UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
T ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Fiscal Year Ended December 31, 2012
OR
£ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 000-29595
TARA GOLD RESOURCES CORP.
(Name of Small Business Issuer in its charter)
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Nevada
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90-0316566
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(State of incorporation)
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(IRS Employer Identification No.)
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375 N. Stephanie St., Bldg. 2 Ste. # 211
Henderson, NV
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89014
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(Address of principal executive office)
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(Zip Code)
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Registrant’s telephone number, including area code: (888) 901-4550
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common stock, par value $0.001
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes £ No T
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
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Indicate by check mark whether the registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes T No £
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes T No £
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K T
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer £
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Non-accelerated filer £(Do not check if a smaller reporting company)
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Accelerated filer £
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act):
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The aggregate market value of the voting stock held by non-affiliates of the Company on June 30, 2012, was approximately $0.
As of April 15, 2013, the Company had 102,795,119 outstanding shares of common stock.
Documents incorporated by reference: None
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This report includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which included but are not limited to, statements concerning our business strategy, plans and objectives, projected revenues, expenses, gross profit, income, and mix of revenue. These forward-looking statements are based on our current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by us. Words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “potential,” “believes,” “seeks,” “hopes,” “estimates,” “should,” “may,” “will,” “with a view to” and variations of these words or similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, our actual results could differ materially and adversely from those expressed in any forward-looking statements.
Additional information on the various risks and uncertainties potentially affecting our operating results are discussed in this report and other documents we file with the Securities and Exchange Commission, or the SEC, or are available upon written request to our corporate secretary at 375 N Stephanie St., Bldg. 2 Ste. #211, Henderson, NV. We undertake no obligation to revise or update publicly any forward-looking statements for any reason, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on these forward-looking statements.
As used in this report, “Tara Gold,” “Company,” “we,” “our” and similar terms refer to Tara Gold Resources Corp. and its subsidiaries, unless the context indicates otherwise.
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PART I
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PART II
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PART III
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PART IV
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Tara Gold Resources Corp. (the “Company” or “Tara Gold”), was incorporated in 1999 in Nevada as Westnet Communications Group, Inc. On April 1, 2001, the Company acquired MerchantPark Communications, Inc. for shares of its common stock. After this acquisition, the Company’s operations involved the development of software which could be used by small businesses for web-site development and hosting.
In March 2002 the Company discontinued its software development operations and was inactive until early 2004. In November 2003 the Company changed its name to American Stellar Energy, Inc., and began acquiring oil and gas properties in early 2004. In 2005 the Company sold its oil and gas properties after it determined that these properties were not economical.
In 2005 the Company became involved in the exploration of gold and silver mining properties. In February 2006, the Company changed its name to Tara Gold Resources Corp. In May 2005 Tara Gold, through its subsidiary Corporacion Amermin S.A. de C.V. (“Amermin”), began acquiring mining properties in Mexico. Tara Gold’s operations in Mexico are conducted through Amermin and American Metal Mining since Mexican law provides that only Mexican corporations are allowed to own mining properties. All of Tara Gold’s operations in Mexico are conducted through its Mexican subsidiaries.
In 2006 Tara Gold, then focused on gold and silver properties, formed Tara Minerals Corp.(“Tara Minerals”) when it determined that some investors prefer lead, zinc and silver projects, rather than solely gold and silver projects, and that capital may be easier to obtain by separating gold properties from industrial metal projects. Although this was Tara Gold’s intention when it formed Tara Minerals, Tara Minerals nevertheless has interests in properties which may be productive of gold or silver. Tara Minerals owns 99.9% of the common stock of American Metal Mining S.A. de C.V., a Mexican corporation. Tara Minerals formed Adit Resources Corp. (“Adit”) in 2009 to hold the Picacho property, described further below, and to finance exploration and development of the Picacho property through the sale of Adit’s securities. Currently, Tara Minerals owns 87% of the common stock of Adit Resources Corp. As of April 15, 2013, Tara Gold owns approximately 52% of the outstanding common stock of Tara Minerals. Tara Gold and Tara Minerals’ operations in Mexico are conducted through American Metal Mining and Amermin since Mexican law provides that only Mexican corporations are allowed to own mining properties.
Tara Gold focuses primarily on gold mining concessions. Tara Minerals’ primary focus is also on gold and silver, as well as industrial minerals, copper, lead, zinc, iron, and other associated metals.
On April 4, 2012, Adit sold its subsidiary, American Copper Mining S.A. de C.V. (“American Copper”) to Yamana Mexico Holdings B.V. (“Yamana”). American Copper’s primary asset was the Picacho groupings.
In the event of any conflicts of interest between Tara Gold and Tara Minerals, Tara Minerals will have the first opportunity to acquire and develop properties which may be productive of gold and silver. With this process, Tara Gold will be able to share in any mining properties which Tara Minerals successfully develops.
On May 25, 2011, Tara Gold distributed one share of Tara Minerals for every 20 issued and outstanding shares of Tara Gold. Tara Gold plans to make additional distributions until all Tara Minerals’ shares held by Tara Gold have been distributed to Tara Gold’s shareholders. Once this is complete, Tara Gold will not have any interest in the properties owned by Tara Minerals or Adit.
Tara Gold and Tara Minerals will continue their efforts to develop mining properties which are thought to contain commercial quantities of gold, silver and other minerals. There is no assurance that any of Tara Gold’s remaining properties will be capable of producing precious or industrial metals in commercial quantity.
For the most part, the officers and directors of Tara Minerals, Tara Gold, and Adit are the same, and will remain the same following the distribution of all the shares of Tara Minerals held by Tara Gold. As discussed elsewhere in this Annual Report, Adit has sold its only property and it is not expected that Adit will acquire any new mining properties.
Below is a chart which illustrates Tara Gold’s mining properties as of April 15, 2013.
No properties were joint ventured as of April 15, 2013.
The chart below illustrates Tara Gold’s mining properties after Tara Gold completes the distribution of its shares of Tara Mineral’s common stock.
After acquiring a property and selecting a possible exploration area through its own efforts or with others, Tara Gold will typically compile reports, past production records and geologic surveys concerning the area. Tara Gold will then undertake a field exploration program to determine whether the area merits further work. Initial field exploration on a property normally consists of geologic mapping and geochemical and/or geophysical surveys, together with selected sampling to identify environments that may contain specific mineral occurrences. If an area shows promise, geologic drilling programs may be undertaken to further define the existence of any economic mineralization. If such mineralization is identified , further work may be undertaken to estimate ore reserves, evaluate the feasibility of the development of the mining project, obtain permits for commercial development, and, if the project appears to be economically viable, proceed to place the mineral deposit into commercial production.
In connection with the acquisition of a property, Tara Gold may conduct limited reviews of title and related matters and obtain representations regarding ownership. Although Tara Gold 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.
The proposed exploration program for Tara Gold’s properties will typically 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 occurring simultaneously. Rock chip and soil geochemistry may be initiated first to test and define the mineralization. This may be followed up with a CSAMT (Controlled-Source Audio-Frequency Magneto Telluric) (or other appropriate geophysical methods) to test the extent and depth of sulfide mineralization which could 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 may begin. Split samples (i.e. samples cut in half) from logged cores will be sent for assay at Tara Gold’s laboratory or at laboratories operated by third parties. Remaining cores will be saved for third party independent confirmation. Prospect samples will be assayed by Tara Gold at its laboratory with occasional splits sent to third party labs for verification. Samples for mine production will be taken according to the standard methodology generally accepted for either drill cuttings or channel sampling. Samples for mine production will be assayed internally at Tara Gold’s laboratory, with duplicate assaying of every twentieth sample. Splits of every twentieth sample will be sent to an outside laboratory for confirmation. After drilling results have been evaluated, a mineral resource calculation will be made.
The capital required for the exploration and development of mining properties is substantial. Tara Gold plans to finance its future operations through joint venture arrangements with third parties (generally providing that the third party will obtain a specified percentage of Tara Gold’s interest in a certain property in exchange for the expenditure of a specified amount), the sale of Tara Gold’s properties, Tara Gold’s operations and by the sale of Tara Gold and its subsidiaries’ common stock. If the capital required to develop its properties is not available, Tara Gold may attempt to sell one or more of its properties.
The exploration and development of properties that would be joint ventured with third parties would be managed by one of the joint venture participants who would be 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 generally must perform specific tasks over a specified time period. Separate fees may be charged to the joint venture by the operator and, once certain conditions are met, the joint venture participant is typically required to pay the costs in proportion to its interests in the property.
Mines have limited lives, an inherent risk in the mining business. Although Tara Gold plans to acquire other mining properties, there is a limited supply of desirable mineral lands available in Mexico where Tara Gold would consider conducting exploration and/or production activities. In addition, Tara Gold faces strong competition for new properties from other mining companies, many of which have greater financial resources. Further, Tara Gold may be unable to acquire attractive new mining properties on terms that are considered acceptable.
