Nevada
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20-5000381
|
|
(State or other jurisdiction of
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(I.R.S. Employer
|
|
incorporation or organization)
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Identification No.)
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2162 Acorn Court
|
||
Wheaton, IL
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60189
|
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(Address of principal executive offices)
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(Zip code)
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(630) 462-2079
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||
(Registrant's telephone number, including area code)
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Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer o
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Smaller reporting company þ
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Page
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3
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21
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24
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25
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25
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25
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25
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25
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25
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26
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SEPT 30, 2011
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DEC 31, 2010
|
|||||||
(Unaudited)
|
||||||||
Assets
|
||||||||
Current assets
|
||||||||
Cash
|
$ | 411,960 | $ | 157,579 | ||||
Recoverable value added taxes, net of allowance for bad debt of $1,235,132
and $1,366,533 at September 30, 2011 and December 31, 2010, respectively
|
161,221 | 170,494 | ||||||
Other receivables, net of allowance for bad debt of $3,062 and $4,692 at
September 30, 2011 and December 31, 2010, respectively
|
110,822 | 104,828 | ||||||
Prepaid Assets
|
133,000 | - | ||||||
Total current assets
|
817,003 | 432,901 | ||||||
Property, plant, equipment, mine development and land, net of accumulated
depreciation of $491,600 and $295,925 at September 30, 2011 and December
31, 2010, respectively
|
6,994,044 | 8,101,786 | ||||||
Mining deposits
|
201,102 | 53,368 | ||||||
Deferred tax
|
2,820,013 | 2,930,982 | ||||||
Goodwill
|
12,028 | 12,028 | ||||||
Other assets
|
165,112 | 157,870 | ||||||
Total Assets
|
$ | 11,009,302 | $ | 11,688,935 | ||||
Liabilities and stockholders’ equity
|
||||||||
Current liabilities
|
||||||||
Accounts payable and accrued expenses
|
$ | 1,017,660 | $ | 680,221 | ||||
Notes payable, current portion
|
411,696 | 824,001 | ||||||
Notes payable related party
|
100,000 | 100,000 | ||||||
Due to related parties, net of due from of $79,077 and $69,143 at September
30, 2011 and December 31, 2010, respectively
|
2,552,645 | 3,465,232 | ||||||
Deferred revenue
|
100,000 | - | ||||||
Total current liabilities
|
4,182,001 | 5,069,454 | ||||||
Notes payable, non-current portion
|
80,620 | 1,068,350 | ||||||
Total liabilities
|
4,262,621 | 6,137,804 | ||||||
Commitments and contingencies
|
- | - | ||||||
Iron Ore Properties financial instrument, net of $180,000 beneficial conversion feature
|
570,000 | - | ||||||
Stockholders’ equity
|
||||||||
Common stock: $0.001 par value; authorized 200,000,000 shares; issued and
outstanding 64,859,588 and 57,236,288 shares outstanding at September 30,
2011 and December 31, 2010, respectively
|
64,860 | 57,236 | ||||||
Additional paid-in capital
|
29,993,883 | 24,515,978 | ||||||
Common stock payable, net of stock receivable of $0 and $212,744 at
September 30, 2011 and December 31, 2010, respectively
|
218,000 | 1,129,696 | ||||||
Other comprehensive loss
|
(208,419 | ) | (246,253 | ) | ||||
Accumulated deficit during exploration stage
|
(26,441,934 | ) | (21,962,357 | ) | ||||
Total Tara Minerals stockholders’ equity
|
3,626,390 | 3,494,300 | ||||||
Non-controlling interest
|
2,550,291 | 2,056,831 | ||||||
Total equity
|
6,176,681 | 5,551,131 | ||||||
Total liabilities and stockholders’ equity
|
$ | 11,009,302 | $ | 11,688,935 |
THREE
MONTHS
ENDED
SEPTEMBER
30, 2011
|
THREE
MONTHS
ENDED
SEPTEMBER
30, 2010
|
NINE
MONTHS
ENDED
SEPTEMBER
30, 2011
|
NINE
MONTHS
ENDED
SEPTEMBER
30, 2010
|
FROM
INCEPTION
(MAY 12,
2006) TO
SEPTEMBER 30, 2011 |
||||||||||||||||
Mining revenues
|
$ | - | $ | 86,178 | $ | - | $ | 123,953 | $ | 160,421 | ||||||||||
Cost of revenue
|
- | - | - | - | 658,007 | |||||||||||||||
Gross margin
|
- | 86,178 | - | 123,953 | (497,586 | ) | ||||||||||||||
Exploration expenses
|
109,123 | 448,058 | 1,497,277 | 2,336,708 | 3,970,986 | |||||||||||||||
Operating, general, and
administrative expenses
|
1,146,825 | 3,480,312 | 2,803,028 | 13,166,066 | 23,175,368 | |||||||||||||||
Net operating loss
|
(1,255,948 | ) | (3,842,192 | ) | (4,300,305 | ) | (15,378,821 | ) | (27,643,940 | ) | ||||||||||
Non-operating (income) expense
|
||||||||||||||||||||
Interest (income)
|
(6,744 | ) | (82,063 | ) | (19,823 | ) | (94,899 | ) | (155,463 | ) | ||||||||||
Loss on conversion of note payable
|
- | - | - | - | 783,090 | |||||||||||||||
Interest expense
|
32,415 | 239,629 | 101,542 | 274,544 | 2,190,342 | |||||||||||||||
Gain on debt extinguishment
|
