10-Q 1 a81112010q.htm FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2012 a81112010q.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 10-Q
 
 (Mark One)
 
þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2012
 
OR
 
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
FOR THE TRANSITION PERIOD 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.)
     
375 N. Stephanie St. Bldg. 2 Ste. #211
    
Henderson, NV
  
89014
(Address of principal executive offices)
  
  (Zip code)
     
(888) 901-4550
    
(Registrant's telephone number, including area code)
    


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 þ    No o

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 (§232.405 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  þ    No o

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  o   No þ
 
As of August 14, 2012, the Company had 68,752,278 outstanding shares of common stock.
 
 
1
 
 
 
 
 
 
 
 
 
 
2
 
PART I - FINANCIAL INFORMATION



 
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, 2012 AND 2011
AND
THE PERIOD FROM INCEPTION (MAY 12, 2006) THROUGH JUNE 30, 2012
 
 
 
 
 
 
 
TARA MINERALS CORP. AND SUBSIDIARIES
(A Subsidiary of Tara Gold Resources Corp.)
(An Exploration Stage Company)
CONDENSED CONSOLIDATED BALANCE SHEETS

   
June 30, 2012
    
December 31, 2011
  
   
(Unaudited)
        
Assets
            
Current assets:
            
Cash
   $ 4,115,818     $ 365,587  
Other receivables, net
     621,410       341,950  
Deferred tax asset, current portion
     3,809,000       4,041,000  
Prepaid assets
     101,269       116,500  
Total current assets
     8,647,497       4,865,037  
                 
Property, plant, equipment, mine development, land and construction in progress, net
     7,673,602       6,948,187  
Mining deposits
     25,726       28,880  
Deferred tax asset, non-current portion
     1,748,000       2,475,000  
Other assets
     21,537       219,780  
Total assets
   $ 18,116,362     $ 14,536,884  
                 
Liabilities and Stockholders’ Equity
                
Current liabilities:
                
Accounts payable and accrued expenses
   $ 2,724,864     $ 1,282,856  
Notes payable, current portion
     1,359,805       419,977  
Notes payable related party
     -       100,000  
Due to related parties, net of due from
     1,088,270       2,380,403  
Total current liabilities
     5,172,939       4,183,236  
Notes payable, non-current portion
     1,209,092       68,974  
Total liabilities
     6,382,031       4,252,210  
                 
Iron Ore Properties financial instrument, net
     600,000       570,000  
                 
Stockholders’ equity:
                
Common stock: $0.001 par value; authorized 200,000,000 shares; issued and
outstanding 68,752,278 and 66,713,435 shares
     68,752       66,713  
Additional paid-in capital
     33,577,244       30,930,613  
Technical data paid with common stock
     -       1,432,805  
Accumulated deficit during exploration stage
     (25,152,142 )     (25,333,453 )
Accumulated other comprehensive loss
     (195,951 )     (209,217 )
Total Tara Minerals stockholders’ equity
     8,297,903       6,887,461  
Non-controlling interest
     2,836,428       2,827,213  
Total stockholders’ equity
     11,134,331       9,714,674  
Total liabilities and stockholders’ equity
   $ 18,116,362     $ 14,536,884  
 
See Accompanying Notes to these Condensed Consolidated Financial Statements.
 
 
TARA MINERALS CORP. AND SUBSIDIARIES
(A Subsidiary of Tara Gold Resources Corp.)
(An Exploration Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND
COMPREHENSIVE LOSS
(UNAUDITED)

   
Three Months
Ended
June 30, 2012
    
Three Months
Ended
June 30, 2011
    
Six Months
Ended
June 30, 2012
    
Six Months
Ended
June 30, 2011
    
From Inception
(May 12, 2006)
 Through 
June 30, 2012
  
                               
Mining revenues
  
$
-
    
$
-
    
$
-
    
$
-
    
$
160,421
  
Cost of revenue
    
-
      
-
      
-
      
-
      
658,007
  
Gross margin
    
-
      
-
      
-
      
-
      
(497,586
)
Exploration expenses
    
715,462
      
890,640
      
860,123
      
2,820,959
      
6,232,858
  
Operating, general and administrative expenses
    
1,439,677
      
960,717
      
2,072,954
      
1,656,203
      
26,668,816
  
Net operating loss
    
(2,155,139
)
    
(1,851,357
)
    
(2,933,077
)
    
(4,477,162
)
    
(33,399,260
)
                                         
Non-operating (income) expense:
                                        
       Interest income
    
(7,503
)
    
(6,528
)
    
(14,020
)
    
(13,079
)
    
(176,109
)
       Interest expense
    
3,979
      
63,817
      
8,815
      
69,127
      
2,077,276
  
       Loss on debt due to extinguishment and conversion
    
-
      
-
      
-
      
-
      
776,952
  
       Loss on disposal or sale of assets
    
-
      
-
      
-
      
4,260
      
28,190
  
       Gain on dissolution of joint venture
    
-
      
-
      
-
      
-
      
(100,000
)
       Other income
    
-
      
(162
)
    
-
      
(11,253
)
    
(775,775
)
Total non-operating (income) loss
    
(3,524
) 
    
57,127
      
(5,205
) 
    
49,055
      
1,830,534
  
Loss before income taxes
    
(2,151,615
)
    
(1,908,484
)
    
(2,927,872
)
    
(4,526,217
)
    
