or Encumbrance on the Concessions other than those stated in Schedule C;

(h)

subject only to the rights of any government authority having jurisdiction, no person, governmental entity, or corporation or association of any kind is entitled to or has been granted any royalty or other payment in the nature of rent or royalty on any minerals, metals or concentrates or any other Product mined, produced, removed or otherwise recovered, or to be mined, produced, removed or otherwise recovered, from the Concession Area other than those stated in Schedule C;

(i)

no proceedings are pending and there is no basis for the institution of any proceedings leading to the dissolution or winding-up of Tara Mexico or Tara Corp. or the placing of any of them into bankruptcy or subject to any other laws governing the affairs of insolvent persons;

(j)

Tara Mexico has paid or properly accrued all required federal, state, provincial and local taxes, including, without limitation, income tax, unemployment compensation, social security, payroll, sales and uses, gross receipts and property, and has filed all tax returns related thereto which have been required to be filed other than those stated in Schedule [C];

(k)

there are no actions, suits or proceedings, including plans for nationalization pending or, to the knowledge of Tara, threatened against Tara Corp. or Tara Mexico, at law or in equity, or by any federal, provincial, state, municipal or other government department, commission, board, bureau or agency, domestic or foreign in respect of the Concessions, and Tara is not aware of any existing grounds on which such action, suit or proceeding might be commenced with any reasonable likelihood of success, other than those stated in Schedule C;

(l)

Tara Mexico is in compliance with all applicable laws, rules, regulations, orders, judgments, claims, permits, certificates, approvals and decrees;

(m)

Tara Mexico has obtained all necessary environmental and operation permits required to conduct Mining Operations in accordance with applicable law other than those set forth in Schedule C hereto, it being understood that CME will use its best efforts to cooperate with Tara in order to obtain all relevant permits;

(n)

Tara Mexico is not either charged with, in receipt of any notice or warning of, or, to the best of its knowledge, under investigation with respect to, any failure or alleged failure to

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comply with any provision of any applicable laws, rules, regulations, orders, judgments, Concessions, permits, certificates, approvals and decrees;

(o)

neither this Agreement (including the schedules hereto) nor any written information provided to CME by or on behalf of Tara Corp. or Tara Mexico in connection with the transactions contemplated by this Agreement contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary in order to make the statements contained herein and therein not misleading in light of the circumstances in which such statements were made; and

(p)

to the best of its knowledge, there no pending event or condition that might have a material adverse effect on the operations of TARA, the Don Roman Project or the Iron Ore Properties.

2.3

Survival of Representations and Warranties

The representations and warranties contained in, and made as of the date of, this Agreement are conditions on which the Parties have relied in entering into this Agreement and will survive the execution hereof and the acquisition by CME of the ownership interest in the Concessions.

Each Party will indemnify, defend, protect and save the other Parties harmless for, from and against all loss, damage, costs, actions and suits arising out of or in connection with any breach of any representation, warranty, covenant, agreement or condition made or to be fulfilled by it hereunder.  A Party may waive any of such representations, warranties, covenants, agreements or conditions in whole or in part at any time without prejudice of its right in respect of any other breach of the same or any other representation, warranty, covenant, agreement or condition.

ARTICLE 3
COVENANTS

3.1

 Covenants of Tara

Tara Corp. and Tara Mexico shall cooperate in all respects with CME in order to facilitate the formation of the joint venture in accordance with Subsection  4.8 herein in the event that the Second Option is exercised.

3.2

Covenants of CME

CME undertakes to enter into to a private placement memorandum (“PPM”) with Tara within 2 days of the Operative Date.  The PPM shall provide for the subscription of US $8,000,000 in Tara Minerals Corp. securities on the following schedule:

(i)

US $250,000 by August 23, 2011;

(ii)

an additional US $750,000 by September 7, 2011; and

(iii)

the full US $8,000,000 by December 6, 2011.

The Parties anticipate that the private placement will be closed by December 6, 2011.

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ARTICLE 4
OPTION

4.1

Grant of Options

(a)

Tara Mexico hereby grants to CME the sole, irrevocable and exclusive right and option (the “First Option”) in accordance with the other provisions of this Article 4, to acquire a thirty percent (30%) ownership interest in the Don Roman Project and the Assets during the First Option Period.

(b)

Tara Mexico hereby also grants to CME the sole, irrevocable and exclusive right and option (the “Second Option”) in accordance with the other provisions of this Article 4, to increase its interest in the Don Roman Project and the Assets to fifty percent (50%) at any time during the Second Option Period.

4.2

Consideration for the Grant of the Options

As consideration for the First Option and the Second Option, CME shall make a payment of such cash consideration (the “Cash Consideration”) corresponding to the sum of US$250,000 paid by CME in an escrow account pursuant to Subsection 2(b) of the LOI minus the costs incurred by or on behalf of CME in respect of work performed in relation to the Concessions up to the Effective Date, including US$50,000 to SpringBok Development, it being understood that such costs shall not exceed US$150,000 in the aggregate.

4.3

Holder of Concessions During Option Period

Within  thirty days of the Operative Date,  Tara shall form a new corporation (“MexCo”) which it shall wholly own, organized under the laws of Mexico, to hold title to the Concessions .  Tara Mexico shall convey and register title to the Concessions in the name of MexCo as soon as possible after its creation and shall transfer all permits, licenses and Assets held by Tara Mexico to MexCo.  Any permits, licenses or titles, acquired for the Project after the Operative Date shall be in the name of MexCo.  Prior to CME's exercise of the First Option, Tara Corp. shall hold all shares of MexCo.  Following  the exercise of the First Option, Tara Corp. shall hold 70% of the of the shares of MexCo with CME beneficially owning the remaining 30%.  Upon the exercise of the Second Option by CME MexCo shall become a wholly-owned subsidiary of the JVC.  As long as this Option Agreement is in effect, MexCo shall not sell, convey, transfer, or encumber any titles or concessions that it holds without the consent of the Management Committee.

4.4

Maintenance of First Option

(a)

In the event that CME wishes to maintain the First Option in force, it may do so by doing work and making Start-Up Expenditures as set forth in the table below:

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Option Maintenance  Period		Maintenance Obligation
	Within the Phase 1 Start-Up Period (the period from the Operative Date to 120 days from such date)	incur a minimum of US$2,000,000 in Start-Up Expenditures in order to re-start Mining Operations based on the Start-Up Program and Budget and (ii) achieve the Production Rate of 120 tonnes per day (the “Phase 1 Production Rate”).
	Within the Phase 2 Start-Up Period (the period from the end of the Phase 1 Start-Up Period to 12 months from the Operative Date)	incur a minimum of an additional minimum of US$6,000,000 in Start-Up Expenditures to achieve a Production Rate of 360 tonnes per day  (“Phase 2 Production Rate”) (it being understood that this amount shall be in addition to and shall not include the amounts spent during the Phase 1 Start-Up Period.

(b)

Any Start-Up Expenditures incurred by CME in excess of the Start-Up Expenditures required for the corresponding period may at its discretion be credited and set-off against Start-Up Expenditures for future phases.  If CME manages to attain the agreed upon Production Rate during the agreed upon corresponding period, but has not incurred the minimum Start-Up Expenditures for the corresponding period, CME may (i) pay the shortfall to Tara in cash, or (ii) use the shortfall of these funds until the end of the Second Option Period for the acquisition and development of additional concessions as agreed to by the Management Committee, it being understood that these concessions shall be deemed to form part of the Project , as follows:

(i)

if such concessions are acquired before the First Option is exercised, then they will be registered in the name of Tara Mexico; and

(ii)

if such concessions are acquired after the First Option is exercised but before the Second Option is exercised, then Tara Mexico shall be the 70% holder and beneficial owner of these concessions and  CME shall be the holder and beneficial owner of the remaining 30%.

(c)

In the event that CME, using commercially reasonable best efforts is unable to perform work on the Project because it has not obtained the necessary operating permits as required to conduct Mining Operations for reasons attributable to Tara’s non-performance of obligations under such permits, then CME will be entitled to a cure period equal to the period for which work is delayed pending the obtaining of such permits.

(d)

In the event that CME, using commercially reasonable best efforts is unable to achievethe Phase 2 Production Rate set forth in subsection 4.3(a) hereto, it shall provide Tara with written notice to such effect, and shall be entitled (i) to a grace period of three (3) months to achieve the Phase 2 Production Rateor (ii) to attain at least 75% of the Phase 2 Production Rate

(e)

Subject to subsection 4.3(c), in the event that obligations including Start-Up Expenditures set forth in the table in Subsection 4.3(a) above are not made within the corresponding period, the First Option shall terminate.

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4.5

Exercise of First Option

(a)

First Option Period. The First Option shall be exercisable until the earlier of (i) the date that CME gives Tara written notice of termination in accordance with Section 4.10 or (ii) 11:59 p.m. (Eastern) on August 8, 2012 (“First Option Period”)

(b)

Exercise of First Option. Provided that CME shall have incurred Start-Up Expenditures equal to at least US$8 million in aggregate on or before the date that shall be twelve months from the Effective Date, CME shall be entitled to exercise the First Option. In order to exercise the First Option, CME shall deliver a written notice to Tara that it is exercising the First Option and provide reasonable particulars of the Expenditures incurred, the work performed by it and the Production Rate attained  (the “First Option Exercise Notice”).

(c)

On the tenth Business Day from the delivery of the First Option Exercise Notice in compliance with Subsection 4.4(b) , unless Tara objects in writing, that the information submitted by CME does not demonstrate the required Start-Up Expenditures and Production Rate obligations have been complied with, CME shall become the beneficial owner of 30% of all of Tara’s rights and interests in relation to the Don Roman Project and other Assets.  If Tara makes this objection then, CME shall have ten Business Days to produce additional documentation to demonstrate that it has satisfied the conditions of exercise of the First Option.  IF Tara is satisfied with the additional documentation provided by CME, then CME’s beneficial interest shall be deemed to have vested on the tenth Business Day from the delivery of the First Option Exercise Notice.

4.6

Maintenance of Second Option

(a)

Second Option Period. The Second Option shall be exercisable from the date that shall be [3] Business Days from the date of the First Option Exercise Notice until the (i)  11:59 p.m. (Eastern Standard Time) on the date that is 24 months from the Operative Date, or (ii) the date of termination of this Agreement in accordance with Section 4.10 (the “Second Option Period”).

(b)

Maintenance of Second Option.  In the event that CME wishes to maintain the Second Option in force, it may do so by doing work and making Start-Up Expenditures as set forth in the table below:

Option Maintenance Period	Maintenance Obligation
Within the Phase 3 Start-Up Period (the period from the end of the Phase 2 Start-Up Period to 24 months from the Operative Date)	incur a minimum of US$5,000,000 in Start-Up Expenditures to achieve and maintain the a Production Rate of 600 tonnes per day  (“Phase 3 Production Rate”) (it being understood that this amount shall be in addition to and shall not include the amounts spent during the Phase 2 Start-Up Period).