Tara Gold’s operations have not been affected by the escalating conflicts in Mexico involving drug cartels.
As of April 15, 2013, Tara Gold had interests in the mining properties listed below, all of which are located in Mexico. Tara Gold’s interests in the properties are generally in the form of mining concessions granted by the Mexican government. Although Mexican mining concessions are similar in some respects to unpatented mining claims in the United States, there are differences. See “Mexican Mining Laws and Regulations” below for information regarding Mexican mining concessions.
Although Tara Gold believes that each of these properties has deposits of silver, gold, copper, lead, zinc, or iron, the properties are in the exploration stage, do not have any known reserves, and may never produce any of these metals in commercial quantities.
Tara Gold’s most significant mining properties are La Currita and the Don Roman Groupings, described further below. The other properties described below are not considered significant since Tara Gold did not, as of April 15, 2013, have any plans to develop those properties.
In Mexico, land size is denominated in hectares and weight is denominated in tonnes. One hectare is equal to approximately 2.47 acres and one tonne is equal to 2,200 pounds.
With the exception of the Don Roman Groupings, as of April 15, 2013, no plants or other facilities were located on any of the properties.
Tara Gold will use its own employees, or contract with qualified personnel, to conduct and supervise all aspects of its exploration program.
Unless otherwise noted below, all of the properties below were purchased from non-related third parties.
La Currita Prospect
Tara Gold acquired the La Currita property in May 2005 for an effective purchase price of $1,253,439, plus $180,000 of value-added tax.
The La Currita property covers 65 hectares and is located in Chihuahua, approximately 400 kilometers southwest of the city of Chihuahua, northern Mexico. The property is situated on the western edge of the Sierra Madre Occidental in the Temoris mining district and can be accessed by dirt road and a regular pick-up truck. The La Currita property includes four mines.
Geologically, La Currita is a low sulfide epithermal gold/silver tabular vein system that has a strike orientation of N30W and a dip of 60 degrees. It is part of the sequence of volcanic rocks that form the base of the Sierra Madre Occidental. This sequence of rocks is characterized by an up to 1,000 meter thick Lower Volcanic Sequence of andesitic flows, volcanic sediments and intrusive bodies that are unconformably overlain by a thick (up to 1,000 meters) Upper Volcanic Sequence of caldera-related rhyolitic flows, ignimbrites and domes. Precious metal mineralization in these units is hosted in low-sulfide quartz veins, breccias and stockwork zones that formed in the Lower Volcanic Sequence, principally along northwest trending, extensional normal faults.
The justification for acquiring the La Currita concession is that the veins are located in the larger Sierra Madre Gold zone of Mexico. Locally the area is dominated by an abundance of quartz veins that are mineralized with gold. The La Currita veins are of the same type as others in the district and have been mined in the past to produce many tons of gold/silver concentrate. Recent geological sampling, as well as mine production sampling, has produced consistent analytical results, which show the presence of substantial gold. Geological mapping has shown the length and width of the veins to be adequate for mining. The depth of the veins is projected into the concession from drilling on other concessions covering the same veins and shows the depth to be more than adequate for mining.
The La Currita mines were in production between 1983 and 1998. Mining operations resumed in early January 2007 and were terminated by October 2008.
As of December 31, 2012, Tara Gold has spent approximately $729,000 on mapping, sampling, and trenching. Additional historical exploration was performed by other third parties prior to the acquisition of this property.
Currently no further exploration program is planned for La Currita. As of April 15, 2013, Tara Gold was looking for a joint venture partner which would be willing to fund the development of this prospect.
Auriferos and Las Brisas Prospects
Auriferos and Las Brisas properties are located in the southern part of the state of Sonora, Mexico in the Alamos district, which also resides on the western edge of the Sierra Madre Occidental Gold belt. The properties in this area have returned results positive for gold and silver, although reserves have not been calculated. For management purposes we do not manage these as a group even though they are adjacent to each other. These prospects can be accessed from the paved highway from the town of Navojoa, Sonora going east towards Alamos, Sonora, 24 kilometers before arriving to Alamos take the caliche road north for 15 kilometers to the CFE Power Plant and Dam, from there take the left fork heading northwest following the 2 rut dirt road for 7 kilometers to the town of Minitas which sits amidst the concessions.
All of these properties are adjacent, but seem to form one deposit system, which is characterized as a silver-gold-bearing quartz vein and stockwork system. The district is underlain by older metasediments and granitic volcanic rocks. Within the deposit area itself, the bedrock consists of dacitic volcanic rocks that are mineralized and the bedrock is covered by younger, non-mineralized agglomerates of dacitic volcanic rocks and breccias.
Mineralization at the properties is confined to precious metals in the form of silver and gold-bearing epithermal quartz veins. The quartz veins commonly occur in swarms within the dacitic volcanics, which have an average trend of N60W and dip between vertical and 60 degrees northeast. The veins average between 1-2 meters in thickness. There is also a well-developed and prolific stockwork of smaller ½” or less quartz veins present in the central zones of the deposit.
Auriferos V Fraccion 1 and 2 Prospects
In 2007, Tara Gold signed an agreement with Pershimco Resources Ltd. (“Pershimco”) providing Pershimco the option to acquire a 75% interest in the Las Minitas Prospect. In March 2008 Tara Gold and Pershimco agreed to terminate their joint venture with respect to the Las Minitas prospect. The agreement with Pershimco contained a clause that any prospects purchased by Pershimco adjacent to the Las Minitas Prospect would revert to Tara Gold. This resulted in Tara Gold obtaining the Auriferos V Fraccion 1 and 2 Prospects (“Auriferos”).
The Company returned the Las Minitas Prospect in November 2012 but retained ownership of Auriferos.
As of December 31, 2012, the Company has not spent any money on exploring this property. Historical exploration was performed by other third parties prior to the acquisition of this property.
The Auriferos concessions are 400.7177 hectares in size and are located in the state of Sonora, Mexico, near the towns of Alamos and Quiriego.
As of April 15, 2013, Tara Minerals is in the process of terminating the acquisition agreement and the return of the property, or other disposal. As of April 15, 2013, the Company considers this prospect an asset held for disposal.
Las Brisas Prospect
Tara Gold acquired the Las Brisas Prospect in August 2007 for an effective purchase price of $3,134, plus $391 of value-added tax.
The Las Brisas Prospect is 6,428.6896 hectares and is located in the state of Sonora, Mexico, approximately 40 kilometers northwest of the town of Alamos. The property lies at the western edge of the Sierra Madre Occidental gold-silver belt.
As of December 31, 2012, the Company has not spent any money on exploring this property. Historical exploration was performed by other third parties prior to the acquisition of this property.
As of April 15, 2013, Tara Minerals is in the process of terminating the acquisition agreement and the return of the property, or other disposal. As of April 15, 2013, the Company considers this prospect an asset held for disposal.
Properties owned by Tara Minerals Corp.
Don Roman Groupings
The Don Roman Groupings, comprised of 10,680.1213 hectares, were acquired in October 2006, November 2008, and March and April 2011 for an effective purchase price of approximately $2,126,000, plus value-added tax of approximately $327,500. The Don Roman Groupings consist of the Pilar, Don Roman, Las Nuvias, Centenario, La Verde and La Palma prospects.
The Don Roman plant is 18 kilometers north from Choix, state of Sinaloa, Mexico. The plant is accessed by 18 kilometers of paved road. From the plant site, the closest concessions are the Don Roman Groupings which can be accessed with a regular pick-up truck through a Company maintained road. The Don Roman Groupings are in the heart of the La Reforma mining district as well as the stated gold belt that stems from the state of Chihuahua.
The Don Roman Groupings are located in the northern part of the La Reforma mining district of northeastern Sinaloa, Mexico. The predominant rocks in the area are Upper Jurassic-Lower Cretaceous carbonate (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.
Tara Minerals’ justification for acquiring the Don Roman concessions is the general knowledge in Mexico of the types and occurrence of deposits that form around a typical “Porphyry Copper Deposit System.” The many large and small, high-grade poly-metallic veins in the district, which surround the known low-grade porphyry copper center, are typical of this type of system. These types of veins have been mined successfully in many other districts in the U.S. and Mexico. The percentage of poly-metallics, meaning zinc, lead, copper and iron, is buoyed by the presence of substantial silver and gold as subordinate metals in these veins. One of the veins obtained has been mined for 20 years. Several others have been mined off and on for many years. One of the veins, El Refugio, was first mined over 400 years ago and has seen mining as recently as 5 years ago.
Preliminary and continuing evaluation of the Don Roman Groupings have identified numerous mineralized systems at various locations on the property, some of which include a series of parallel northwest trending lead, zinc, silver structures that can be traced for more than 300 meters; an abandoned lead, zinc, silver mine; and historic vein-type gold mineralization. A number of these mineralized structures lie within a complex suite of volcanic-granitic and sedimentary (carbonate) rocks. Preliminary evaluation of the property has indicated the potential for five separate mineral systems each having varying mineral characteristics. Initial sampling has indicated the potential for two lead, zinc, silver systems; two gold copper systems; and one iron ore, gold, copper system.