(35,229,794
)
Income tax benefit
    
-
      
-
      
-
      
-
      
(6,516,000
)
Loss from continuing operations
    
(2,151,615
)
    
(1,908,484
)
    
(2,927,872
)
    
(4,526,217
)
    
(28,713,794
)
Discontinued operations:
                                        
Gain from discontinued operations, net of tax
    
3,673,724
      
-
      
3,618,402
      
-
      
3,618,402
  
Net income (loss)
    
1,522,109
      
(1,908,484
) 
    
690,530
      
(4,526,217
) 
    
(25,095,392
) 
       Add: Net (income) loss attributable to
       non-controlling interest
    
(522,984
)
    
11,178
      
(509,219
)
    
17,548
      
(56,750
)
Net income (loss) attributable to Tara Minerals’ shareholders
    
999,125
      
(1,897,306
)
    
181,311
      
(4,508,669
)
    
(25,152,142
)
                                         
Other comprehensive income (loss):
                                        
     Foreign currency translation
    
100,169
      
2,650
      
13,266
      
(32,737
)
    
(195,951
)
Total comprehensive income (loss)
  
$
1,099,294
    
$
(1,894,656
)
  
$
194,577
    
$
(4,541,406
)
  
$
(25,348,093
)
                                         
Net income (loss) per share, basic
  
$
0.02
    
$
(0.03
)
  
$
0.01
    
$
(0.08
)
        
                                         
Weighted average number of shares, basic
    
67,468,494
      
61,297,513
      
67,095,113
      
59,436,159
          
                                         
Net income (loss) per share, diluted
  
$
0.02
    
$
(0.03
)
  
$
0.01
    
$
(0.08
)
        
                                         
Weighted average number of shares, diluted
    
75,627,241
      
61,297,513
      
75,253,860
      
59,436,159
          
 
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)
 
                   
   
For the Six
Months Ended
June 30, 2012
    
For the Six
Months Ended
June 30, 2011
    
From Inception
(May 12, 2006)
Through
June 30, 2012
  
Cash flows from operating activities:                  
   Net income (loss) attributable to Tara Minerals’ shareholders
   $ 181,311     $ (4,508,669 )   $ (25,152,142 )
   Adjustments to reconcile net loss to net cash:
                        
      Depreciation and amortization
     141,002       138,121       715,817  
      Allowance for doubtful accounts
     127,718       (9,403 )     1,959,913  
      Stock based compensation and stock bonuses
     354,864       529,738       8,819,806  
      Common stock issued for services and other expenses
     54,000       -       5,843,134  
      Cancellation of shares for settlement
     -       -       (750,000 )
      Non-controlling interest in net income (loss) of consolidated subsidiaries
     509,219       (17,548 )     56,760  
      Non-controlling interest - stock issued to third parties of subsidiaries
     -       -       671,028  
      Accretion of beneficial conversion feature and debt discount
     -       -       1,983,575  
      Exploration expenses paid with parent and subsidiary common stock
     430,000       2,491,989       3,716,365  
      Loss on debt due to extinguishment and conversion
     -       -       776,952  
      Accrued interest converted to common stock
     -       -       84,438  
      Deferred tax asset, net
     -       -       (6,516,000 )
      Gain from discontinued operations, net of tax
     (3,618,402 )      -       (3,618,402 ) 
      Gain on dissolution of joint venture
     -       -       (100,000 )
      Other
     10,646       16,467       93,113  
   Changes in operating assets and liabilities:
                        
      Other receivables, net
     (100,129 )     (198,114 )     (1,339,465 )
      Prepaid expenses
     15,231       (158,500 )     (101,269 )
      Other assets
     (265 )     2,792       (93,018 )
      Accounts payable and accrued expenses
     (452,786 )      (114,246 )     856,863  
   Net cash used in operating activities
     (2,347,591 )     (1,827,373 )     (12,092,532 )
Cash flows from investing activities:
                        
   Acquisition of property, plant, equipment, land and construction in progress
     (147,831 )     -       (2,793,014 )
   Purchase of mining concession
     -       (30,060 )     (860,231 )
   Mining deposits
     3,154       (6,462 )     (208,358 )
   Proceeds from the sale or disposal of assets
     -       29,128       29,128  
   Proceeds from the sale of American Copper Mining
     7,500,000       -       7,500,000  
   Cash investment in American Copper Mining in 2012
     (224,521 )     -       (224,521 )
   Other
     -       -       (1,721 )
Net cash provided by (used in) investing activities
     7,130,802       (7,394 )     3,441,283  
Cash flows from financing activities:
                        
   Cash from the sale of common stock
     357,000       1,364,744       10,280,589  
   Proceeds from notes payable, related party
     -       -       150,000  
   Proceeds from notes payable
     -       -       480,000  
   Payments towards notes payable
     (245,946 )     (102,523 )     (1,561,448 )
   Payments towards notes payable, related party
     (100,000 )             (100,000 )
   Payment towards equipment financing
     -       -       (201,438 )
   Change in due to/from related parties, net
     (1,107,300 )     (362,668 )     646,670  
   Payments from joint venture partners
     -       -       100,000  
   Non-controlling interest – cash from the sale of common stock of subsidiaries
     -       500,000       2,368,645  
   Iron Ore Properties financial instrument
     50,000       750,000       800,000  
Net cash (used in) provided by financing activities
     (1,046,246 )      2,149,553       12,963,018  
                         
Effect of exchange rate changes on cash
     13,266       (32,737 )     (195,951 )
                         
