As filed with the Securities and Exchange Commission on ______, 2007
Commission File No. 333-143512
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
AMENDMENT NO. 3
Registration Statement Under
THE SECURITIES ACT OF 1933
TARA MINERALS CORP.
--------------------------------------------------
(Exact name of registrant as specified in charter)
Nevada 1031 Applied For
- -------------------- -------------------------- --------------------
(State or other jurisdiction (Primary Standard Classi- (IRS Employer
of incorporation) fication Code Number) I.D. Number)
2162 Acorn Court
Wheaton, IL 60187
630-462-2079
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(Address and telephone number of principal executive offices)
2162 Acorn Court
Wheaton, IL 60187
-------------------------- ------------------
(Address of principal place of business or intended principal place of business)
Francis Richard Biscan, Jr.
2162 Acorn Court
Wheaton, IL 60187
630-462-2079
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(Name, address and telephone number of agent for service)
Copies of all communications, including all communications sent
to the agent for service, should be sent to:
William T. Hart, Esq.
Hart & Trinen, LLP
1624 Washington Street
Denver, Colorado 80203
303-839-0061
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box [X].
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Title of each Proposed Proposed
Class of Maximum Maximum
Securities Securities Offering Aggregate Amount of
to be to be Price Per Offering Registration
Registered Registered Share (1) Price Fee
- ---------- ---------- --------- --------- ------------
Common stock (2) 6,581,000 $0.50 $3,290,500 $102
- -----------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457. The per-share offering price was calculated based upon
a price of $0.50 per share, which is the price that the shares will be
offered prior to the time that a market develops for the Company's common
stock.
(2) Shares of common stock offered by selling shareholders
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of l933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
PROSPECTUS
TARA MINERALS CORP.
Common Stock
By means of this prospectus a number of Tara Minerals' shareholders are
offering to sell up to 6,581,000 shares of Tara Minerals' common stock at a
price of $0.50 per share, which is the price that the shares will be offered
prior to the time that a market develops for Tara Minerals' common stock. If and
when Tara Minerals' common stock becomes quoted on the OTC Bulletin Board or
listed on a securities exchange, the shares owned by the selling shareholders
may be sold in the over-the-counter market, or otherwise, at prices and terms
then prevailing or at prices related to the then-current market price, or in
negotiated transactions.
Tara Minerals will not receive any proceeds from the sale of the common
stock by the selling stockholders.
As of the date of this prospectus there was no public market for Tara
Minerals' common stock.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
THESE SECURITIES ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK. FOR A
DESCRIPTION OF CERTAIN IMPORTANT FACTORS THAT SHOULD BE CONSIDERED BY
PROSPECTIVE INVESTORS, SEE "RISK FACTORS" BEGINNING ON PAGE 4 OF THIS
PROSPECTUS.
The date of this prospectus is _________, 2007.
PROSPECTUS SUMMARY
Tara Minerals was incorporated in Nevada on May 12, 2006.
Tara Minerals plans to explore and develop mining properties which may be
productive of metals such as copper, lead and zinc. As of the date of this
prospectus Tara Minerals had acquired three mining properties in Mexico.
Tara Minerals' offices are located at 2162 Acorn Court, Wheaton, IL
60187. Tara Minerals' telephone number is 630-462-2079 and its fax number is
630-456-4135.
Tara Minerals website is www.taraminerals.com. Tara Minerals is not a blank
check company required to comply with Rule 419 of the Securities and Exchange
Commission.
The Offering
By means of this prospectus a number of Tara Minerals' shareholders are
offering to sell up to 6,581,000 shares of its common stock at a price of $0.50
per share. If and when Tara Minerals' common stock becomes quoted on the OTC
Bulletin Board or listed on a securities exchange, the shares owned by the
selling shareholders may be sold in the over-the-counter market, or otherwise,
at prices and terms then prevailing or at prices related to the then-current
market price, or in negotiated transactions.
Forward Looking Statements
This prospectus contains various forward-looking statements that are based
on Tara Minerals' beliefs as well as assumptions made by and information
currently available to Tara Minerals. When used in this prospectus, the words
"believe", "expect", "anticipate", "estimate" and similar expressions are
intended to identify forward-looking statements. Such statements may include
statements regarding and are subject to certain risks, uncertainties and
assumptions which could cause actual results to differ materially from
projections or estimates. Factors which could cause actual results to differ
materially are discussed at length under the heading "Risk Factors". Should one
or more of the enumerated risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from
those anticipated, estimated or projected. Investors should not place undue
reliance on forward-looking statements, all of which speak only as of the date
made.
RISK FACTORS
The securities being offered involve a high degree of risk. Prospective
investors should consider the following risk factors which affect Tara Minerals'
business and this offering. If any of the risks discussed below materialize,
shares of Tara Minerals' common stock could decline in value or become
worthless.
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Risk Factors Related to Tara Minerals' Business.
TARA MINERALS IS IN THE EXPLORATION STAGE, HAS CONDUCTED ONLY LIMITED
OPERATIONS, AND MAY NEVER BE PROFITABLE. As of the date of this prospectus Tara
Minerals:
o had not generated any revenue, and
o did not have any probable or proven reserves.
Tara Minerals may not be able to implement its business plan, may never be
profitable, and the shares which may be sold in this offering may not have any
value.
THE FAILURE OF TARA MINERALS TO OBTAIN CAPITAL MAY SIGNIFICANTLY RESTRICT ITS
PROPOSED OPERATIONS. The capital required for exploration and development of
mining properties is substantial. Even if Tara Minerals finds a valuable deposit
of minerals, it may be several years before production is possible.
This Offering is being conducted on a "best efforts" basis. There is no
minimum number of shares required to be sold in this Offering. If only a small
number of shares are sold (and absent funding from any other source), the amount
received from investors may not provide any significant benefit to Tara
Minerals. Even if all shares offered are sold, Tara Minerals may need to obtain
additional capital until the time, if ever, that it is able to earn a profit.
Tara Minerals does not know what the terms of any future capital raising
may be but any future sale of Tara Minerals Tara Minerals' equity securities
would dilute the ownership of existing stockholders and could be at prices
substantially below the price of the shares of common stock sold in this
offering. The failure of Tara Minerals to obtain the capital which it requires
will result in the slower implementation of Tara Minerals' business plan or the
inability of Tara Minerals to implement its business plan. Tara Minerals may not
be able to obtain the capital which it will need.
TARA MINERALS' EARNINGS WILL BE AFFECTED BY THE PRICE OF COPPER, LEAD, ZINC AND
SILVER. Tara Minerals' revenues will primarily be derived from the sale of
metals such as copper, lead, zinc and silver. As a result, Tara Minerals'
earnings will be directly related to the prices of these metals which are
affected by numerous factors including:
o expectations for inflation;
o speculative activities;
o relative exchange rate of the U.S. dollar;
o global and regional demand and production;
o political and economic conditions; and
o production costs in major producing regions.
These factors are beyond Tara Minerals' control and are impossible to
predict. If the market prices for these metals fall below the costs to produce
them for a sustained period of time, Tara Minerals may have to discontinue its
exploration, development or mining operations.
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THE EXPLORATION AND DEVELOPMENT OF NEW ORE BODIES MAY COST MORE AND PROVIDE LESS
RETURN THAN ESTIMATED. Tara Minerals' operations will be dependent to a large
extent on its ability to explore for and develop new ore bodies and/or expand
existing mining operations. Before it can begin a development project, Tara
Minerals Tara Minerals must first determine whether it is economically feasible
to do so. This determination will be based on estimates of several factors,
including:
o reserves;
o expected recovery rates of metals from the ore;
o facility and equipment costs;
o capital and operating costs of a development project;
o future metals prices;
o comparable facility and equipment costs; and
o anticipated climate conditions.
Some mining prospects may have no operating history upon which to base any
estimates, in which case estimates will be based in large part on Tara Minerals'
interpretation of geological data, a limited number of drill holes, and other
sampling techniques. Actual operating costs and returns from a development
project may differ substantially from estimates, causing the project to be
uneconomical.
TARA MINERALS' EXPLORATION EFFORTS MAY NOT BE SUCCESSFUL. Tara Minerals must
continually replace ore reserves depleted by production. Tara Minerals' ability
to replace depleted ore reserves will depend on the success of its exploration
program. Mineral exploration is highly speculative, involves many risks and is
often nonproductive. Even if Tara Minerals finds a valuable deposit of minerals,
it may be several years before production is possible.
During that time, it may not be economically feasible to mine and process
mineral deposits. Establishing ore reserves requires substantial capital
expenditures and, in the case of new properties, to construct mining and
processing facilities. As a result of these costs and uncertainties, Tara
Minerals may never be profitable.
TARA MINERALS WILL FACE STRONG COMPETITION FROM OTHER MINING COMPANIES FOR THE
ACQUISITION OF PROPERTIES. Mines have limited lives and as a result, Tara
Minerals must continually seek to replace and expand reserves through the
acquisition of new properties. In addition, there is a limited supply of
desirable mineral lands available in the Mexico and other areas where Tara
Minerals would consider conducting exploration and/or production activities.
Tara Minerals will face strong competition for new properties from other mining
companies, many of which have greater financial resources than Tara Minerals. As
a result, Tara Minerals may be unable to acquire attractive new mining
properties on terms that considered acceptable.
THE UNAVAILABILITY OF PERSONNEL, MATERIAL OR EQUIPMENT WOULD PREVENT THE
EXPLORATION AND DEVELOPMENT OF TARA MINERALS' PROPERTIES. Tara Minerals does not
plan to hire any additional employees to implement its business plan but rather
plans to use independent contractors for its mining operations. In addition, all
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material and equipment used in its mining operations will be obtained from
unrelated third parties. However, shortages of qualified personnel, material and
equipment needed for Tara Minerals' mining operations could interfere with Tara
Minerals' exploration and development plans and, consequently, Tara Minerals may
incur costs in excess of those anticipated as well as delays in its mining
operations. Additionally, because the contractors who will provide services to
Tara Minerals may be involved in mining activities for others, to the extent the
contractors can obtain only a limited supply of a necessary item, they may use
the item for mining operations unrelated to Tara Minerals' properties.
THE TITLES TO SOME PROPERTIES MAY BE DEFECTIVE, IN WHICH CASE TARA MINERALS MAY
NOT BE ABLE TO PRODUCE ORE FROM THE PROPERTIES. Mining properties located in
foreign countries may constitute a significant portion of Tara Minerals'
property holdings. The validity of the title to mining properties in foreign
countries is often uncertain and may be contested. In accordance with mining
industry practice, Tara Minerals will not generally obtain title opinions until
it decides to develop a property. Therefore, while Tara Minerals will attempt to
acquire satisfactory title to undeveloped properties, some titles may be
defective.
TARA MINERALS' OPERATIONS MAY BE ADVERSELY AFFECTED BY RISKS AND HAZARDS
ASSOCIATED WITH THE MINING INDUSTRY. Tara Minerals' business will be subject to
a number of risks and hazards including:
o environmental hazards;
o political and country risks;
o industrial accidents;
o labor disputes;
o unusual or unexpected geologic formations;
o cave-ins;
o explosive rock failures; and
o flooding and periodic interruptions due to inclement or hazardous
weather conditions.
These risks could result in:
o damage to or destruction of mineral properties or producing
facilities;
o personal injury;
o environmental damage;
o delays in mining;
o monetary losses; and
o legal liability.
However, Tara Minerals may not be able to obtain insurance to protect
itself against future losses, particularly if there is a significant increase in
the cost of premiums. Insurance against environmental risks may generally be
either unavailable or too expensive, in which case Tara Minerals would not
maintain environmental insurance. To the extent Tara Minerals is subject to
environmental liabilities, it would have to pay for these liabilities. Moreover,
in the event that Tara Minerals is unable to fully pay for the cost of remedying
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an environmental problem, Tara Minerals might be required to suspend operations
or enter into other interim compliance measures.
TARA MINERALS MAY BE UNABLE TO CONDUCT MINING OPERATIONS IF IT IS UNABLE TO
OBTAIN REQUIRED GOVERNMENT PERMITS. In the ordinary course of business, mining
companies are required to obtain government permits for mining operations.