Temporary provisional permits have been acquired. Tara Minerals continues to work toward procuring definitive permits as production and financing allows. High voltage electrical service has been supplied to an electrical substation which is owned by Tara Minerals and supplies power to operate the Don Roman plant.
Two circuits capable of producing a minimum of 200 tonnes per day are operational, with a third circuit that can be completed when production makes it necessary. An additional regrind circuit can also be implemented at the appropriate time. The plant, when all circuits are operational, is capable of processing approximately 400 tonnes per day.
In 2010, Tara Minerals began production at the Don Roman plant and extracted lead, zinc, and silver material from its mine and stockpiled it for future processing at the plant. During production in 2010, 181 tons of concentrate were produced and sold. In the fourth quarter of 2010, the plant activity ceased.
As of December 31, 2012, $7,400,000 has been spent on the mapping, sampling, trenching, plant facilities, processing equipment, and related mining equipment on the Don Roman property.
Exploration of the veins in the concessions will be multi-phased. The first phase will consist of drilling approximately 10 diamond core holes in the El Rosario vein system to accurately determine the total length, width and depth of the veins. This phase will further define the mineralized structure, which will then allow the concentration plant to be restarted. This cost will be approximately $150,000 and will be paid from cash received from the sale of the Picacho Prospect. The work will be completed under the direction of Steve Eady, Tara Mineral’s Chief Geologist.
Additional exploration phases will be conducted after the start of mining and will be paid with revenue generated by concentrate production from the Don Roman plant.
Pirita Prospect
Tara Minerals acquired the Pirita Prospect in June 2009 for an effective purchase price of $250,000, plus value-added tax of $30,000.
The Pirita Prospect is 6,656.1049 hectares in size and is located near the town of Bacoachi, state of Sonora, Mexico and the towns of Urieque and Morelos, state of Chihuahua, Mexico. The property can be accessed with a regular pick-up truck by driving 6 kilometers from Bacoachi along an unimproved dirt road.
The Pirita prospect is located within the gold orogenic belt of the Sierra Madre mountains in northern Mexico along the Sonora-Chihuahua border. Principally the area is underlain by Cretaceous or older meta-sediments and granodiorite. The prospect is overlain by various volcanic sequences of andesite, dacite and basalt. To date no detailed geology has been completed on the prospect.
As of December 31, 2012, the Company has not spent any money on exploring this property. Historical exploration was performed by other third parties prior to Tara Minerals’ acquisition of this property.
As of April 15, 2013, Tara Minerals was in negotiations to amend its agreements relating to the Pirita Prospect which may include the termination of the acquisition agreement and the return of the property, or other disposal. Per the acquisition agreement, Tara Minerals can only return the property if it is in good standing, which requires that all taxes must be paid and the property must be clear of any liabilities. As of April 15, 2013, Tara Minerals had not paid the property taxes associated with this prospect and considers this prospect an asset held for disposal
Iron Ore Projects
Tara Minerals raised $800,000 through a royalty rights offering to fund these projects.
Tania Iron Ore Project
Tara Minerals leased the Tania Iron Ore Project in May 2011in exchange for royalty payments based on production of Iron Ore.
Tara Minerals has the right to remove 6 million tonnes of iron ore concentrate from the property, with renewal rights extending through the life of the property. Tara Minerals had agreed to pay $6 per tonne for the first 500,000 tonnes removed from the property and $7 per tonne thereafter. As of December 31, 2012, Tara Minerals has paid $100,000 against future royalty payments.
The property, comprised of 3,233.0147 hectares, is located approximately 33 kilometers southeast, via dirt road from the port of Manzanillo, in the city of Manzanillo, State of Colima, Mexico. The iron ore is contained within decomposed granite with little overburden. The property has not been subjected to modern exploration methods or concentrating processes prior to Tara Minerals’ involvement.
As of December 31, 2012, approximately $169,000 had been spent on road access construction, mapping, sampling, and trenching.
As of April 15, 2013, Tara Minerals is in the process of terminating this lease.
Las Viboras Dos Iron Ore Project
Tara Minerals acquired the Las Viboras Dos Iron Ore Project in July 2011 for an effective purchase price of $188,094, plus value-added tax of $30,095.
This property, comprised of 147.9201 hectares, is located near the town of La Huerta, state of Jalisco, Mexico. It is accessible by a 50 kilometer paved highway from Manzanillo towards La Huerta.
As of December 31, 2012, the Company has not spent any money exploring this property. Historical exploration was performed by other third parties prior to Tara Minerals’ acquisition of this property.
As of April 15, 2013, Tara Minerals is in the process of terminating the acquisition agreement and the return of the property, or other disposal. As of April 15, 2013, the Company considers this prospect an asset held for disposal.
Property owned by Adit Resources
Picacho Groupings
On April 4, 2012 Adit Resources Corp. sold its subsidiary, American Copper Mining S.A. de C.V. (“American Copper”) to Yamana Mexico Holdings B.V. (“Yamana”). American Copper’s primary asset is the Picacho groupings.
As consideration for the sale of American Copper, Yamana paid or agreed to pay Adit the following, in U.S. dollars:
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$7.5 million, minus approximately $780,000 (the amount required to pay the Mexican government to release its tax lien on the Property), was deposited into an escrow account and released May 25, 2012;
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$9.8 million scheduled to be released on May 25, 2013;
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During the period ending on May 25, 2017, Yamana will pay $1.0 million for every 100,000 ounces of gold, (whether proved, measured or inferred) (as defined by Canadian Securities Administrators National Instrument 43-101) discovered on the Picacho Groupings. If no gold is discovered on the Picacho Groupings by May 25, 2015, Yamana will make an advance payment of $3 million. Yamana’s maximum payment under this provision of the sale agreement, is $14 million; and,
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$4.3 million on May 25, 2018.
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Yamana Gold Inc. effectively surrendered 500,000 Adit common shares, and warrants to purchase an additional 250,000 Adit common shares, upon the execution of the sale agreement.
Yamana has the option to terminate the sale agreement within ten business days prior to May 25, 2013 for any reason. If the sale agreement is terminated, Yamana will be required to return the capital stock of American Copper and the underlying property to the Company in good standing.
United States Mining Laws and Regulations
In the United States, unpatented mining claims on inappropriate 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 inappropriate 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 Gold 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 local governmental authorities as well as the rights of adjoining property owners. Tara Gold 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 Gold 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 Gold 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 Gold’s 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 Gold may incur expenditures for land reclamation pursuant to federal and state land restoration laws and regulations. Under certain circumstances, Tara Gold 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, as well as reserved areas such as the coast and the seabed, are not free.
Exploration mining concession applications are filed at government offices. Exploration concessions are valid for fifty years and give their holders the right to carry out exploration work and, if warranted, put into produce any ore discovered on the concession.
Mining concessions do not grant the holder the 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, depends 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 that 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 Gold’s offices are located at 375 N. Stephanie St., Bldg. 2 Ste. #211, Henderson, NV 89014. The office space is supplied free of charge by Lynda R. Keeton-Cardno, Chief Financial Officer of Tara Gold and Tara Minerals.
As of April 15, 2013 Tara Gold had 10 employees; Tara Minerals had 9 employees; and American Metal Mining, Tara Mineral’s subsidiary, had 2 employees. All personnel for Amermin had subcontract labor.
Tara Gold’s website is www.taragoldresources.com
Not required.
None.
See Item 1.
On September 13, 2010, Tara Gold announced that it had entered into a tentative agreement with Tara Minerals which provided Tara Minerals would acquire all of the outstanding shares of Tara Gold by exchanging one share of Tara Mineral’s common stock for two Tara Gold shares.
On September 20, 2010, Chris Columbo filed a lawsuit in the District Court for Carson City Nevada, against Tara Gold, Tara Gold’s officers and directors and Tara Minerals. The essence of the lawsuit was to obtain the fairest price for Tara Gold, whether from Tara Minerals or a third party. On October 25, 2010 Mr. Columbo voluntarily dismissed his lawsuit against Tara Gold and other defendants.
On October 22, 2010, Patricia J. Root filed a lawsuit in the Circuit Court for Dupage County, Illinois, against, Tara Gold, Tara Gold’s directors and Tara Minerals. The essence of the lawsuit was to prevent Tara Mineral’s proposed acquisition of Tara Gold.
Tara Gold believes the lawsuit filed by Ms. Root was premature since, as noted in the September 13, 2010 press release, the transaction is tentative and is subject to the approval of the shareholders of Tara Gold who are not officers or directors of Tara Gold. No binding agreement between Tara Gold and Tara Minerals was ever signed. In April 2011 Ms. Root subsequently dismissed her lawsuit against Tara Gold and other defendants.