Net increase (decrease)
     3,750,231       282,049       4,115,818  
Cash, beginning of period
     365,587       157,579       -  
Cash, end of period
   $ 4,115,818     $ 439,628     $ 4,115,818  
 
 
Supplemental Information:
                        
   Interest paid
   $ -     $ 273     $ 286,665  
   Income taxes paid
   $ -     $ -     $ 10,565  
                         
Non-cash Investing and Financing Transactions:
                        
                         
Purchase of mining concession paid by debt to related party plus capitalized interest
   $ -     $ 163,793     $ 1,445,448  
Purchase of or (reduction) in purchase of concession paid with notes payable
plus capitalized interest
   $ 2,147,171     $ (1,310,974 )   $ 3,569,315  
Recoverable value-added taxes incurred through additional debt and due to
related party, net of mining concession modification
   $ 348,000     $ (215,557 )   $ 2,101,293  
Beneficial conversion value for convertible debt
   $ -     $ -     $ 1,695,000  
Beneficial conversion feature on financial instrument
   $ 20,000     $ 180,000     $ 200,000  
Conversion of debt to common stock, plus accrued interest
   $ -     $ -     $ 2,309,438  
Purchase of property and equipment through debt and common stock
   $ -     $ 48,491     $ 1,298,051  
Issuance of common stock for Tara Gold Payable
   $ -     $ -     $ 100,000  
Security deposits reclassified to other receivables
   $ 1,768     $ -     $ 1,768  
Reclassification of mining deposit to mining concession paid through debt
   $ (175,000 )   $ -     $ (175,000 )
 
See Accompanying Notes to these Condensed Consolidated Financial Statements.
 
 
 
 
 
 
 
TARA MINERALS CORP. AND SUBSIDIARIES
(A Subsidiary of Tara Gold Resources Corp.)
(An Exploration Stage Company)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
Note 1.      Nature of Business and Significant Accounting Policies
 
Nature of business and principles of consolidation:

The accompanying Condensed Consolidated Financial Statements of Tara Minerals Corp. (the “Company”) should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2011. Significant accounting policies disclosed therein have not changed, except as noted below.

Tara Minerals owns 99.9% of the common stock of American Metal Mining S.A. de C.V. (“AMM”), a Mexican corporation.  Tara Minerals also owns 87% of the common stock of Adit Resources Corp. (“Adit”). Tara Minerals’ operations in Mexico are conducted through AMM since Mexican law provides that only Mexican corporations are allowed to own mining properties.  American Metal Mining’s primary focus is on industrial minerals, e.g. iron, copper and zinc.

On April 4, 2012 Adit sold its subsidiary American Copper Mining S.A. de C.V. (“ACM”) to Yamana Mexico Holdings B.V. (“Yamana”). ACM’s primary asset was the Picacho groupings.

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.

In this filing references to "Company," "we," "our," and/or "us," refers to Tara Minerals and, unless the context indicates otherwise, its consolidated subsidiaries.

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

The accompanying Condensed Consolidated Financial Statements and the related footnote information are unaudited.  In the opinion of management, they include all normal recurring adjustments necessary for a fair presentation of the condensed consolidated balance sheets of the Company as of June 30, 2012 and December 31, 2011, the condensed consolidated results of its operations for the three and six months ended June 30, 2012 and 2011 and the condensed consolidated statements of cash flows for the six months ended June 30, 2012 and 2011. Results of operations reported for interim periods are not necessarily indicative of results for the entire year. All 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 non-monetary asset and liability accounts, (iii) historical exchange rates for revenues and expenses associated with non-monetary 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 income (loss) is recorded to accumulated other comprehensive income (loss).

Current and historical exchange rates are not indicative of what future exchange rates will be and should not be construed as such.

Relevant exchange rates used in the preparation of the financial statements for the AMM and ACM are as follows for the six months ended June 30, 2012 and 2011.  Mexican pesos per one U.S. dollar.

 
June 30, 2012
  
Current exchange rate
Ps.     
     13.6530  
Weighted average exchange rate for the six months ended
Ps.     
     13.2656  
 
 
June 30, 2011
  
Current exchange rate
Ps.     
     11.7748  
Weighted average exchange rate for the six months ended
Ps.     
     11.9044  
 
 
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.

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.

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

Impuesto al Valor Agregado taxes (IVA) are recoverable value-added taxes charged by the Mexican government on goods sold and services rendered at a rate of 16%.  Under certain circumstances, these taxes are recoverable by filing a tax return and as determined by the Mexican taxing authority.

Each period, receivables are reviewed for collectability.  When a receivable is determined to not be collectable we allow for the receivable until we are either assured of collection or assured that a write-off is necessary.  Our allowance in association with our receivable from IVA from our Mexico subsidiaries is based on our determination that the Mexican government may not allow the complete refund of these taxes.

   
June 30, 2012
    
December 31, 2011
  
   
(Unaudited)
        
Allowance – recoverable value-added taxes
   $ 1,161,034     $ 1,211,109  
Allowance – other receivables
     -       377  
Total
   $ 1,161,034     $ 1,211,486  

Recently Adopted and Recently Issued Accounting Guidance

Adopted

In May 2011, the Financial Accounting Standards Board 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 became effective for the reporting period beginning January 1, 2012.  The adoption of this guidance did 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 became effective for the reporting period beginning January 1, 2012.  The adoption of this guidance did 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 became effective for the reporting period beginning January 1, 2012.  The adoption of this guidance did not have a material impact on the Company’s financial position, result of operations or cash flows.