Obtaining the necessary government permits is a complex and time-consuming
process involving numerous jurisdictions and often involving public hearings and
costly undertakings. The duration and success of efforts to obtain permits will
be contingent upon many variables not within Tara Minerals' control. Obtaining
environmental protection permits, including the approval of reclamation plans,
may increase costs and cause delays depending on the nature of the activity to
be permitted and the interpretation of applicable requirements implemented by
the permitting authority. Tara Minerals may not be able to obtain all permits
necessary for its mining operations and, if obtained, the costs involved may
exceed those previously estimated. It is possible that the costs and delays
associated with the compliance with applicable standards and regulations could
become so significant that Tara Minerals would not proceed with the development
or operation of a mine or mines.
TARA MINERALS WILL FACE SUBSTANTIAL GOVERNMENTAL REGULATION AND ENVIRONMENTAL
RISKS, WHICH COULD CAUSE TARA MINERALS TO SPEND SUBSTANTIAL AMOUNTS OF MONEY.
Tara Minerals' business will be subject to extensive laws and regulations
governing development, production, labor standards, occupational health, waste
disposal, use of toxic substances, environmental regulations, mine safety and
other matters.
Tara Minerals may be required to maintain reserves for costs associated
with mine closure, reclamation of land and other environmental matters. Future
expenditures related to closure, reclamation and environmental expenditures are
difficult to estimate due to:
o the uncertainties relating to the costs and remediation methods that
will be required in specific situations;
o the possible participation of other potentially responsible parties;
and
o changing environmental laws, regulations and interpretations.
Various laws and permits require that financial assurances be in place for
certain environmental and reclamation obligations and other potential
liabilities. The amount of the financial assurances and the amount required to
be set aside as collateral for financial assurances are dependent upon a number
of factors, including reclamation cost estimates. Tara Minerals may be unable to
maintain the financial assurances which may be required.
TARA MINERALS' OFFICERS HAVE LIMITED MINING EXPERIENCE AND DO NOT PLAN TO DEVOTE
THEIR FULL TIME TO TARA MINERALS' BUSINESS. The President of Tara Minerals is
Francis Richard Biscan, Jr. Although Tara Minerals plans to hire experienced
geologists and contractors, Mr. Biscan has only limited experience in mining. In
addition, since Tara Minerals' officers plan to devote only a portion of their
time to its business, Tara Minerals' chances of being profitable will be less
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than if it had full time management. Notwithstanding the above, the loss of Mr.
Biscan, whether as a result of death, disability or otherwise, may have a
material adverse effect upon Tara Minerals' business.
TARA MINERALS' PRINCIPAL SHAREHOLDER OWNS A CONTROLLING INTEREST IN TARA
MINERALS' COMMON STOCK. Tara Gold Resources Corp. owns 80% of Tara Minerals'
outstanding common stock and is able to control the election of directors, the
appointment of officers, and the outcome of other corporate actions requiring
shareholder approval. As a result of this concentration of ownership, other
shareholders do no have the voting power to change management, even if a change
in management would be perceived by the investment community as being
beneficial.
Risk Factors Related to this Offering
AS OF THE DATE OF THIS PROSPECTUS THERE WAS NO PUBLIC MARKET FOR TARA MINERALS'
COMMON STOCK AND IF NO PUBLIC MARKET DEVELOPS, PURCHASERS OF THE SHARES OFFERED
BY THIS PROSPECTUS MAY BE UNABLE TO SELL THEIR SHARES. If purchasers are unable
to sell their shares, purchasers may never be able to recover any amounts which
they paid for Tara Minerals' shares.
BECAUSE THERE IS NO PUBLIC MARKET FOR TARA MINERALS' COMMON STOCK, THE PRICE FOR
THE SHARES, DOES NOT BEAR ANY RELATIONSHIP TO TARA MINERALS' ASSETS, BOOK VALUE
OR NET WORTH, AND MAY BE GREATER THAN THE PRICE WHICH INVESTORS IN THIS OFFERING
MAY RECEIVE WHEN THEY RESELL THEIR SHARES. Accordingly, the offering price of
Tara Minerals' common stock should not be considered to be any indication of the
value of its shares. The factors considered in determining the offering price
included Tara Minerals' future prospects and the likely trading price for its
common stock if a public market ever develops.
SHOULD A MARKET FOR TARA MINERALS' COMMON STOCK EVER DEVELOP, DISCLOSURE
REQUIREMENTS PERTAINING TO PENNY STOCKS MAY REDUCE THE LEVEL OF TRADING ACTIVITY
IN THE MARKET FOR TARA MINERALS' COMMON STOCK AND INVESTORS MAY FIND IT
DIFFICULT TO SELL THEIR SHARES. If a market ever develops for Tara Minerals'
common stock, trades of its common stock will be subject to Rule 15g-9 of the
Securities and Exchange Commission, which rule imposes certain requirements on
broker/dealers who sell securities subject to the rule to persons other than
established customers and accredited investors. For transactions covered by the
rule, brokers/dealers must make a special suitability determination for
purchasers of the securities and receive the purchaser's written agreement to
the transaction prior to sale. The Securities and Exchange Commission also has
rules that regulate broker/dealer practices in connection with transactions in
"penny stocks". Penny stocks generally are equity securities with a price of
less than $5.00 (other than securities registered on certain national securities
exchanges or quoted on the NASDAQ system, provided that current price and volume
information with respect to transactions in that security is provided by the
exchange or system). The penny stock rules require a broker/ dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document prepared by the Commission that provides
information about penny stocks and the nature and level of risks in the penny
stock market. The broker/dealer also must provide the customer with current bid
and offer quotations for the penny stock, the compensation of the broker/dealer
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and its salesperson in the transaction, and monthly account statements showing
the market value of each penny stock held in the customer's account. The bid and
offer quotations, and the broker/dealer and salesperson compensation
information, must be given to the customer orally or in writing prior to
effecting the transaction and must be given to the customer in writing before or
with the customer's confirmation.
DILUTION AND COMPARATIVE SHARE DATA
As of October 31, 2007 Tara Minerals had 36,581,000 outstanding shares of
common stock, which had a book value of approximately $0.03 per share. These
shares were sold for cash of $2,540,500 and services rendered.
The following table illustrates per share dilution and the comparative
stock ownership of Tara Minerals' stockholders as compared to the investors in
this offering, assuming all shares offered by this prospectus are sold.
Shares outstanding as of October 31, 2007 36,581,000
Shares to be sold in this offering 6,581,000
Net tangible book value per share at as of
October 31, 2007 $0.03
Offering price, per share $0.50
Dilution to purchasers of shares offered by this prospectus $0.47
Equity ownership by purchasers of shares offered by
this prospectus 18%
The following table shows the amount paid by the present shareholders of
Tara Minerals for their shares of Tara Minerals' common stock as of opposed to
investors in this offering:
Name Price Paid Per Share
Tara Gold Resources Corp. Nil
Private Investors $0.50
Qualico Capital Corp. Services rendered, and
valued at $0.50 per share
MARKET FOR TARA MINERALS' COMMON STOCK.
Tara Minerals' common stock is not quoted on any exchange and there is no
public trading market for its shares.
As of October 31, 2007, Tara Minerals had 36,539,200 outstanding shares of
common stock and 72 shareholders. Except for the options shown in the
"Management" section of this prospectus, Tara Minerals does not have any
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outstanding options, warrants or other arrangements providing for the issuance
of additional shares of its capital stock.
All of the outstanding shares of Tara Minerals are restricted securities.
The 30,000,000 shares owned by Tara Gold Resources may be sold in accordance
with Rule 144 of the Securities and Exchange Commission. The other outstanding
shares may be sold in accordance wit Rule 144 beginning in December 2007.
Holders of common stock are entitled to receive dividends as may be
declared by the Board of Directors. Tara Minerals' Board of Directors is not
restricted from paying any dividends but is not obligated to declare a dividend.
No dividends have ever been declared and it is not anticipated that dividends
will ever be paid.
MANAGEMENT'S DISCUSSION AND ANALYSIS
AND PLAN OF OPERATION
Tara Minerals was incorporated on May 12, 2006. During the period from its
incorporation through July 31, 2007 Tara Minerals did not generate any revenue
and incurred $104,757 in exploration expenses and $135,277 in operating and
general administration expenses.
Between December 2006 and February 2007 Tara Minerals raised $2,540,000
from the sale of 5,081,000 shares of its common stock to private investors.
Tara Minerals' plan of operation during the twelve months following the
date of this prospectus is described in the "Business" section of this
prospectus.
Tara Minerals anticipates that its capital requirements for the twelve
months following the date of this prospectus will be:
Exploration and Development - Pilar de Mocoribo property $75,000
Property payments and taxes - Pilar de Mocoribo property 322,000
Exploration and Development - Don Ramon property 900,000
Exploration and Development - Las Nuvias property 25,000
General and administrative expenses 275,000
----------
Total $1,597,000
==========
Tara Minerals believes that its cash on hand will satisfy its working
capital needs until August 2008. After that time, Tara Minerals, if it is unable
to find joint venture partners to fund all or part of the exploration and
development costs of its properties, will need to obtain additional capital.
Tara Minerals' future plans will be dependent upon the amount of capital
available to Tara Minerals and the extent to which Tara Minerals is able to have
joint venture partners pay the costs of exploring and developing its mining
properties.
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Tara Minerals does not anticipate that it will need to hire any employees
during the twelve month period following the date of this prospectus.
Tara Minerals does not have any commitments or arrangements from any
person to provide Tara Minerals with any additional capital. If additional
financing is not available when needed, Tara Minerals may continue to operate in
its present mode or Tara Minerals may need to cease operations. Tara Minerals
does not have any plans, arrangements or agreements to sell its assets or to
merge with another entity.
See Note 1 to the financial statements included as part of this prospectus
for a description of Tara Minerals' accounting policies and recent accounting
pronouncements.
BUSINESS
Tara Minerals plans to explore and develop mining properties which may be
productive of copper, lead, zinc and other industrial metals. Tara Minerals was
incorporated in Nevada on May 12, 2006 and is in the exploration stage.
As of the date of this prospectus Tara Gold Resources Corp., which is also
engaged in the exploration and development of mining properties in Mexico, owned
80% of Tara Minerals' common stock. The reason Tara Gold formed Tara Minerals
was that, in the opinion of Tara Gold, some investors prefer gold and silver
projects, while others prefer lead, zinc and silver projects. Consequently,
capital may be easier to obtain by separating gold properties from industrial
metal properties. In this regard, Tara Gold has the first right to acquire any
gold or silver prospects and Tara Minerals has the first right to acquire any
industrial metal prospects.
At some point in the future Tara Gold may distribute its shares in Tara
Minerals to its shareholders. By doing so, the shareholders of Tara Gold will
own two public corporations, one of which is involved in the exploration of gold
and silver properties and the other of which is involved in the exploration of
industrial metal properties. However, there is no commitment on the part of Tara
Gold to distribute its shares in Tara Minerals and the distribution of these
shares may never occur.
Tara Minerals plans to acquire low-cost properties that have the potential
to yield high returns. After acquiring a property and selecting a possible
exploration area through its own efforts or with others, Tara Minerals will
typically compile reports, past production records and geologic surveys
concerning the area. Tara Minerals may then undertake a field exploration
program to determine whether the area merits work. Initial field exploration on
a property normally consists of geologic mapping and geochemical and/or
geophysical surveys, together with selected sampling to identify host
environments that may contain specific mineral occurrences. If an area shows
promise, geologic drilling programs will be undertaken in an effort to locate
the existence of economic mineralization. If mineralization is delineated,
further work will be undertaken to estimate ore reserves, evaluate the
feasibility for the development of the mining project, obtain permits for
commercial development, and, if the project appears to be economically viable,
proceed to place the deposit into commercial production.
The capital required for exploration and development of mining properties
is substantial. Tara Minerals plans to finance its future operations through
joint venture arrangements with third parties (generally providing that the
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third party will obtain a specified percentage of Tara Minerals' interest in a
certain property in exchange for the expenditure of a specified amount), the
sale by Tara Minerals of interests in properties, and by the sale of common
stock.
The exploration and development of properties that are joint ventured with
third parties are normally managed by one of the joint venture participants
which is designated as the operator. The operator of a mining property generally
provides all labor, equipment, supplies and management on a cost plus fee basis
and often must perform specific tasks over a specified time period. Separate
fees may be charged to the joint venturers by the operator and, once certain
conditions are met, the joint venturers are typically required to pay the costs
in proportion to their interests in the property.
Tara Minerals' properties will typically consist of a variety of interests
including, properties located in foreign countries and unpatented and patented
claims held under lease or owned by Tara Minerals. Typically, the rights to
properties which Tara Minerals may acquire will be sub-surface rights which will
allow Tara Minerals to explore for, and if warranted, develop the property. See
"Mexican Mining Laws and Regulations" in this section of the prospectus for
information concerning use of surface rights in Mexico for mining operations.