(c)

In the event that CME, using commercially reasonable best efforts is unable to achieve the Phase Production Rate set forth in Subsection 4.5(b), it shall provide Tara with written notice to such effect, and shall be entitled (i) to a grace period of three ( 3 ) months to

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achieve the Phase 3 Production Rate or (ii) to achieve at least 75% of the Phase 3 Production Rate.

(d)

Subject to Subsection 4.5(c), in the event that obligations including Start-Up Expenditures set forth in the table above are not made within the corresponding period, the Second Option shall terminate.

(e)

For clarity, CME shall have no interest in the Project until it exercises the First Option in accordance with this Article 4 in its entirety, save for the share of Net Income it shall be entitled to pursuant to Section 9.1 herein.

4.7

Exercise of Second Option

(a)

Provided that CME shall have complied with its obligations under 4.5 of this Agreement and provided in particular that it shall have incurred Start-Up Expenditures pursuant the table set forth in Section 4.5(b) equal to at least US$5 million in aggregate on or before the date that shall be 24 months from the Operative Date, CME shall be entitled to exercise the Second Option. In order to exercise the Second Option, CME shall deliver a written notice to Tara Mexico that it is exercising the Second Option and provide  reasonable particulars of the Start-Up Expenditures incurred, the work performed by it and the Production Rate attained  (the “Second Option Exercise Notice”).

(b)

 On the tenth Business Day from the delivery of the Second Option Exercise Notice in compliance with Subsection 4.7(a) , unless Tara objects in writing that the information submitted by CME does not demonstrate the required Start-Up Expenditures and Production Rate obligations have been complied with, CME shall become the beneficial owner of 50% of all of Tara’s rights and interests in relation to the Don Roman Project and other Assets.  If Tara makes this objection, then CME shall have ten Business Days to  produce additional documentation to demonstrate that it has satisfied the conditions of exercise of the Second Option. If Tara is satisfied with the additional documentation provided by CME, then CME’s additional beneficial interest shall be deemed to have vested on the tenth Business Day from the delivery of the Second Option Exercise Notice.  

4.8

Formation of Joint Venture

(a)

Formation of JVC.  Upon exercise of the Second Option, the Parties will be deemed to have entered into a joint venture and Tara and CME or their successors or  assigns shall form a joint venture company (a “JVC”) under the laws of such jurisdiction as shall be chosen by the Parties , which shall become the parent of MexCo as the JVC’s wholly owned subsidiary .  MexCo shall be the registered Holder of the Don Roman Project and other Assets, and if that the Iron Ore Option is exercised and CME retains its right to 50% of the Iron Ore Properties in accordance with section4.9, MexCo shall be the registered Holder of the Iron Ore Properties .  The sole business of the JVC and the MexCo shall be to acquire the Don Roman Project and other Assets, and as applicable the Iron Ore Properties, and to explore, develop and to mine and treat ores and sell the Products from the Concession Area.

(b)

Transfer of Property in the JVC.  Within 30 days of incorporation and registration of the JVC (but not in any event before the exercise of the Second Option), Tara and CME shall (i) promptly transfer all of their respective rights and interest in the Don Roman Project and the Assets, MexCo, as well as such other properties as may be acquired under Section

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4.3 to the JVC and in consideration thereof, the JVC shall issue common shares to Tara and CME such that 50% of the issued and outstanding shares of the JVC shall be held by CME or a nominee thereof, and the remaining 50% shall be held by Tara or a nominee thereof, and (ii) carry out all procedures legally required to effect such transfer including but not limited to Tara Mexico conveying all titles to the Don Roman Project not previously conveyed to the MexCo, the registration of title to the concessions comprising the Don Roman Project in the name of MexCo, and all applicable publication requirements.

(c)

Management of the JVC.  The JVC shall be managed pursuant to a shareholders and joint venture agreement (the “Joint Venture Agreement”) in the form attached hereto as Schedule E to be entered promptly by the Parties following the formation of the JVC.  

4.9

Grant and Exercise of Iron Ore Option

(a)

Tara Mexico hereby grants to CME the sole, irrevocable and exclusive right and option (the “Iron Ore Option”) in accordance with the other provisions of this Section 4.9 to acquire fifty percent (50%) of Tara’s interest in the Iron Ore Properties by incurring a minimum of US$1,000,000 of Expenditures (“Iron Ore Expenditures”) on advancing toward Iron Ore Commercial Production such Iron Ore Property as designated and prescribed by the Management Committee within ninety (90) days of the date hereof .  Any such Iron Ore Expenditures shall be credited to CME as Start-Up Expenditures for the Phase 1 Start-Up Period under the table set forth in paragraph 4.3(a).

(b)

If CME does not meet this Expenditure obligation within this time period, the Iron Ore Option shall terminate , and CME shall forfeit its right to earn an undivided fifty percent (50%) interest the Iron Ore Properties.  For clarity, subject to complying with its option maintenance obligations, CME shall continue to have the sole and exclusive right to acquire up to a 50% interest in the Don Roman Project.

(c)

Upon satisfaction of the Iron Ore Expenditures, CME shall have thirty days to notify Tara as to whether it elects or not to pursue the Iron Ore Properties.  

(i)

If CME elects not to pursue the Iron Ore Properties, within 20 days of said notice, Tara will issue to CME 1,000,000 common shares of Tara Corp. valued at $1.00 per share.  Upon issuance of such shares of Tara Corp., CME shall forfeit all of its rights in the Iron Ore Properties, and the $1,000,000 expended on the Iron Ore Properties shall be applied to the Start-Up Expenditures.

(ii)

If CME elects to keep its 50% interest in the Iron Ore Properties, then the Iron Ore Properties shall form part of the joint venture to be entered between CME and Tara upon the exercise of the Second Option, and CME’s interest in the Iron Ore Properties shall vest upon the exercise of the Second Option.

4.10

Option Termination

(a)

CME may terminate the Options at any time notwithstanding that it may have made any portion of the above Start-Up Expenditures during such periods.  Upon termination, it shall have no further obligations under this Agreement, except as otherwise provided.  

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(b)

The Options granted pursuant to this Article 4, subject to Sections 4.4 (c), 4.6 (c) ,and Article 11, shall be of no further force or effect at the expiration of the corresponding Option Period.

ARTICLE 5
OPTION PERIODS’ RIGHTS AND OBLIGATIONS

5.1

CME’s Rights during the Option Periods

During the Option Periods CME shall be entitled to:

(a)

conduct all prospecting, exploration, and development activities and studies relevant to discovering and developing a commercial mine with respect to the Concession Area, including geological, geochemical, geophysical, drilling, metallurgical, economic and other activities and studies;

(b)

conduct Operations in accordance with the Start-Up Plan and Budget and the Operating Plan;

(c)

to enter onto the Concession Area, and neither Tara Corp. nor Tara Mexico shall interfere with CME and its employees, agents and contractors’ use and rights in respect of the Concession Area to:

(i)

enter thereon;

(ii)

have quiet possession thereof;

(iii)

do such prospecting, exploration, development and/or other mining work thereon and thereunder as CME may determine in accordance with the Start-Up Plan and Budget and the Operating Plan;

(iv)

bring upon and erect upon the Concession Area such buildings, plant, machinery, tools, appliances and/or equipment as CME may deem advisable;

(v)

conduct any work program activities or other work on the Concession Area; and

(vi)

remove therefrom and dispose of reasonable quantities of ores, minerals and metals for the purposes of obtaining assays or making other tests.

5.2

Obligations of Tara Mexico and Tara Corp. during Option Periods

Tara Mexico and Tara Corp. are obligated during the Option Periods:

(a)

to promptly deliver to CME any notices, demands or other material communications relating to the Concessions;

(b)

to obtain the prior written approval of CME to the sending of any notice, demand or other material communications relating to the Concessions;

(c)

to not sell, transfer, encumber or otherwise dispose of or grant any Encumbrance with respect to the Concessions nor any interest therein nor take any action that could result in any claims or liabilities to arise in respect of the Concessions;

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(d)

to not take any steps towards, or agree to, the dissolution, winding up or liquidation of Tara Corp. or Tara Mexico;

(e)

to effect any renewals of the Concessions on or before the dates such Concessions expire;  and

(f)

to promptly notify CME of any claim or threatened claim relating to Tara Corp or Tara Mexico, any of the Concessions and/or the Concession Area including any proceeding for bankruptcy, insolvency or dissolution of Tara.

5.3

Emergency Expenditures during the Option Periods

Notwithstanding any other provision of this Agreement, CME will be entitled to incur as Expenditures all costs and expenses necessary to preserve or protect life, limb, property or the environment in respect of the Concessions or otherwise in the course of exploration or development activities.

5.4

Registered Title during the Option Periods

(a)

Prior to the exercise of the First Option, Tara shall ensure that Tara Mexico remains the registered holder of the Concessions free of all Encumbrances except as otherwise permitted herein.

(b)

On exercise of the First Option by CME pursuant to Subsection 4.5 (c), Tara shall register CME’s interest in the Concessions on title with the appropriate authorities in Mexico, provided that CME shall cooperate as needed to effectuate such registration.

5.5

Abandonment during the Option Periods

Tara Mexico shall not relinquish, surrender or abandon any part of the Concessions during the Option Periods, unless and only to the extent required by law, in which case it shall obtain the prior written consent from CME, such consent not to be withheld unreasonably.  Following a relinquishment, surrender or abandonment under this Section, the Concession Area or portion thereof so relinquished, surrendered or abandoned will thereafter cease to form part of the Concessions and will no longer be subject to this Agreement, save and except with respect to such obligations or liabilities of the Parties as have accrued to the date of such relinquishment, surrender or abandonment.

ARTICLE 6 MANAGEMENT COMMITTEE

6.1

Management Committee

A management committee in respect of the Project (the “Management Committee”) will be established on or forthwith after the Operative Date.  Except as herein otherwise provided, the Management Committee will make all decisions in respect of Mining Operations. Appointments to the Management Committee shall be made or changed by written notice to the other Party.

6.2

Members

As of the Operative Date, each of Tara Corp. and CME will forthwith appoint two (2) representatives to the Management Committee.  When CME satisfies the conditions of the Phase I Start-Up Period under Section 4.4(a), CME shall appoint an additional representative who shall serve for six

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months from the date after appointment, who shall be succeeded by a representative appointed by Tara to serve for the next six months, with alternating six month appointments for the duration of this Option Agreement.  The additional representative shall be entitled to vote only in the event of a tie vote of the first four members.  In the event that CME exercises the First Option, but does not exercise the Second Option during the Second Option Period or notifies Tara before the end of the Second Option Period that it does not intend to exercise the Second Option, then it shall be entitled to appoint one (1) representative to the Management Committee and Tara shall be entitled to appoint the remaining three (3) representatives to the Management Committee.