- | - | - | (6,138 | ) | (6,138 | ) | |||||||||||||
Loss on disposal or sale of assets
|
- | - | 4,260 | - | 4,260 | |||||||||||||||
Other expense (income)
|
116 | (92 | ) | (11,137 | ) | (1,148 | ) | (791, 172 | ) | |||||||||||
Total non-operating expense
|
25,787 | 157,474 | 74,842 | 172,359 | 2,024,919 | |||||||||||||||
Loss before income taxes
|
(1,281,735 | ) | (3,999,666 | ) | (4,375,147 | ) | (15,551,180 | ) | (29,668,859 | ) | ||||||||||
Income tax provision (benefit)
|
110,969 | - | 110,969 | - | (2,820,013 | ) | ||||||||||||||
Less: non-controlling interest
|
(11,008 | ) | 12,889 | 6,540 | 304,043 | 406,913 | ||||||||||||||
Net loss attributable to Tara
Minerals’ shareholders
|
(1,403,712 | ) | (3,986,777 | ) | (4,479,576 | ) | (15,247,137 | ) | (26,441,933 | ) | ||||||||||
Other comprehensive income (loss):
|
||||||||||||||||||||
Foreign currency translation
|
70,571 | 33,616 | 37,834 | (35,661 | ) | (208,419 | ) | |||||||||||||
Comprehensive loss
|
$ | (1,333,141 | ) | $ | (3,953,161 | ) | $ | (4,441,742 | ) | $ | (15,282,798 | ) | $ | (26,650,352 | ) | |||||
Net loss per share, basic and diluted
|
$ | (0.02 | ) | $ | (0.07 | ) | $ | (0.07 | ) | $ | (0.29 | ) | ||||||||
Weighted average number
of shares, basic and diluted
|
63,946,338 | 54,661,144 | 62,846,792 | 53,529,486 |
NINE
MONTHS
ENDED
SEPTEMBER
30, 2011
|
NINE
MONTHS
ENDED
SEPTEMBER
30, 2010
|
FROM
INCEPTION
(MAY 12,
2006)
THROUGH
SEPTEMBER
30, 2011
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net loss attributable to Tara Minerals’ shareholders
|
$ | (4,479,576 | ) | $ | (15,247,137 | ) | $ | (26,441,933 | ) | |||
Adjustments to reconcile net loss to net cash used in operating
activities:
|
||||||||||||
Allowance for doubtful accounts
|
(133,031 | ) | 653,674 | 1,858,903 | ||||||||
Depreciation
|
208,217 | 153,415 | 504,142 | |||||||||
Stock based compensation and stock bonuses
|
529,738 | 6,471,099 | 8,464,942 | |||||||||
Common stock issued for services
|
214,500 | 4,221,110 | 5,586,184 | |||||||||
Cancellation of shares for settlement
|
- | - | (750,000 | ) | ||||||||
Non-controlling interest in net loss of consolidated subsidiaries
|
(6,540 | ) | (277,973 | ) | (406,903 | ) | ||||||
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
|
- | 84,156 | 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
|
110,969 | - | (2,820,013 | ) | ||||||||
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
|
(48,676 | ) | (292,848 | ) | (1,102,284 | ) | ||||||
Other receivables
|
2,867 | (56,228 | ) | (106,653 | ) | |||||||
Prepaid expenses
|
(133,000 | ) | - | (133,000 | ) | |||||||
Other assets
|
(7,242 | ) | (110,577 | ) | (165,113 | ) | ||||||
Accounts payable and accrued expenses
|
352,127 | 345,121 | 1,051,467 | |||||||||
Deferred revenue
|
100,000 | - | 100,000 | |||||||||
Net cash used in operating activities
|
(2,213,996 | ) | (2,825,675 | ) | (8,860,721 | ) | ||||||
Cash flows from investing activities:
|
||||||||||||
Acquisition of land
|
- | - | (19,590 | ) | ||||||||
Purchase of mining concession
|
(30,060 | ) | (25,149 | ) | (860,231 | ) | ||||||
Deposits toward mining concessions
|
(177,734 | ) | - | (208,734 | ) | |||||||
Acquisition of property, plant and equipment
|
(5,522 | ) | (330,205 | ) | (2,593,571 | ) | ||||||
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 used in investing activities
|
(184,188 | ) | (355,354 | ) | (3,654,719 | ) | ||||||
Cash flows from financing activities:
|
||||||||||||
Cash from the sale of common stock
|
2,272,411 | 980,043 | 8,970,699 | |||||||||
Proceeds from notes payable, related party
|
- | 247,030 | 150,000 | |||||||||
Proceeds from notes payable
|
- | 480,000 | 480,000 | |||||||||
Payments towards notes payable
|
(123,093 | ) | (711,451 | ) | (1,313,556 | ) | ||||||
Payment towards equipment financing
|
- | (41,412 | ) | (201,438 | ) | |||||||
Change in due to/from related parties, net
|
(1,002,587 | ) | 304,245 | 1,926,213 | ||||||||
Common stock payable
|
218,000 | 671,500 | 5,256 | |||||||||
Non-controlling interest – cash from sale of sale of
common stock of subsidiaries |
500,000 | 260,482 | 2,368,645 |
Iron Ore Properties financial instrument
|
750,000 | - | 750,000 | |||||||||
Net cash provided by financing activities
|
2,614,731 | 2,190,437 | 13,135,819 | |||||||||
Effect of exchange rate changes on cash
|
37,834 | (35,661 | ) | (208,419 | ) | |||||||
Net increase (decrease)
|
254,381 | (1,026,253 | ) | 411,960 | ||||||||
Cash, beginning of period
|
157,579 | 1,230,376 | - | |||||||||
Cash, end of period
|
$ | 411,960 | $ | 204,123 | $ | 411,960 | ||||||
Supplemental Information:
|
||||||||||||
Interest paid
|
$ | 100,987 | $ | 26,275 | $ | 283,454 | ||||||
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 |
$ | (192,102 | ) | $ | (508,814 | ) | $ | 1,384,641 | ||||
Beneficial conversion value for convertible debt
|
$ | - | $ | - | $ | 1,695,000 | ||||||
Conversion of debt to common stock, plus accrued interest
|
$ | 559,350 | $ | - | $ | 2,309,438 | ||||||
Purchase of mining equipment with common stock
|
$ | - | $ | - | $ | 600,000 | ||||||
Acquisition of property and equipment through debt
|
$ | 312,042 | $ | 1,224,955 | $ | 742,963 | ||||||
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
|
$ | - | $ | 288,576 | $ | - | ||||||
Beneficial conversion feature on financial instrument
|
$ | 180,000 | $ | - | $ | 180,000 | ||||||
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 |
September 30, 2011
|
||
Current exchange rate
|
Ps.