Tara Minerals subsequently decided that it would not acquire Tara Gold.
On May 6, 2010, the Securities and Exchange Commission temporarily suspended trading in Tara Gold’s securities due to the failure of Tara Gold to file its 10-Q and 10-K reports pursuant to Section 13 of the Securities and Exchange Act of 1934.
On the same day the Commission issued an Order Instituting Proceedings whereby the Commission sought to revoke Tara Gold’s registration of its common stock pursuant to Section 12(g) of the Exchange Act.
On September 7, 2010, an administrative law judge issued an Initial Decision revoking Tara Gold’s registration of its common stock. On September 24, 2010 Tara Gold filed a Petition to Review the decision of the administrative law judge. On September 30, 2010, the Commission granted Tara Gold’s Petition for Review. On November 1, 2010, Tara Gold filed a brief in support of its petition with the Commission. On July 18, 2011, the Commission revoked the registration of Tara Gold’s securities pursuant to Section 12(j) of the Securities Act of 1934. Tara Gold has appealed the Commission’s decision to the U.S, 7th Circuit Court of Appeals. In May 2012 the 7th Circuit Court of Appeals dismissed Tara Gold’s appeal on the basis that:
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Tara Gold filed a Registration Statement on August 4, 2011,
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·
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The Registration Statement automatically became effective on October 3, 2011,
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·
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Upon the effectiveness of the Registration Statement, Tara Gold’s common stock was registered pursuant to Section 12(g) of the 1934 Act,
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·
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Since Tara Gold’s stock had become registered under the 1934 Act, there was no point in reversing the Commission decision, and therefore the issue was moot.
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There is no assurance that Tara Gold will be able to continue to file reports required by the Securities and Exchange Commission in a timely manner.
In August 2011 Tara Minerals entered into an agreement with Carnegie Mining and Exploration, Inc. which provided Carnegie with the option to earn up to a 50% interest in Tara Minerals’ Don Roman and iron ore projects.
In order to earn an interest in the Don Roman project, Carnegie was required to spend certain amounts on the Don Roman property such that the Don Roman plant reached minimum production levels. Carnegie could earn a 50% interest in Tara Minerals’ iron ore projects by spending $1,000,000 toward the projects by November 6, 2011.
Carnegie did not spend the required amounts on either project and Tara Minerals terminated the option.
On November 10, 2011, Tara Minerals filed a complaint against Carnegie seeking a declaration that Carnegie failed to properly exercise its option to acquire an interest in the iron ore properties. Carnegie was required to respond to the complaint on or before March 21, 2012.
On December 9, 2011, Carnegie and a purported affiliate, Carnegie Operations, LLC filed a complaint in Texas state court against former employees of Carnegie. Although Tara Minerals was not initially named as a defendant, the substance of the state court complaint made it clear that the core issues were substantially similar to those raised in the Nevada litigation. The individual defendants removed the case to federal court in Dallas, Texas on December 22, 2011. Carnegie responded with a First Amended Complaint on January 31, 2012, which formally named Tara Minerals as a defendant. In its amended complaint, Carnegie seeks an injunction against Tara Minerals in connection with its option on the iron ore properties, as well as damages for alleged fraud, trade secret theft, civil conspiracy, and tortuous interference with Carnegie’s employment contracts with the individual defendants.
On February 14, 2012, Tara Minerals moved the Texas court for a transfer of venue to Nevada so that the cases could be consolidated. The motion is premised upon the facts that: 1) the option agreement includes an express consent to jurisdiction and venue in Nevada; 2) Tara Minerals filed its lawsuit first in Nevada; 3) the cases involve common issues of fact and law; and 4) transfer is cost-efficient and more convenient for the key witnesses in both matters. In July 2012, the Texas Court granted Tara Minerals motion and transferred the case to Nevada.
All litigation related to the Don Ramon option was settled on March 15, 2013, pursuant to a Settlement Agreement and Release executed by all interested parties. In exchange for Carnegie’s acknowledgement that it has no rights under the Option, AMM assigned its Champinon mining rights purchase contract, including all related obligations and acquisition payments, to Plathio Trading Mexico, SA de CV, Carnegie’s Mexican subsidiary, and the Company agreed to issue to Carnegie 500,000 restricted shares of the Company’s common stock, which may not be sold until the earlier of: (i) the Company’s shares reaching a minimum trading price of $1.00 per share; or (ii) two years from the date of the Agreement. Under the transfer agreement for the Champinon property, AMM retains mining and beneficial rights to known silver, zinc, and led vein structure present on the Champinon concession. The Agreement confirms Carnegie’s acknowledgement of the Company’s 100% ownership of the Don Roman property.
Other than the foregoing, Tara Gold is not involved in any legal proceedings and Tara Gold does not know of any legal proceedings which are threatened or contemplated.
Not applicable.
Prior to May 2010, the common stock of Tara Gold traded in the over-the-counter market, which is sometimes referred to as the “pink sheets”, under the symbol: TRGD. In May 2010 the Securities and Exchange Commission stopped the trading in Tara Gold’s common stock due to the fact that Tara Gold was delinquent in filing its 10-K and 10-Q reports. As a result of the SEC’s stop trading order, Tara Gold’s common stock was removed from the Pink Sheets and until July 18, 2011 traded only on an unsolicited basis.
As a result of the Commission’s ruling on July 18, 2011 (see Item 3 above), all trading in Tara Gold’s stock ceased. In 2012, Tara Gold successfully filed a Form 10 which cleared SEC comments in November 31, 2012. To begin trading once again Tara Gold will engage in the 15c-211 process with a market maker in 2013.
Shown below are the ranges of high and low closing prices for Tara Gold’ common stock for the periods indicated as reported by FINRA and as reported on www.stockhouse.com until trading ceased. The market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commissions and may not necessarily represent actual transactions.
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Quarter Ended
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High
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Low
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||||||
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31-Mar-11
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$ | 0.50 | $ | 0.26 | ||||
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30-Jun-11
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$ | 0.47 | $ | 0.20 | ||||
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30-Sep-11
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$ | 0.45 | $ | 0.40 | ||||
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31-Dec-11
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$ | - | $ | - | ||||
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31-Mar-12
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$ | - | $ | - | ||||
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30-Jun-12
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$ | - | $ | - | ||||
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30-Sep-12
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$ | - | $ | - | ||||
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31-Dec-12
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$ | - | $ | - | ||||
As of April 15, 2013 Tara Gold had 102,795,119 outstanding shares of common stock and 76 shareholders of record. As of that same date Tara Gold did not have any outstanding options, warrants or securities which were convertible into shares of Tara Gold’s common stock.
We have not paid and do not expect to declare or pay any cash dividends on our common stock in the foreseeable future, and we currently intend to retain future earnings, if any, to finance the expansion of our business. The decision whether to pay cash dividends on our common stock will be made by our Board of Directors, in their discretion, and will depend on our financial condition, operating results, capital requirements and other factors deemed relevant by our Board of Directors.
During the years ended December 31, 2012 and 2011 neither Tara Gold, nor any of Tara Gold’s officers or directors, purchased any shares of Tara Gold’s common stock in the open market.
Not applicable.
Tara Gold was incorporated in October 1999. During the period from its incorporation through December 31, 2012, Tara Gold generated revenue of approximately $725,000 and incurred expenses of approximately $759,000 in cost of sales, $10,693,000 in exploration expenses and $45,104,000 in operating and general administration expenses. Included in operating and general and administrative expenses are non-cash charges of approximately $9,140,000 pertaining to the issuance of stock based compensation and stock bonuses of Tara Minerals.
Material changes of certain items in Tara Gold’s Statement of Operations for the year ended December 31, 2012, as compared to the year ended December 31, 2011, are discussed below.
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Year Ended
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December 31, 2012
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December 31, 2011
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||||||
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(In thousands of U.S. Dollars)
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||||||||
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Revenue
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$ | - | $ | - | ||||
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Cost of revenue
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- | - | ||||||
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Exploration expenses
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1,441 | 2,901 | ||||||
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Operating, general and administrative expenses
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5,047 | 5,788 | ||||||
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Net operating loss
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$ | (6,488 | ) | $ | (8,689 | ) | ||
For the year ended December 31, 2012, exploration expenses decreased due to the operational focus on only one property, Champinon, compared to the year ended December 31, 2011, when the Company focused on acquiring technical data and focusing on Centenario, La Palma, La Verde and the Iron Ore Properties. For the year ended December 31, 2012, exploration expenses consisted of $680,000 for the acquisition of Champinon’s technical data ($430,000 paid with Tara Minerals’ stock and $250,000 with cash) and $761,000 for preproduction activities, geological consulting, assaying, field supplies, other mine expenses and compensation of two engineers hired in 2012. For the year ended December 31, 2011 explorations expenses consisted of $2,592,000 for the acquisition of technical data for Centenario, La Palma and La Verde ($2,492,000 paid with Tara Minerals’ stock and $100,000 with cash), which comprises the majority of exploration expenses for the period; the remaining $309,000 was spent on mine activities and other various mine expenses for the Iron Ore Properties (Tania, Las Viboras Dos and Champinon properties).