6.3

Time of Meetings

The Operator will call a Management Committee meeting at least once every 3 months, and, in any event within 10 days of being requested to do so by any representative.

Notwithstanding the above, meetings will be held as required, at least once every two weeks during the Phase 1 Start-Up Period, and at least monthly during the Phase 2 and Phase 3 Start-Up Periods to address matters relating to the work and payments being conducted by or on behalf of the Operator or in connection with the Project, provided that any meetings may be held at such other intervals as determined by the Management Committee.

6.4

Notice and Place of Meetings

The Operator will give notice, specifying the time and place of, and the agenda (including material data to be discussed) for, the meeting to all representatives at least 10 days before the time appointed for the meeting. In the case of an emergency, reasonable notice of a meeting will suffice. Unless otherwise agreed to by the Management Committee, all meetings will be held in Las Vegas, Nevada.  Each agenda for a meeting will include the consideration and approval of the minutes of the immediately preceding meeting.

6.5

Meeting via Telephone Conference

In lieu of a meeting, the Management Committee may hold telephone conferences, so long as minutes are prepared in accordance with Section 6.9.

6.6

Waiver of Notice

Notice of a meeting will not be required if representatives of all of the Parties are present and unanimously agree upon the agenda.

6.7

Quorum

A quorum for any meeting will be present if at least three representatives are present.  If a quorum is present at the meeting, the Management Committee will be competent to exercise all of the authorities, powers and discretions herein bestowed upon it hereunder.  The Management Committee will not transact any business at a meeting unless a quorum is present at the commencement of the meeting.  A representative may attend and vote at a meeting by telephone conference call in which each representative may hear, and be heard by, the other representatives.  

In the event that the quorum is not met at this meeting, the meeting shall be adjourned for 24 hours and the quorum shall then consist of a minimum of one representative of each Party.  

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6.8

Voting

The Management Committee will decide every question submitted to it by a majority of votes with each representative being entitled to one vote.

6.9

Secretary and Records

The representative of the Operator will be the chairman and secretary of the meeting.  The secretary of the meeting will take minutes of that meeting and circulate copies thereof to each Party within a reasonable time following the termination of the meeting, and in any event no later than the time of delivery of the notice of the next following meeting. The Parties shall have 14 days after receipt to sign and return such minutes or provide written comments on such minutes to the Operator. If a Party submits timely written comments on meeting minutes, the Management Committee shall seek, for a period not to exceed 14 days, to agree upon such minutes which are acceptable to the Parties. At the end of such period, failing agreement by the Parties on revised minutes, the minutes of the meeting shall be the original minutes as prepared by the Operator, together with the comments of the Parties.

At each meeting, the Operator shall provide information concerning the amounts being expended as Expenditures at such time and the purposes of such expenditures.  The Management Committee shall, among other things, (a) approve programs and budgets proposed by the Operator; (b) monitor and make on-going recommendations regarding Expenditures, (c) monitor and make on-going recommendations regarding work on the Project and locations and determination for the conduct of such exploration, development, and expansion work, (d) approve any Expenditures not included in the budget and exceeding US $ 100,000, and (e) provide such other advice and direction as it sees fit.

6.10

Consent Resolutions

The Management Committee may make decisions by obtaining the consent in writing of all of the representatives of all Parties.  Any decision so made will be as valid as a decision made at a duly called and held meeting.

6.11

Binding Decisions

Management Committee decisions made in accordance with this Agreement will be binding upon all of the Parties.

6.12

Costs of Representatives

Each Party will bear the expenses incurred by its representative in attending meetings .

6.13

Additional Rules

The Management Committee may, by agreement of the representatives of all the members, establish such other rules of procedure, not inconsistent with this Agreement, as the Management Committee deems fit.

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ARTICLE 7
OPERATOR

7.1

Appointment as Operator

(a)

CME , which may act through an affiliate or through an independent third party, shall be the sole Operator of the Project starting as at the Operative Date and until (i) the exercise of the Second Option by CME in accordance with the terms of this Agreement, or (ii) the expiration or termination of the Option pursuant to the terms hereof.  In the event CME exercises the Second Option, it shall be the Operator of the Project in accordance with the terms set forth in the Joint Venture Agreement.

(b)

In the event that CME exercises the First Option but does not exercise the Second Option or notifies Tara during the Second Option Period that it does not intend to exercise the Second Option, then the Operator shall be as designated by the Management Committee.

7.2

Status of Operator

The Operator in its operations hereunder will be deemed to be an independent contractor.  The Operator will not act or hold itself out as agent for any of the Parties nor make any commitments on behalf of any of the Parties unless specifically permitted by this Agreement or directed in writing by a Party.

7.3

Qualifications of Operator

The Operator will be duly authorized to conduct business in the jurisdiction in which the Concessions are located and will hold all necessary licences and authorities as necessary to act in such capacity.  Any Party may request the Operator to provide evidence of such authorization, licences and authorities.  Tara has satisfied itself that geologists and engineers currently contemplated by CME to carry out the work anticipated under the Option Agreement are qualified.  If there is a change in the staffing of these positions, CME shall identify replacements for approval of the Management Committee, such approval shall not be unreasonably withheld.

7.4

General Duties

Subject to any specific provision of this Agreement and subject to it having the right to reject any direction on reasonable grounds by virtue of its status as an independent contractor, the Operator will perform its duties hereunder in accordance with the directions of the Management Committee and in accordance with this Agreement.  The Operator will manage and carry out Mining Operations substantially in accordance with Start-Up Program and Budget and the Operating Plan adopted by the Management Committee and in connection therewith will, in advance if reasonably possible, notify the Management Committee of any change in Mining Operations which the Operator considers material and if it is not reasonably possible, the Operator will notify the Management Committee so soon thereafter as is reasonably possible.

7.5

Duties and Obligations of Operator

The Operator will have the sole and exclusive right and authority to manage and carry out all Mining Operations in accordance herewith and, subject to Article 9, to incur the Expenditures required for that purpose.  In so doing the Operator will:

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(a)

conduct all activities in compliance with the applicable laws and regulations governing the Project and do all things necessary to maintain the Concessions in good standing during such period;

(b)

comply with the provisions of all agreements or instruments of title under which the Concessions or Assets are held in good standing;

(c)

incur Expenditures in accordance with programs and budgets approved by the Management Committee;

(d)

do such acts, and pay as Expenditures such fees and rents as may be required to keep the Project in good standing;

(e)

conduct or perform all work, and ensure that its agent conduct and perform all work on the Project in a good and workmanlike manner to the best of its ability in accordance with best international mining practices and in compliance with all applicable laws of all governmental authorities, including without limitation, all Environmental Laws;

(f)

prepare and present to the Management Committee all work plans and budgets;

(g)

keep full and complete records of all Project exploration and development work, funding, Expenditures, expenses, revenues, mining and milling data, and other metrics together with the results of surveys, drilling, assays made, shipments and ensure that all such records and results shall be available for inspection by Tara;

(h)

provide written updates of the milling/processing activity, the derived revenue, and relevant metrics on a quarterly basis and promptly notify Tara of any and all material milling/processing issues that may significantly vary expected results;

(i)

implement the decisions of the Management Committee;

(j)

pay all Expenditures properly incurred promptly as and when due and advise the Management Committee if it lacks sufficient funds to carry out its responsibilities under this Agreement;

(k)

keep the Concessions and Assets free of all liens and Encumbrances (other than those, if any, in effect on the Operative Date, those the creation of which is permitted pursuant to this Agreement, or builder’s or mechanic’s liens) arising out of the Mining Operations and, in the event of any lien being filed as aforesaid, proceed with diligence to contest or discharge the same;

(l)

with the approval of the Management Committee prosecute claims and, where a defence is available, defend litigation arising out of the Mining Operations, provided that any Party may join in the prosecution or defence at its own expense;

(m)

perform such assessment work or make payments in lieu thereof and pay such rentals, taxes or other payments and do all such other things as may be necessary to maintain the Concessions in good standing, including, without limiting generality, staking and restaking mining claims, and applying for licenses, leases, grants, concessions, permits, patents and other rights to and interests in the Minerals;

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(n)

maintain books of account in accordance with the Accounting Procedure, provided that the judgment of the Operator as to matters related to the accounting, for which provision is not made in the Accounting Procedure, will govern if the Operator’s accounting practices are in accordance with accounting principles generally accepted in the mining industry in the United States of America;

(o)

perform its duties and obligations hereunder in a sound and workmanlike manner, in accordance with sound mining and engineering practices and other practices customary in the Canadian mining industry, and in substantial compliance with all applicable federal, provincial, territorial and municipal laws, bylaws, ordinances, rules and regulations and this Agreement;

(p)

prepare and deliver the reports provided for in Subsections 7.5(s) and (t);

(q)

maintain adequate insurance coverage in accordance with normal industry standards and practice, naming the parties as insured and protecting the parties from third party claims, and shall provide satisfactory evidence of such insurance at the request of Tara;

(r)

use qualified and licensed employees, agents and independent contractors under the management and direction of the Operator of the Project and any payment for wages, benefits, any statutory withholdings or remittances, employment related matters or applicable contractual fees required to be paid to the workforce will be made by the Operator.

(s)

provide Tara with; (i) monthly reports indicating the status of all work on the Project and a summary of all results obtained or received in connection therewith, and the compilation and interpretation thereof as well as a breakdown of the Expenditures incurred in carrying out such work reconciled with budgetary progress for such time period and conclusions of drilling results; and (ii) timely reports and information and forthwith upon the occurrence of any material results or other events, notice in reasonable detail, and will provide copies of relevant data of such material results or events;  

(t)

provide written updates of the mining activity and relevant metrics on a monthly basis; the Operator must  also promptly notify Tara of any and all material mining issues that may significantly vary expected results;

(u)

provide Tara with weekly electronic reports that summarize the daily metrics critical or material in assessing the status of the Project at any given time.

(v)

pay or cause to be paid all invoices for all materials and services purchased by the Operator in connection with work on the Project;

(w)

produce accurate, comprehensive and complete monthly financial and accounting reports, to be delivered to Tara no later than the 10^th business day following the end of each month;

(x)

permit Tara Mexico and Tara Corp. or their duly authorized agents upon reasonable prior notice to CME, to have access to the Concession Area in order to examine any work carried out by CME,  or pursuant to Subsection 15.5(b), provided however that neither Tara Mexico, Tara Corp. nor their agents shall interfere or obstruct the operation of CME, its employees, agents, and contractors in the Concession Area, and further provided that

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Tara Mexico, Tara Corp. and their agents shall enter upon the Concession Area at their own risk;

(y)

indemnify Tara, from and against any and all claims, demands, actions, and causes of action arising out of or relating to for the Operator’s activities on the Concessions, but not Tara’s activities on the Concessions; and

(z)

have such additional duties and obligations as the Management Committee may from time to time determine.