|
13.4567
|
Weighted average exchange rate for the six months ended
|
Ps.
|
12.0300
|
September 30, 2011
|
December 31, 2010
|
|||||||
(Unaudited)
|
||||||||
Land
|
$ | 19,590 | $ | 19,590 | ||||
Mining concessions:
|
||||||||
Pilar
|
710,172 | 710,172 | ||||||
Don Roman (a)
|
521,739 | 521,739 | ||||||
Las Nuvias
|
100,000 | 100,000 | ||||||
Centenario (b)
|
635,571 | 1,946,545 | ||||||
La Palma (c)
|
80,000 | - | ||||||
La Verde (d)
|
60,000 | - | ||||||
Pirita
|
249,909 | 246,455 | ||||||
Picacho
|
1,250,000 | 1,250,000 | ||||||
Picacho Fractions (e)
|
163,793 | - | ||||||
Las Viboras Dos (f)
|
195,390 | - | ||||||
Mining concessions
|
3,966,574 | 4,774,911 | ||||||
Property, plant and equipment
|
3,499,480 | 3,603,210 | ||||||
7,485,644 | 8,397,711 | |||||||
Less – accumulated depreciation
|
(491,600 | ) | (295,925 | ) | ||||
$ | 6,994,044 | $ | 8,101,786 |
|
a.
|
In August, 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 Properties located in Mexico, including the Company’s Tania Iron Ore property. (See Note 8)
|
|
b.
|
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.
|
|
c.
|
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 paid during the second quarter of 2011.
|
|
d.
|
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. The Company 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.
|
|
e.
|
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. The full amount was financed with an interest rate of LIBOR plus 3.25%.
|
|
f.
|
On July 2011, the Company executed an agreement to acquire a mining concession known as “Las Viboras Dos” from an independent third party. The properties approximate 148 hectares, and the acquisition price of the properties was $195,390 plus value added taxes. The purchase price was financed and as of September 30, 2011 the balance due toward the purchase price was $209,487.
|
|
Note 3.
|
Mining Deposits
|
|
Note 4.
|
Other assets, current and non-current
|
|
Note 5.
|
Income taxes
|
|
Note 6.
|
Notes Payable
|
September 30, 2011
|
December 31, 2010
|
|||||||
(Unaudited)
|
||||||||
Mining concession
|
$ | 383,396 | $ | 1,699,737 | ||||
Auto loans
|
108,920 | 119,766 | ||||||
Equipment
|
- | 72,848 | ||||||
492,316 | 1,892,351 | |||||||
Less – current portion
|
(411,696 | ) | (824,001 | ) | ||||
Total – non-current portion
|
$ | 80,620 | $ | 1,068,350 |
Due on or before
|
September
30, 2012
|
September
30, 2013
|
September
30, 2014
|
September
30, 2015
|
September
30, 2016
|
Total
|
||||||||||||||||||
Mining Concessions
|
$ | 383,396 | $ | - | $ | - | $ | - | $ | - | $ | 383,396 | ||||||||||||
Auto Loans
|
28,300 | 32,314 | 39,245 | 9,061 | - | 108,920 | ||||||||||||||||||
Total
|
$ | 411,696 | $ | 32,314 | $ | 39,245 | $ | 9,061 | $ | - | $ | 492,316 |
|
Note 7.
|
Related Party Transactions
|
|
Note 8.
|
Iron Ore Properties and Related Financial Instrument
|
|
Note 9.
|
Stockholders’ Equity
|
|
·
|
212,000 shares payable, valued at $218,000 for cash.
|
|
Note 10.