In connection with the acquisition of a property, Tara Minerals may
conduct limited reviews of title and related matters and obtains certain
representations regarding ownership. Although Tara Minerals plans to conduct
reasonable investigations (in accordance with standard mining practice) of the
validity of ownership, it may be unable to acquire good and marketable title to
its properties.
Mines have limited lives, which is an inherent risk in the mining
business. Although Tara Minerals plans to acquire other mining properties, there
is a limited supply of desirable mineral lands available in Mexico where Tara
Minerals would consider conducting exploration and/or production activities. In
addition, Tara Minerals faces strong competition for new properties from other
mining companies, many of which have substantial financial resources, and Tara
Minerals may be unable to acquire attractive new mining properties on terms that
are considered acceptable.
Tara Minerals owns 99.9% of the capital stock of American Metal Mining
S.A. de C.V., a Mexican corporation. All of Tara Minerals' operations in Mexico
are conducted through American Metals Mining since Mexican law provides that
only Mexican corporations are allowed to own mining properties.However, when the
Pillar de Mocoribo, Don Ramon and Lourdes and Las Nuvias properties were
acquired in September and October 2006, American Metal Mining had not been
incorporated. As a result, the mining properties owned by Tara Minerals were
acquired by Corporacion Amermin, S.A. de C.V., the Mexican subsidiary of Tara
Gold. These properties were transferred to American Metal Mining after its
formation in December 2006. All references to Tara Minerals include the
operations of American Metals Mining.
As of October 31, 2007 Tara Minerals had a 100% interest in the mining
properties listed below. Although Tara Minerals believes that each of these
properties has deposits of copper, lead or zinc, the properties are in the
exploratory state, do not have any known reserves, and may never produce any of
these metals in commercial quantities.
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The properties are located in the northern part of the La Reforma Mining
District of northeastern Sinaloa State, Mexico. The predominate rocks in the
area are Upper Jurassic-Lower Cretaceous cabonate (limestone) rocks and Tertiary
granitic intrusives. The La Reforma Mining District has been mined for more than
300 years, with substantial amounts of precious and base metals produced from
numerous mines. In the opinion of Tara Minerals, the district has never been
properly explored using present day, industry standard, exploration methods,
including geochemistry, geophysics, and geology. Tara Minerals feels that this
area may potentially host base metals that were never discovered or exploited
due in part to market conditions, lack of technology, and lack of funding.
All of Tara Minerals projects are located approximately 25 kilometres from
the town of Choix, Sinaloa State, Mexico. The properties are accessed by driving
a 4x4 vehicle on Sinaloa State maintained roads along the north side of the Rio
Fuerte River to the village of Altamira, located in the center of the La Reforma
Mining District. From Altamira, the road trends due north to the village of
Mocoribo. The properties can then be reached by hiking two kilometers from the
village.
In October 2006 Tara Minerals' three properties were visited in the field
by a professional geologist with experience in mineral assessment and property
evaluations in Chihuahua, Durango, Sinaloa and Sonora, Mexico.
The proposed exploration program for each property will consist of
rock-chip sampling, soil geochemistry, geological mapping, a geophysical survey,
trenching, drilling, and resource calculation. The exploration program will take
place in phases, with some phases occuring simultaneously. Rock chip and soil
geochemistry will be initiated first to test and define the mineralization. This
will be followed up with a CSAMT (Controlled-Source Audio-Frequency Magneto
Telluric) to test the extent and depth of sulfide mineralization those would
host copper, lead or zinc. The CSAMT is an industry standard geophysical
technique that has been used successfully to identify carbonate deposits in
Mexico and other locations. Upon completion of the exploration program, and if
results are positive, a drilling program will begin. Drilling results will then
be evaluated and a mineral resource calculation will be made.
As of October 31, 2007 no equipment, plants or other facilities were
located on any of the properties. Water and power will need to be brought to the
properties via water trucks and portable electrical generating equipment to
further explore the prospects.
Although as of the date of this prospectus Tara Minerals had not hired any
independent contractors to conduct exploration work on its properties, Tara
Minerals will contract with qualified personnel to conduct and supervise all
aspects of its exploration program.
The exploration program on the properties will be funded either through
Tara Mineral's cash on hand, proceeds from the sale of Tara Minerals' common
stock, or funds obtained from a joint venture partner.
In Mexico land size is denominated in hectares and weight is denominated
in tonnes. One hectares is equal to approximately 2.47 acres and one tonne is
equal to 2,200 pounds.
12
Pilar de Mocoribo Prospect
- --------------------------
The Pilar de Mocoribo prospect was acquired in September 2006 from an
unrelated third party for $800,000 (executive of value added tax), which amount
is to be paid in accordance with the following schedule:
2006 $ 135,000
2007 235,000
2008 155,000
2009 275,000
------------
$ 800,000
============
The Pilar de Mocoribo prospect is 1,260 hectares in size. Preliminary
evaluation of the property has identified a series of parallel NE trending
mineralized structures that can be traced for more than 300 meters. These
mineralized structures lie within a complex suite of volcanic-granitic and
sedimentary (carbonate) rocks.
As of October 31, 2007 a preliminary rock-chip sampling program, at a cost
of approximately $9,000 has been completed on the property.
The following shows the timing and estimated cost for the present
exploration plan for this property:
Phase Projected Completion Estimated Cost
----- -------------------- --------------
Mapping and sampling March 2008 $75,000
Don Ramon and Lourdes Concession
- --------------------------------
The Don Ramon and Lourdes concession, comprised of 331 hectares, was
acquired in October 2006 from an unrelated third party for approximately
$522,000, plus value added taxes of approximately $78,000. The purchase price
was paid in full in January 2007.
Preliminary evaluation of the property has identified an abandoned mine
and extensive sulfide mineralization within a complex suite of volcanic-granitic
and sedimentary rocks.
Detailed surface sampling and road construction have been completed a cost
of approximately $172,000.
Initial technical assessment work has begun at the property, including
identification of all permits needed to move towards active mining, locating
water sources, assessing options and costs associated with the design of various
mining systems, mill configurations and mill/pad locations.
The following shows the timing and estimated cost for the present
exploration plan for this property:
13
Phase Projected Completion Estimated Cost
----- -------------------- --------------
Mine engineering study,
economic feasibility study, December 2007 $125,000
plant design
Las Nuvias Concession
The Las Nuvias prospect is 41 hetares in size and was acquired for
$115,000 in October 2006 from an unrelated third party. The purchase price was
paid in full in January 2007.
Preliminary evaluation of the property has identified an abandoned
prospect with historic vein-type mineralization occurring within an older
complex suite of volcanic-granitic and sedimentary rocks.
As of October 31, 2007 a preliminary rock-chip sampling program, at a cost
of approximately $9,000 has been completed on the property. Since this property
is directly south of the Don Ramon and Lourdes concession, Tara Minerals plans
to delay any further work on this property pending further evaluation of the Don
Ramon and Lourdes concession.
United States Mining Laws and Regulations
- -----------------------------------------
In the United States, unpatented mining claims on unappropriated federal
land may be acquired pursuant to procedures established by the Mining Law of
1872 and other federal and state laws. These acts generally provide that a
citizen of the United States (including corporations) may acquire a possessory
right to develop and mine valuable mineral deposits discovered upon
unappropriated federal lands, provided that such lands have not been withdrawn
from mineral location, e.g., national parks, military reservations and lands
designated as part of the National Wilderness Preservation System. The validity
of all unpatented mining claims is dependent upon inherent uncertainties and
conditions. These uncertainties relate to such non-record facts as the
sufficiency of the discovery of minerals, proper posting and marking of
boundaries, and possible conflicts with other claims not determinable from
descriptions of record. Prior to discovery of a locatable mineral thereon, a
mining claim may be open to location by others unless the owner is in possession
of the claim.
The domestic exploration programs conducted by Tara Minerals will be
subject to federal, state and local environmental regulations. The United States
Forest Service and the Bureau of Land Management extensively regulate mining
operations conducted on public lands. Most operations involving the exploration
for minerals are subject to existing laws and regulations relating to
exploration procedures, safety precautions, employee health and safety, air
quality standards, pollution of stream and fresh water sources, odor, noise,
dust, and other environmental protection controls adopted by federal, state, and
14
local governmental authorities as well as the rights of adjoining property
owners. Tara Minerals may be required to prepare and present to federal, state,
or local authorities data pertaining to the effect or impact that any proposed
exploration or production of minerals may have upon the environment. All
requirements imposed by any such authorities may be costly and time-consuming,
and may delay commencement or continuation of exploration or production
operations.
Future legislation and regulations are expected to continue to emphasize
the protection of the environment, and, as a consequence, the activities of Tara
Minerals may be more closely regulated to further the cause of environmental
protection. Such legislation and regulations, as well as future interpretation
of existing laws, may require substantial increases in capital and operating
costs to Tara Minerals and may result in delays, interruptions, or a termination
of operations, the extent of which cannot be predicted.
Mining operations in the United States are subject to inspection and
regulation by the Mine Safety and Health Administration of the Department of
Labor (MSHA) under provisions of the Federal Mine Safety and Health Act of 1977.
Tara Minerals' operations will also be subject to regulations under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended (CERCLA or Superfund), which regulates and establishes liability for the
release of hazardous substances, and the Endangered Species Act (ESA), which
identifies endangered species of plants and animals and regulates activities to
protect these species and their habitats. Tara Minerals may incur expenditures
for land reclamation pursuant to federal and state land restoration laws and
regulations. Under certain circumstances, Tara Minerals may be required to close
an operation until a particular problem is remedied or to undertake other
remedial actions.
Mexican Mining Laws and Regulations
- -----------------------------------
In Mexico, Article 27 of the Mexican Constitution grants the ownership of
essentially all minerals to the Mexican nation. The right to exploit those
minerals is given to private parties through concessions issued by the Mexican
government. The current Mining Law of Mexico was enacted in 1992. Concessions
are granted on mining lots, the sides of which measure 100 meters, or a multiple
of 100, except when adjoining lots (granted when there were no size
requirements) require a smaller size. An exploration concession is granted to
the first applicant that meets the requirements of the Mining Law, the most
important of which is that the claimed area is deemed to be "free land". Under
the Mining Law, areas that are already covered by mining concessions or
applications for mining concessions are not free, as well as reserved areas such
as the coast and the seabed.
Exploration mining concession applications are filed at government
offices. Exploration concessions are valid for six years and give their holders
the right to carry out exploration work. While the concessionaire may keep the
minerals obtained in the course of the exploration work, the mine may not be put
into production. If the concessionaire wishes to continue exploration work
beyond six years, or wishes to go into production, the concessionaire may, at
any time before the expiration of the six year term, request an exploitation
concession, which is valid for 50 years and renewable once for a similar term.
15
Mining concessions do not grant the holder right to enter or use the
surface land of the mining lots. It is therefore necessary to obtain the
permission of the surface owner for that purpose. Typically, a verbal
authorization with no consideration is granted for prospecting and sample
gathering. A simple letter agreement or contract is normally used for drilling,
trenching, or basic road building. For more advanced exploration activities, a
small monetary consideration is normally required. In some cases the
concessionaire is also required to make minor improvements which benefit the
local community such as fixing a road or fence or building an earthen dam.
Building and operating a mine requires a more formal agreement. If an agreement
cannot be reached with the surface owner, the Mining Law gives the
concessionaire the right to request a temporary occupation of the land or an
expropriation (or an easement for the construction of roads, power lines, water
pipes, etc.). Compensation is set through an appraisal made by the federal
government.
A concessionaire's most important obligation is the performance of
assessment work on the mining lots. A minimum amount of assessment work measured
in monetary terms must be performed each year, depending on the size of the
mining lot and, for an exploration mining concession, the number of years
elapsed since its issue, pursuant to minimum investment tables established by
the Mexican government. Assessment work may be done either through expenditures
or the sale of minerals. A report must be filed in May of every year regarding
the work for the previous calendar year. Lack of performance of the minimum work
will result in the cancellation of the concession; payment to the government in
lieu of required assessment of work is not allowed.
Concessionaires must comply with federal environmental regulations which
generally require that mining activities be subject to an environmental impact
statement authorization. Normally an environmental impact statement
authorization can be obtained in six to twelve months from the date of its
filing. However, mining operations which do not exceed levels established by the
Mexican government are not required to file an environmental impact statement.