Issued

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.
 
Note 2.      Property, plant, equipment, mine development, land and construction in progress, net

   
June 30, 2012
    
December 31, 2011
  
   
(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
     635,571       635,571  
  La Palma
     80,000       80,000  
  La Verde
     60,000       60,000  
  Pirita
     250,000       250,000  
  Picacho (a)
     -       1,250,000  
  Picacho Fractions (a)
     -       163,793  
  Las Viboras Dos
     188,094       188,094  
  Champinon (b)
     2,147,171       -  
Mining concessions
     4,692,747       3,959,369  
                 
Construction in progress
     127,414       -  
Property, plant and equipment
     3,534,137       3,531,501  
      8,373,888       7,510,460  
Less – accumulated depreciation
     (700,286 )     (562,273 )
    $ 7,673,602     $ 6,948,187  

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

 
a.
On April 2012 the Company sold ACM to Yamana. ACM’s primary asset was the Picacho groupings (see Note 11).

 
b.
In September 2011, the Company leased the Mina El Champinon Iron Ore Project (“Champinon”) for royalty payments based on production.

In May, 2012, the Company terminated the lease agreement for Champinon and entered into a new agreement to acquire the Iron Ore Project for an effective purchase price of $2,175,000, plus $348,000 in value-added taxes.

Included in the purchase agreement, all prior payments plus value-added taxes (see Note 4) were applied to the note payable.
 
 
The resulting outstanding debt payment schedule, including applicable value added taxes, is as follow:

2012
   $ 473,667  
2013
     947,333  
2014
     696,000  
Total
   $ 2,117,000  

In accordance with the Interest Topic of FASB ASC, the note payable amount of $2,175,000 has been discounted using the incremental borrowing rate of 1.30%. As of June 30, 2012, the present value of future payments toward the notes payable on the contract is as follows:

   
Debt
    
IVA
    
Total
  
                   
Total remaining debt
   $ 1,825,000     $ 292,000     $ 2,117,000  
Imputed interest
     (27,829 )     -       (27,829 )
Present value of debt
   $ 1,797,171     $ 292,000     $ 2,089,171  

In May 2012, the Company purchased technical data pertaining to the Champinon from the former owner for 500,000 shares of the Company’s common stock valued at $430,000.

Other Mining Commitments

Mina Godinez

In July 2010, the Company entered into a joint venture agreement whereby third parties would contribute 100% of the mining rights to the concession “Mina Godinez” and Tara Minerals would have the exclusive rights to manage, operate, explore and exploit the concession. This joint venture was terminated January 18, 2012.

Note 3.      Income Taxes

On April 2012, the Company sold ACM (see Note 11) resulting in an updated estimated deferred tax asset of $5,557,000 (current and non-current). The change of $959,000 from December 31, 2011 was recognized as an income tax expense and offset the gain on discontinued operations as of June 30, 2012.

Note 4.      Other Assets
 
As of June 30, 2012 and December 31, 2011, respectively, the Company had no advances and $175,000 towards the Champinon lease (see Note 2) and security deposits of $21,537 and $32,752. During the six months ending June 30, 2012, the Company made an additional advance toward Champinon in the amount of $60,345 and all advances related to Champinon were applied towards the note payable (see Note 2).

Note 5.      Notes Payable

The following table represents the outstanding balance of notes payable.
 
   
June 30, 2012
    
December 31, 2011
  
   
(Unaudited)
        
Mining concession
   $ 2,486,565     $ 392,189  
Auto loans
     82,332       96,762  
Related party
     -       100,000  
      2,568,897       588,951  
Less – current portion
     (1,359,805 )     (519,977 )
Total – non-current portion
   $ 1,209,092     $ 68,974  

See Note 2 above for notes payable relating to mining concessions.
 
 
The five year maturity schedule for notes payable is presented below:

   
2013
    
2014
    
2015
    
2016
    
2017
    
Total
  
                                     
Mining Concessions
  
$
1,329,612
    
$
811,074
    
$
345,879
    
$
-
    
$
-
    
$
2,486,565
  
Auto Loans
    
30,193
      
34,257
      
17,882
      
-
      
-
      
82,332
  
Total
  
$
1,359,805
    
$
845,331
    
$
363,761
    
$
-
    
$
-
    
$
2,568,897
  

Note 6.      Related Party Transactions

   
June 30, 2012
    
December 31, 2011
  
   
(Unaudited)
        
Due from related parties
   $ 633,017     $ 144,962  
Due to related parties
     (1,721,287 )     (2,525,365 )
    $ (1,088,270 )   $ (2,380,403 )

All transactions with related parties have occurred in the normal course of operations and Mexico based related party transactions are measured at the foreign exchange amount.

 In January 2007, Corporacion Amermin S.A. de C.V. (“Amermin”), a subsidiary of Tara Gold, made the arrangements to purchase the Pilar, Don Roman and Las Nuvias properties listed in Note 2 (part of the Don Roman Groupings) and sold the concessions to AMM. At June 30, 2012, Amermin has paid the original note holder in full and AMM owes Amermin $535,659 for the Pilar mining concession and $211,826 for the Don Roman mining concession.

As of June 30, 2012, Amermin loaned AMM $969,408 at 0% interest, due on demand.

As of June 30, 2012, the Company paid in full the 0% interest and due on demand $568,645 loan from Tara Gold.

As of June 20, 2012, the Company loaned Tara Gold $544,355 at 0% interest, due on demand.