Material changes of certain items in Tara Gold’s operating, general and administrative expenses for the year ended December 31, 2012, as compared to the year ended December 31, 2011, are discussed below.
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Year Ended
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December 31, 2012
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December 31, 2011
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(In thousands of U.S. Dollars)
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||||||||
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Bad debt expense
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$ | 806 | $ | 850 | ||||
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Investment banking and investor relations expense
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369 | 577 | ||||||
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Compensation, officer employment contracts and bonuses
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1,576 | 1,730 | ||||||
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Professional fees
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1,159 | 1,235 | ||||||
Impuesto al Valor Agregado taxes (IVA) are recoverable value-added taxes charged by the Mexican government on goods sold and services rendered at a rate of 16%. Under certain circumstances, these taxes are recoverable by filing a tax return and as determined by the Mexican taxing authority. Each period, receivables are reviewed for collectability. When a receivable has doubtful collectability we allow for the receivable until we are either assured of collection (and reverse the allowance) or assured that a write-off is necessary. Our allowance in association with our receivables from IVA from our Mexico subsidiaries is based on our determination that the Mexican government may not allow the complete refund of these taxes. Bad debt expense increased for the year ended December 31, 2012, when compared to the year ended December 31, 2011 due to increases in allowance for IVA from 90% to 100% and other receivables from 50% to 100%.
The decrease in investment banking and investor relations expense for the year ended December 31, 2012 is due
to a decrease in equity financing during 2012 due to the focus of selling and the resulting funds obtained from the sale of American Copper Mining; compared to a focus on completing equity financing for the year ended December 31, 2011. In 2012, there were no sales of common stock of Tara Gold, only exercises of warrants, options and stock for services at Tara Minerals.
The decrease in compensation, officer employment contracts and bonuses was due to the controller position being outsourced starting in the third quarter of 2012, offset by additional personnel in all of 2012 and a decrease in options vested or awarded to officers. This area for 2012 consisted of $1,331,000 paid in cash or accrued for and $245,000 relating to options; 2011 consisted of $914,000 paid in cash or accrued for and $816,000 relating to options.
Professional fees for the year ended December 31, 2012 were due to legal and consulting services used for the negotiations, close and amendment of the agreement for the sale of American Copper Mining, and services due to operational focus on Champinon. Professional fees for the year ended December 31, 2011 consisted of consulting and legal services discussed in Item 3.
The following is an explanation of Tara Gold’s material sources and (uses) of cash during the years ended December 31, 2012 and 2011:
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December 31, 2012
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December 31, 2011
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|||||||
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(In thousands of U.S. Dollars)
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||||||||
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Net cash used in operating activities
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$ | (5,751 | ) | $ | (3,789 | ) | ||
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Acquisition of property, plant, equipment, mine development, land and construction in progress
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(563 | ) | (6 | ) | ||||
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Proceeds from the sale or disposal of assets
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- | 44 | ||||||
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Purchase of mining concession
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- | (30 | ) | |||||
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Mining deposits
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2 | (181 | ) | |||||
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Proceeds from the sale of American Copper Mining
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7,500 | - | ||||||
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Investment in American Copper Mining in 2012
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(33 | ) | - | |||||
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Payments towards notes payable
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(741 | ) | (135 | ) | ||||
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Payments towards notes payable, related party
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(100 | ) | - | |||||
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Payments from joint venture partners
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- | 100 | ||||||
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Change in due to/from related parties, net
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(252 | ) | (103 | ) | ||||
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Non-controlling interest – cash from the sale of common stock of subsidiaries
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357 | 3,508 | ||||||
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Iron Ore Properties financial instrument
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50 | 750 | ||||||
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Cash, beginning of period
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419 | 193 | ||||||
Tara Gold anticipates that its capital requirements during the twelve months ending December 31, 2013 will be:
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Tara Minerals
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||||
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Exploration and Development – Don Roman Groupings
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$ | 2,665,000 | ||
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Exploration and Development - Dixie Mining District, Idaho
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3,237,000 | |||
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Property taxes
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44,000 | |||
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General and administrative expenses
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1,007,000 | |||
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Tara Gold
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||||
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Property taxes
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1,000 | |||
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General and administrative expenses
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446,000 | |||
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Total
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$ | 7,400,000 | ||
The capital requirements shown above include capital required by Tara Gold and subsidiaries.
Tara Minerals is continuing the planning and preparation necessary to bring the Don Roman mill into production in 2013. At the same time, the Company is engaging in planning and preparation for the development of the district, by initially focusing on the mineralized structures that could serve as start-up mine feed for the Don Roman plant. The exploration work-plan, that is being developed, will be focusing on the consistency of material in an effort to maximize recovery at the plant. In addition, all work will be done in a 43-101 compliant manner, with a focus on completing a technical report that further defines mineralized structures to establish reserves. This work will also support the expansion planning for increasing production later in 2013.
In addition to, and as a part of, development plans for the Don Roman district, during the second and third quarters of 2012, the Company also focused on plans to put the Champinon Iron Ore Project into production. Two benches were blasted, samples were assayed, and recovery work completed by Metcon Research. Site preparation, such as roadwork, retaining walls, pads, electrical panels, tailings pond, and scales were completed on time and within budget. Equipment was mobilized through a strategic alliance with a local company that was also contracted to provide equipment and buy the iron concentrate.
On March 15, 2013, a Settlement Agreement and Release was entered into whereas Tara Minerals assigned its Champinon mining rights purchase contract, including all related obligations and acquisition payments, to Plathio Trading Mexico, SA de CV, Carnegie’s Mexican subsidiary. Under this Transfer Agreement, Tara Minerals retains mining and beneficial rights to known silver, zinc, and led vein structure present on the Champinon concession.
On March 15, 2013, Tara Minerals expanded its holdings to include a U.S. based mining district, referred to as the Dixie Mining District of central Idaho, USA. To date, the land package consists of 6,721 acres of both patented and unpatented mining claims. The optioned claims include previously mined veins with historic sampling of the exposed outcrops averaging 14 grams/tonne of gold. Tara's initial focus is to assess the previously unmined veins for their near-term production potential. Tara's technical team has already begun the assessment process, which includes sampling and a detailed review of several historical underground mining levels. Tara has also initiated the process to acquire production related permits and explore processing options, including contracting processing to third parties.
Tara Gold will need to obtain additional capital if it is unable to generate sufficient cash from its operations or find joint venture partners to fund all or part of its exploration and development costs.
In May 2010 the Securities and Exchange Commission stopped the trading in Tara Gold’s common stock due to the fact that Tara Gold was delinquent in filing its 10-K and 10-Q reports. As a result of the SEC’s stop trading order, Tara Gold’s common stock was removed from the Pink Sheets and until July 18, 2011 traded only on an unsolicited basis. As a result of the Commission’s ruling on July 18, 2011 (see Item 3 above), all trading in Tara Gold’s stock ceased. In 2012, Tara Gold successfully filed a Form 10 which cleared SEC comments November 31, 2012. To begin trading once again Tara Gold will engage in the 15c211 process with a market maker in 2013.
On May 25, 2011, Tara Gold distributed one share of Tara Minerals for every 20 issued and outstanding shares of Tara Gold. Tara Gold plans to make additional distributions until all Tara Minerals’ shares held by Tara Gold have been distributed to Tara Gold’s shareholders. Once this is complete, Tara Gold will not have any interest in the properties owned by Tara Minerals or Adit.
As of the date of this filing, the Company is reviewing the Pirita, Tania and Las Viboras Dos properties for continued inclusion as part of the Company’s mining property portfolio. Tara Gold and Tara Minerals are critically reviewing all properties for joint venture, option or sale opportunities.
Tara Gold does not know of any trends, events or uncertainties that have had, or are reasonably expected to have, a material impact on its sales, revenues or income from continuing operations, or liquidity and capital resources except for the possible future payments related to the sale of American Copper Mining which are disclosed in the financial statements below.
Tara Gold’s future plans will be dependent upon the amount of capital available to Tara Gold, the amount of cash provided by it and its subsidiaries operations and the extent to which Tara Gold is able to have joint venture partners pay the costs of exploring and developing its mining properties.
Tara Gold does not have any commitments or arrangements from any person to provide Tara Gold with any additional capital. If additional financing is not available when needed, Tara Gold may continue to operate in its present mode or Tara Gold may need to cease operations. Tara Gold does not have any plans, arrangements or agreements to sell its assets or to merge with another entity.
Off-Balance Sheet Arrangements
At December 31, 2012, Tara Gold had no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our consolidated financial condition, results of operations, liquidity, capital expenditures or capital resources.