The Mining Law forbids concessionaires from removing mine timbering and
supports and requires compliance with all safety rules promulgated by the
Mexican government.
Mexican and foreign individuals, as well as Mexican corporations, are
allowed to hold mining concessions. Although foreign corporations may not hold
mining concessions, foreign corporations may, however, own Mexican corporations.
General
- -------
Tara Minerals' offices are located at 2162 Acorn Court, Wheaton, IL 60187
and consist of approximately 150 square feet of office space are supplied free
of charge by Francis Richard Biscan, Jr., the President of Tara Minerals.
As of October 31, 2007 the only employees of Tara Minerals were its two
officers.
Tara Minerals' website is www.taraminerals.com.
MAP
- ----------------------------
]
] [ ] Pilar de Mocoribo
Choix, Sinaloa ]
State, Mexico ] [ ] Don Ramon and Lourdes
]
] [ ] Las Nuvias
- ----------------------------
Tara Minerals mining properties are located approximately 25 kilometers East of
Choix, Mexico.
16
MANAGEMENT
Name Age Position
---- --- --------
Francis R. Biscan 46 President, Chief Executive Officer and a Director
Clifford A. Brown 56 Principal Financial Officer and a Director
The directors of Tara Minerals serve in such capacity until the first
annual meeting of Tara Minerals' shareholders and until their successors have
been duly elected and qualified. The officers of Tara Minerals serve at the
discretion of Tara Minerals' directors.
The principal occupations of Tara Minerals' officers, directors and
consultants, during the past several years, are as follows:
Francis Richard Biscan Jr. has been an officer and director of Tara Minerals
since May 2006. Between 1997 and August 2003 Mr. Biscan was an independent
financial consultant, providing advice to public and private companies in the
areas of capital formation and mergers and acquisitions. Mr. Biscan has also
been an officer and director of Tara Gold Resources Corp. since August 2003.
Clifford A. Brown has been an officer and director of Tara Minerals since May
2006. Since 1989 Mr. Brown has been the President of Clifford A. Brown and Co.,
a firm which provides accounting and consulting services and sells accounting
software. Since 1993 Mr. Brown has served as the treasurer and Board member of
Restoration Ministries, Inc., a non-profit corporation with 33 different
ministries in Chicago. Mr. Brown has also been an officer and director of Tara
Gold Resources Corp. since November 2004.
Tara Minerals does not have a compensation committee. Tara Minerals' Board
of Directors serves as its Audit Committee. Clifford A. Brown is Tara Minerals'
financial expert. Since Mr. Brown is an officer and director of Tara Minerals,
Mr. Brown is not independent as that term is defined in section 121(A) of the
listing standards of the American Stock Exchange.
None of Tara Minerals' directors are independent as that term is defined
in section 121(A) of listing standards of the American Stock Exchange.
Tara Minerals has not adopted a Code of Ethics applicable to its principal
executive, financial, and accounting officers and persons performing similar
functions. Tara Mineral does not believe it needs a Code of Ethics at this time
since Tara Minerals has only two officers.
Executive Compensation
The following table shows the compensation paid or accrued during the year
ended October 31, 2007 to the executive officers of Tara Minerals.
17
All
Other
Annual
Stock Option Compen-
Name and Principal Fiscal Salary Bonus Awards Awards sation
Position Year (1) (2) (3) (4) (5) Total
- ------------------ ------ ------ ----- ------ ------ ------- -----
Francis R. Biscan, 2007 -- -- -- $873,130 -- $873,130
President and
Chief Executive
Officer
Clifford A. Brown, 2007 -- -- -- $291,043 -- $291,043
Principal Financial
Officer
(1) The dollar value of base salary (cash and non-cash) received.
(2) The dollar value of bonus (cash and non-cash) received.
(3) During the periods covered by the table, the value of Tara Mineral's shares
issued as compensation for services to the persons listed in the table.
(4) The value of all stock options granted during the periods covered by the
table. See Note 6 to the financial statements included as part of this
prospectus for details concerning the assumptions used in determining the
value of these options. See the "Stock Option and Bonus Plans - Summary"
section below for other information concerning these stock options.
(5) All other compensation received that Tara Minerals could not properly
report in any other column of the table.
Tara Minerals does not have an employment agreements with any of its
officers.
The following shows the amounts which Tara Minerals expects to pay to its
officers during the twelve month period ending October 31, 2008, and the time
these persons plan to devote to Tara Minerals' business. Tara Minerals does not
have employment agreements with any of its officers.
Proposed Time to be Devoted to
Name Compensation Tara Minerals' Business
---- ------------ -----------------------
Francis Richard Biscan, Jr. $60,000 20 hours / week
Clifford A. Brown $24,000 20 hours / week
Long-Term Incentive Plans. Tara Minerals does not provide its officers or
employees with pension, stock appreciation rights, long-term incentive or other
plans and has no intention of implementing any of these plans for the
foreseeable future.
Employee Pension, Profit Sharing or other Retirement Plans. Tara Minerals
does not have a defined benefit, pension plan, profit sharing or other
retirement plan, although it may adopt one or more of such plans in the future.
Compensation of Directors. Tara Minerals' directors did not receive any
compensation for their services as directors during the fiscal year ended
October 31, 2006.
18
Stock Option and Bonus Plans
- ----------------------------
Tara Minerals has adopted stock option and stock bonus plans. A summary
description of these plans follows. In some cases these Plans are collectively
referred to as the "Plans".
Incentive Stock Option Plan. Tara Minerals' Incentive Stock Option Plan
authorizes the issuance of shares of Tara Minerals' common stock to persons that
exercise options granted pursuant to the Plan. Only Tara Minerals employees may
be granted options pursuant to the Incentive Stock Option Plan. The option
exercise price is determined by Tara Minerals' directors but cannot be less than
the market price of Tara Minerals' common stock on the date the option is
granted.
Non-Qualified Stock Option Plan. Tara Minerals' Non-Qualified Stock Option
Plan authorizes the issuance of shares of Tara Minerals' common stock to persons
that exercise options granted pursuant to the Plan. Tara Minerals' employees,
directors, officers, consultants and advisors are eligible to be granted options
pursuant to the Plan, provided however that bona fide services must be rendered
by such consultants or advisors and such services must not be in connection with
the offer or sale of securities in a capital-raising transaction.
Stock Bonus Plan. Tara Minerals' Stock Bonus Plan allows for the issuance
of shares of common stock to it's employees, directors, officers, consultants
and advisors. However bona fide services must be rendered by the consultants or
advisors and such services must not be in connection with the offer or sale of
securities in a capital-raising transaction.
Summary. The following lists, as of October 31, 2007, the options granted
pursuant to the Plans. Each option represents the right to purchase one share of
Tara Minerals' common stock.
Total Shares
Shares Reserved for Shares Remaining
Reserved Outstanding Issued as Options/Shares
Name of Plan Under Plans Options Stock Bonus Under Plans
- ------------ ----------- ------------ ----------- --------------
Incentive Stock Option Plan 1,000,000 -- N/A 1,000,000
Non-Qualified Stock Option
Plan 2,000,000 1,000,000 N/A 1,000,000
Stock Bonus Plan 750,000 N/A -- 750,000
Tara Minerals' stock option and bonus plans have not been approved by its
shareholders.
The following lists the unexercised options which were outstanding as of
October 31, 2007 and held by the Tara Minerals' officers and directors. All of
the options listed below were granted on February 1, 2007 pursuant to Tara
Minerals' Non-Qualified Stock Option Plan.
Shares underlying
unexercised options which are:
----------------------------- Exercise Expiration
Name Exercisable Unexercisable Price Date
- ---- ----------- ------------- -------- ----------
Francis Richard Biscan, Jr. 750,000 -- $0.05 2/01/10
Clifford A. Brown 250,000 -- $0.05 2/01/10
19
Transactions with Related Parties
The following table lists all shares of Tara Minerals' common stock, which
have been sold as of the date of this prospectus.
Number
Shareholder of Shares Date Consideration
- ----------- --------- ------ -------------
Tara Gold Resources Corp. 30,000,000 5/25/06 $300
Qualico Capital Corp. 1,500,000 1/30/07 Investor relations services
Private Investors 5,081,000 12/06 to 2/07 $0.50 per share
Tara Gold Resources Corp., the controlling shareholder of Tara Minerals,
is also engaged in the exploration and development of mining properties in
Mexico. Tara Gold Resources will have the first right to acquire any gold or
silver mining prospects. Tara Minerals will have the first right to acquire any
mining prospect which may be productive of metals other than gold or silver.
PRINCIPAL SHAREHOLDERS
The following table lists, as of October 31, 2007, those persons owning
beneficially 5% or more of Tara Minerals' common stock, the number and
percentage of outstanding shares owned by each director and officer of Tara
Minerals and by all officers and directors as a group. Unless otherwise
indicated, each owner has sole voting and investment powers over his shares of
common stock.
Name and Address Number of Shares (1) Percent of Class
- ---------------- -------------------- ----------------
Francis Richard Biscan, Jr. (2) 750,000 2%
2162 Acorn Court
Wheaton, IL 60187
Clifford A. Brown (2) 250,000 0.7%
313 Arbor Avenue
West Chicago, IL 60185
Tara Gold Resources Corp. (2) 30,000,000 82%
2162 Acorn Court
Wheaton, IL 60187
All officers and directors
as a group (2 persons) 1,000,000 2.7%
(1) Includes shares issuable upon the exercise of options held by the following
persons:
20
Shares Issuable Upon
Name Exercise of Options
---- --------------------
Francis Richard Biscan, Jr. 750,000
Clifford A. Brown 250,000
(2) Francis Richard Biscan, Jr., and Clifford A. Brown control Tara Gold
Resources Corp.
SELLING SHAREHOLDERS
The persons listed in the following table plan to offer the shares shown
opposite their respective names by means of this prospectus. The owners of the
shares to be sold by means of this prospectus are referred to as the "selling
shareholders". The selling shareholders acquired their shares from Tara Minerals
in private transactions for cash at a price of $0.50 per share and, in the case
of Qualico Capital Corp., for services rendered.
Tara Minerals will not receive any proceeds from the sale of the shares by
the selling shareholders. Tara Minerals will pay all costs of registering the
shares offered by the selling shareholders. The selling shareholders will pay
all sales commissions and other costs of the sale of the shares offered by them.