|
Options and Warrants
|
September 30, 2011
|
December 31, 2010
|
|||||||
Expected volatility
|
163.11% | 208.37% - 319.79% | ||||||
Weighted-average volatility
|
146.85% | 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% |
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
|
(830,000 | ) | (0.79 | ) | ||||||||||||
Outstanding at September 30, 2011
|
3,450,000 | $ | 0.43 | 3.0 | $ | 2,634,000 | ||||||||||
Exercisable at September 30, 2011
|
2,240,000 | $ | 0.36 | 3.5 | $ | 2,322,400 |
Non-vested Options
|
Options
|
Weighted
-Average
Grant-Date
Fair Value
|
||||||
Non-vested 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 | ) | ||||
Non-vested at September 30, 2011
|
1,210,000 | $ | 0.29 |
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
|
2,671,001 | 1.13 | ||||||||||||||
Exercised
|
(1,207,500 | ) | 0.95 | |||||||||||||
Forfeited, cancelled or expired
|
(5,000 | ) | 0.40 | |||||||||||||
Outstanding at September 30, 2011
|
5,730,500 | $ | 0.99 | 1.5 | $ | 1,646,949 | ||||||||||
Exercisable at September 30, 2011
|
5,730,500 | $ | 0.99 | 1.5 | $ | 1,646,949 |
Non-vested Warrants
|
Warrants
|
Weighted
-Average
Grant-Date
Fair Value
|
||||||
Non-vested at December 31, 2010
|
$ | - | $ | - | ||||
Granted
|
2,671,001 | 1.13 | ||||||
Vested
|
(2,671,001 | ) | (1.13 | ) | ||||
Forfeited
|
- | - | ||||||
Non-vested at September 30, 2011
|
- | $ | - |
|
Note 11.
|
Non-controlling Interest
|
Non-controlling interest
at September 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
|
(6,540 | ) | - | |||||
AMM non-controlling interest
|
5 | 5 | ||||||
Total non-controlling interest
|
$ | 2,550,291 | $ | 2,056,831 |
|
Note 12.
|
Fair Value
|
Fair Value at September 30, 2011 (Unaudited)
|
||||||||||||||||
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
Assets:
|
||||||||||||||||
None
|
$ | - | $ | - | $ | - | $ | - | ||||||||
Liabilities:
|
||||||||||||||||
Total notes payable, related and unrelated
|
$ | 592,316 | $ | 592,316 | $ | - | $ | - | ||||||||
Due to related parties, net of due from
|
2,552,645 | 2,552,645 | - | - | ||||||||||||
Iron Ore Properties financial instrument
|
570,000 | - | - | 570,000 | ||||||||||||
Total
|
$ | 3,714,961 | $ | 3,144,961 | $ | - | $ | 570,000 |
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 | $ | - | $ | - |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
|
Three Months Ended
|
September 30, 2011
|
September 30, 2010
|
||||||
Revenue
|
$ | - | $ | 86,178 | ||||
Cost of revenue
|
- | - | ||||||
Exploration expenses
|
109,123 | 448,058 | ||||||
Operating, general and administrative expenses
|
1,146,825 | 3,480,312 | ||||||
Net operating loss
|
$ | (1,255,948 | ) | $ | (3,842,192 | ) |
Three Months Ended
|
September 30, 2011
|
September 30, 2010
|
||||||
Bad debt
|
$ | 149,105 | $ | 162,246 | ||||
Investor relations expense
|
238,250 | 2,982,827 | ||||||
Compensation, officer employment contracts and bonuses
|
206,438 | 96,780 | ||||||
Legal
|
36,913 | - | ||||||
Professional Fees
|
184,468 | 201,702 | ||||||
Repair and maintenance
|
4,249 | 20,478 |
Nine Months Ended
|
September 30, 2011
|
September 30, 2010
|
||||||
Revenue
|
$ | - | $ | 123,953 | ||||
Cost of revenue
|
- | - | ||||||
Exploration expenses
|
1,497,277 | 2,336,708 | ||||||
Operating, general and administrative expenses
|
2,803,028 | 13,166,066 | ||||||
Net operating loss
|
$ | (4,300,305 | ) | $ | (15,378,821 | ) |
Nine Months Ended
|
September 30, 2011
|
September 30, 2010
|
||||||
Bad debt expense
|
$ | 96,302 | $ | 605,284 | ||||
Depreciation expense
|
208,216 | 153,434 | ||||||
Investor relations expense
|
321,283 | 7,316,674 | ||||||
Compensation, officer employment contracts and bonuses
|
1,022,339 | 3,827,395 | ||||||
Professional fees
|
490,224 | 640,847 | ||||||
Repairs and maintenance
|
15,193 | 55,770 | ||||||
Rent and rental of equipment
|
52,989 | 13,748 |
September 30,
|
||||||||
2011
|
2010
|
|||||||
Net cash (used) by operating activities
|
$ | (2,213,996 | ) | $ | (2,825,675 | ) | ||
Acquisition of property, plant and equipment
|
(5,522 | ) | (330,205 | ) | ||||
Purchase of mining properties
|
(30,060 | ) | (25,149 | ) | ||||
Payments made for mining deposits
|
(177,734 | ) | - | |||||
Sale of common stock
|
2,272,411 | 980,043 | ||||||
Loans from unrelated and related parties
|
- | 727,030 | ||||||
Payments toward notes payable
|
(123,093 | ) | (711,452 | ) | ||||
Sale of common stock of subsidiaries
|
500,000 | 260,482 | ||||||
Iron Ore Properties financial instrument
|
750,000 | - | ||||||
Change in due to/from related parties, net
|
(1,002,587 | ) | 304,245 | |||||
Shares subscribed
|
218,000 | 671,500 | ||||||
Cash on hand at beginning of period
|
157,579 | 1,230,376 |
Exploration and Development – Don Roman Groupings
|
$ | 1,500,000 | ||
Exploration and Development - Picacho Groupings
|
2,500,000 | |||
Exploration and Development – Iron Ore Properties
|
750,000 | |||
Property taxes
|
95,000 | |||
General and administrative expenses
|
400,000 | |||
Total
|
$ | 5,245,000 |
(a) | Exhibits | |
10.1
|
Acquisition Agreement –La Verde’s technical data
|
|
10.2
|
Subcontractor Agreement – Tania Iron Ore Property
|
|
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
|
|
10.10
|
Acquisition Agreement – Las Viboras Dos
|
|
10.11
|
Acquisition Agreement – Exploitation rights on Champinon
|
|
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
|
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
|
|
a)
|
The amount of $3’000,000.00 million Pesos Mx. Cy., both parties agree that payments be carried out in the following manner.