Critical Accounting Policies
The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect our reported assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities. We base our estimates and judgments on historical experience and on various other assumptions we believe to be reasonable under the circumstances. Future events, however, may differ markedly from our current expectations and assumptions. While there are a number of significant accounting policies affecting our consolidated financial statements, we believe the following critical accounting policies involve the most complex, difficult and subjective estimates and judgments.
Recoverable Value-Added Taxes (IVA) and Allowance for Doubtful Accounts
Impuesto al Valor Agregado taxes (IVA) are recoverable value-added taxes charged by the Mexican government on goods sold and services rendered at a rate of 16%. Under certain circumstances, these taxes are recoverable by filing a tax return and as determined by the Mexican taxing authority.
Each period, receivables are reviewed for collectability. When a receivable has doubtful collectability we allow for the receivable until we are either assured of collection (and reverse the allowance) or assured that a write-off is necessary. Our allowance in association with our receivable from IVA from our Mexico subsidiaries is based on our determination that the Mexican government may not allow the complete refund of these taxes.
Property, plant, equipment, mine development and land
Mining concessions and acquisitions, exploration and development costs relating to mineral properties are 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. If it is determined that the deferred costs related to a property are not recoverable over its productive life, those costs will be written down to fair value as a charge to operations in the period in which the determination is made. 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 is assessed at least annually for indicators of impairment such as adverse changes to any of the following:
• estimated recoverable ounces of copper, lead, zinc, gold, silver or other precious minerals
• estimated future commodity prices
• estimated expected future operating costs, capital expenditures and reclamation expenditures
A write-down to fair value is recorded when the expected future cash flow is less than the net book value of the property or when events or changes in the property indicate that carrying amounts are not recoverable. This analysis is completed as needed, and at least annually. As of the date of this filing no events have occurred that would require the write-down of any assets. In addition, the carrying amounts of the group’s assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If such indication of impairment exists, the asset’s recoverable amount will be reduced to its estimated fair value. As of December 31, 2012 and 2011, respectively, no indications of impairment existed.
Certain mining plant and equipment included in mine development and infrastructure is depreciated on a straight-line basis over their estimated useful lives from 3 – 10 years. Other non-mining assets are recorded at cost and depreciated on a straight-line basis over their estimated useful lives from 3 – 10 years.
Financial and Derivative Instruments
The Company periodically enters into financial instruments. Upon entry, each instrument is reviewed for debt or equity treatment. In the event that the debt or equity treatment is not readily apparent, FASB ASC 480-10-S99 is consulted for temporary treatment, once a triggering event of any such instruments happens that removes the temporary element the Company appropriately reclassifies the instrument to debt or equity.
We periodically assess our financial and equity instruments to determine if they require derivative accounting. Instruments which may potentially require derivative accounting are conversion features of debt, equity, and common stock equivalents in excess of available authorized common shares, and contracts with variable share settlements. In the event of derivative treatment, we mark the instrument to market.
Exploration expenses and Technical Data
Exploration costs not directly associated with proven reserves on our mining concessions are charged to operations as incurred.
Technical data, including engineering reports, maps, assessment reports, exploration samples certificates, surveys, environmental studies and other miscellaneous information, may be purchased for our mining concessions. When purchased for concessions without proven reserves, the cost is considered research and development pertaining to a developing mine and is expensed when incurred.
Stock Based Compensation
Stock based compensation is accounted for using the Equity-Based Payments to Non-Employee’s Topic of the FASB ASC, which establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments. We determine the value of stock issued at the date of grant. We also determine at the date of grant the value of stock at fair market value or the value of services rendered (based on contract or otherwise) whichever is more readily determinable.
Shares issued to employees are expensed upon issuance.
Stock based compensation for employees is accounted for using the Stock Based Compensation Topic of the FASB ASC. We use the fair value method for equity instruments granted to employees and will use the Black-Scholes model for measuring the fair value of options, if issued. The stock based fair value compensation is determined as of the date of the grant or the date at which the performance of the services is completed (measurement date) and is recognized over the vesting periods.
Not applicable.
TARA GOLD RESOURCES CORP. AND SUBSIDIARIES
(An Exploration Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR
THE YEARS ENDED DECEMBER 31, 2012 AND 2011
AND
THE PERIOD FROM INCEPTION (OCTOBER 14, 1999) THROUGH DECEMBER 31, 2012
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27
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FINANCIAL STATEMENTS:
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29
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30
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31
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39
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41
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To the Board of Directors and Stockholders’
of Tara Gold Resources Corp., Inc. and Subsidiaries,
We have audited the accompanying consolidated balance sheet of Tara Gold Resources Corp., Inc. (an exploration stage company) (a Nevada corporation) and subsidiaries as of December 31, 2011, and the related consolidated statements of operations and comprehensive loss, stockholders' equity, and cash flows for the year then ended and the period from inception (October 14, 1999) through December 31, 2011. 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 audits. The financial statements of Tara Gold Resources Corp., Inc. and subsidiaries from inception (October 14, 1999) through December 31, 2010, were audited by other auditors whose report there on dated April 18, 2011, expressed an unqualified opinion on those statements.
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 audit 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 Gold Resources Corp, Inc. and subsidiaries as of December 31, 2011, and the results of its operations and its cash flows for the year then ended and for the period from inception (October 14, 1999) through December 31, 2011, in conformity with accounting principles generally accepted in the United States of America.
Wilson Morgan LLP
/s/ Wilson Morgan LLP
Irvine, California
April 13, 2012
Report of Independent Registered Public Accounting Firm
Board of Directors and Stockholders
Tara Gold Resources Corp.
We have audited the accompanying consolidated balance sheet of Tara Gold Resources Corp. as of December 31, 2012, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for the year then ended and the period from inception (October 14, 1999) to December 31, 2012. These financial statements are the responsibility of the entity’s management. Our responsibility is to express an opinion on these financial statements based on our audit. The consolidated financial statements of Tara Gold Resources Corp.from inception (October 14, 1999) to December 31, 2010 and 2011 were audited by other auditors whose reports dated April 15, 2011 and April 13, 2012 expressed unqualified opinions on those financial statements.
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 financial statements are free of material misstatement. Our audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide 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 Gold Resources Corp. as of December 31, 2012, and the results of its operations and its cash flows for the year then ended and the period from inception (October 14, 1999) to December 31, 2012 in conformity with accounting principles generally accepted in the United States of America.
|
/s/ StarkSchenkein, LLP
|
|
StarkSchenkein, LLP
|
Denver, Colorado
April 15, 2013
| 3600 South Yosemite Street | Suite 600 | Denver, CO 80237 | P: 303.694.6700 | TF: 888.766.3985 | F: 303.694.6761 | www.starkcpas.com |
|
An Independent Member of BKR International
|
TARA GOLD RESOURCES CORP. AND SUBSIDIARIES
(An Exploration Stage Company)
(In thousands of U.S. Dollars)
|
December 31, 2012
|
December 31, 2011
|
|||||||
|
Assets
|
||||||||
|
Current assets:
|
||||||||
|
Cash
|
$
|
957
|
$
|
419
|
||||
|
Other receivables, net
|
304
|
539
|
||||||
|
Due from related parties, net of due to
|
89
|
-
|
||||||
|
Deferred tax asset, current portion
|
3,323
|
4,041
|
||||||
|
Other current assets
|
54
|
117
|
||||||
|
Assets held for disposal, net
|
132
|
-
|
||||||
|
Total current assets
|
4,859
|
5,116
|
||||||
|
Property, plant, equipment, mine development, land and construction in progress, net
|
8,878
|
11,084
|
||||||
|
Mining deposits
|
27
|
29
|
||||||
|
Deferred tax asset, non-current portion
|
2,961
|
2,475
|
||||||
|
Other assets
|
25
|
222
|
||||||
|
Total assets
|
$
|
16,750
|
$
|
18,926
|
||||
|
Liabilities and Stockholders’ Equity
|
||||||||
|
Current liabilities:
|
||||||||
|
Accounts payable and accrued expenses
|
$
|
3,460
|
$
|
2,858
|
||||
|
Notes payable, current portion
|
1,114
|
2,607
|
||||||
|
Notes payable related party
|
-
|
100
|
||||||
|
Due to related parties, net of due from
|
-
|
156
|
||||||
|
Total current liabilities
|
4,574
|
5,721
|
||||||
|
Notes payable, non-current portion
|
722
|
69
|
||||||
|
Total liabilities
|
5,296
|
5,790
|
||||||
|
Iron Ore Properties financial instrument, net
|
600
|
570
|
||||||
|
Stockholders’ equity:
|
||||||||
|
Common stock: $0.001 par value; authorized 150,000,000 shares; 102,795,119
shares issued and outstanding
|
103
|
103
|
||||||
|
Additional paid-in capital
|
10,787
|
10,787
|
||||||
|
Accumulated deficit during exploration stage
|
(22,720
|
)
|
(19,620
|
)
|
||||
|
Accumulated other comprehensive loss
|
(377
|
)
|
(446
|
)
|
||||
|
Total Tara Gold stockholders’ deficit
|
(12,207
|
)
|
(9,176
|
)
|
||||
|
Non-controlling interest
|
23,061
|
21,742
|
||||||
|
Total stockholders’ equity
|
10,854
|
12,566
|
||||||
|
Total liabilities and stockholders’ equity
|
$
|
16,750
|
$
|
18,926
|
||||
See accompanying notes to these consolidated financial statements.