Tara, at its expense, shall have the right to review and, if required, dispute the contents of any reports as to Expenditures incurred or compliance with the terms of the approved budget by the independent accountants of Tara.  The Operator shall provide access, upon every reasonable request, to Tara to all work papers of the Operator, accounting books and records and the appropriate personnel to verify the accuracy, presentation and other matters relating to the preparation of such reports.

ARTICLE 8

OPERATION OF THE MINE

8.1

Operating Plan

The Operator shall submit to the Management Committee an operating plan (the “Operating Plan”) based on the results of the PEA, which shall be a detailed plan with respect to the re-start of Mining Operations.  

The Operating plan shall contain the following:

(a)

a description of the proposed Mining Operations;

(b)

a plan to achieve the Production Rate of 120 tonnes per day on or prior to the date that is one 120 days from the Operative Date, to achieve a Production Rate of 360 tonnes per day on the date that is twelve (12) months from the Operative Date, and to achieve and maintain a Production Rate of 600 tonnes per day on or prior to the date that is twenty four (24) months from the Operative Date.

(c)

a detailed estimate of all Expenditures plus a reasonable allowance for contingencies;

(d)

an estimate of the quantity and quality of the ore to be mined and the concentrates or metals or other Products and by-products to be produced;

(e)

confirmation that funds in respect of Start-Up Expenditures will be raised;

(f)

a plan to achieve Iron Ore Commercial Production on at least one Iron Ore Property; and

(g)

such other facts as may be necessary to reasonably illustrate the results intended to be achieved by the Operating Plan.

Upon request of any Party the Operator will meet with that Party to discuss the Operating Plan and will provide such additional or supplemental information as that Party may reasonably require with respect thereto.

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8.2

Approval and Amendment of Operating Plan

The Management Committee will adopt the Operating Plan, with such changes as it deems necessary, as soon as practicable using commercial best efforts, but not later than the date which shall be 30 days after the Operative Date.  The Management Committee, may from time to time and any time amend any Operating Plan as appropriate by majority vote pursuant to Section 6.8 herein.  The Operating Plan may be amended by the Management Committee to suspend Production in the event that the price of metals falls materially from those existing as of the Operative Date and production cannot be maintained at a profit.

ARTICLE 9

REVENUE SHARING AND FUNDING OF EXPENDITURES

9.1

Revenue Sharing

(a)

Upon satisfaction of the Phase 1 Start-Up Expenditures, CME shall have the right to 50% of the Net Income. CME’s right to 50% of the Net Income shall continue until the Options expire or terminate in accordance with this Agreement without being exercised, whereupon it shall forfeit all rights in respect of the Net income. For clarity, CME shall not have any interest in the Project save for its interest in the Net Income until it shall have exercised the First Option.

(b)

If, having exercised the First Option, CME does not exercise the Second Option within the Second Option Period or, prior to the end of the Second Option Period, notifies Tara that it does not intend to exercise the Second Option, then it shall be entitled to 30% of the Net Income with respect to the Don Roman Project ,and Tara shall be entitled to the remaining 70%, provided that if CME has exercised the Iron Ore Option, it shall be entitled to 50% of the Net Income from the Iron Ore Property.

(c)

If CME exercises both the First Option and the Second Option, CME shall continue to have the right to 50% of the Net Income, subject to applicable dilution provisions to be contained in the Joint Venture Agreement.

9.2

Funding of Expenditures

(a)

CME shall be responsible for, and shall alone fund all of the Start-Up Expenditures.

(b)

After the satisfaction of the Start-Up Expenditures by CME and upon the exercise of the Second Option by CME, Expenditures shall be funded in accordance with the Operating Plan as approved by the Management Committee in accordance with each Party’s proportionate interest in the Project, as more particularly described in the Joint Venture Agreement, it being understood that the Net Income of the Parties may be applied to fund expenditures subject to their approval.  If a Party elects not to contribute to an approved program and budget, such non-contributing Party’s interest in the Project shall be diluted appropriately as set forth in the Joint Venture Agreement.  If a Party is diluted to 10% or less then its interest shall be converted into a net smelter returns royalty as set forth in the Joint Venture Agreement.

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ARTICLE 10

TRANSFERS

10.1

Limitations on Transfers

No Party will transfer, convey, assign, create any Encumbrance in respect of, in any manner transfer, alienate or otherwise dispose of or deal with (in this Article, to “Transfer”) any or all of its interest in the Project or transfer or assign any or all of its rights under this Agreement (in this Article, such interests and rights, collectively, the “Holdings”) without the prior written consent of the non-transferring Party, such consent not to be unreasonably withheld, conditioned or delayed.

10.2

Exceptions

Nothing in Section 10.1 applies to or restricts in any manner:

(a)

a Transfer by the transferring Party of all or any portion of its Holdings to an Affiliate of the transferring Party, provided that such Affiliate first assumes and agrees to be bound by the terms of this Agreement and agrees with the other Parties in writing to re-transfer the Holdings to the transferring Party before ceasing to be an Affiliate of the transferring Party; or

(b)

an amalgamation or corporate reorganization involving the transferring Party which has the effect in law of the amalgamated or surviving corporation possessing all the property, rights and interests and being subject to all the debts, liabilities and obligations of each amalgamating or predecessor corporation; or

(c)

a transfer, conveyance, assignment, mortgage or grant which is otherwise specifically required or permitted under this Agreement.

10.3

Conditions of Transfers

As a condition of any Transfer other than to another Party, the transferee must covenant and agree to be bound by this Agreement, including this Article 10 and prior to the completion of any such Transfer, the transferring Party will deliver to the other Parties evidence thereof in a form satisfactory to such other Parties.  Notwithstanding any such Transfer, the transferring Party will remain liable for all of its accrued obligations hereunder.

ARTICLE 11
FORCE MAJEURE

11.1

Events

Notwithstanding any other provisions contained herein, a Party will not be liable for its failure to perform any of its obligations under this Agreement due to a cause beyond its commercially reasonable control (except those caused by its own lack of funds) including, but not limited to, acts of God, fire, flood, explosion, strikes, lockouts or other industrial disturbances; laws, rules and regulations or orders of any duly constituted court or governmental authority, including nationalization; government intervention with Operations; war; acts of terrorism; non availability of materials for transportation; delays in obtaining or the inability to obtain required licenses and  approvals of governmental or regulatory authorities or protests, demonstrations or other events causing work stoppages by environmental lobbyists or aboriginal peoples’ groups (in this Article, each an “Intervening Event”).

- 28 -

11.2

Effect of Intervening Events

All time limits imposed by this Agreement will be extended by a period equivalent to the period of delay resulting from an Intervening Event described in Section 11.1.

11.3

Obligation to Remove Intervening Events

A Party relying on the provisions of this Article 11 will take all reasonable steps to eliminate any Intervening Event and, if possible, will perform its obligations under this Agreement as far as practical, but nothing herein will require such Party to settle or adjust any labour dispute or to bring action against, question or to test the validity of any law, rule, regulation or order of any duly constituted court or governmental authority or to complete its obligations under this Agreement if an Intervening Event renders completion impossible.

11.4

Giving Notice

A Party relying on the provisions of this Article 11 will give written notice to the other Parties forthwith upon the occurrence of the Intervening Event and forthwith after the end of the period of delay when such Intervening Event has been eliminated or rectified.

ARTICLE 12
CONFIDENTIAL INFORMATION

12.1

Confidential Information

Except as specifically otherwise provided for herein, the Parties will keep confidential all data and information respecting this Agreement and the Project, and will refrain from using it other than for the activities contemplated hereunder, including obtaining financing, or publicly disclosing it unless required by law or by the rules and regulations of any regulatory authority or stock exchange having jurisdiction, or with the consent of the other Parties, such consent not to be unreasonably withheld.  If a public announcement is so required, the Party making the disclosure shall provide the other Party with a draft of such announcement and give such Party a minimum of  forty-eight (48)  hours to review and provide comments, prior to making such announcement.   In the event that this Agreement is terminated in accordance with Section 15.1, the confidentiality provision set forth in this Section 12.1 and as applicable in the Confidentiality Agreement, shall survive such termination.

12.2

Information in Public Domain

The provisions of this Article 12 do not apply to information which is or becomes part of the public domain other than through a breach of the terms hereof.

12.3

Press Release

All public announcements relating to this Agreement or the transactions contemplated hereby shall be made at such time and in such manner as the Parties hereto shall mutually agree, except that nothing in this Agreement shall prevent a Party hereto from making any disclosure in connection with the transactions contemplated by this Agreement to the extent that in the opinion to counsel of such Party, such disclosure is required by law.  

- 29 -

12.4

Confidentiality Agreement

The Parties agree that the Confidentiality Agreement will continue to be in effect between them , to the extent that the provisions contained therein do not conflict with the confidentiality provisions contained in this Agreement.

ARTICLE 13
DISPUTE RESOLUTION

13.1

Negotiation Period

If a dispute arises out of or relates to this Agreement, or the breach or validity thereof, or in respect of the legal relationship associated with or derived from this Agreement, and the dispute cannot be settled within 60 days through negotiation or mediation, then either Party may file an action seeking to resolve the dispute.

13.2

Jurisdiction and Venue

The Parties consent to the non-exclusive jurisdiction and venue of the federal and state courts of Las Vegas, Nevada for any action to interpret, enforce or seek damages under this Agreement.

ARTICLE 14
NOTICE

14.1

Notice

All invoices, notices, consents and demands under this Agreement will be in writing and may be delivered personally, transmitted by fax or email (with transmission confirmed by another recorded means), or may be forwarded by first class prepaid registered mail as follows:

Notices to CME will be given to the following address and fax number:

Carnegie Mining And Exploration, Inc.
c/o DeSanctis Bufete

Attn:  Claudia Rios Castro

P.O. Box 832-1729, WTC,

Suite 301, Third Floor

Tower B, P.H. Toresde las Americas

Urbanizacion Punta Pacifica

Panama, Republic of Panama

Facsimile:

(507) 213-1976

Email:

www.desanctisbufete.com

- 30 -

Notice to Tara Corp. or Tara Mexico will be given to the following address and fax number:

Tara Minerals Corp.

2162 Acorn Court

Wheaton, Illinois, 60189, USA

Facsimile:

(630) 597-2508
Attention:

Francis R. Biscan Jr.

or to such addresses as each Party may from time to time specify by notice.  