|
TRANSFEROR
|
TRANSFEREE
|
RAMÓN GONZÁLEZ VEGA
|
AMERICAN METAL MINING,
S. A. DE C. V.
Represented by its Legal Proxy
Ramiro Trevizo Ledezma, Engineer
|
DALIA M. MONTES DÍAZ
|
ENRIQUE FERNÁNDEZ IBÁÑEZ
(ATTORNEY AT LAW)
|
TRANSFEROR
|
TRANSFEREE
|
RAMÓN GONZÁLEZ VEGA
|
AMERICAN METAL MINING,
S. A. DE C. V.
Represented by its Legal Proxy
Ramiro Trevizo Ledezma, Engineer
|
DALIA M. MONTES DÍAZ
|
ENRIQUE FERNÁNDEZ IBÁÑEZ
(ATTORNEY AT LAW)
|
|
1.
|
Carry out exploration and exploitation works taking into consideration the minimum investment costs established per the Mining Law and its ruling.
|
|
2.
|
Upkeep the CONCESSION, complying to such a purpose with the paperwork and payment of the corresponding rights and subjecting himself to the general dispositions and official Mexican standards of the mining and metallurgical industries agreeing with Article 27 of the Mining Law among others applicable, its Ruling and the rest of the applicable and current legislation. Regardless the immediately afore mentioned and in accordance with Article 23, third paragraph of the Mining Law, non compliance to the obligations previously stated as well as those written in this present instrument on the part of the OPERATOR will not relive the LICENSEE of not complying with same.
|
|
3.
|
Carry out the totality of the ongoing payments as well as those extraordinary regarding the adequate operation of the mine related with the CONCESSION, such as the payment of the workers’ payroll working underground, on maintenance, equipment and machinery repair, taxes, rent payable to owners or land holders of the surface where the CONCESSION lies, administration expenses, among others;
|
|
4.
|
Surrender records and proof of work execution, undertakings, investigations and tests carried out wherein appear the results obtained as well as the ore bodies found within the limits covering the CONCESSION;
|
|
5.
|
Remove peacefully and safely the OPERATOR regarding any law suit, claim, harm, damage, responsibility, action and costs originated by reason of his behavior and actions in relation with this contract and during its term in effect;
|
|
6.
|
Take caution in looking after the environment and the ecological protection in conformity with the applicable and current legal dispositions on such matter, heeding with the disposition of Article 39 of the Mining Law;
|
|
7.
|
Carry out partial payments on COUNTERCLAIMS punctually and in all opportunity under the terms admitted by the subscription of this present instrument;
|
|
8.
|
Pay the semester rights that must be honored in order to keep the CONCESSION current, and;
|
|
9.
|
In general, comply with the totality of the obligations set herein and consigned in Article 27 of the Mining Law, among other applicable and current dispositions.
|
|
1.
|
Upkeep and current in his favor the rights derived from the CONCESSION as well as not to request reduction, subdivision, surface unification covering same, nor to desist from the rights derived from them in the understanding that in order to carry out such paper work he will require under any consideration the previous and written authorization of the OPERATOR.
|
|
2.
|
To abstain himself of celebrating any contracts or agreements regarding the rights derived from the CONCESSIONS but only with the OPERATOR or with the mercantile society this latter names for such purposes under the terms of this contract, nor to transfer the rights derived from the CONCESSION to third parties alien to the OPERATOR or whoever this latter names, and;
|
|
3.
|
Upkeep the mining rights derived from the CONCESSION free of any lien, burden, attachment, affectation or limitation of domain or of any other nature.
|
LICENSEE
Av. Independencia 2812
Colonia Centro
C. P. 31000
Ciudad de Chihuahua, Chihuahua
Ph: 01-614-415-1971
|
OPERATOR
Calle California 5101, Office 206
Col. Haciendas de Santa Fe
C.P. 31215
Ciudad de Chihuahua, Chihuahua
Ph: 01-614-200-8481
|
LICENSEE
HECTOR CERVANTES TREJO
AGUSTIN CERON GUEDEA
|
OPERATOR
RAMIRO TREVIZO LEDEZMA
RAMIRO TREVIZO GONZÀLEZ
|
LICENSEE
CORPORACION KEDAH,
S. A. DE C. V.
Represented in this act by:
HECTOR CERVANTES TREJO
|
OPERATOR
AMERICAN METAL MINING
S. A. DE C. V.
Represented in this act by:
RAMIRO TREVIZO GONZALEZ
|
Date: November 14, 2011
|
/s/ Francis R. Biscan
|
|
Francis R. Biscan, Jr.,
|
||
Principal Executive Officer
|
Date: November 14, 2011
|
/s/ Lynda R. Keeton-Cardno
|
|
Lynda R. Keeton-Cardno,
|
||
Principal Financial Officer
|
|
(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: November 14, 2011
|
/s/ Francis R. Biscan, Jr.