TARA GOLD RESOURCES CORP. AND SUBSIDIARIES
(An Exploration Stage Company)
AND COMPREHENSIVE LOSS
(In thousands of U.S. dollars, except share amounts)
|
December 31,
2012
|
December 31,
2011
|
From Inception
October 14, 1999 to
December 31, 2012
|
||||||||||
|
Revenues
|
||||||||||||
|
Revenue from website development and software
|
$ | - | $ | - | $ | 168 | ||||||
|
Mining revenues
|
- | - | 557 | |||||||||
|
Total revenues
|
- | - | 725 | |||||||||
|
Cost of revenue
|
- | - | 759 | |||||||||
|
Gross margin
|
- | - | (34 | ) | ||||||||
|
Exploration expenses
|
1,441 | 2,901 | 10,693 | |||||||||
|
Operating, general, and administrative expenses
|
5,047 | 5,788 | 45,104 | |||||||||
|
Net operating loss
|
(6,488 | ) | (8,689 | ) | (55,831 | ) | ||||||
|
Non-operating (income) expense:
|
||||||||||||
|
Interest (income)
|
(32 | ) | (31 | ) | (375 | ) | ||||||
|
Interest expense
|
16 | 28 | 1,255 | |||||||||
|
Settlement gain
|
- | - | (134 | ) | ||||||||
|
Loss on extinguishment of debt, net
|
637 | - | 2,186 | |||||||||
|
Gain on deconsolidation, dissolution and sale of joint venture
interest
|
- | (100 | ) | (21,036 | ) | |||||||
|
Loss on disposal of assets
|
2 | 4 | 405 | |||||||||
|
Gain on acquisition of mining concession
|
- | - | (100 | ) | ||||||||
|
Realized loss on the sale of marketable securities
|
- | 389 | 5,099 | |||||||||
|
Gain on sale of net cash flow interest
|
- | - | (197 | ) | ||||||||
|
Gain on Tara Minerals stock dividend
|
- | (1,028 | ) | (1,028 | ) | |||||||
|
Impairment of long lived asset
|
171 | - | 171 | |||||||||
|
Other income
|
(2 | ) | (20 | ) | (1,347 | ) | ||||||
|
Total non-operating (income) loss
|
792 | (758 | ) | (15,101 | ) | |||||||
|
Loss before income taxes
|
(7,280 | ) | (7,931 | ) | (40,730 | ) | ||||||
|
Income tax benefit
|
727 | 3,585 | 6,629 | |||||||||
|
Loss from continuing operations
|
(6,553 | ) | (4,346 | ) | (34,101 | ) | ||||||
|
Discontinued operations:
|
||||||||||||
|
Loss from operations of oil properties and La Escuadra
|
- | - | (1,021 | ) | ||||||||
|
Gain from discontinued operations, net of tax
|
3,576 | - | 3,576 | |||||||||
|
Net loss
|
(2,977 | ) | (4,346 | ) | (31,546 | ) | ||||||
|
Net loss attributable to non-controlling interest
|
(123 | ) | 1,786 | 8,826 | ||||||||
|
Net loss attributable to Tara Gold’s shareholders
|
(3,100 | ) | (2,560 | ) | (22,720 | ) | ||||||
|
Other comprehensive gain (loss):
|
||||||||||||
|
Foreign currency translation gain (loss)
|
69 | 68 | (377 | ) | ||||||||
|
Total comprehensive loss
|
$ | (3,031 | ) | $ | (2,492 | ) | $ | (23,097 | ) | |||
|
Net loss per share, basic and diluted
|
$ | (0.03 | ) | $ | (0.04 | ) | ||||||
|
Weighted average number of shares, basic and diluted
|
102,795,119 | 102,795,119 | ||||||||||
See accompanying notes to these consolidated financial statements.
TARA GOLD RESOURCES CORP. AND SUBSIDIARIES
(An Exploration Stage Company)
From inception (October 14, 1999) to December 31, 2012
(In thousands of U.S. dollars, except share amounts)
|
Common Stock
|
Additional
Paid-In
|
Accumulated
Deficit During
|
Accumulated
Other
Comprehensive
|
Total
Stockholders’
|
||||||||||||||||||||
|
Shares
|
Amount
|
Capital
|
Exploration Stage
|
Loss
|
Deficit
|
|||||||||||||||||||
|
Balance at inception
|
- | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||
|
Issuance of common stock to Founders for cash
|
4,000,000 | 4 | - | - | - | 4 | ||||||||||||||||||
|
Net loss
|
- | - | - | (9 | ) | - | (9 | ) | ||||||||||||||||
|
Balance at December 31, 2000
|
4,000,000 | 4 | - | (9 | ) | - | (5 | ) | ||||||||||||||||
|
Issuance of common stock in exchange for 100%
of common stock of MerchantPark
|
1,500,000 | 2 | (2 | ) | - | - | - | |||||||||||||||||
|
Issuance of common stock for cash
|
2,491,583 | 2 | 152 | - | - | 154 | ||||||||||||||||||
|
Issuance of common stock for services
|
4,645,261 | 5 | 77 | - | - | 82 | ||||||||||||||||||
|
|
||||||||||||||||||||||||
|
Issuance of common stock for 100% of shares of
Caged Iron Technologies
|
2,000,000 | 2 | 101 | - | - | 103 | ||||||||||||||||||
|
Issuance of common stock issued for debt
|
459,000 | - | 46 | - | - | 46 | ||||||||||||||||||
|
Issuance of common stock issued for assets
|
3,064,556 | 3 | 301 | - | - | 304 | ||||||||||||||||||
|
Stock offering costs
|
- | - | (13 | ) | - | - | (13 | ) | ||||||||||||||||
|
Foreign currency translation gain
|
- | - | - | - | 1 | 1 | ||||||||||||||||||
|
Net loss
|
- | - | - | (418 | ) | - | (418 | ) | ||||||||||||||||
|
Balance at December 31, 2001
|
18,160,400 | $ | 18 | $ | 662 | $ | (427 | ) | $ | 1 | $ | 254 | ||||||||||||
See accompanying notes to these consolidated financial statements.
TARA GOLD RESOURCES CORP. AND SUBSIDIARIES
(An Exploration Stage Company)
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ DEFICIT
From inception (October 14, 1999) to December 31, 2012
(In thousands of U.S. dollars, except share amounts)
(Continued)
|
Common Stock
|
Additional
Paid-In
|
Accumulated
Deficit During
|
Accumulated Other
Comprehensive
|
Total
Stockholders’
|
||||||||||||||||||||
|
Shares
|
Amount
|
Capital
|
Exploration Stage
|
Deficit
|
Deficit
|
|||||||||||||||||||
|
Balance at December 31, 2001
|
18,160,400 | $ | 18 | $ | 662 | $ | (427 | ) | $ | 1 | $ | 254 | ||||||||||||
|
Issuance of common stock for services
|
2,336,500 | 2 | 22 | - | - | 24 | ||||||||||||||||||
|
Issuance of common stock for debt
|
5,844,976 | 6 | 272 | - | - | 278 | ||||||||||||||||||
|
Issuance of common stock for cash
|
6,000,000 | 6 | 23 | - | - | 29 | ||||||||||||||||||
|
Net Loss
|
- | - | - | (677 | ) | - | (677 | ) | ||||||||||||||||
|
Balance at December 31, 2002
|
32,341,876 | 32 | 979 | (1,104 | ) | 1 | (92 | ) | ||||||||||||||||
|
|
||||||||||||||||||||||||
|
Issuance of common stock for cash
|
3,754,848 | 4 | 53 | - | - | 57 | ||||||||||||||||||
|
Issuance of common stock for debt
|
9,019,445 | 9 | 189 | - | - | 198 | ||||||||||||||||||
|
Net loss
|
- | - | - | (156 | ) | - | (156 | ) | ||||||||||||||||
|
Balance at December 31, 2003
|
45,116,169 | $ | 45 | $ | 1,221 | $ | (1,260 | ) | $ | 1 | $ | 7 | ||||||||||||
See accompanying notes to these consolidated financial statements.