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 $163,793 plus value added taxes of $26,207, financed at LIBOR plus 3.25%. As of June 30, 2012, ACM paid Amermin in full.

On July 28, 2010, Adit borrowed $100,000 from an officer of Adit. The note bears interest at 3.25% per year, with interest payable quarterly. As of June 30, 2012, the note was paid in full.

Note 7.      Stockholders’ Equity

In April 2012, the Company sold 594,000 units in a private offering for $297,000 in cash, or $0.50 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 for one year.

April 2012, the Company issued 125,000 shares of common stock for warrants exercised, for $50,000 in cash or $0.40 a share.

April 2012, the Company issued 60,000 shares of common stock, valued at $54,000 or $0.90 a share for services rendered.

June 2012, the Company issued 500,000 shares of common stock, valued at $430,000 or $0.86 a share for the purchase of Champinon’s technical data.

June 2012, the Company issued 559,843 shares of common stock, valued at $1,432,805 or $2.56 a share to settle the acquisition of Centenario, La Verde and La Palma’s technical data.

June 2012, the Company issued 200,000 shares of common stock for options exercised, for $10,000 in cash or $0.05 a share.

 
Note 8.      Options and Warrants

The Company has the following incentive plans which are registered under a Form S-8:
·      Incentive Stock Option Plan
·      Nonqualified Stock Option Plan
·      Stock Bonus Plan

In March 2012, the Company sold 594,000 units in a private offering for $297,000 in cash, or $0.50 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 or any time before December 31, 2012. The shares and warrants were issued in April 2012.

On October 28, 2009, Adit, the Company’s subsidiary, adopted the following incentive plans which have not been registered:
·      Incentive Stock Option Plan
·      Nonqualified Stock Option Plan
·      Stock Bonus Plan

There was no issuance of instruments under the Adit plans in 2012.

The fair value of each award discussed above is estimated on the date of grant using the Black-Scholes 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 the award granted is usually estimated at half of the contractual term as noted in the individual agreements, unless the life is one year or less based upon management’s assessment of known factors, and represents the period of time that management anticipates awards granted 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.

   
June 30, 2012
    
December 31, 2011
  
Expected volatility
    
104.82%
      
98.06% - 163.11%
  
Weighted-average volatility
    
104.82%
      
143.46%
  
Expected dividends
    
0
      
0
  
Expected term (in years)
    
1.50
      
1.50
  
Risk-free rate
    
0.05%
      
0.58%
  

A summary of option activity under the Plans as of June 30, 2012 (unaudited) 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, 2011
    
3,350,000
    
$
0.69
              
Granted
    
200,000
      
0.05
              
Exercised
    
(200,000
)
    
0.05
              
Forfeited, expired or cancelled
    
-
      
-
              
Outstanding at June 30, 2012
    
3,350,000
    
$
0.69
      
3.0
    
$
1,000,000
  
Exercisable at June 30, 2012
    
2,590,000
    
$
0.58
      
3.5
    
$
980,800
  

 Non-vested Options
  
Options
    
Weighted
-Average
Grant-Date
 Fair Value
  
Non-vested at December 31, 2011
    
1,010,000
    
$
1.08
  
Granted
    
200,000
      
0.05
  
Vested
    
     (450,000
)
    
0.32
  
Forfeited, expired or cancelled
    
-
      
-
  
Non-vested at June 30, 2012
    
760,000
    
$
0.48
  


A summary of warrant activity as of June 30, 2012 (unaudited) 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, 2011
    
7,393,081
    
$
0.89
              
Granted
    
594,000
      
1.00
              
Exercised
    
(125,000
)
    
0.40
              
Forfeited, cancelled or expired
    
(1,893,334
)
    
0.51
              
Outstanding at  June 30, 2012
    
5,968,747
    
$
1.04
      
1.5
    
$
516,500
  
Exercisable at June 30, 2012
    
5,968,747
    
$
1.04
      
1.5
    
$
516,500
  
 
All warrants vest upon issuance.

Note 9.
Non-controlling Interest

   
June 30, 2012
    
December 31, 2011
  
   
(Unaudited)
        
Common stock for cash
   $ 1,999,501     $ 1,999,501  
Common stock for services
     95,215       95,215  
Exploration expenses paid for in subsidiary common stock
     240,000       240,000  
Officer stock based compensation
     944,956       944,956  
Cumulative net loss attributable to non-controlling interest
     56,756       (452,464 )
Treasury stock
     (500,000 )     -  
Other
     -       5  
Total non-controlling interest
   $ 2,836,428     $ 2,827,213  

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, 2012 (Unaudited)
  
   
Total
    
Level 1
    
Level 2
    
Level 3
  
Assets:
                        
None
  
$
-
    
$
-
    
$
-
    
$
-
  
                                 
Liabilities:
                                
Iron Ore Properties financial instrument
  
 $
600,000
    
 $
-
    
 $
-
    
 $
600,000
  
 
 
Fair Value at December 31, 2011
  
   
Total
    
Level 1
    
Level 2
    
Level 3
  
Assets:
                        
None
  
$
-
    
$
-
    
$
-
    
$
-
  
                                 
Liabilities:
                                
Iron Ore Properties financial instrument
  
 $
570,000
    
 $
-
    
 $
-
    
 $
570,000
  

 
Note 11.
Sale of American Copper Mining

On April 4, 2012, Adit sold its wholly owned subsidiary, American Copper Mining (“ACM”), to Yamana Mexico Holdings B.V. (“Yamana”). ACM’s primary asset was the Picacho Groupings. The Picacho concessions do not have any proven reserves. Subsequent to the sale, the Company did not retain ownership in ACM.