Share Percentage
Shares to be Ownership Ownership
Shares Sold in this After After
Name Owned Offering Offering Offering
- ---- ------ ------------ --------- ----------
Affrunti, Peter and/or Frances 10,000 10,000 -- --
Anderson, David 30,000 30,000 -- --
Anderson, Zak 40,000 40,000 -- --
Bennett, Mary 25,000 25,000 -- --
Boelander, Cal 400,000 400,000 -- --
Boerio, Michael 20,000 20,000 -- --
Boyce, Patrick 20,000 20,000 -- --
Buckle, Albert 30,000 30,000 -- --
Bucknell, Phillip 25,000 25,000 -- --
Corner, Dan and Cheryl 4,000 4,000 -- --
Cottone, Carol A. 3,000 3,000 -- --
Crona, Johan 50,000 50,000 -- --
Crona, Nils 100,000 100,000 -- --
Dhalander, Peter 200,000 200,000 -- --
Dhalander, Peter 300,000 300,000 -- --
Dopkey, Bob 50,000 50,000 -- --
Drew, Warren 40,000 40,000 -- --
Dropkin, Joel 100,000 100,000 -- --
Eckart, Kile 500,000 500,000 -- --
Finnigan, James R. 20,000 20,000 -- --
Finnigan, Robert 20,000 20,000 -- --
21
Share Percentage
Shares to be Ownership Ownership
Shares Sold in this After After
Name Owned Offering Offering Offering
- ---- ------ ------------ --------- ----------
Free, Dennis 2,000 2,000 -- --
Frost, Stephen 30,000 30,000 -- --
Hall, Marty 30,000 30,000 -- --
Healey, Malcolm H. 5,000 5,000 -- --
Healy, Robert V. 10,000 10,000 -- --
Hearon, Mark 10,000 10,000 -- --
Helper, Chaz 600,000 600,000 -- --
HJB Enterprises Ltd. 20,000 20,000 -- --
Jarka, John 10,000 10,000 -- --
Jester, Matt 10,000 10,000 -- --
Kahovec, John 2,000 2,000 -- --
Kahovec, Martin 10,000 10,000 -- --
Kahovec, Matt 100,000 100,000 -- --
Kisler, Don 30,000 30,000 -- --
Lancon, Brad A. 6,000 6,000 -- --
Lancon, Brent J. 6,000 6,000 -- --
Lippoldt, Keith 20,000 20,000 -- --
Madden, Frank 10,000 10,000 -- --
Majzner, Kurt 6,000 6,000 -- --
Marcou, John 20,000 20,000 -- --
Masluk, Oleh 5,000 5,000 -- --
Metzel, Gerald 40,000 40,000 -- --
Metzel, Jeff 2,000 2,000 -- --
Metzel, Leonard 160,000 160,000 -- --
Norikane, Bob 50,000 50,000 -- --
O'Connor, Michael T. 80,000 80,000 -- --
Oldenburger, John 40,000 40,000 -- --
O'Neil, Sarah 20,000 20,000 -- --
Pillai, Sanjiv 72,000 72,000 -- --
Pitts, Charles and Trudy 50,000 50,000 -- --
Pitts, Miles 20,000 20,000 -- --
Prosi, Robert J. 20,000 20,000 -- --
Radice, Diane 2,000 2,000 -- --
Saldanha, Steve 15,000 15,000 -- --
Sandeno, Mark 6,000 6,000 -- --
Savage, Brian 250,000 250,000 -- --
Senner, Mike 20,000 20,000 -- --
Shoupestal, Gary 30,000 30,000 -- --
Siebolts, Dietmar 100,000 100,000 -- --
Smallwood, Kipp 100,000 100,000 -- --
Smith, Paul and Lucia 100,000 100,000 -- --
Stauffer, Franz 60,000 60,000 -- --
Stauffer, Franz 40,000 40,000 -- --
22
Share Percentage
Shares to be Ownership Ownership
Shares Sold in this After After
Name Owned Offering Offering Offering
- ---- ------ ------------ --------- ----------
Tedesco, Sergio 5,000 5,000 -- --
Tsai, Wei Tek 200,000 200,000 -- --
Tyson, Terry 200,000 200,000 -- --
Victorin, Jim 100,000 100,000 -- --
Walner, Phil 20,000 20,000 -- --
Wechs, Martin 160,000 160,000 -- --
Weniger, Carl 30,000 30,000 -- --
Westphal, David 20,000 20,000 -- --
Zetmeir, Karl D. 100,000 100,000 -- --
Zurbuchen, George 40,000 40,000 -- --
Qualico Capital Corp. 1,500,000 1,500,000 -- --
HJB Enterprises is controlled by Dr. Harold Diamond.
Qualico Capital Corp. is controlled by Peter Lindhout.
Qualico Capital Corp. provides investor relations services to the Company.
Except as noted above, no selling shareholder has, or had, any material
relationship with Tara Minerals, or Tara Minerals' officers or directors. To
Tara Minerals' knowledge, no selling shareholder is affiliated with a broker
dealer.
Plan of Distribution
The shares of common stock owned by the selling shareholders may be
offered and sold by means of this prospectus from time to time as market
conditions permit. Since as of the date of this prospectus no market exists for
Tara Minerals' common stock, sales by the selling shareholders, until Tara
Minerals' common stock becomes quoted on the OTC Bulletin Board or listed on a
securities exchange, will be made at a price of $0.50 per share. If and when
Tara Minerals' common stock becomes quoted on the OTC Bulletin Board or listed
on a securities exchange, the shares owned by the selling shareholders may be
sold in the over-the-counter market, or otherwise, at prices and terms then
prevailing or at prices related to the then-current market price, or in
negotiated transactions. These shares may be sold by one or more of the
following methods, without limitation:
o a block trade in which a broker or dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;
o purchases by a broker or dealer as principal and resale by such broker
or dealer for its account pursuant to this prospectus;
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and
23
o face-to-face transactions between sellers and purchasers without a
broker/dealer.
In competing sales, brokers or dealers engaged by the selling shareholders
may arrange for other brokers or dealers to participate. Brokers or dealers may
receive commissions or discounts from selling shareholders in amounts to be
negotiated. As to any particular broker-dealer, this compensation might be in
excess of customary commissions. Neither Tara Minerals nor the selling
stockholders can presently estimate the amount of such compensation.
Notwithstanding the above, no NASD member will charge commissions that exceed 8%
of the total proceeds from the sale.
The selling shareholders and any broker/dealers who act in connection with
the sale of the shares may be deemed to be "underwriters" within the meaning of
ss.2(11) of the Securities Acts of 1933, and any commissions received by them
and any profit on any resale of the shares as principal might be deemed to be
underwriting discounts and commissions under the Securities Act.
If any selling shareholder enters into an agreement to sell his or her
shares to a broker-dealer as principal, and the broker-dealer is acting as an
underwriter, Tara Minerals will file a post-effective amendment to the
registration statement, of which this prospectus is a part, identifying the
broker-dealer, providing required information concerning the plan of
distribution, and otherwise revising the disclosures in this prospectus as
needed. Tara Minerals will also file the agreement between the selling
shareholder and the broker-dealer as an exhibit to the post-effective amendment
to the registration statement.
The selling stockholders may also sell their shares pursuant to Rule 144
under the Securities Act of 1933.
Tara Minerals has advised the selling shareholders that they and any
securities broker/dealers or others who may be deemed to be statutory
underwriters will be subject to the prospectus delivery requirements under the
Securities Act of 1933. Tara Minerals has also advised each selling shareholder
that in the event of a "distribution" of the shares owned by the selling
shareholder, such selling shareholder, any "affiliated purchasers", and any
broker/dealer or other person who participates in the distribution may be
subject to Rule 102 of Regulation M under the Securities Exchange Act of 1934
("1934 Act") until their participation in that distribution is completed. Rule
102 makes it unlawful for any person who is participating in a distribution to
bid for or purchase stock of the same class as is the subject of the
distribution. A "distribution" is defined in Rule 102 as an offering of
securities "that is distinguished from ordinary trading transactions by the
magnitude of the offering and the presence of special selling efforts and
selling methods". Tara Minerals has also advised the selling shareholders that
Rule 101 of Regulation M under the 1934 Act prohibits any "stabilizing bid" or
"stabilizing purchase" for the purpose of pegging, fixing or stabilizing the
price of the common stock in connection with this offering.
DESCRIPTION OF SECURITIES
Tara Minerals is authorized to issue 75,000,000 shares of common stock.
Holders of common stock are each entitled to cast one vote for each share held
of record on all matters presented to shareholders. Cumulative voting is not
24
allowed; hence, the holders of a majority of the outstanding common stock can
elect all directors.
Holders of common stock are entitled to receive such dividends as may be
declared by the Board of Directors out of funds legally available therefore and,
in the event of liquidation, to share pro rata in any distribution of Tara
Minerals' assets after payment of liabilities. The board is not obligated to
declare a dividend. It is not anticipated that dividends will be paid in the
foreseeable future.
Holders of common stock do not have preemptive rights to subscribe to
additional shares if issued by Tara Minerals. There are no conversion,
redemption, sinking fund or similar provisions regarding the common stock. All
outstanding shares of common stock are fully paid and nonassessable.
LEGAL PROCEEDINGS
Tara Minerals is not involved in any legal proceedings and Tara Minerals
does not know of any legal proceedings which are threatened or contemplated.
INDEMNIFICATION
The Bylaws of Tara Minerals authorize indemnification of a director,
officer, employee or agent of Tara Minerals against expenses incurred by him in
connection with any action, suit, or proceeding to which he is named a party by
reason of his having acted or served in such capacity, except for liabilities
arising from his own misconduct or negligence in performance of his duty. In
addition, even a director, officer, employee, or agent of Tara Minerals' who was
found liable for misconduct or negligence in the performance of his duty may
obtain such indemnification if, in view of all the circumstances in the case, a
court of competent jurisdiction determines such person is fairly and reasonably
entitled to indemnification. Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors, officers, or
persons controlling Tara Minerals' pursuant to the foregoing provisions, Tara
Minerals has been informed that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and is therefore unenforceable.
AVAILABLE INFORMATION
Tara Minerals has filed with the Securities and Exchange Commission a
Registration Statement on Form SB-2 (together with all amendments and exhibits)
under the Securities Act of 1933, as amended, with respect to the Securities
offered by this prospectus. This prospectus does not contain all of the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Securities and
Exchange Commission. For further information, reference is made to the
Registration Statement which may be read and copied at the Commission's Public
Reference Room at 100 F. Street, N.E., Washington, D.C. 20549. The public may
obtain information on the operation of the Public Reference Room by calling the
Commission at 1-800-SEC-0330. The registration statement is also available at
www.sec.gov, the website of the Securities and Exchange Commission.
25
TARA MINERALS CORP. AND SUBSIDIARY
(A Subsidiary of Tara Gold Resources Corp.)
(An Exploration Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE NINE MONTHS ENDED JULY 31, 2007
YEAR ENDED OCTOBER 31, 2006
And
THE PERIOD FROM INCEPTION (MAY 12, 2006) THROUGH JULY 31, 2007
TARA MINERALS CORP. AND SUBSIDIARY
(A Subsidiary of Tara Gold Resources Corp.)
(An Exploration Stage Company)
CONTENTS
FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm 1
Consolidated Balance Sheets 2
Consolidated Statements of Operations and Comprehensive Loss 3
Consolidated Statements of Stockholder's Equity 4
Consolidated Statements of Cash Flows 5-6
Notes to the Consolidated Financial Statements 7-15
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholder
of Tara Minerals Corp. and Subsidiary
We have audited the accompanying consolidated balance sheet of Tara Minerals
Corp., Inc. (a Nevada corporation) as of October 31, 2006, and the related
consolidated statements of operations and comprehensive loss, stockholders'
equity, and cash flows for the period from Inception (May 12, 2006) through
October 31, 2006. These consolidated financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. The Company
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances but not for the purpose of
expressing an opinion on the effectiveness of the Company's internal control
over financial reporting. Accordingly, we express no such opinion. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall consolidated financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Tara Minerals Corp
as of October 31, 2006, and the results of its operations and its cash flows for
the period from Inception (May 12, 2006) through October 31, 2006, in conformity
with accounting principles generally accepted in the United States of America.
Mendoza Berger & Company, LLP
Irvine, California
May 18, 2007
TARA MINERALS CORP.AND SUBSIDIARY
(A Subsidiary of Tara Gold Resources Corp.)
(An Exploration Stage Company)
CONSOLIDATED BALANCE SHEETS
July 31, October 31,
Assets 2007 2006
-------- -----------
(Unaudited) (Audited)
Current assets:
Cash and cash equivalents $ 1,060,046 $ -
Recoverable value added taxes 264,557 -
Other receivables 4,778 -
Due from related parties, net 409,287 -
Prepaid assets 8,302 -
-------------- -------------
Total current assets 1,746,970 -
Property, equipment and mine development,
net of accumulated depreciation of $11,717
and $0 at July 31, 2007 and October 31,
2006, respectively 1,545,337 -
-------------- -------------
Total assets $ 3,292,307 $ -
============== =============
Liabilities and stockholder's equity
Current liabilities:
Accounts payable $ 10,527 $ -
Accrued expenses 9,106 -
Due to related parties, current portion 502,060 -
-------------- -------------
Total current liabilities 521,693 -
Due to related parties, non-current portion 461,400 -
-------------- -------------
Total liabilities 983,093 -
Minority Interest - -
Commitments and contingencies - -
Stockholder's equity:
Common stock: $.001 par value; authorized
75,000,000 shares; issued and outstanding:
30,000,000 shares at July 31, 2007
and October 31, 2006, respectively 30,000 30,000
Additional paid-in capital 1,134,173 (30,000)
Common stock subscribed (5,081,000 shares) 2,540,500 -
Deficit accumulated during exploration stage (1,493,241) -
Other comprehensive income 97,782 -
-------------- -------------
Total stockholder's equity 2,309,214 -
-------------- -------------
Total $ 3,292,307 $ -
============== =============
See Accompanying Notes to these Consolidated Financial Statements.
2
TARA MINERALS CORP.AND SUBSIDIARY
(A Subsidiary of Tara Gold Resources Corp.)