TARA GOLD RESOURCES CORP. AND SUBSIDIARIES
(An Exploration Stage Company)
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ DEFICIT
From inception (October 14, 1999) to December 31, 2012
(In thousands of U.S. dollars, except share amounts)
(Continued)
|
Common Stock
|
Additional
Paid-In
|
Accumulated
Deficit During
|
Accumulated Other
Comprehensive
|
Total
Stockholders’
|
||||||||||||||||||||
|
Shares
|
Amount
|
Capital
|
Exploration Stage
|
Deficit
|
Deficit
|
|||||||||||||||||||
|
Balance at December 31, 2003
|
45,116,169 | $ | 45 | $ | 1,221 | $ | (1,260 | ) | $ | 1 | $ | 7 | ||||||||||||
|
Issuance of common stock for cash
|
2,807,000 | 3 | 161 | - | - | 164 | ||||||||||||||||||
|
Issuance of common stock for services
|
3,010,000 | 3 | 147 | - | - | 150 | ||||||||||||||||||
|
Stock cancelled
|
(1,200,000 | ) | (1 | ) | 1 | - | - | - | ||||||||||||||||
|
Share subscriptions received
|
- | - | - | - | - | 148 | ||||||||||||||||||
|
Net loss
|
- | - | - | (373 | ) | - | (373 | ) | ||||||||||||||||
|
|
||||||||||||||||||||||||
|
Balance at December 31, 2004
|
49,733,169 | $ | 50 | $ | 1,530 | $ | (1,633 | ) | $ | 1 | $ | 96 | ||||||||||||
See accompanying notes to these consolidated financial statements.
TARA GOLD RESOURCES CORP. AND SUBSIDIARIES
(An Exploration Stage Company)
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ DEFICIT
From inception (October 14, 1999) to December 31, 2012
(In thousands of U.S. dollars, except share amounts)
(Continued)
|
Common Stock
|
Additional
Paid-In
|
Accumulated
Deficit During
|
Accumulated Other
Comprehensive
|
Total
Stockholders’
|
||||||||||||||||||||
|
Shares
|
Amount
|
Capital
|
Exploration Stage
|
Deficit
|
Deficit
|
|||||||||||||||||||
|
Balance at December 31, 2004
|
49,733,169 | $ | 50 | $ | 1,530 | $ | (1,633 | ) | $ | 1 | $ | 96 | ||||||||||||
|
Issuance of common stock for services
|
6,472,984 | 6 | 273 | - | - | 279 | ||||||||||||||||||
|
Issuance of common stock for cash
|
13,506,001 | 14 | 431 | - | - | 445 | ||||||||||||||||||
|
Share subscriptions delivered
|
- | - | - | - | - | (113 | ) | |||||||||||||||||
|
Common stock for mining concession finders’ fees
|
200,000 | - | 8 | - | - | 8 | ||||||||||||||||||
|
Warrants for mining concession finders’ fees
|
- | - | 4 | - | - | 4 | ||||||||||||||||||
|
Beneficial conversion feature
|
- | - | 207 | - | - | 207 | ||||||||||||||||||
|
Foreign currency translation loss
|
- | - | - | - | (7 | ) | (7 | ) | ||||||||||||||||
|
Net loss
|
- | - | - | (935 | ) | - | (935 | ) | ||||||||||||||||
|
Balance at December 31, 2005
|
69,912,154 | $ | 70 | $ | 2,453 | $ | (2,568 | ) | $ | (8 | ) | $ | (16 | ) | ||||||||||
See accompanying notes to these consolidated financial statements.
TARA GOLD RESOURCES CORP. AND SUBSIDIARIES
(An Exploration Stage Company)
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ DEFICIT
From inception (October 14, 1999) to December 31, 2012
(In thousands of U.S. dollars, except share amounts)
(Continued)
|
Common Stock
|
Additional
Paid-In
|
Accumulated
Deficit During
|
Accumulated Other
Comprehensive
|
Total
Stockholders’
|
||||||||||||||||||||
|
Shares
|
Amount
|
Capital
|
Exploration Stage
|
Deficit
|
Deficit
|
|||||||||||||||||||
|
Balance at December 31, 2005
|
69,912,154 | $ | 70 | $ | 2,453 | $ | (2,568 | ) | $ | (8 | ) | $ | (16 | ) | ||||||||||
|
Issuance of common stock for services
|
2,251,250 | 2 | 228 | - | - | 230 | ||||||||||||||||||
|
Issuance of common stock for cash
|
7,440,433 | 7 | 1,753 | - | - | 1,760 | ||||||||||||||||||
|
Share subscriptions delivered
|
634,615 | 1 | 41 | - | - | 7 | ||||||||||||||||||
|
Conversion of convertible debt to stock
|
3,700,000 | 4 | 187 | - | - | 191 | ||||||||||||||||||
|
Beneficial conversion feature
|
- | - | 185 | - | - | 185 | ||||||||||||||||||
|
Foreign currency translation loss
|
- | - | - | - | (32 | ) | (32 | ) | ||||||||||||||||
|
|
||||||||||||||||||||||||
|
Unrealized loss on investments
|
- | - | - | - | (449 | ) | (449 | ) | ||||||||||||||||
|
Net loss
|
- | - | - | 361 | - | 361 | ||||||||||||||||||
|
Balance as of December 31, 2006
|
83,938,452 | $ | 84 | $ | 4,847 | $ | (2,207 | ) | $ | (487 | ) | $ | 2,237 | |||||||||||
See accompanying notes to these consolidated financial statements.
TARA GOLD RESOURCES CORP. AND SUBSIDIARIES
(An Exploration Stage Company)
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ DEFICIT
From inception (October 14, 1999) to December 31, 2012
(In thousands of U.S. dollars, except share amounts)
(Continued)
|
Common Stock
|
Additional
Paid-In
|
Accumulated
Deficit During
|
Accumulated Other
Comprehensive
|
Total
Stockholders’
|
||||||||||||||||||||
|
Shares
|
Amount
|
Capital
|
Exploration Stage
|
Deficit
|
Deficit
|
|||||||||||||||||||
|
Balance at December 31, 2006
|
83,938,452 | $ | 84 | $ | 4,847 | $ | (2,207 | ) | $ | (487 | ) | $ | 2,237 | |||||||||||
|
Issuance of common stock for services
|
600,000 | 1 | 607 | - | - | 608 | ||||||||||||||||||
|
Issuance of common stock for cash
|
2,217,500 | 2 | 885 | - | - | 887 | ||||||||||||||||||
|
Issuance of common stock for exercise of warrants and receipt of cash
|
4,443,333 | 4 | 2,249 | - | - | 2,253 | ||||||||||||||||||
|
Stock based compensation
|
- | - | 1,164 | - | - | 1,164 | ||||||||||||||||||
|
Conversion of convertible debt to stock
|
2,316,667 | 2 | 67 | - | - | 69 | ||||||||||||||||||
|
Conversion of convertible debt to stock subscription and related settlement expense
|
- | - | - | - | - | 342 | ||||||||||||||||||
|
Stock bonus payable
|
- | - | - | - | - | 126 | ||||||||||||||||||
|
Stock issued for additional ownership interest in Amermin
|
1,500,000 | 2 | 598 | - | - | 600 | ||||||||||||||||||
|
|
||||||||||||||||||||||||
|
Foreign currency translation gain
|
- | - | - | - | 25 | 25 | ||||||||||||||||||
|
Unrealized loss on investments
|
- | - | - | - | (1,147 | ) | (1,147 | ) | ||||||||||||||||
|
Net loss
|
- | - | - | (2,441 | ) | - | (2,441 | ) | ||||||||||||||||
|
Balance as of December 31, 2007
|
95,015,952 | $ | 95 | $ | 10,417 | $ | (4,648 | ) | $ | (1,609 | ) | $ | 4,723 | |||||||||||
See accompanying notes to these consolidated financial statements.
TARA GOLD RESOURCES CORP. AND SUBSIDIARIES
(An Exploration Stage Company)
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ DEFICIT
From inception (October 14, 1999) to December 31, 2012
(In thousands of U.S. dollars, except share amounts)
(Continued)
|
Common Stock
|
Additional
Paid-In
|
Accumulated
Deficit During
|
Accumulated Other
Comprehensive
|
Total
Stockholders’
|
||||||||||||||||||||
|
Shares
|
Amount
|
Capital
|
Exploration Stage
|
Deficit
|
Deficit
|
|||||||||||||||||||
|
Balance at December 31, 2007
|
95,015,952 | $ | 95 | $ | 10,417 | $ | (4,648 | ) | $ | (1,609 | ) | $ | 4,723 | |||||||||||
|
Issuance of common stock for services
|
175,000 | - | 67 | - | - | 67 | ||||||||||||||||||
|
Shares subscriptions delivered
|
1,150,000 | 1 | 467 | - | - | - | ||||||||||||||||||
|
Conversion of convertible debt to stock
|
5,654,167 | 6 | 184 | - | - | 190 | ||||||||||||||||||
|
Foreign currency translation gain
|
- | - | - | - | (637 | |||||||||||||||||||