Additional payments due in consideration of the sale of ACM are contingent to whether or not Yamana exercises its option to terminate the agreement within ten business days prior to May 25, 2013. If the agreement is terminated, Yamana will be required to return the capital stock of ACM. Due to the contingent nature of future payments they are recognized when the contingency is removed. Possible future payments include:

 
·
$9.8 million on May 25, 2013;
 
·
During the period ending on May 25, 2017, Yamana will pay $1.0 million for every 100,000 ounces of gold, (whether proved, measured or inferred) (as defined by Canadian Securities Administrators National Instrument 43-101) discovered on the Picacho Groupings. If no gold is discovered on the Picacho Groupings by May 25, 2015, Yamana will make an advance payment of $3 million. Pursuant to this provision of the Agreement, Yamana will pay a maximum of $14 million.
 
·
$4.3 million on May 25, 2018.

Gain from discontinued operations, net of tax was calculated as the followed on the date of sale:

Other receivables, net
   $ 24,338  
Other current assets
     10,565  
Goodwill
     12,028  
Fixed assets, net of accumulated depreciation
     3,983  
Mining concessions
     1,413,793  
Accounts payable and accrued expenses
     (457 )
     Fair market value of net assets
   $ 1,464,250  

Fair value of consideration received:
      
      Cash
   $ 7,500,000  
      Treasury Stock
     500,000  
Fair market value of net assets
     (1,464,250 )
      Gain on deconsolidation of subsidiary
     6,535,750  
      Loss on discontinued operations
     (57,584 )
      Tax expense
     (2,859,764 )
Gain from discontinued operations, net of tax
   $ 3,618,402  

 
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, 2012 Tara Minerals generated revenue of $160,421 and incurred expenses of $658,007 in cost of sales; $6,232,858 in exploration expenses and $26,668,816 in operating and general administration expenses.  Included in operating and general and administrative expenses is a non-cash charge of $8,819,806 pertaining to the issuance of stock options and bonus plans.

            Material changes of certain items in Tara Minerals’ Statement of Operations for the three months ended June 30, 2012, as compared to the same period last year, are discussed below.

Three Months Ended
  
June 30, 2012
    
June 30, 2011
  
       
Revenue
  
$
-
    
$
-
  
Cost of revenue
    
-
      
-
  
Exploration expenses
    
715,462
      
890,640
  
Operating, general and administrative expenses
    
1,439,677
      
960,717
  
Net operating loss
  
$
(2,155,139
)
  
$
(1,851,357
)
 
For the three months ending June 30, 2012, exploration expenses consisted of $430,000 for the purchase of Champinon’s technical data, preproduction activities, geological consulting, assaying, field supplies and other mine expenses.  As of June 30, 2011, exploration expenses consisted of approximately $740,000 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.

Material changes of certain items in Tara Minerals’ operating, general and administrative expenses for the three months ended June 30, 2012, as compared to the same period last year, are discussed below.

Three Months Ended
  
June 30, 2012
  
June 30, 2011
  
                 
Bad debt expense
  
$
116,113
    
$
97,921
  
Investment banking and investor relations expense
    
199,432
      
30,750
  
Compensation, officer employment contracts and bonuses
    
449,264
      
455,244
  
Professional fees
    
372,168
      
217,511
  
 
Bad debt expense for the three months ending June 30, 2012 of $116,113 was due to the corresponding Impuesto al Valor Agregado taxes (“IVA”) receivable experienced in the normal course of business in the Mexican subsidiaries. During the three months ending June 30, 2011 the Company recognized bad debt recovery due to the renegotiation of an agreement which included IVA and caused an adjustment of IVA receivables, allowance and bad debt expense.

The increase in investment banking and investor relations expense is due to options awarded to investor relations consultants in 2012. During the three months ended June 30, 2012 investor relations consisted of $81,232 paid in cash, $110,000 in options awarded and $8,200 that were accrued. 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, 2012 compensation, officer employment contracts and bonuses consisted of options valued at $244,865 and officer compensation of $204,399. 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.

Professional fees increased in 2012 due to increased legal expenses due to negotiations of the sale of American Copper Mining, which was finalized in April 2012.

 
Material changes of certain items in Tara Minerals’ Statement of Operations for the six months ended June 30, 2012, as compared to the same period last year, are discussed below.

Six Months Ended
  
June 30, 2012
    
June 30, 2011
  
             
Revenue
   $ -     $ -  
Cost of revenue
     -       -  
Exploration expenses
     860,123       2,820,959  
Operating, general and administrative expenses
     2,072,954       1,656,203  
Net operating loss
   $ (2,933,077 )   $ (4,477,162 )

For the six months ending June 30, 2012, exploration expenses consisted of $430,000 for the purchase of Champinon’s technical data, preproduction activities, geological consulting, assaying, field supplies and other mine expenses.

In 2011, Tara Minerals sought to expand and advance the Don Roman Groupings project by acquiring additional mineral claims and by finding a joint venture partner that would provide the capital and expertise to restart the operations.

In August 2011, an agreement was signed that included an option for the joint venture partner to earn a 50% interest in the Don Roman Groupings and an additional option to earn an interest in Tara Minerals iron ore properties. As of December 31, 2011 this joint venture expired.