Any notice will be deemed to have been given and received:

(a)

if personally delivered, then on the day of personal service to the recipient party, provided that if such date is a day other than a Business Day such notice will be deemed to have been given and received on the first Business Day following the date of personal service;

(b)

if by pre-paid registered mail, then the first Business Day, after the expiration of five (5) days following the date of mailing; or

(c)

if sent by facsimile transmission or e-mail and successfully transmitted prior to 4:00 pm on a Business Day where the recipient is located, then on that Business Day, and if transmitted after 4:00 pm on a Business Day where the recipient is located or on the day that is not a Business Day where the recipient is located, then on the first Business Day following the date of transmission.

ARTICLE 15
GENERAL

15.1

Termination

(a)

During the First Option Period, this Agreement may be terminated by CME at any time by providing Tara Corp. with 30 days notice.  Upon termination, CME shall have no further Expenditure commitment or rights or obligations thereunder.

(b)

This Agreement shall terminate automatically if CME does not exercise the First Option during the First Option Period, including any grace period provided for herein .

(c)

In the event that the First Option is terminated, CME will have 30 days to (a) deliver to Tara all data, reports and technical information prepared by or for it related to the Project upon receipt payment for work completed to date; and (b) vacate the Concession without any right to remove any vehicles, equipment, portable structures and other apparatus belonging to the Project and/or acquired towards the satisfaction of the Option.

(d)

In the event that the Second Option is exercised, then this Option Agreement shall terminate automatically, and the relationship of the Parties shall be governed by the Joint Venture Agreement.

- 31 -

15.2

Entire Agreement

This Agreement and the schedules hereto constitute the entire agreement among the Parties and supersedes and replaces any preliminary or other agreement or arrangement, whether oral or written, express or implied, statutory or otherwise heretofore existing among the Parties in respect of the subject matter of this Agreement, including without limitation the LOI.  This Agreement may not be amended or modified except by an instrument signed by each of the Parties.

15.3

Expenses

Each Party shall bear and be solely responsible for its own costs and expenses incurred in connection with this Agreement, the Joint Venture Agreement and the transactions contemplated herein and therein, except as otherwise provided herein.

15.4

 Area of Interest

(a)

If at any time after the Effective Date, either Party desires to acquire, or causes any other party to acquire, a mining concession or property (or any direct or indirect right, title or interest therein) (a “Mineral Interest”), which is located or lies wholly or partly within five (5) kilometers of the circumambient boundaries of any part of the Concessions as they exist as of the Operative Date (the “Area of Interest”), such Party shall notify the Management Committee of its intention to acquire such Mineral Interest and the Management Committee shall either unanimously approve or reject such transaction. The parties hereby acknowledge and agree that they will only acquire Mineral Interests that have been approved by the Management Committee as herein provided. The approval of the Management Committee shall include an approval of the purchase price, form of payment and other details of the acquisition transaction. Any Mineral Interest so acquired will be deemed to form part of the Don Roman Project for purposes of this Agreement.

(b)

if at any time after the Effective Date, either Party desires to acquire, or causes any other party to acquire, an iron ore concession or property (or any direct or indirect right, title or interest therein) (an “Iron Ore Mineral Interest”), which is located in Mexico then, such party shall notify the Management Committee of its intention to acquire such Iron Ore Mineral Interest and the Management Committee shall either unanimously approve or reject such transaction. If the Management Committee rejects or unanimous approval cannot be achieved for such acquisition, the Party desiring to acquire the Iron Ore Mineral Interest shall be free to proceed with the acquisition , provided, in the case of CME, that CME shall have exercised the First Option .  If unanimous  approval of the Management Committee is achieved, such approval shall include the purchase price, form of payment and other details of the acquisition transaction. Any Iron Ore Mineral Interest so acquired will be transferred to the Project upon exercise of the Option and shall form part of the Concessions and the Project and become subject to this Definitive Agreement Any Iron Ore Mineral Interest so acquired will be deemed to form part of the Iron Ore Properties for purposes of this Agreement.

(c)

If this Agreement is otherwise terminated for a reason other than formation of the JVC, then, for a period of two years after the termination of this Agreement, CME and each of its Affiliates will not acquire any Mineral Interests or located wholly or in part within the Area of Interest or Iron Ore Mineral Interests located in Mexico.

- 32 -

15.5

Other Activities and Interests

(a)

Other than as set out in Section 15.4 above, each party shall be free to conduct its business ventures of any kind whatsoever, whether or not competitive with the activities undertaken pursuant hereto, independently any without any communication, notice or reference to the other Party and neither Party will have the obligation to invite the other Party to participate in any negotiations, dealing or agreements with any third parties whether in Mexico or in any other jurisdiction.  

(b)

Tara and CME each shall have all right of passage necessary to work on concessions other than the Concessions that it has any interest in.

15.6

No Waiver

No consent or waiver expressed or implied by any Party in respect of any breach or default by any other Party in the performance by such other Party of its obligations hereunder will be deemed or construed to be a consent to, or a waiver of, any other breach or default.

15.7

Further Assurances

The Parties will promptly execute or cause to be executed all documents, deeds, conveyances and other instruments of further assurance which may be reasonably necessary or advisable to carry out fully the intent of this Agreement or to record wherever appropriate the respective interests from time to time of the Parties in Tara Mexico and/or the Assets.

15.8

Manner of Payment

All payments to be made to any Party may be made by electronic wire at such bank or banks in Canada or Mexico as the Party may designate.  Such bank or banks will be deemed the agent of the designating Party for the purposes of receiving, collecting and receipting such payment.

15.9

Enurement

This Agreement will enure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.

15.10

Special Remedies

CME shall be entitled to specific performance in the event of Tara Corp .’s or Tara Mexico’s breach of the terms of this Agreement.  In addition, each of Tara Corp. and Tara Mexico agrees that its failure to comply with the covenants and restrictions set out in Section 5.5 (Abandonment during the Option Periods), Article 10 (Transfers) or Article 12 (Confidential Information) would constitute an injury and cause damage to CME, which is impossible to measure monetarily.  Therefore, in the event of any such failure, CME will, in addition and without prejudice to any other rights and remedies that it may have at law or in equity, be entitled to injunctive relief restraining, enjoining or specifically enforcing the provisions of Section 5.5, Article 10 or Article 12, as the case may be, and each of Tara Corp. and Tara Mexico hereby waives any defence it may have in law to such injunctive or equitable relief.  

- 33 -

15.11

No Strict Construction

The language used in this Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent, and no rule of strict construction shall be applied against any Party.

15.12

Governing Law

This Agreement will be construed according to and governed by the laws in force in the State of Nevada and the applicable federal laws of the United States of America.

15.13

Time of the Essence

Time is of the essence in the performance of each obligation under this Agreement.

15.14

Counterparts

This Agreement may be executed in any number of counterparts and all such counterparts, taken together, will be deemed to constitute one and the same instrument.  This Agreement may be signed and accepted by facsimile.

[Remainder of Page Intentionally Left Blank]

- 34 -

IN WITNESS WHEREOF this Agreement has been executed as of the date first above given.

	TARA MINERALS CORP.
	By:
Name:
Title:

	AMERICAN METAL MINING, S.A. DE C.V.
	By:
Name:
Title:

	CARNEGIE MINING AND EXPLORATION, INC.
	By:
Name:
Title:

- 35 -

EX-10.9

_   

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Francis Richard Biscan, certify that;

1.

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

2.

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;

3.

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;

4.

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:

a)

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;

b)

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;

c)

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

d)

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

5.

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):

a)

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

b)

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  15, 2011

/s/ Francis Richard Biscan

Francis Richard Biscan,

Principal Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Lynda R. Keeton-Cardno, certify that;

1.

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

2.

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;

3.

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;

4.

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:

a)

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;

b)

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;

c)

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

d)

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

5.

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):

a)

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

b)

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 15, 2011

/s/ Lynda R. Keeton Cardno

Lynda R. Keeton-Cardno

Principal Financial Officer

EX-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, 2011, as filed with the Securities Exchange Commission on the date hereof (the “Report”), we, Francis Richard Biscan, the Principal Executive Officer of the Company, and Lynda R. Keeton Carno, 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 15, 2011

/s/ Francis Richard Biscan

Francis Richard Biscan,

Principal Executive Officer

Date:   AUGUST 15, 2011

/s/ Lynda R. Keeton-Cardno

Lynda R. Keeton-Cardno,

Principal Financial Officer

XML



CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Jun. 30, 2011	Dec. 31, 2010
CONDENSED CONSOLIDATED BALANCE SHEETS [Abstract]
Recoverable value added taxes, allowance for bad debt	$ 1,358,736	$ 1,366,533
Other receivables, allowance for bad debt	3,086	4,692
Property, plant, equipment mine development and land, accumulated depreciation	421,504	295,925
Due from related parties	40,440	69,143
Common stock, par value per share	$ 0.001	$ 0.001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	63,641,921	57,236,288
Common stock, shares outstanding	63,641,921	57,236,288
Common stock, stock receivable	$ 0	$ 212,744

XML



CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (USD $)	3 Months Ended		6 Months Ended		62 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS [Abstract]
Mining revenues		$ 37,775		$ 37,775	$ 160,421
Cost of revenue					658,007
Gross margin		37,775		37,775	(497,586)
Exploration expenses	465,150	292,679	1,388,154	1,888,650	3,861,863
Operating, general, and administrative expenses	960,717	2,570,705	1,656,203	9,685,754	22,028,543
Net operating loss	(1,425,867)	(2,825,609)	(3,044,357)	(11,536,629)	(26,387,992)
Non-operating (income) expense:
Interest (income)	(6,528)	(6,142)	(13,079)	(12,836)	(148,719)
Loss On Conversion Of Note Payable					783,090
Interest expense	63,817	34,694	69,127	34,915	2,157,927
Gain on debt extinguishment		(6,138)		(6,138)	(6,138)
Loss on disposal or sale of assets			4,260		4,260
Other (income)	(162)	(27)	(11,253)	(1,056)	(791,288)
Total non-operating (income) expense	57,127	22,387	49,055	14,885	1,999,132
Loss before income taxes	(1,482,994)	(2,847,996)	(3,093,412)	(11,551,514)	(28,387,124)
Income tax benefit					(2,930,982)
Less: non-controlling interest	11,178	291,154	17,548	291,154	417,921
Net loss attributable to Tara Minerals' shareholders	(1,471,816)	(2,556,842)	(3,075,864)	(11,260,360)	(25,038,221)
Other comprehensive loss:
Foreign currency translation	2,650	(64,400)	(32,737)	(69,277)	(278,990)
Comprehensive loss	$ (1,469,166)	$ (2,621,242)	$ (3,108,601)	$ (11,329,637)	$ (25,317,211)
Net loss per share, basic and diluted	$ (0.02)	$ (0.05)	$ (0.05)	$ (0.22)
Weighted average number of shares, basic and diluted	61,297,513	53,998,455	59,436,159	52,954,278

XML



Document And Entity Information	6 Months Ended
	Jun. 30, 2011	Aug. 15, 2011
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2011
Entity Registrant Name	Tara Minerals Corp.
Entity Central Index Key	0001387054
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		63,641,921

XML



Stockholders' Equity

6 Months Ended

Jun. 30, 2011

Stockholders' Equity [Abstract]

Stockholders' Equity

Note 7.