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
AND
COMPREHENSIVE LOSS
Period from
For the Nine For the Nine inception From inception
months ended months ended May 12, 2006, May 12, 2006
July 31, 2007 July 31, 2006 to October 31, to July 31, 2007
(Unaudited) (Unaudited) 2006 (Unaudited)
------------- ------------- ------------- ----------------
Mining Revenue $ - $ - $ - $ -
Exploration expenses 104,757 - - 104,757
Operating, general, and administrative
expenses 1,299,450 - - 1,299,450
Depreciation 11,717 - - 11,717
------------- ------------- ------------- ----------------
Total expenses 1,311,167 - - 1,311,167
------------- ------------- ------------- ----------------
Net operating loss (1,415,924) - - (1,415,924)
Non-operating (income) expense
Interest (income) (15,341) - - (15,341)
Other (income) (12) - - (12)
Interest expense 92,675 - - 92,675
------------- ------------- ------------- ----------------
(77,322) - - (77,322)
Minority interest 5 - - 5
------------- ------------- ------------- ----------------
Net loss (1,493,241) - - (1,493,241)
Other comprehensive income:
Foreign currency translation 97,782 - - 97,782
------------- ------------- ------------- ----------------
Comprehensive loss $ (1,395,459) - - $ (1,395,459)
============= ============= ============= ================
Net loss per share, basic
and diluted $ (0.05) - $ (0.00)
============= ============= =============
Weighted average number of shares 30,000,000 - 174,419
============= ============= =============
Accompanying Notes to these Consolidated Financial Statements.
3
TARA MINERALS CORP.AND SUBSIDIARY
(A Subsidiary of Tara Gold Resources Corp.)
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
Accumulated
Common Stock Additional Common Other Deficit During
Paid In Stock Comprehensive Exploration
Shares Amount Capital Subscribed Income Stage Total
---------------------------------------------------------------------------------------------
Balance at inception
(May 12, 2006 ) - $ - $ - $ - $ - $ - $ -
Founders shares, issued
October 31, 2006 30,000,000 30,000 (30,000) - - - -
Net income - - - - - - -
------------ ---------- ----------- ----------- ----------- ------------ -----------
Balance at October 31,
2006 30,000,000 30,000 (30,000) - - - -
Common stock subscribed
(5,081,200 shares) - - - 2,540,500 - - 2,540,500
Stock based compensation
(stock options) - - 1,164,173 - - - 1,164,173
Foreign currency
translation - - - - 97,782 - 97,782
Net loss - - - - - (1,493,241) (1,493,241)
------------ ---------- ----------- ----------- ----------- ------------ -----------
Balance at July 31, 30,000,000 $ 30,000 $1,134,173 $2,540,500 $ 97,782 $ (1,493,241) $ 2,309,214
2007
============= ========== =========== =========== =========== ============= ============
See Accompanying Notes to these Consolidated Financial Statements.
4
TARA MINERALS CORP.AND SUBSIDIARY
(A Subsidiary of Tara Gold Resources Corp.)
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
From
For the Inception
For the Nine Nine months Period from May 12,
months ended ended inception, 2006 through
July 31, July 31, May 12, 2006, July 31,
2007 2006 to October 31, 2007
(Unaudited) (Unaudited) 2006 (Unaudited)
-----------------------------------------------------
Cash flows from operating activities:
Net loss $(1,493,241) $ - $ - $(1,493,241)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation 11,717 - - 11,717
Stock based compensation 1,164,173 - - 1,164,173
Changes in assets and liabilities:
Minority interest 5 - - 5
(Increase) in recoverable
value added taxes (58,342) - - (58,342)
(Increase) in other receivables (4,778) - - (4,778)
(Increase) in prepaid expenses (8,302) - - (8,302)
Increase in accounts payable 10,526 - - 10,526
Increase in accrued expenses 9,106 - - 9,106
------------ ---------- ----------- -------------
Net cash used in operating activities (369,136) - - (369,136)
------------ ---------- ----------- -------------
Cash flows from investing activities:
Acquisition of machinery (8,282) - - (8,282)
------------ ---------- ----------- -------------
Net cash used in investing activities (8,282) - - (8,282)
------------ ---------- ----------- -------------
Cash flows from financing activities:
Proceeds from share subscription
receivable 2,540,500 - - 2,540,500
Payments toward equipment financing (160,026) - - (160,026)
Change in due to/from related
parties, net (1,040,787) - - (1,040,787)
Minority interest in net assets of
subsidiary (5) - - (5)
------------ ---------- ----------- -------------
Net cash provided by financing
activities 1,339,682 - - 1,339,682
------------ ---------- ----------- -------------
Effect of exchange rate changes
on cash 97,782 - - 97,782
Cash and cash equivalents:
Net increase (decrease) 1,060,046 - - 1,060,046
Beginning of period - - - -
------------ ---------- ----------- -------------
End of period $ 1,060,046 $ - - $ 1,060,046
============ ========== =========== =============
See Accompanying Notes to these Consolidated Financial Statements.
5
TARA MINERALS CORP.AND SUBSIDIARY
(A Subsidiary of Tara Gold Resources Corp.)
(An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
(CONTINUED)
From
For the Inception
For the Nine Nine months Period from May 12,
months ended ended inception 2006 through
July 31, July 31, May 12, 2006, July 31,
2007 2006 to October 31, 2007
(Unaudited) (Unaudited) 2006 (Unaudited)
-----------------------------------------------------
SUPPLEMENT DISCLOSURE OF CASH
FLOW INFORMATION
Interest paid $ - $ - $ - $ -
Income taxes paid $ - $ - $ - $ -
NON-CASH TRANSACTIONS
Acquisition of property and equipment
through debt $ 167,072 $ - $ - $ 167,072
Purchase of mining concession paid by
debt to related party plus capitalized
interest $1,381,700 $ - $ - $1,381,700
Recoverable value-added taxes incurred
through additional debt and due to
related party $ 206,215 $ - $ - $ 206,215
Stock-based compensation $1,164,173 $ - $ - $1,164,173
See Accompanying Notes to these Consolidated Financial Statements.
6
TARA MINERALS CORP.
(A Subsidiary of Tara Gold Resources Corp.)
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
Note 1. Nature of Business and Significant Accounting Policies
Nature of business and principles of consolidation:
- ---------------------------------------------------
Tara Minerals Corp. (the "Company") was organized May 12, 2006 under the laws of
the State of Nevada. The Company currently is engaged in the acquisition,
exploration and development of mineral resource properties in Mexico. The
Company owns 99.9% of common stock of American Metal Mining, S.A. de C.V. (the
"subsidiary"), which was established in December 2006 and operates in Mexico. On
August 10, 2007, Tara Minerals took delivery of the shares of American Metal
Mining. Payment in full for these shares was issued September 21, 2007. All
financial information in these financial statements is based in US dollars, the
Company's functional currency. The Company currently has no revenue-producing
operations and, in accordance with Statement of Financial Accounting Standard
(SFAS) No. 7, "Accounting and Reporting by Development Stage Enterprises," is
considered an Exploration Stage Company.
Tara Minerals Corp. is also the wholly-owned subsidiary of Tara Gold Resources
Corp., a public traded company listed on the pink sheets of the U.S. public
securities market.
The consolidated financial statements include the financial statements of the
Company and its 99.9% owned subsidiary. All amounts are in U.S. dollars unless
otherwise indicated. All significant inter-company balances and transactions
have been eliminated in consolidation.
The subsidiary's functional currency is the U.S. dollar. As a result, the
financial statements of the subsidiary 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 loss as recorded to other comprehensive (loss) income. 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 subsidiary are as follows for the nine months ended July 31, 2007 (Mexican
pesos per one U.S. dollar). There were no foreign currency transactions for the
period ended October 31, 2006.
July 31, 2007
-------------
Current exchange rate Ps. 10.9812
Weighted average exchange rate for the period ended Ps. 10.9165
Other comprehensive income for the nine months ended July 31, 2007 is $97,782.
7
TARA MINERALS CORP.
(A Subsidiary of Tara Gold Resources Corp.)
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
Note 1. Nature of Business and Significant Accounting Policies (cont'd)
A summary of the Company's significant accounting policies is as follows:
- -------------------------------------------------------------------------
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.
Cash and Cash Equivalents
- -------------------------
For the Statements of Cash Flows, all highly liquid investments with maturity of
three months or less are considered to be cash equivalents. There were no cash
equivalents as of July 31, 2007 and October 31, 2006.
Property and Equipment and Mining Concessions
- ---------------------------------------------
Mining concessions and acquisitions, exploration and development costs relating
to mineral properties will be deferred until the properties are brought into
production, at which time they will be amortized on the unit of production
method based on estimated recoverable reserves. The amounts, at which mineral
properties and the related deferred costs are recorded, do not necessarily
reflect present or future values.
The recoverability of the book value of each property will be assessed annually
for indicators of impairment such as adverse changes to any of the following:
o estimated recoverable ounces of gold
o estimated future commodity prices
o estimated expected future operating costs, capital expenditures and
reclamation expenditures
If it is determined that the deferred costs related to a property are not
recoverable over its productive life, or when events or changes in the property
indicate that carrying amounts are not recoverable. those costs will be written
down to estimated fair value as a charge to operations in the period in which
the determination is made. Deferred costs attributable to the Company's
properties will be reviewed at each balance sheet date to determine whether
there is any indication of impairment.
Certain mining plant and equipment included in mine development and
infrastructure will be depreciated on a straight-line basis over their estimated
useful lives from 3 - 7 years.
8
TARA MINERALS CORP.
(A Subsidiary of Tara Gold Resources Corp.)
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
Note 1. Nature of Business and Significant Accounting Policies (cont'd)
Other non-mining assets will be recorded at cost and depreciated on a
straight-line basis over their estimated useful lives from 3 - 7 years.
Revenue recognition
- -------------------
Revenue from the sale of bullion, concentrate and industrial metals will be
recognized when ownership passes to the purchaser at which time the following
conditions are met:
i) persuasive evidence that an agreement exists;
ii) the risks and rewards of ownership pass to the purchaser including
delivery of the product;
iii) the selling price is fixed and determinable, and
iv) collectibility is reasonably assured.
Reclamation and remediation costs (asset retirement obligations)
- ----------------------------------------------------------------
In August 2001, the FASB issued Statements of Financial Accounting Standards
(SFAS) No. 143, "Accounting for Asset Retirement Obligations", which established
a uniform methodology for accounting for estimated reclamation and abandonment
costs. The statement was adopted January 1, 2004. Reclamation costs are
allocated to expense over the life of the related assets and are periodically
adjusted to reflect changes in the estimates present value resulting from the
passage of time and revisions to the estimates of either the timing or amount of
the reclamation and abandonment costs.
Future remediation costs for reprocessing plant and buildings are accrued based
on management's best estimate at the end of each period of the undiscounted
costs expected to be incurred at a site. Such cost estimates include, where
applicable, ongoing care, maintenance and monitoring costs. Changes in estimates
are reflected in earnings in the period an estimate is revised. There were no
reclamation and remediation costs accrued as of July 31, 2007 and October 31,
2006.
Exploration expenses
- --------------------
Exploration costs not directly associated with proving reserves on the Company's
mining concessions are charged to operations as incurred.
Stock-based compensation
- ------------------------
The Company adopted SFAS No. 123 (revised 2004), "Share-Based Payment" ("SFAS
123(R)"), on May 12, 2006, which requires the measurement and recognition of
compensation expense for all share-based awards made to employees and directors,
including employee stock options and shares issued through its employee stock
purchase plan, based on estimated fair values.
9
TARA MINERALS CORP.
(A Subsidiary of Tara Gold Resources Corp.)
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
Note 1. Nature of Business and Significant Accounting Policies (cont'd)
Income taxes
- ------------
Income taxes are provided for using the liability method of accounting in
accordance with SFAS No. 109 "Accounting for Income Taxes." A deferred tax asset
or liability is recorded for all temporary differences between financial and tax
reporting. Temporary differences are the differences between the reported
amounts of assets and liabilities and their tax basis. Deferred tax assets are
reduced by a valuation allowance when, in the opinion of management, it is more
likely than not that some portion or all of the deferred tax assets will not be
realized. Deferred tax assets and liabilities are adjusted for the effect of
changes in tax laws and rates on the date of enactment.
Net loss per common share
- -------------------------
Net loss per share is calculated in accordance with SFAS No. 128, "Earnings Per
Share." The weighted-average number of common shares outstanding during each
period is used to compute basic loss per share. Diluted loss per share is
computed using the weighted averaged number of shares and dilutive potential
common shares outstanding. Dilutive potential common shares are additional
common shares assumed to be exercised.
Basic net loss per common share is based on the weighted average number of
shares of common stock outstanding since inception. As of July 31, 2007 and
October 31, 2006 the Company had no potentially dilutive common shares.
The 1,000,000 options disclosed in Note 6 could potentially dilute basic
Earnings Per Share in the future but have not been included in the computation
of diluted Earnings Per Share because to do so would have been antidilutive as
of July 31, 2007.