Throughout 2011, the Company purchased technical data for Centenario, La Palma and La Verde for stock, which comprises the majority of exploration expenses.

In 2011, the Company also ventured into the iron ore industry segment, exploring the Tania, Las Viboras Dos and Champinon properties.

Material changes of certain items in the Company’s 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, 2012
    
June 30, 2011
  
             
Bad debt expense (recovery)
   $ 135,165     $ (52,802 )
Investment banking and investor relations expense
     232,633       92,303  
Compensation, officer employment contracts and bonuses
     618,500       815,900  
Professional fees
     597,417       361,673  

Bad debt expense for the six months ending June 30, 2012 of $135,165 (including $7,446 due to exchange rate fluctuation) was due to the corresponding IVA receivable experienced in the normal course of business in the Mexican subsidiaries. Bad debt expense for the six months ended June 30, 2011 was due to the renegotiation of an agreement which included IVA and caused an adjustment of IVA receivables, allowance and bad debt expense.

As of June 30, 2012 investor relations consisted of $110,000 in options, $114,433 in cash and $8,200 in accrued expenses. 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.

During the six months ended June 30, 2012 compensation, officer employment contracts and bonuses consisted of officer compensation of $244,865 in options and $373,635 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.

Professional fees increased in 2012 due to increased legal expenses due to negotiations of the sale of American Copper Mining, which was finalized in April 2012. Professional fees increased $140,000 in 2012 due to the use of more professionals and consultants.

 
The following is an explanation of Tara Minerals’ material sources and (uses) of cash during the six months ended June 30, 2012 and 2011:
     
June 30, 2012
      
June 30, 2011
  
                 
Net cash used in operating activities
  
$
(2,347,591
)
  
$
(1,827,373
)
Acquisition of property, plant and equipment
    
            (147,831
)
    
(30,060
)
Mining deposits
    
3,154
      
(6,462
)
Payments made for construction in progress
    
(127,414
)
    
-
  
Investment in American Copper Mining in 2012
    
  (224,521
)
    
-
  
Proceeds from the sale or disposal of assets
      
-
    
29,128
  
Proceeds from the sale of American Copper Mining
    
7,500,000
      
-
  
Cash for the sale of common stock
    
357,000
      
1,364,744
  
Payments towards notes payable
    
(245,946
)
    
(102,523
)
Payments towards notes payable, related party
    
(100,000
)
    
-
  
Iron Ore Property Financial Instrument
    
50,000
      
750,000
  
Change in due to/from related parties, net
    
(1,107,300
) 
    
(362,668
) 
Non-controlling interest – cash from the sale of common stock of subsidiaries
    
-
      
500,000
  
Cash, beginning of period
    
365,587
      
157,579
  
 
Tara Minerals anticipates that its capital requirements during the twelve months ending June 30, 2013 will be:

Exploration and Development – Don Roman Groupings
  
$
750,000
  
Exploration and Development – Champinon
    
750,000
  
Property taxes
    
95,000
  
General and administrative expenses
    
1,000,000
  
Total
  
$
            2,595,000
  

The capital requirements shown above include capital required by Tara Minerals and subsidiaries.

In 2012, Tara Minerals is focusing its efforts on the exploration and development of the Mina El Champinon Iron Ore Project (“Champinon”) and preparatory work to bring the Don Roman mill into production in 2013. The Company has developed a strategy, which we believe will lead to the successful development of the mine and commercial production of iron ore. To date, the Company has completed numerous assays of the ore body, along with recovery analysis from Metcon Research supporting the potential viability of commercial production. Digital surveying of the area has been commissioned to develop a detailed map for the plotting of past, present, and future exploration work and current mine development planning. The permit necessary to begin mining and commercial production is in progress, with the application for an export permit to immediately follow its receipt. A production site has been determined and excavation work is ongoing to prepare the site for the installation of equipment necessary to achieve commercial quantities of saleable grade iron ore. The Company’s goal is to begin pilot production in the third quarter of 2012, with commercial sales in the fourth quarter. To this end, the Company has signed a sales agreement with a customer for mined iron ore as of the date of this filing.

The Company 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.

As of the date of this filing, the Company is reviewing the Pirita, Tania and Las Viboras Dos properties for continued inclusion as part of the Company’s mining property portfolio.  No payments toward Pirita were made in 2012 or 2011.  The Company may decide to terminate the purchase/lease agreements and return the properties. Tara Minerals is critically reviewing all properties for joint venture, option or sale opportunities.

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 except for the possible future payments related to the sale of American Copper Mining which are disclosed in the financial statements 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. 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.


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.
 
 
 
 
 
 
PART II
 
OTHER INFORMATION
 

On September 13, 2010, Tara Gold announced that it had entered into a tentative agreement with Tara Minerals which provided that Tara Minerals would acquire all of the common shares of Tara Gold by exchanging one share of Tara Minerals’ common stock for two Tara Gold shares.  In an effort to avoid any conflicts due to common directors, the transaction would require the approval of non-affiliate shareholders owning a majority of the outstanding shares of Tara Minerals and Tara Gold.

On September 20, 2010 Chris Columbo filed a lawsuit in the District Court for Carson City Nevada, against Tara Minerals, Tara Gold, and Tara Minerals’ officers and directors. The essence of the lawsuit was to obtain the fairest price for Tara Gold, whether from Tara Minerals or a third party.  On October 25, 2010 Mr. Columbo voluntarily dismissed his lawsuit against Tara Minerals and other defendants.