Stockholders' Equity

The authorized common stock of the Company consists of 200,000,000 shares with par value of $0.001.

March 2011, the Company issued 1,012,977 shares of common stock valued at $1,215,572 or $1.20 a share to convert loans from unrelated parties.

March 2011, the Company issued 105,722 shares of common stock valued at $126,866 or $1.20 a share to convert a loan from a related party.

March 2011, the Company issued 125,000 shares of common stock for warrants exercised, for $50,000 or $0.40 a share for warrants exercised for cash.

April 2011, the Company issued 100,000 shares of common stock to an Officer of the Company, valued at $100,000 or $1.00 a share for payment  on behalf of Tara Gold for services rendered.

April 2011, the Company issued 416,100 shares of common stock valued at $353,685 or $0.85 a share for the purchase of Centenario's technical data. See Note 2 above.

April 2011, the Company issued 460,000 shares of common stock valued at $391,000 or $0.85 a share for the purchase of La Palma's technical data. See Note 2 above.

April 2011, the Company issued 370,000 shares of common stock valued at $314,500 or $0.85 a share for the purchase of La Verde's technical data. See Note 2 above.

April 2011, the Company issued 280,000 shares of common stock valued at $112,000 or $0.40 a share for warrants exercised for cash.

May 2011, the Company issued 792,500 shares of common stock valued at $317,000 or $0.40 a share for warrants exercised for cash.

In May 2011, the Company sold, in a private offering of 1,643,334 units for $493,000 in cash, or $0.30 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 $1.00 per share at any time on or before May 1^st, 2012.

May 2011, the Company issued 1,100,000 shares of common stock valued at $55,000 or $0.050 a share for cash to Officers of the Company that exercised non-qualified stock options.

In May 2011, the Company increased its authorized capitalization to 200,000,000 shares of common stock.

Common Stock Payable

At June 30, 2011, common stock payable consists of:

·

125,000 shares payable, valued at $125,000 for  cash and

·

100,000 shares payable, valued at $66,000 for prepaid services.

XML



Other assets, current and non-current

6 Months Ended

Jun. 30, 2011

Other assets, current and non-current [Abstract]

Other assets, current and non-current

Note 3.

Other assets, current and non-current

In September 2010, Tara Minerals signed an agreement to purchase three real estate properties for a price of $1,000,000. In order to hold these properties Tara Minerals made a cash deposit of $60,000. Tara Minerals is obligated to pay all the expenses, fees and general expenditures relating to the sale, which expenses, up to a maximum of $500,000, which are deductible from the sales price.  In March 2011, Tara Minerals received notification from Pacemaker Silver Mining S.A. de C.V. a wholly-owned Mexican subsidiary of El Tigre, indicating that they also had surface rights related to being able to work claims they held mining rights too. Although this is does not effect our specific right to the tailing piles, there could be an issue as to who would have specific areas and specific times.   Until the difference can be determined, the deposit has been expensed in 2011.

In May 2011, the Company paid $66,667 towards a $100,000 advanced to the Iron Ore Project Vendor, against future royalty payments (See Note 6).

In May 2011, the Company advanced $175,000 to a subcontractor for improvements needed at the Iron Ore Project site; the advance will be expensed over a six-month period beginning in July 2011.

XML



Non-controlling Interest

6 Months Ended

Jun. 30, 2011

Non-controlling Interest [Abstract]

Non-controlling Interest [Text Block]

Note 9.

Non-controlling Interest

On January 28, 2011, Adit, sold 500,000 units at a price of $1.00 per unit to Yamana Gold Inc.  Each unit consisted of one share of Adit's common stock and one half warrant. Each full warrant entitles Yamana to purchase one share of Adit's common stock at a price of $1.50 per share at any time on or before January 28, 2014.

In connection with the sale of the units, Adit also signed a letter of intent that grants Yamana an option to acquire up to a 70% interest in Adit's Picacho gold/silver project.  A definitive agreement is expected to be completed August, 2011.  Upon completion of the definitive agreement, Adit will sell an additional 2,500,000 units to Yamana at a price of $1.00 per unit. The units will be identical to the units sold on January 28, 2011.  From the $3,000,000 received from Yamana, Adit will be required to spend $2,000,000 in exploration work on the Picacho project within 12 months of signing the definitive agreement.  

Yamana can earn a 51% interest in the project by spending an additional $5,000,000 on the project within 30 months of the date of the definitive agreement and paying Adit an additional $1,000,000. Yamana can increase its interest to 70% by spending an additional $9,000,000 on the project and paying Adit an additional $2,000,000.

	Non-controlling interest at June 30, 2011	Non-controlling interest at December 31, 2010
	(Unaudited)
Combined Adit / ACM:
Private placement	$ 1,499,501	$ 1,499,501
Common stock for cash	500,000	-
Finder's fees	95,215	95,215
Technical data for Picacho	240,000	240,000
Officer compensation	487,500	487,500
Officer options	134,978	134,978
Cumulative statement of operations pickup through December 31, 2010	(400,368)	(400,368)
Statement of operations pickup 2011	(17,548)	-
AMM non-controlling interest	5	5
Total non-controlling interest	$ 2,539,283	$ 2,056,831

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Fair Value

6 Months Ended

Jun. 30, 2011

Fair Value [Abstract]

Fair Value

Note 10.

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, 2011 (Unaudited)
	Total	Level 1	Level 2	Level 3
Assets:
None	$ -	$ -	$ -	$ -
Liabilities:
Total notes payable, related and unrelated	$ 402,280	$ 402,280	$ -	$ -
Due to related parties, net of due from	3,192,564	3,192,564	-	-
Iron Ore financial instrument	750,000			750,000
Total	$ 3,594,844	$ 3,594,844	$ -	$ -

	Fair Value at December 31, 2010
	Total	Level 1	Level 2	Level 3
Assets:
None	$ -	$ -	$ -	$ -
Liabilities:
Total notes payable, including related   party	$ 1,992,351	$ 1,992,351	$ -	$ -
Due to related parties, net of due from	3,465,232	3,465,232	-	-
Total	$ 5,457,583	$ 5,457,583	$ -	$ -

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Stock Compensation

6 Months Ended

Jun. 30, 2011

Stock Compensation [Abstract]

Stock Compensation

Note 8.

 Stock Compensation

In January 2010, under its Incentive Stock Option Plan the Company granted two of its officers' options for the purchase of 750,000 shares of common stock. In May 2011, the options were cancelled and the Company concurrently granted new Incentive Stock Options to the officers; under this new grant the officers have the option to purchase 750,000 shares of common stock, exercisable at a price of $0.58 per share and vest at various dates until May 2013. The options expire at various dates beginning May 2013.  In accordance with the Stock Compensation Topic, FASB ASC 718-20-35, the Company has analyzed the cancellation of the award accompanied by the concurrent grant of a replacement award and determined that there was no further incremental compensation cost. As of June 30, 2011 options that vested in 2011 associated with this transaction were valued at $493,384.

In September 2010, the Company granted options for 200,000 shares of common stock to an unrelated third party for investor relations services. The options have an exercise price of $1.00 per share, vest between September 2010 and March 2011 and expire two years from the date of vesting. As of June 30, 2011 options that vested in 2011 were valued at $36,353.

In May 2011, the Company sold, in a private offering of 1,643,334 units for $493,000 in cash, or $0.30 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 $1.00 per share at any time on or before May 1^st, 2012.

The fair value of each option 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 agreements and represents the period of time that management anticipates option 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.

	2011	2010
Expected volatility	163.11%	208.37% - 319.79%
Weighted-average volatility	163.11%	159.17%
Expected dividends	0	0
Expected term (in years)	2.00	0.75 - 4.50
Risk-free rate	0.58%	0.30% - 2.37%

A summary of option activity under the Plan as of June 30, 2011 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, 2010	4,630,000	$ 0.49
Granted	750,000	0.58
Exercised	(1,100,000)	0.05
Forfeited, expired or cancelled	(750,000)	(1.57)
Outstanding at June 30, 2011	3,530,000	$ (0.11)	3.0	$ 3,608,200
Exercisable at June 30, 2011	2,320,000	$ 0.09	3.5	$ 3,132,600

Nonvested Options	Options	Weighted -Average Grant-Date  Fair Value
Nonvested at December 31, 2010	1,475,000	$ 1.37
Granted	750,000	0.58
Vested	(390,000)	0.78
Forfeited, expired or cancelled	(625,000)	(1.57)
Nonvested at June 30, 2011	1,210,000	$ 0.29

A summary of warrant activity under the Plan as of June 30, 2011, and changes during the period then ended is presented below:

Warrants	Shares	Weighted- Average Exercise Price	Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at December 31, 2010	4,271,999	$ 0.73
Granted	1,653,334	0.30
Exercised	(1,197,500)	0.38
Forfeited, cancelled or expired	(5,000)	0.40
Outstanding at  June 30, 2011	4,722,833	$ 0.88	1.5	$4,253,773
Exercisable at June 30, 2011	4,722,833	$ 0.88	1.5	$ 4,253,773

Nonvested Warrants	Warrants	Weighted -Average Grant-Date  Fair Value
Nonvested at December 31, 2010	$ -	$ -
Granted	1,653,334	0.30
Vested	(1653,334)	(0.30)
Forfeited	-	-
Nonvested at June 30, 2011	-	$ -

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Nature of Business and Significant Accounting Policies

6 Months Ended

Jun. 30, 2011

Nature of Business and Significant Accounting Policies [Abstract]

Nature of Business and Significant Accounting Policies

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, 2010. Significant accounting policies disclosed therein have not changed, except as noted below.

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 the United States of America and 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 87% of the common stock of Adit Resources Corp., 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 Resources Corp. ("Adit") was organized in June 2009 and ACM was purchased in June 2009.  The Company currently has limited operations and, in accordance with the Financial Accounting Standards Board Accounting Standards Codification ("FASB ASC") Development Stage Entities Topic, is considered an Exploration Stage Company.

Tara Minerals Corp. is a subsidiary of Tara Gold Resources Corp. ("Tara Gold" or the "Company's Parent).

Unless otherwise indicated, all references to the Company include the operations of its subsidiaries, and all references to Adit include the operation of its subsidiary.