|
|
Francis R. Biscan, Jr.,
|
||
Principal Executive Officer
|
Date: November 14, 2011
|
/s/ Lynda R. Keeton-Cardno
|
|
Lynda R. Keeton-Cardno,
|
||
Principal Financial Officer
|
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2011 | Dec. 31, 2010 |
---|---|---|
CONDENSED CONSOLIDATED BALANCE SHEETS [Abstract] | ||
Recoverable value added taxes, allowance for bad debt | $ 1,235,132 | $ 1,366,533 |
Other receivables, allowance for bad debt | 3,062 | 4,692 |
Property, plant, equipment, mine development and land, accumulated depreciation | 491,600 | 295,925 |
Due from related parties | 79,077 | 69,143 |
Iron Ore Properties financial instrument, carrying value of beneficial conversion feature | 180,000 | |
Common stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 64,859,588 | 57,236,288 |
Common stock, shares outstanding | 64,859,588 | 57,236,288 |
Common stock, stock receivable | $ 0 | $ 212,744 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (USD $) | 3 Months Ended | 9 Months Ended | 65 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS [Abstract] | |||||
Mining revenues | $ 86,178 | $ 123,953 | $ 160,421 | ||
Cost of revenue | 658,007 | ||||
Gross margin | 86,178 | 123,953 | (497,586) | ||
Exploration expenses | 109,123 | 448,058 | 1,497,277 | 2,336,708 | 3,970,986 |
Operating, general, and administrative expenses | 1,146,825 | 3,480,312 | 2,803,028 | 13,166,066 | 23,175,368 |
Net operating loss | (1,255,948) | (3,842,192) | (4,300,305) | (15,378,821) | (27,643,940) |
Non-operating (income) expense: | |||||
Interest (income) | (6,744) | (82,063) | (19,823) | (94,899) | (155,463) |
Loss on conversion of note payable | 783,090 | ||||
Interest expense | 32,415 | 239,629 | 101,542 | 274,544 | 2,190,342 |
Gain on debt extinguishment | (6,138) | (6,138) | |||
Loss on disposal or sale of assets | 4,260 | 4,260 | |||
Other expense (income) | 116 | (92) | (11,137) | (1,148) | (791,172) |
Total non-operating expense | 25,787 | 157,474 | 74,842 | 172,359 | 2,024,919 |
Loss before income taxes | (1,281,735) | (3,999,666) | (4,375,147) | (15,551,180) | (29,668,859) |
Income tax provision (benefit) | 110,969 | 110,969 | (2,820,013) | ||
Less: non-controlling interest | (11,008) | 12,889 | 6,540 | 304,043 | 406,913 |
Net loss attributable to Tara Minerals' shareholders | (1,403,712) | (3,986,777) | (4,479,576) | (15,247,137) | (26,441,933) |
Other comprehensive income (loss): | |||||
Foreign currency translation | 70,571 | 33,616 | 37,834 | (35,661) | (208,419) |
Comprehensive loss | $ (1,333,141) | $ (3,953,161) | $ (4,441,742) | $ (15,282,798) | $ (26,650,352) |
Net loss per share, basic and diluted | $ (0.02) | $ (0.07) | $ (0.07) | $ (0.29) | |
Weighted average number of shares, basic and diluted | 63,946,338 | 54,661,144 | 62,846,792 | 53,529,486 |
Document and Entity Information | 9 Months Ended | |
---|---|---|
Sep. 30, 2011 | Nov. 14, 2011 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 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 | Q3 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 64,859,588 |
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Related Party Transactions | 9 Months Ended | ||
---|---|---|---|
Sep. 30, 2011 | |||
Related Party Transactions [Abstract] | |||
Related Party Transactions |
Due to related parties, net of due from related parties was $2,552,645 and $3,465,232 as of September 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 September 30, 2011, due from related parties is $79,077 and due to related parties, includes: - Pilar mining concession: $535,237 (inclusive of valued added tax) - Don Roman concession: $211,826 - Due to Amermin: $810,794 - Other related party: $101,209 As of September 30, 2011, Tara Gold had loaned the Company $754,599 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 the Company which provided that the Company 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 of the Company's common stock to its shareholders. In May 2011, the first distribution, at a rate of one share of the Company's common stock for every 20 outstanding shares of Tara Gold, was made. Additional distributions will be announced over the next 24 months until all of the Company's common stock, held by Tara Gold, are distributed to Tara Gold shareholders. As of September 30, 2011 Tara Gold owns 55.13% of the common stock of the Company. On May 2011, ACM acquired three mining concessions knows as "Picacho Fractions I, II and III" from Amermin. The acquisition price of the properties was $190,000 including $26,207 in value added taxes, financed at LIBOR plus 3.25%. |
Fair Value | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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.