Recent Accounting Pronouncements
- --------------------------------
In February 2006, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 155, "Accounting for Certain Hybrid Financial Instruments--an Amendment of
FASB Statements No. 133 and 140" ("SFAS No. 155"). SFAS No. 155 allows financial
instruments that contain an embedded derivative and that otherwise would require
bifurcation to be accounted for as a whole on a fair value basis, at the
holders' election. SFAS No. 155 also clarifies and amends certain other
provisions of SFAS No. 133 and SFAS No. 140. This statement is effective for all
financial instruments acquired or issued in fiscal years beginning after
September 15, 2006. We do not expect that the adoption of SFAS No. 155 will have
a material impact on our financial condition or results of operations.
In June 2006, the Emerging Issues Task Force ("EITF") reached a consensus on
EITF Issue No. 06-3, "How Taxes Collected from Customers and Remitted to
Governmental Authorities Should Be Presented in the Income Statement (That Is,
Gross versus Net Presentation)" ("EITF 06-3"). EITF 06-3 provides that the
presentation of taxes assessed by a governmental authority that is directly
imposed on a revenue-producing transaction between a seller and a customer on
either a gross basis (included in revenues and costs) or on a net basis
10
TARA MINERALS CORP.
(A Subsidiary of Tara Gold Resources Corp.)
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
Note 1. Nature of Business and Significant Accounting Policies (cont'd)
(excluded from revenues) is an accounting policy decision that should be
disclosed. The provisions of EITF 06-3 will be effective for us as of January 1,
2007. We do not expect that the adoption of EITF 06-3 will have a material
impact on our consolidated financial statements.
In July 2006, the FASB issued FIN 48, "Accounting for Uncertainty in Income
Taxes--an interpretation of FASB Statement No. 109" ("FIN 48"). FIN 48 clarifies
the recognition threshold and measurement of a tax position taken on a tax
return. FIN 48 is effective for fiscal years beginning after December 15, 2006.
FIN 48 also requires expanded disclosure with respect to the uncertainty in
income taxes. We are currently evaluating the requirements of FIN 48 and the
impact this interpretation may have on our financial statements.
In September 2005, the SEC Staff issued SEC Staff Accounting Bulletin 107,
"Implementation Guidance for FASB 123 (R)." The staff believes the guidance in
the SAB will assist issuers in their initial implementation of Statement 123R
and enhance the information received by investors and other users of financial
statements, thereby assisting them in making investment and other decisions.
This SAB includes interpretive guidance related to share-based payment
transactions with non-employees, the transition from nonpublic to public entity
status, valuation methods (including assumptions such as expected volatility and
expected term), the accounting for certain redeemable financials instruments
issued under share-based payment arrangements, the classification of
compensation expense, non-GAAP financial measures, first-time adoption of
Statement 123R in an interim period, capitalization of compensation cost related
to share-based payment arrangements, the accounting for income tax effects of
share-based payment arrangements upon adoption of Statement 123R and disclosures
of MD&A subsequent to adoption of Statement 123R.
In September 2006, the SEC Staff issued Staff Accounting Bulletin No. 108,
"Considering the Effects of Prior Year Misstatements when Quantifying
Misstatements in the Current Year Financial Statements" ("SAB No. 108"). SAB No.
108 requires the use of two alternative approaches in quantitatively evaluating
materiality of misstatements. If the misstatement as quantified under either
approach is material to the current year financial statements, the misstatement
must be corrected. If the effect of correcting the prior year misstatements, if
any, in the current year income statement is material, the prior year financial
statements should be corrected. In the year of adoption (fiscal years ending
after November 15, 2006 or calendar year 2006 for us), the misstatements may be
corrected as an accounting change by adjusting opening retained earnings rather
than being included in the current year income statement. We do not expect that
the adoption of SAB No. 108 will have a material impact on our financial
condition or results of operations.
In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" (SFAS
157). SFAS 157 provides guidance for using fair value to measure assets and
liabilities. SFAS 157 addresses the requests from investors for expanded
disclosure about the extent to which companies measure assets and liabilities at
fair value, the information used to measure fair value and the effect of fair
value measurements on earnings. SFAS 157 applies whenever other standards
require (or permit) assets or liabilities to be measured at fair value, and does
11
TARA MINERALS CORP.
(A Subsidiary of Tara Gold Resources Corp.)
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
not expand the use of fair value in any new circumstances. SFAS 157 is effective
for financial statements issued for fiscal years beginning after November 15,
2007 and will be adopted by the Company in the first quarter of fiscal year
2009. We do not expect that the adoption of SFAS 157 will have a material impact
on our financial condition or results of operations.
Note 2. Property, equipment and mine development
July 31, October 31,
2007 2006
-------- -----------
Mining concessions:
Pilar (a) $ 759,961 $ -
Don Ramon (b) 521,739 -
Las Nuvias (c) 100,000 -
------------ -----------
Mining concession 1,381,700 -
Machinery and equipment 175,354 -
------------ -----------
1,557,054 -
Less - accumulated depreciation (11,717) -
------------ -----------
$ 1,545,337 $ -
============ ===========
a. In September 2006 another subsidiary of Tara Gold Resources Corp., the
Company's parent, acquired the Pilar de Mocribo Prospect (Pilar) from an
unrelated third party for $800,000 plus $120,000 of value added tax. This
property was then assigned to the Company in January 2007. The Company is
required to repay the other subsidiary of its parent for this mining
concession as follows (including the applicable value added tax):
Fiscal Year
-----------
2007 $ -
2008 322,000
2009 471,500
------------
$ 793,500
============
In accordance with Accounting Principles Board Opinion 21 "Interest on
Receivables and Payables" (APB21), the future payments of the total payment
amount of $800,000 has been discounted using the incremental borrowing rate
of 5.01%. As of July 31, 2007, the present value of future payments is as
follows:
Debt IVAT Total
---- ---- -----
Total Debt $ 690,000 $ 103,500 $ 793,500
Imputed interest (40,039) - (40,039)
------------ ------------ --------------
Present value of future
payments 649,961 103,500 753,461
Less: current portion (250,061) (42,000) (292,061)
------------ ------------ --------------
$ 399,900 $ 61,500 $ 461,400
============ ============ ==============
12
TARA MINERALS CORP.
(A Subsidiary of Tara Gold Resources Corp.)
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
Note 2. Property, equipment and mine development (cont'd)
b. On January 8, 2007 the Company amended its October 2006 agreement to acquire
the Don Ramon Prospect (Don Ramon) from an unrelated third party for $521,739
plus $78,261 of value added tax. The purchase price was paid in full in
January 2007. This property was assigned to the Company in January 2007 by
the Company's parent.
c. On January 8, 2007 the Company amended its October 2006 agreement to acquire
the Las Nuvias Prospect (Las Nuvias) for $100,000 plus $15,000 of value added
tax from an unrelated third party. The purchase price was paid in full in
January 2007. This property was assigned to the Company in January 2007 by
the Company's parent.
Note 3. Stockholders' Equity
The authorized common stock of the Company consists of 75,000,000 shares with
par value of $0.001. On October 31, 2006 the Company issued 30,000,000 shares of
its $0.001 par value common stock as Founders' shares to its parent company.
On November 28, 2006, the Company authorized a private placement of its common
stock of up to 6,000,000 shares of stock at $0.50 per share for a total of
$3,000,000. The shares of common stock are restricted under Rule 144 and have
not been registered with the Securities and Exchange Commission. As of July 31,
2007 the Company has collected $2,540,500 in Share Stock Subscribed representing
5,081,000 common shares subscribed.
In January 2007, the Company signed a marketing agreement with an independent
third party with compensation of 1,500,000 common shares valued at $0.50 per
share. As of July 31, 2007 the third party had not started work towards the
contract nor had the shares been issued.
In February 2007, the Company issued stock options to the officers of the
Company. See footnote 6.
Note 4. Income Taxes
We did not provide any current or deferred U.S. federal income tax provision or
benefit for any of the periods presented because we have experienced operating
losses since inception. We provided a full valuation allowance on the net
deferred tax asset, consisting of net operating loss carry forwards, because
management has determined that it is more likely than not that we will not earn
income sufficient to realize the deferred tax assets during the carry forward
period. The total net operating loss to be carried forward at July 31, 2007 is
$1,493,241.
The components of the Company's deferred tax asset as of July 31, 2007 and
October 31, 2006 are as follows:
2007 2006
------ ------
Net operating loss carry forward $ 522,634 $ -
13
TARA MINERALS CORP.
(A Subsidiary of Tara Gold Resources Corp.)
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
Note 4. Income Taxes (cont'd)
Valuation allowance (522,634) -
---------- ---------
Net deferred tax asset $ - $ -
========= =========
A reconciliation of the statutory income taxes rate and the effective rate
is as follows:
2007 2006
---- ----
Tax at statutory rate 35% 35%
Valuation allowance (35%) (35%)
--------- ---------
- -
========= =========
The net federal operating loss carry forward will expire in 2026. This carry
forward may be limited upon the consummation of a business combination under IRC
Section 381 or certain ownership changes, as defined in IRC Section 382.
Note 5. Related Party Transactions
The Company is a subsidiary of Tara Gold Resources Corp. As of April 30, 2007
another subsidiary of Tara Gold Resources Corp., Corporacion Amermin, S.A. de
C.V. ("Amermin"), made the arrangements to purchase all properties listed in
Note 2. These properties were assigned to the Company's subsidiary American
Metal Mining, S.A. de C.V ("American Metal Mining") as of January 2007. American
Metal Mining will make payments to Amermin and Amermin will make payments
related to the original purchase agreement for the Pilar mining concession
described in note 2a above. Due to related parties, both current and non-current
portions for Pilar, is $793,500 as of July 31, 2007.
In January 2007, Amermin paid the entire balance of Don Ramon and Las Nuvias
concessions described in notes 2b and 2c above. Per the assignment agreement,
transferring the property to American Metal Mining, the Company will make
payments to Amermin to repay for the amounts paid plus related IVAT. As of July
31, 2007 the Company owed Amermin $210,000.
As of July 31, 2007 the Company had advanced $429,734 in cash to related parties
in the form of short term loans. The receivables, denoted as due from related
parties on the balance sheet, accrue no interest and are payable on November 30,
2007. Subsequent to July 31, 2007 $12,287 was repaid to the Company.
There were no related party transactions as of October 31, 2006.
An officer of the corporation provides office services without charge. Such
costs are immaterial to the financial statements and accordingly, have not been
reflected therein. American Metal Mining shares office space with Amermin in
Mexico at no charge.
14
TARA MINERALS CORP.
(A Subsidiary of Tara Gold Resources Corp.)
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
Note 6. Stock Compensation
On February 1, 2007, the Company adopted the following stock option plans:
o Incentive Stock Option Plan
o Nonqualified Stock Option Plan
o Stock Bonus Plan
The Company's 2007 stock option plans, which are shareholder approved, permit
the grant of share options and shares to its officers for up to 1,000,000 shares
of common stock with an exercise price of $.05 to two of the Company's officers
for compensation which expire February 1, 2010.
The fair value of each option award 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 options 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.
2007
------
Expected volatility 163.90%
Weighted-average volatility 163.90%
Expected dividends 0
Expected term (in years) 2.7
Risk-free rate 4.92%
A summary of option activity under the Plan as of July 31, 2007, and changes
during the period then ended is presented below:
Weighted-
Weighted- Average
Average Remaining Aggregate
Exercise Contractual Intrinsic
Options Shares Price Term Value
------------------------------------------------------------------------------
Outstanding at October 31, 2006 -
Granted 1,000,000 $0.05
Exercised - -
Forfeited or expired - -
--------- -----
Outstanding at July 31, 2007 1,000,000 $0.05 2.7 $1,164,173
========= ===== === ==========
Exercisable at July 31, 2007 1,000,000 $0.05 2.7 $1,164,173
========= ===== === ==========
All shares were vested at July 31, 2007.
15
TABLE OF CONTENTS
Page
PROSPECTUS SUMMARY ..............................................
RISK FACTORS ....................................................
DILUTION AND COMPARATIVE SHARE DATA..............................
MARKET FOR TARA MINERALS' COMMON STOCK ..........................
MANAGEMENT'S DISCUSSION AND ANALYSIS
AND PLAN OF OPERATION ......................................
BUSINESS.........................................................
MANAGEMENT ......................................................
PRINCIPAL SHAREHOLDERS...........................................