The accompanying Condensed Consolidated Financial Statements and the related footnote information are unaudited.  In the opinion of management, these financials statements include all normal recurring adjustments necessary for a fair presentation of the condensed consolidated balance sheets of the Company at June 30, 2011 and December 31, 2010, and the condensed consolidated statements of operations for the three and six months ended June 30, 2011 and 2010. 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 re-measured 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 re-measurement gain or loss is recorded as other comprehensive 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, 2011.  Mexican pesos per one U.S. dollar.  

	June 30, 2011
Current exchange rate	Ps.	11.7748
Weighted average exchange rate for the six months ended	Ps.	11.9044

The Company's significant accounting policies are:

Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Recoverable Value-Added Taxes (IVA) and Allowance for Doubtful Accounts

Each period receivables are reviewed for collectability.  When a receivable is determined to not be collectable, the Company allows for the receivable until the Company is either assured of collection or assured that a write off is necessary.  The Company has recorded an allowance of $1,358,736 and $1,366,533 as of June 30, 2011 and December 31, 2010, respectively, for its receivables for IVA taxes paid by the Company's Mexican subsidiaries based upon the determination that the Mexican government may not pay the complete refund of these taxes.

Reclassifications

Certain reclassifications, which have no effect on net loss, have been made in the prior period financial statements to conform to the current presentation.  

Purchase of Technical Data

Technical data, including engineering reports, maps, assessment reports, exploration samples certificates, surveys, environmental studies and other miscellaneous information, may be purchased for our mining concessions. When purchased for concessions without proven reserves the cost is considered research and development pertaining to a developing mine and in accordance with the Research and Development (R&D) Topic of the FASB ASC and is expensed when incurred.

Financial Instruments

The Company periodically enters into financial instruments. Upon entry, each instrument is reviewed for debt or equity treatment. In the event that the debt or equity treatment is not readily apparent, FASB 480-10-S99 is consulted for temporary treatment, once a triggering event of any such instruments happen that remove the temporary element the Company appropriately reclassifies the instrument to debt or equity.

Recently Adopted and Recently Issued Accounting Guidance

Adopted

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 that 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 its consolidated financial statements, as the Company does not currently have any such arrangements with its customers.

Issued

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.

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Notes Payable

6 Months Ended

Jun. 30, 2011

Notes payable [Abstract]

Notes payable

Note 4.

Notes Payable

The following table represents the outstanding balance of loans and capital leases for the Company as of June 30, 2011 and December 31, 2010.

	June 30, 2011	December 31, 2010
	(Unaudited)
Mining concession	$ 173,910	$ 1,699,737
Auto loans	128,370	119,766
Equipment	-	72,848
	302,280	1,892,351
Less - current portion	(209,964)	(824,001)
Total - non-current portion	$ 92,316	$ 1,068,350

During the six months ended June 30, 2011, one of the vehicles purchased in 2010 was stolen, the insurance claim was processed and the note payable and the fixed asset removed from the AMM's books. AMM defaulted on an equipment capital lease entered into on July 21, 2010, the equipment was capitalized as an asset and the asset and related debt were removed and payments were reclassified as treating payments similar to an operating lease.

AMM financed the purchase of one truck to be used in operations for $48,491; the note payable has a 13.5% interest rate and a maturity date of June 1^st, 2015 or a term of forty eight months.

The five year maturity schedule for notes payable is presented below:

Due on or before	June 30, 2012	June 30, 2013	June 30, 2014	June 30, 2015	June 30, 2015	Total
Pirita (See Note 2)	$ 173,910	$ -	$ -	$ -	$ -	$ 173,910
Auto Loans	36,055	25,203	45,306	21,807	-	128,370
Total - non-current portion	$ 209,964	$ 25,203	$ 45,306	$ 21,807	$ -	$ 302,280

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Related Party Transactions

6 Months Ended

Jun. 30, 2011

Related Party Transactions [Abstract]

Related Party Transactions

Note 5.

Related Party Transactions

Due to related parties, net of due from related parties was $3,192,564 and $3,465,232 as of June 30, 2011 and December 31, 2010, respectively.

The Company is a subsidiary of Tara Gold Resources Corp. In January 2007, another subsidiary of Tara Gold Resources Corp., Corporacion Amermin, S.A. de C.V. ("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 the Company's subsidiary AMM as of January 2007. AMM makes payments to Amermin and Amermin made payments related to the 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, 2011, due from related parties is $78,293 and due to related parties, includes:

- Pilar mining concession: $535,237 (inclusive of valued added tax)

- Don Roman concession: $211,826

- Due to Amermin: $888,032

- Other related party: $120,333

As of June 30, 2011, Tara Gold had loaned the Company $1,497,566 which amount is included in Due to Related Parties. There are no terms to this related party payable and it is due on demand.

In September 2010, Tara Gold entered into a tentative agreement with Tara Minerals which provided that Tara Minerals would acquire all of the outstanding shares of Tara Gold by exchanging one Tara Mineral share for two Tara Gold shares.  In 2011 this agreement was cancelled and Tara Gold announced it would begin to distribute all of its shares in Tara Minerals to its shareholders. In May 2011, the first distribution, at a rate of one Tara Minerals common share for every 20 outstanding shares of Tara Gold, was made. Additional distributions will be announced over the next 24 months until all Tara Minerals shares, held by Tara Gold, are distributed to Tara Gold shareholders.

On May 2011, the Company acquired three mining concessions knows as "Picacho Fractions I, II and III" from another subsidiary of Tara Gold, Corporacion Amermin, S.A. de C.V. ("Amermin"). The acquisition price of the properties was $190,000 including $26,207 in value added taxes, financed at 3.25% plus LIBOR.

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Iron Ore Project and Related Financial Instrument

6 Months Ended

Jun. 30, 2011

Iron Ore Project and Related Financial Instrument [Abstract]

Iron Ore Project and Related Financial Instrument

Note 6.

Iron Ore Project and Related Financial Instrument

In May 2011, the Company reached an agreement for the right to mine the 3,233 hectare Tania Iron Ore project located in Manzanillo, State of Colima, Mexico. The Company has the right to remove 6 million tonnes of salable concentrate from the property, with perpetual renewal rights, extending through the life of the property. The Company will pay the vendor $6 per salable tonne for the first 500,000 tonnes removed from the property and $7 per tonne thereafter. A total of $100,000 will be advanced to the vendor against future royalty payments. As of June 30, 2011 the Company advanced $66,667.  

The Company raised $750,000 through a financial instrument to fund the project. A portion of the funds will be used to secure appropriate environmental permits, export permits, and recovery process engineering. The financial instrument has no repayment requirement, except if the Iron Ore Project generates revenue, interest rate or term. As the Company's common stock has not been issued nor is this a debt instrument, in accordance with our accounting policy we have treated this as temporary financing until such time as something changes requiring debt or permanent equity treatment. The beneficial conversion feature calculated for the conversion feature of this instrument is $180,000, once a triggering event takes place the beneficial conversion feature accounting will follow the treatment of debt or equity.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	6 Months Ended		62 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011
Cash flows from operating activities:
Net loss attributable to Tara Minerals' shareholders	$ (3,075,864)	$ (11,260,360)	$ (25,038,221)
Adjustments to reconcile net loss to net cash used in operating activities:
Allowance for doubtful accounts	(9,403)	493,696	1,982,531
Depreciation	138,121	83,695	434,046
Stock based compensation and stock bonuses	529,738	3,642,041	8,464,942
Common stock issued for services		4,109,748	5,371,684
Cancellation of shares for settlement			(750,000)
Non-controlling interest in net loss of consolidated subsidiaries	(17,548)	(270,147)	(417,911)
Non-controlling interest - stock issued to third parties of subsidiaries			348,549
Expense of mining deposit upon note modification			6,000
Accretion of beneficial conversion feature and debt discount		31,924	1,983,575
Exploration expenses paid with parent and subsidiary common stock	1,059,184	1,224,375	2,283,559
Gain on debt extinguishment		(6,138)	(6,138)
Loss on conversion of debt to common stock			783,090
Accrued interest converted to common stock			84,438
Deferred tax asset, net			(2,930,982)
Loss on disposal or sale of assets	4,260		4,260
Rent expense reclassified from capital lease	12,207		12,207
Changes in current operating assets and liabilities:
Recoverable value added taxes	(190,150)	(170,346)	(1,243,758)
Other receivables	(7,964)	(42,783)	(117,484)
Prepaid expenses	16,500		16,500
Other assets	(172,208)	(44,051)	(330,079)
Accounts payable and accrued expenses	(114,247)	224,904	585,093
Net cash used in operating activities	(1,827,374)	(1,983,442)	(8,474,099)
Cash flows from investing activities:
Acquisition of land			(19,590)
Purchase of mining concession	(30,059)	(25,149)	(860,230)
Deposits toward mining concessions	(6,462)	(398)	(37,462)
Acquisition of property, plant and equipment		(229,622)	(2,588,049)
Cash included in business acquisition			2,037
Business acquisition goodwill			(3,758)
Payments made for construction in progress
Proceeds from disposal/sale of assets	29,128		29,128
Net cash provided (used in) investing activities	(7,393)	(255,169)	(3,477,924)
Cash flows from financing activities:
Cash from the sale of common stock	1,239,744	978,905	7,938,032
Proceeds from notes payable, related party		50,000	150,000
Proceeds from notes payable		380,103	480,000
Payments towards notes payable	(102,523)	(711,452)	(1,292,986)
Payment towards equipment financing			(201,438)
Change in due to/from related parties, net	(362,668)	162,490	2,566,132
Common stock receivable	125,000		(87,744)
Non-controlling interest - cash from sale of sale of common stock of subsidiaries	500,000	260,482	2,368,645
Iron Ore Property financial instrument	750,000		750,000
Net cash provided by financing activities	2,149,553	1,120,528	12,670,641
Effect of exchange rate changes on cash	(32,737)	(69,277)	(278,990)
Net increase (decrease)	282,049	(1,187,360)	439,628
Cash, beginning of period	157,579	1,230,376
Cash, end of period	439,628	43,016	439,628
Supplemental Information:
Interest paid	273	25,649	182,740
Income taxes paid
Non-cash Investing and Financing Transactions:
Purchase of mining concession paid by debt to related party plus capitalized interest (negative movement due to note modification)	163,793		1,445,448
Purchase of or (reduction) in purchase of concession paid with notes payable plus capitalized interest	(1,310,974)	(3,324,485)	986,771
Recoverable value-added taxes incurred through additional debt and due to related party, net of mining concession modification	(215,557)	(508,814)	1,361,186
Beneficial conversion value for convertible debt			1,695,000
Conversion of debt to common stock, plus accrued interest			2,309,438
Purchase of mining equipment with common stock			600,000
Acquisition of property and equipment through debt	48,491	1,044,375	1,259,938
Receivable reclassified to mining deposit		28,368	28,368
Construction in progress reclassified to property plant and equipment		2,163,485	2,163,485
Warrants with debt		191,546	191,546
Beneficial conversion feature on financial instrument	180,000		180,000
Stock Payable for prepaid expenses	(66,000)		(66,000)
Business Combination of American Copper Mining:
Cash			(2,037)
Due from related parties			1,989
Goodwill (from net assets)			8,270
Accounts payable and accrued expenses			$ 12,071

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Property, plant, equipment, mine development and land

6 Months Ended

Jun. 30, 2011

Property, plant, equipment, mine development and land [Abstract]

Property, plant, equipment, mine development and land

Note 2.