|
Mining Deposits | 9 Months Ended | |||
---|---|---|---|---|
Sep. 30, 2011 | ||||
Mining Deposits [Abstract] | ||||
Mining Deposits |
On September 2011, the Company executed an agreement for the right to mine an Iron Ore Property known as "Champinon". The property approximates 150 hectares and is located in Sinaloa, Mexico. The agreement gives the Company the right to mine Champinon for a period of 10 years. The Company will pay the concession holder a royalty of $5, plus any Value Added Tax, for each tone of material sold. The Company has committed to extract and sell a minimum of 60,000 tonnes every 6 months and the Company anticipates that it can initially reach production rates of a minimum of 30,000 tonnes per month, scaling up to over 50,000 tonnes per month. . As of September 30, 2011, the concession holder has been paid $175,000, plus Value Added Taxes, recorded as a mining deposit, and will be advanced funds, against the minimum royalty, on a monthly basis. Additionally, as of September 30, 2011 production has not commenced. |
Stockholders' Equity | 9 Months Ended | |||||
---|---|---|---|---|---|---|
Sep. 30, 2011 | ||||||
Stockholders' Equity [Abstract] | ||||||
Stockholders' Equity |
March 2011, the Company issued 1,012,977 shares of common stock valued at $1,215,572 or $1.20 a share to unrelated parties as a result of the conversion of loans in the principal amount of $480,000 and related interest of $26,489 at December 2010. March 2011, the Company issued 105,722 shares of common stock valued at $126,866 or $1.20 a share to a related party as a result of the conversion of loans in the principal amount of $50,000 and related interest of $2,861 at December 2010. March 2011, the Company issued 125,000 shares of common stock for warrants exercised, for $50,000 in cash or $0.40 a share. 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. See Note 7 above. 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 for warrants exercised, for $112,000 in cash or $0.40 a share. May 2011, the Company issued 792,500 shares of common stock for warrants exercised, for $317,000 in cash or $0.40 a share. In May 2011, the Company sold 1,643,334 units in a private offering 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 1st, 2012. May 2011, the Company issued 1,100,000 shares of common stock for $55,000 in cash or $0.050 a share to Officers of the Company who exercised stock options. In May 2011, the Company increased its authorized capitalization to 200,000,000 shares of common stock. In September 2011, the Company sold 1,017,667 units in a private offering for $1,017,667 in cash, or $1.00 per unit. Each unit consisted of one share of the Company's common stock and one warrant. Each warrant entitles the holder to purchase one share of the Company's common stock at a price of $1.25 per share during the first year or $1.50 per share during the second year after units were sold and shares issued. September 2011, the Company issued 100,000 shares of common stock, valued at $66,000 or $0.66 a share for services rendered. September 2011, the Company issued 90,000 shares of common stock, valued at $148,500 or $1.65 a share for services rendered. September 2011, the Company issued 10,000 shares of common stock for warrants exercised, for $15,000 in cash or $1.50 a share. Common Stock Payable At September 30, 2011, common stock payable consists of:
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Options and Warrants | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Options and Warrants [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Options and Warrants |
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 September 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 September 30, 2011 options that vested in 2011 were valued at $36,353. In May 2011, the Company sold 1,643,334 units in a private offering 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, 2012. In September 2011, the Company sold 1,017,667 units in a private offering for $1,017,667 in cash, or $1.00 per unit. Each unit consisted of one share of the Company's common stock and one warrant. Each warrant entitles the holder to purchase one share of the Company's common stock at a price of $1.25 per share during the first year or $1.50 per share during the second year after units were sold and shares issued. 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.
A summary of option activity under the Plan as of September 30, 2011 and changes during the period then ended is presented below:
A summary of warrant activity under the Plan as of September 30, 2011, and changes during the period then ended is presented below:
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Iron Ore Properties and Related Financial Instrument | 9 Months Ended | ||
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Sep. 30, 2011 | |||
Iron Ore Properties and Related Financial Instrument [Abstract] | |||
Iron Ore Properties and Related Financial Instrument |
In May 2011, the Company reached an agreement for the right to mine the 3,233 hectare Tania Iron Ore Property 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 tone for the first 500,000 tonnes removed from the property and $7 per tone thereafter. As of September 30, 2011 the Company had advanced $66,667 toward a total of $100,000 to the vendor against future royalty payments. The Company raised $750,000 through a financial instrument to fund potential Iron Ore Properties. 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 Properties generate revenue. As the Company's common stock has not been issued and this is not a debt instrument, the amount raised has been treated as a temporary financing until such time as changes require debt or permanent equity treatment. The beneficial conversion feature of this instrument was determined to be $180,000. Once a triggering event takes place the beneficial conversion feature accounting will follow the treatment of debt or equity. |
Nature of Business and Significant Accounting Policies | 9 Months Ended | |||||||||
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Sep. 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 September 30, 2011 and December 31, 2010, and the condensed consolidated statements of operations for the three and nine months ended September 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 nine months ended September 30, 2011. Mexican pesos per one U.S. dollar.