SELLING SHAREHOLDERS.............................................
DESCRIPTION OF SECURITIES........................................
LEGAL PROCEEDINGS................................................
INDEMNIFICATION .................................................
AVAILABLE INFORMATION............................................
FINANCIAL STATEMENTS.............................................
No dealer, salesperson or other person has been authorized to give any
information or to make any representation not contained in this prospectus, and
if given or made, such information or representations must not be relied upon as
having been authorized by Tara Minerals. This prospectus does not constitute an
offer to sell, or a solicitation of an offer to buy, any of the securities
offered in any jurisdiction to any person to whom it is unlawful to make an
offer by means of this prospectus.
Until _______, 2007 all dealers effecting transactions in the registered
securities, whether or not participating in this distribution, may be required
to deliver a prospectus. This is in addition to the obligation of dealers to
deliver a prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.
PART II
Information Not Required in Prospectus
Item 24. Indemnification of Officers and Directors
The Nevada Revised Statutes provides that the Company may indemnify any and
all of its officers, directors, employees or agents or former officers,
directors, employees or agents, against expenses actually and necessarily
incurred by them, in connection with the defense of any legal proceeding or
threatened legal proceeding, except as to matters in which such persons shall be
determined to not have acted in good faith and in the Company's best interest.
Item 25. Other Expenses of Issuance and Distribution.
The following table shows the costs and expenses payable by the Company in
connection with the issuance and distribution of the securities being
registered.
SEC Filing Fee $ 102
Blue Sky Fees and Expenses 500
Printing Expenses 200
Legal Fees and Expenses 25,000
Accounting Fees and Expenses 10,000
Miscellaneous Expenses 4,198
---------
TOTAL $40,000
=========
All expenses other than the SEC filing fee are estimated.
Item 26. Recent Sales of Unregistered Securities.
The following lists all shares issued by the Company since its inception.
Name Date Shares Consideration
- ---- ---- ------ -------------
Tara Gold Resources Corp. 5/25/06 30,000,000 $ 300
Qualico Capital Corp. 1/30/07 1,500,000 Services Rendered
Affrunti, Peter and/or Frances * 12/22/06 10,000 $ 5,000
Anderson, David * 12/06/06 30,000 $ 15,000
Anderson, Zak * 12/08/06 40,000 $ 20,000
Bennett, Mary * 12/21/06 25,000 $ 12,500
Boelander, Cal * 12/05/06 400,000 $ 200,000
Boerio, Michael * 12/14/06 20,000 $ 10,000
Boyce, Patrick 2/06/07 20,000 $ 10,000
Buckle, Albert 1/22/07 30,000 $ 15,000
Bucknell, Phillip * 12/14/06 25,000 $ 12,500
Corner, Dan and Cheryl 1/27/07 4,000 $ 2,000
Cottone, Carol A. * 12/06/06 3,000 $ 1,500
Crona, Johan * 12/18/06 50,000 $ 25,000
1
Name Date Shares Consideration
- ---- ---- ------ -------------
Crona, Nils * 12/14/06 100,000 $ 50,000
Dhalander, Peter * 1/22/07 200,000 $ 100,000
Dhalander, Peter * 12/13/06 300,000 $ 150,000
Dopkey, Bob * 12/16/06 50,000 $ 25,000
Drew, Warren * 1/19/07 40,000 $ 20,000
Dropkin, Joel * 1/11/07 100,000 $ 50,000
Eckart, Kile 12/05/06 500,000 $ 250,000
Finnigan, James R. * 12/06/06 20,000 $ 10,000
Finnigan, Robert * 12/06/06 20,000 $ 10,000
Free, Dennis 1/18/07 2,000 $ 1,000
Frost, Stephen 1/16/07 30,000 $ 15,000
Hall, Marty * 12/15/06 30,000 $ 15,000
Healey, Malcolm H. 2/01/07 5,000 $ 2,500
Healey, Robert V. 1/24/07 10,000 $ 5,000
Hearon, Mark * 12/27/06 10,000 $ 5,000
Helper, Chaz * 12/15/06 600,000 $ 300,000
HJB Enterprises Ltd * 12/09/06 20,000 $ 10,000
Jarka, John 12/08/06 10,000 $ 5,000
Jester, Matt 1/26/07 10,000 $ 5,000
Kahovec, John 1/30/07 2,000 $ 1,000
Kahovec, Martin 12/16/06 10,000 $ 5,000
Kahovec, Matt * 12/22/06 100,000 $ 50,000
Kisler, Don * 1/19/07 30,000 $ 15,000
Lancon, Brad A. 12/14/06 6,000 $ 3,000
Lancon, Brent J. 12/14/06 6,000 $ 3,000
Lippoldt, Keith 12/22/06 20,000 $ 10,000
Madden, Frank 1/30/07 10,000 $ 5,000
Majzner, Kurt 12/19/06 6,000 $ 3,000
Marcou, John * 1/26/07 20,000 $ 10,000
Masluk, Oleh 12/7/06 5,000 $ 2,500
Metzel, Gerald * 12/6/06 40,000 $ 20,000
Metzel, Jeff * 12/6/06 2,000 $ 1,000
Metzel, Leonard * 12/6/06 160,000 $ 80,000
Norikane, Bob * 12/22/06 50,000 $ 25,000
O'Connor, Michael T. * 2/01/07 80,000 $ 40,000
Oldenburger, John * 12/10/06 40,000 $ 20,000
O'Neil, Sarah * 12/18/06 20,000 $ 10,000
Pillai, Sanjiv * 1/24/07 72,000 $ 36,000
Pitts, Charles and Trudy 12/06/06 50,000 $ 25,000
Pitts, Miles 12/14/06 20,000 $ 10,000
Prosi, Robert J. 12/26/06 20,000 $ 10,000
Radice, Diane * 12/22/06 2,000 $ 1,000
Saldanha, Steve 12/18/06 15,000 $ 7,500
Sandeno, Mark * 12/08/06 6,000 $ 3,000
Savage, Brian * 12/05/06 250,000 $ 125,000
Senner, Mike * 12/19/06 20,000 $ 10,000
Shoupestal, Gary * 1/29/07 30,000 $ 15,000
2
Name Date Shares Consideration
- ---- ---- ------ -------------
Siebolts, Dietmar 12/12/06 100,000 $ 50,000
Smallwood, Kipp * 12/23/06 100,000 $ 50,000
Smith, Paul and Lucia * 12/06/06 100,000 $ 50,000
Stauffer, Franz * 12/11/06 60,000 $ 30,000
Stauffer, Franz * 12/05/06 40,000 $ 20,000
Tedesco, Sergio 12/15/06 5,000 $ 2,500
Tsai, Wei Tek * 1/29/07 200,000 $ 100,000
Tyson, Terry * 12/14/06 200,000 $ 100,000
Victorin, Jim * 12/05/06 100,000 $ 50,000
Walner, Phil 12/18/06 20,000 $ 10,000
Wechs, Martin * 1/29/07 160,000 $ 80,000
Weniger, Carl * 1/19/07 30,000 $ 15,000
Westphal, David * 12/13/06 20,000 $ 10,000
Zetmeir, Karl D. * 12/06/06 100,000 $ 50,000
Zurbuchen, George * 1/26/07 40,000 $ 20,000
* Accredited investor
The Company relied upon the exemption provided by Section 4(2) of the Securities
Act of 1933 with respect to the issuance of the shares listed above. The persons
who acquired these shares were all provided with information concerning the
Company prior to the purchase of their shares. The certificates representing the
shares of common stock will bear legends stating that the shares may not be
offered, sold or transferred other than pursuant to an effective registration
statement under the Securities Act of 1933 or pursuant to an applicable
exemption from registration. The shares are "restricted" securities as defined
in Rule 144 of the Securities and Exchange Commission.
Item 27. Exhibits
The following exhibits are filed with this Registration Statement:
Exhibit
Number Exhibit Name
- ------- ------------
3.1 Articles of Incorporation
3.2 Bylaws
4.1 Incentive Stock Option Plan
4.2 Non-Qualified Stock Option Plan
4.3 Stock Bonus Plan
5 Opinion of Counsel
10.1 Acquisition Agreement - Pilar de Mocoribo property
3
Exhibit
Number Exhibit Name
- ------- ------------
10.2 Acquisition Agreement - Don Ramon property
10.3 Acquisition Agreement - Las Nuvias property
10.4 Consulting Agreement with Qualico Capital
10.5 Assignments of mining properties
21 Subsidiaries
23.1 Consent of Attorneys
23.2 Consent of Accountants
Item 28. Undertakings
(a) The small business issuer will:
(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this Registration Statement to.
(i) Include any Prospectus required by Section l0 (a)(3) of the
Securities Act:
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the information in
the registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration statement;
and
(iii) Include any additional or changed material information on the
plan of distribution.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(3) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
(4) For determining liability of the undersigned small business issuer
under the Securities Act to any purchaser in the initial distribution of the
securities, the undersigned small business issuer undertakes that in a primary
4
offering of securities of the undersigned small business issuer pursuant to this
registration statement, regardless of the underwriting method used to sell the
securities to the purchaser, if the securities are offered or sold to such
purchaser by means of any of the following communications, the undersigned small
business issuer will be a seller to the purchaser and will be considered to
offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned
small business issuer relating to the offering required to be filed pursuant to
Rule 424;
(ii) Any free writing prospectus relating to the offering prepared
by or on behalf of the undersigned small business issuer or used or referred to
by the undersigned small business issuer;
(iii) The portion of any other free writing prospectus relating to
the offering containing material information about the undersigned small
business issuer or its securities provided by or on behalf of the undersigned
small business issuer; and
(iv) Any other communication that is an offer in the offering made
by the undersigned small business issuer to the purchaser.
(e) Insofar as indemnification for liabilities arising under the
Securities Act of l933 (the "Act") may be permitted to directors, officers and
controlling persons of the Small Business Issuer pursuant to the foregoing
provisions or otherwise, the Small Business Issuer has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Small Business Issuer of expenses incurred or paid by a
director, officer or controlling person of the Small Business Issuer in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Small Business Issuer will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(g) That, for the purpose of determining liability under the Securities
Act to any purchaser:
(1) If the small business issuer is relying on Rule 430B:
(i) Each prospectus filed by the undersigned small business issuer
pursuant to Rule 424(b)(3) shall be deemed to be part of the registration
statement as of the date the filed prospectus was deemed part of and included in
the registration statement; and
(ii) Each prospectus required to be filed pursuant to Rule
424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on
Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or
(x) for the purpose of providing the information required by section 10(a) of
the Securities Act shall be deemed to be part of and included in the
registration statement as of the earlier of the date such form of prospectus is
first used after effectiveness or the date of the first contract of sale of
securities in the offering described in the prospectus. As provided in Rule
430B, for liability purposes of the issuer and any person that is at that date
5
an underwriter, such date shall be deemed to be a new effective date of the
registration statement relating to the securities in the registration statement
to which that prospectus relates, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof. Provided,
however, that no statement made in a registration statement or prospectus that
is part of the registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a time
of contract of sale prior to such effective date, supersede or modify any
statement that was made in the registration statement or prospectus that was
part of the registration statement or made in any such document immediately
prior to such effective date; or
(2) If the small business issuer is subject to Rule 430C, include the
following:
Each prospectus filed pursuant to Rule 424(b) as part of a registration
statement relating to an offering, other than registration statements relying on
Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be
deemed to be part of and included in the registration statement as of the date
it is first used after effectiveness. Provided, however, that no statement made
in a registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by reference
into the registration statement or prospectus that is part of the registration
statement will, as to a purchaser with a time of contract of sale prior to such
first use, supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement or made in
any such document immediately prior to such date of first use.
6
SIGNATURES
In accordance with the requirements of the Securities Act of l933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned in Wheaton, Illinois on
the 30th day of November 2007.
TARA MINERALS CORP.
By: /s/ Francis Richard Biscan
-----------------------------
Francis Richard Biscan, Jr., President
/s/ Clifford A. Brown
------------------------------
Clifford A. Brown, Chief Financial Officer
and Principal Accounting Officer
In accordance with the requirements of the Securities Act of l933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
- --------- ----- -----
/s/ Francis Richard Biscan Director November 30, 2007
- ----------------------------------
Francis Richard Biscan, Jr.
/s/ Clifford A. Brown Director November 30, 2007
- ----------------------------------
Clifford A. Brown
TARA MINERALS CORP.
FORM SB-2
AMENDMENT NO. 3
EXHIBITS