Property, plant, equipment, mine development and land

	June 30, 2011	December 31, 2010
	(Unaudited)
Land	$ 19,590	$ 19,590
Mining concessions:
Pilar	710,172	710,172
Don Roman	521,739	521,739
Las Nuvias	100,000	100,000
Centenario (a)	635,571	1,946,545
Pirita	249,909	246,455
Picacho	1,250,000	1,250,000
La Palma (b)	80,000	-
La Verde (c)	60,000	-
Picacho Fractions (d)	163,793	-
Mining concessions	3,771,184	4,774,911
Property, plant and equipment	3,493,957	3,603,210
	7,284,731	8,397,711
Less - accumulated depreciation	(421,504)	(295,925)
	$ 6,863,227	$ 8,101,786

Pilar, Don Ramon, Las Nuvias, Centenario, La Palma and La Verde properties are geographically located in Mexico and are known as the Don Roman Groupings.

The Picacho and Picacho Fractions properties are geographically located in Mexico and are known as the Picacho Groupings.

a.

In November 2008, the Company acquired eight mining concessions known as "Centenario" from an independent third party. The properties approximate 5,400 hectares and were purchased for $1,894,050, including $247,050 in value added taxes.

In June 2009, the Company 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 another 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 of $127,000, 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 $251,257 of value added tax.

In March 2011, the Company and the note holder agreed to reduce the purchase price of the Centenario concession to $635,571. These changes resulted in the following: 1) decrease debt by $1,310,974; and 2) decrease recoverable value added taxes by $218,309. At March 31, 2011 the amended purchase price was paid in full.  

In March 2011, the Company purchased technical data pertaining to Centenario from the former owner in consideration for 416,100 shares of the Company's common stock and $100,000 cash. The parties agreed that the value of the stock for the technical data was $2.00 per share for the Company's common stock.  The Company has accounted for the shares at their fair market value as follows:  416,100 shares of the Company's common stock valued at $0.85.  All fair market values were determined based on contemporaneous stock issuances for cash or if the stock was quoted on an exchange, it's closing stock price. All stock was issued April 2011.

b.

On March 2011, the Company executed an agreement to acquire six mining concessions known as "La Palma" from an independent third party. The properties approximate 2,104 hectares, and were purchased for a total of $92,800, including $12,800 in value added taxes. The Company paid $50,000 as a deposit for the concession mining deposit which was applied to the effective price of the property.  The remaining balance of $42,800 was due and paid during the second quarter of 2011. The six concessions acquired were La Palma, Choix, El Pino, La Verde 3, La Verde 4 and La Verde 6.  

In March 2011, the Company purchased technical data pertaining to the La Palma from the former owner for 460,000 shares of the Company's common stock. The parties agreed that the value of the stock for the technical data was $2.00 per share for the Company's common stock.  The Company has accounted for the shares at their fair market value as follows:  460,000 shares of the Company's common stock valued at $0.85.  All fair market values were determined based on contemporaneous stock issuances for cash or if the stock was quoted on an exchange, it's closing stock price. All stock was issued April 2011.

La Palma and La Verde properties are part of the "Don Roman Groupings".

c.

On April 2011, the Company executed an agreement to acquire two mining concessions known as "La Verde" from an independent third party. The properties approximate 127 hectares, and were purchased for a total of $69,600, including $9,600 in value added taxes. AMM paid $30,000 as a deposit for the concession mining deposit which was applied to the effective price of the property and the remaining balance was paid during the second quarter of 2011. The two concessions acquired were La Verde 5 and Mina El Rosario.

In April 2011, the Company purchased technical data pertaining to the La Verde from the former owner for 370,000 shares of the Company's common stock. The parties agreed that the value of the stock for the technical data was $2.00 per share for the Company's common stock.  The Company has accounted for the shares at their fair market value as follows:  370,000 shares of the Company's common stock valued at $0.85.  All fair market values were determined based on contemporaneous stock issuances for cash or if the stock was quoted on an exchange, it's closing stock price. All stock was issued April 2011.

La Palma and La Verde properties are part of the "Don Roman Groupings".

d.

On May 2011, the Company executed an agreement to acquire three mining concessions knows as "Picacho Fractions I, II and III" from Tara Gold. The properties approximate 3,823 hectares, and the acquisition price of the properties was $190,000 including $26,207 in value added taxes. Full amount was financed for an interest rate of  3.25%  plus LIBOR.

Picacho and the Picacho Fractions are known as the Picacho Groupings

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Subsequent Events

6 Months Ended

Jun. 30, 2011

Subsequent Events [Abstract]

Subsequent Events

Note 11.

Subsequent Events

Management evaluated all activity of the Company through August 15, 2011 (the issue date of the Financial Statements) and concluded the following disclosures are pertinent:

a.

In August 8, 2011 the Company entered into an agreement with Carnegie Mining and Exploration, Inc. which provides Carnegie with the option to earn up to a 50% interest in the Company's Don Roman and all of the Company's iron ore projects located in Mexico, including the Company's Tania Iron Ore project.

As consideration for the option, Carnegie paid $100,000 to the Company and spent $150,000 toward bringing the Don Roman mine back into production.

In order to earn a 30% interest in the Don Roman project, Carnegie, no later than:

·

December 9, 2011, must spend $2,000,000 on the Don Roman project and achieve a Production Rate of at least 120 tones of ore throughput per day, and

·

No later than August 8, 2012, must spend $6,000,000 on the Don Roman project and achieve a Production Rate of at least 360 tones of ore throughput per day.

If Carnegie is able to achieve the required Production Rates with the expenditure of less than $2,000,000 or $6,000,000 (as the case may be) the amounts not spent by Carnegie, may, at Carnegie's option, be paid to Tara Minerals or used to acquire additional mining concessions.

In order to earn a 50% interest in the Don Roman project, Carnegie, no later than August 8, 2013, must spend at least $5,000,000 on the Don Roman project and achieve and maintain a Production Rate of at least 600 tones of ore per day.

For purposes of the agreement between the Company and Carnegie, the term Production Rate means the tones which are being processed by the mill at the Don Roman site.

In Mexico, weight is denominated in tones. One tone is equal to 2,200 pounds.

If Carnegie spends at least $2,000,000 on the Don Roman project, Carnegie will be entitled to 50% of the net income from the Don Roman mine until Carnegie earns, or fails to earn, its 30% interest in the Don Roman project. If Carnegie fails to earn its 30% interest in the Don Roman project, Carnegie's rights to any income from the Don Roman mine will terminate. If Carnegie earns it's 30% interest in the Don Roman project, Carnegie will continue to be entitled to a 50% interest in the net income from Don Roman mine until Carnegie earns, or fails to earn its 50% interest in the Don Roman project. If Carnegie fails to earn its 50% interest in the Don Roman project, Carnegie will be entitled to a 30% interest in the net income from the Don Roman mine.  If Carnegie earns its 50% interest in the Don Roman project, Carnegie will continue to be entitled to a 50% interest in the net income from Don Roman mine.

Carnegie may earn a 50% interest in the Company's iron ore projects in Mexico, including the Company's Tania Iron Ore project, by spending $1,000,000 toward the projects by November 6, 2011. Any amounts spent by Carnegie on the iron ore projects will be credited toward the amount Carnegie is required to spend to obtain a 30% interest in the Don Roman project. If Carnegie spends the $1,000,000, but does not elect to acquire a 50% in the iron ore projects, then Tara Minerals will issue to Carnegie 1,000,000 shares of Tara Minerals common stock.

If Carnegie elects to earn its 50% interest in the iron ore projects, then Carnegie, if it spends at least $8,000,000 on the Don Roman project, will be entitled to 50% of the net income from the iron ore projects until Carnegie earns, or fails to earn, its 30% interest in the Don Roman project. If Carnegie fails to earn its 30% interest in the Don Roman project, Carnegie's rights to any income from the iron ore projects will terminate. If Carnegie earns it's 30% interest in the Don Roman project, Carnegie will continue to be entitled to a 50% interest in the net income from the Company's iron ore projects regardless of whether Carnegie earns, or fails to earn, its 50% interest in the Don Roman project.

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)	Jun. 30, 2011	Dec. 31, 2010
Current assets
Cash	$ 439,628	$ 157,579
Recoverable value added taxes, net of allowance for bad debt of $1,358,736 and $1,366,533 at June 30, 2011 and December 31, 2010, respectively	179,092	170,494
Other receivables, net of allowance for bad debt of $3,086 and $4,692 at June 30, 2011 and December 31, 2010, respectively	121,629	104,828
Prepaid Assets	224,500
Total current assets	964,849	432,901
Property, plant, equipment mine development and land, net of accumulated depreciation of $421,504 and $295,925 at June 30, 2011 and December 31, 2010, respectively	6,863,227	8,101,786
Mining deposits	29,830	53,368
Deferred tax, non-current portion	2,930,982	2,930,982
Goodwill	12,028	12,028
Other assets	155,078	157,870
Total assets	10,955,994	11,688,935
Current liabilities
Accounts payable and accrued expenses	566,502	680,221
Note payable, current portion	209,964	824,001
Notes payable related party	100,000	100,000
Due to related parties, net of due from of $40,440 and $69,143 at June 30, 2011 and December 31, 2010, respectively	3,192,564	3,465,232
Total current liabilities	4,069,030	5,069,454
Notes payable, non-current portion	92,316	1,068,350
Total liabilities	4,161,346	6,137,804
Commitments and contingencies
Iron Ore Property financial instrument	570,000
Stockholders' Equity
Common stock: $0.001 par value; authorized 200,000,000 shares; issued and outstanding 63,641,921 and 57,236,288 shares at June 30, 2011 and December 31, 2010, respectively	63,642	57,236
Additional paid-in capital	28,747,934	24,515,978
Common stock payable, net of stock receivable of $0 and $212,744 at June 30, 2011 and December 31, 2010, respectively	191,000	1,129,696
Other comprehensive loss	(278,990)	(246,253)
Accumulated deficit during exploration stage	(25,038,221)	(21,962,357)
Total Tara Minerals stockholders' equity	3,685,365	3,494,300
Non-controlling interest	2,539,283	2,056,831
Total equity	6,224,648	5,551,131
Total liabilities and stockholders' equity	$ 10,955,994	$ 11,688,935