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 $1,235,132 and $1,366,533 as of September 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 the Company's 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 ASC 480-10-S99 is consulted for temporary treatment, once a triggering event of any such instruments happens 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 May 2011, the FASB issued an accounting standard update that amends the accounting standard on fair value measurements. The accounting standard update provides for a consistent definition and measurement of fair value, as well as similar disclosure requirements between U.S. generally accepted accounting principles and International Financial Reporting Standards. The accounting standard update changes certain fair value measurement principles, clarifies the application of existing fair value measurement, and expands the fair value measurement disclosure requirements, particularly for Level 3 fair value measurements. The amendments in this accounting standard update are to be applied prospectively and are effective for interim and annual periods beginning after December 15, 2011. The adoption of this accounting standard update will become effective for the reporting period beginning January 1, 2012. The adoption of this guidance will not have a material impact on the Company's financial position, results of operations or cash flows In June 2011, the FASB issued an accounting standard update which requires the presentation of components of other comprehensive income with the components of net income in either (1) a continuous statement of comprehensive income that contains two sections, net income and other comprehensive income, or (2) two separate but consecutive statements. This accounting standard update eliminates the option to present components of other comprehensive income as part of the statement of shareholders' equity, and is effective for interim and annual periods beginning after December 15, 2011. The adoption of this accounting standard update will become effective for the reporting period beginning January 1, 2012. The adoption of this guidance will not have a material impact on the Company's financial position, results of operations or cash flows. In September 2011, the FASB issued an accounting standard update that amends the accounting guidance on goodwill impairment testing. The amendments in this accounting standard update are intended to reduce complexity and costs by allowing an entity the option to make a qualitative evaluation about the likelihood of goodwill impairment to determine whether it should calculate the fair value of a reporting unit. The amendments also improve previous guidance by expanding upon the examples of events and circumstances that an entity should consider between annual impairment tests in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The amendments in this accounting standard update are effective for interim and annual goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The adoption of this accounting standard update will become effective for the reporting period beginning January 1, 2012. The adoption of this guidance will not have a material impact on the Company's financial position, result of operations or cash flows. Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the SEC did not, or are not believed by management to, have a material impact on the Company's present or future financial position, results of operations or cash flows. |
Other assets, current and non-current | 9 Months Ended | ||
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Sep. 30, 2011 | |||
Other assets, current and non-current [Abstract] | |||
Other assets, current and non-current |
In September 2010, the Company signed an agreement to purchase three properties for a price of $1,000,000. In order to hold these properties, the Company made a cash deposit of $60,000. The Company is obligated to pay all the expenses, fees and general expenditures relating to the sale, up to a maximum of $500,000, which are deductible from the sales price. In March 2011, the Company received notification from Pacemaker Silver Mining S.A. de C.V. a wholly-owned Mexican subsidiary of El Tigre, indicating that they had rights to the three properties. Although this does not affect the Company's specific right to the property, until the difference can be determined, the deposit was expensed in 2011. In May 2011, the Company paid $66,667 towards a $100,000 advance payable to the Iron Ore Properties vendor, against future royalty payments (See Note 8). In May 2011, the Company advanced $175,000 to a subcontractor for improvements needed at the Iron Ore project site. The advance is being expensed over a six-month period beginning in July 2011. |
Income taxes | 9 Months Ended | ||
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Sep. 30, 2011 | |||
Income taxes [Abstract] | |||
Income taxes |
As of September 30, 2011, the 2010 tax returns for Tara Minerals and Adit were filed. As a result of the finalized tax returns, the deferred tax asset was analyzed, resulting in an updated value of $2,820,013. As of December 31, 2010 the Company's estimated deferred tax asset was $2,930,982. The difference of $110,969 was recognized as an income tax provision as of September 30, 2011. |
Notes Payable | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Notes payable [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes payable |
The following table represents the outstanding balance of loans and capital leases for the Company as of September 30, 2011 and December 31, 2010.
During the nine months ended September 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 to treat the 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, 2015. The five year maturity schedule for notes payable is presented below:
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Property, plant, equipment, mine development and land | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Property, plant, equipment, mine development and land [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, plant, equipment, mine development and land |
Note 2. Property, plant, equipment, mine development and land
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.
As consideration for the option, Carnegie paid $100,000 to the Company which were recorded as deferred revenue at September 2011 and Carnegie spent $150,000 toward bringing the Don Roman mine back into production. The Company will deferred revenue recognition on payments received from joint venture partners for options to purchase interests in mining concessions. Upon successfully completing the terms on the agreement or upon a triggering termination event, a gain on the sale of the mining concession will be recognized. In order to earn a 30% interest in the Don Roman project, Carnegie no later than: December 6, 2011, must spend $2,000,000 in Start-Up Expenditures and achieve a Production Rate of at least 120 tonnes of iron ore throughput per day at the Don Roman Groupings, and August 7, 2012, must spend an additional $6,000,000 on the Don Roman project and achieve a Production Rate of at least 360 tonnes of iron ore throughput per day. If Carnegie is able to achieve the required Production Rates with an expenditure of less than $2,000,000 before December 6, 2011 or a cumulative $8,000,000 before August 7, 2012 (as the case may be) the amounts not spent by Carnegie, may, at Carnegie's option, be paid to the Company in cash or used to acquire additional mining concessions. In order to earn a 50% interest in the Don Roman project, Carnegie, must by no later than August 7, 2013, spend at least an additional $5,000,000 on the Don Roman project and achieve and maintain a Production Rate of at least 600 tonnes of iron ore per day. For purposes of the agreement between the Company and Carnegie, the term Production Rate means the tonnes which are being processed by the mill at the Don Roman site. In Mexico, weight is denominated in tonnes. One tone is equal to 2,200 pounds. If Carnegie spends at least $2,000,000 in Start-Up Expenditures, 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 its 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 Properties in Mexico, by spending a minimum of $1,000,000, of the Start-Up Expenditures toward a designated Iron Ore property by November 6, 2011. Any amounts spent by Carnegie on the designated Iron Ore Property 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 Property, then the Company will issue to Carnegie 1,000,000 shares of the Company common stock. As of November 6, 2011, Carnegie had not earned the 50% interest and was notified that its option on the Iron Ore properties had expired.
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.
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 is part of the "Don Roman Groupings".
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 Verde is part of the "Don Roman Groupings".
Picacho and the Picacho Fractions are known as the "Picacho Groupings".
If the Company fails to fulfill its obligations, there is a $74,312 penalty, at September 30, 2011. The Company is reviewing the property for continued inclusion as part of the Company's mining property portfolio. Therefore the penalty was recorded as an accrued expense at September 30, 2011. |
Non-controlling Interest | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Non-controlling Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-controlling Interest [Text Block] |
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 not yet completed. 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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