On October 22, 2010 Patricia J. Root filed a lawsuit in the Circuit Court for Dupage County, Illinois, against Tara Minerals, Tara Gold, and Tara Gold’s directors.  The essence of the lawsuit was to prevent the Company’s proposed acquisition of Tara Gold.

Tara Minerals believed the lawsuit filed by Ms. Root was premature since, as noted in the September 13, 2010 press release, the transaction was tentative and was subject to the approval of the shareholders of Tara Gold who are not officers or directors of Tara Gold.  No binding agreement between Tara Gold and Tara Minerals has been was ever signed.

On April 6, 2011 Ms. Root voluntarily dismissed her lawsuit against Tara Minerals, Tara Gold, and all other defendants.

Tara Minerals subsequently decided that it would not acquire Tara Gold.

In August 2011 Tara Minerals entered into an agreement with Carnegie Mining and Exploration, Inc. which provided Carnegie with the option to earn up to a 50% interest in Tara Minerals’ Don Roman and iron ore projects.

In order to earn an interest in the Don Roman project, Carnegie was required to spend certain amounts on the Don Roman property such that the Don Roman plant reached minimum production levels. Carnegie could earn a 50% interest in Tara Minerals’ iron ore projects by spending $1,000,000 toward the projects by November 6, 2011.

Carnegie did not spend the required amounts on either project and Tara Minerals terminated the option.

On November 10, 2011, Tara Minerals filed a complaint in Nevada against Carnegie seeking a declaration that Carnegie failed to properly exercise its option to acquire an interest in the iron ore properties.

On December 9, 2011, Carnegie and a purported affiliate, Carnegie Operations, LLC filed a complaint in Texas state court against former employees of Carnegie. Although Tara Minerals was not initially named as a defendant, the substance of the state court complaint made it clear that the core issues were substantially similar to those raised in the Nevada litigation. The individual defendants removed the case to federal court in Dallas, Texas on December 22, 2011. Carnegie responded with a First Amended Complaint on January 31, 2012, which formally named Tara Minerals as a defendant. In its amended complaint, Carnegie seeks an injunction against Tara Minerals in connection with its option on the iron ore properties, as well as damages for alleged fraud, trade secret theft, civil conspiracy, and tortuous interference with Carnegie’s employment contracts with the individual defendants.

On February 14, 2012, Tara Minerals moved the Texas court for a transfer of venue to Nevada so that the cases could be consolidated. The motion is premised upon the facts that: 1) the option agreement includes an express consent to jurisdiction and venue in Nevada; 2) Tara Minerals filed its lawsuit first in Nevada; 3) the cases involve common issues of fact and law; and 4) transfer is cost-efficient and more convenient for the key witnesses in both matters. As of July 2012 the Texas court granted Tara Minerals’ the motion and transferred the case to Nevada.

 

In April 2012, the Company sold 594,000 units in a private offering for $297,000 in cash, or $0.50 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 for one year.

April 2012, the Company issued 125,000 shares of common stock for warrants exercised, for $50,000 in cash or $0.40 a share.

April 2012, the Company issued 60,000 shares of common stock, valued at $54,000 or $0.90 a share for services rendered.

June 2012, the Company issued 500,000 shares of common stock, valued at $430,000 or $0.86 a share for the purchase of Champinon’s technical data.

June 2012, the Company issued 559,843 shares of common stock, valued at $1,432,805 or $2.56 a share to settle the acquisition of Centenario, La Verde and La Palma’s technical data.

June 2012, the Company issued 200,000 shares of common stock for options exercised, for $10,000 in cash or $0.05 a share.

We relied upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933 with respect to the issuance of these securities. The purchasers of these securities were sophisticated investors who were provided full information regarding our business and operations. There was no general solicitation in connection with the offer or sale of these securities. The purchasers acquired these securities for their own accounts. The securities, and any shares of common stock issuable upon the exercise of the warrants, cannot be sold unless pursuant to an effective registration statement or an exemption from registration. We paid commissions of $54,000 with respect to the sale of these securities.


None.


None.


None.

 
Exhibit No.
Description of Exhibit
  
10.1
El Champinon – Acquisition Agreement
(1)
10.2
El Champinon – Technical Data
(1)
10.3
Purchase Agreement among Adit Resources Corp., ACM and Yamana Mexico Holdings B.V.
(1)
31.1
Rule 13a-14(a) Certifications – CEO
(1)
31.2
Rule 13a-14(a) Certifications - CFO
(1)
32
Section 1350 Certifications
(1)
101.INS
XBRL Instance Document
(1)
101.SCH
XBRL Taxonomy Extension Schema Document
(1)
101.CAL
XBRL Taxonomy Calculation Linkbase Document
(1)
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document
(1)
101.LAB
XBRL Taxonomy Label Linkbase Document
(1)
101.PRE
XBRL Taxonomy Presentation Linkbase Document
(1)

(1)
Filed with this report.

 


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 
 
TARA MINERALS CORP.
  
       
       
Dated: August 14, 2012
By:
/s/ Francis Richard Biscan, Jr.
  
   
Francis R. Biscan, Jr.,  Director and
  
   
Principal Executive Officer
  
       
       
Dated: August 14, 2012
By: 
/s/ Lynda R. Keeton-Cardno, CPA
  
   
Lynda R. Keeton-Cardno, CPA
  
   
Principal Financial and Accounting Officer
  
 
 
 
 
 
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