g42214010k.htm
U.S.
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, 2013

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)

Nevada
  
90-0316566
(State of incorporation)
  
(IRS Employer Identification No.)
     
375 N. Stephanie St., Bldg. 2 Ste. # 211
Henderson, NV
  
 
89014
(Address of principal executive office)
  
(Zip Code)
 
 
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.
 Yes £   No T

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.

 
Large accelerated filer £
  
Non-accelerated filer £(Do not check if a smaller reporting company)
Accelerated filer £
  
Smaller reporting company T

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act):
Yes  £    No T

The aggregate market value of the voting stock held by non-affiliates of the Company on June 30, 2013, was approximately $0.

As of April 14, 2014, 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 include 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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TABLE OF CONTENTS
 
   
Page
PART I
  
     
Item 1.
5
Item 1A.
19
Item 1B.
19
Item 2.
19
Item 3.
19
Item 4.
20
     
PART II  
     
Item 5.
20
Item 6.
21
Item 7.
21
Item 7A.
26
Item 8.
27
Item 9.
60
Item 9A.
60
Item 9B.
60
     
PART III  
     
Item 10.
61
Item 11.
63
Item 12.
66
Item 13.
67
Item 14.
67
     
PART IV  
     
Item 15.
68
     
SIGNATURES
70
 
 
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Item 1.  Business.

Tara Gold Resources Corp. 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, American Metal Mining (“AMM”) and American Copper Mining (“ACM”) 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 AMM, a Mexican corporation.  Tara Minerals formed Adit Resources Corp. (“Adit”) in 2009 to hold the Picacho Groupings, described further below, and to finance exploration and development of the Picacho Groupings through the sale of Adit’s securities. Currently, Tara Minerals owns 87% of the common stock of Adit Resources Corp. Adit in turns owns 99.99% of ACM.

Unless otherwise indicated, all references to “Tara Gold” or the “Company” include the properties and operations of Tara Minerals, Adit and their respective subsidiaries.

As of April 14, 2014, Tara Gold owned approximately 50% of the outstanding common stock of Tara Minerals. In June 2013, Tara Gold purchased 4,500,000 shares of Tara Minerals’ common stock, for an aggregate consideration of $1,350,000, or $0.30 a share.  Tara Gold and Tara Minerals’ operations in Mexico are conducted through AMM, ACM 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.

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 commenced distributing its shares of Tara Minerals to its shareholders by distributing one share of Tara Minerals for every 20 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.

After Tara Gold has distributed all of its Tara Minerals shares, Tara Gold will not have any interest in the properties owned by Tara Minerals.

Both Tara Gold and Tara Minerals may continue their efforts to develop mining properties that are thought to contain commercial quantities of gold, silver and other minerals. Additionally, once the distribution has been completed, the consolidated parent and subsidiary relationship between Tara Gold and Tara Minerals may change.
 
 
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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.

Below is a chart which illustrates the Company’s mining properties as of April 14, 2014.
 


No properties were joint ventured as of April 14, 2014.
 
 
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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, the Company will typically compile reports, past production records and geologic surveys concerning the area.  The Company 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, the Company may conduct limited reviews of title and related matters and obtain representations regarding ownership.  Although the Company 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 the Company’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 the Company’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 the Company 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 the Company’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.  

 
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The capital required for the exploration and development of mining properties is substantial.  The Company  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 the Company’s interest in a certain property in exchange for the expenditure of a specified amount), the sale of the Company’s properties, the Company’s operations, debt instruments which may or may not be convertible to Tara Gold or its subsidiaries’ common stock, and by the sale of Tara Gold and its subsidiaries’ common stock.  If the capital required to develop its properties is not available, the Company may attempt to sell one or more of its properties.  

The exploration and development of properties joint ventured with third parties may be managed by one of the joint venture participants which 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 the Company plans to acquire other mining properties, there is a limited supply of desirable mineral lands available in Mexico and the United States (“U.S.”) where the Company would consider conducting exploration and/or production activities.  In addition, the Company faces strong competition for new properties from other mining companies, many of which have greater financial resources. Further, the Company may be unable to acquire attractive new mining properties on terms that are considered acceptable.

The Company’s operations have not been affected by the escalating conflicts in Mexico involving drug cartels.

As of April 14, 2014, the Company had interests in the mining properties listed below, which are located in both Mexico and the U.S. The Company’s interests in the properties are generally in the form of mining concessions or patented or unpatented mining claims granted by the respective governments. Although Mexican mining concessions are similar in some respects to unpatented mining claims in the U.S., there are differences.  See “Mexican Mining Laws and Regulations” below for information regarding Mexican mining concessions.

Although the Company believes that each of its properties has deposits of silver, gold, copper, lead, zinc, or iron, the properties are in the exploration stage, do not have any proven reserves, and may never produce any of these metals in commercial quantities.

The Company’s most significant mining properties are the Don Roman Groupings, the Picacho Groupings and the Dixie Mining District Groupings, described further below. The other properties described below are not considered significant since the Company did not, as of April 14, 2014, 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 14, 2014, no plants or other facilities were located on any of the properties.  

 
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The Company 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.

   Las Brisas Prospect

The Company 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. The properties in this area have returned results positive for gold and silver, although reserves have not been calculated.  This prospect can be accessed from the paved highway from the town of Navojoa, Sonora going east towards Alamos, Sonora.  Twenty four 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.

Las Brisas and adjacent properties 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.

 
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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.

As of April 14, 2014, 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 14, 2014, the Company considers this prospect an asset held for disposal.
 
 
 
 
 
 
 
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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.

 
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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 the Company, the district has never been properly explored using present day, industry standard, exploration methods, including geochemistry, geophysics, and geology. The Company 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.

The Company’s justification for acquiring the Don Roman concessions is  based upon 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.

The temporary permits previously help expired in the third quarter 2013.  Without permits, the Company is allowed to perform the following:
 
·
Road maintenance/refurbishment of existing roads only
 
·
Living quarter construction/maintenance
 
·
Surveying
 
·
Surface Sampling
 
·
Old workings exploration/identification and sampling
 
·
Mapping
 
·
Plant maintenance and refurbishment
 
·
Use of 900kva electricity for plant testing during maintenance and refurbishment
 
·
Fencing, limiting identifying surface areas and general protection for all working and old working areas (safety)
 
·
Locating and drilling of water well
 
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, the Company 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, 2013, $7,703,000 has been spent on the mapping, sampling, trenching, plant facilities, processing equipment, and related mining equipment on the Don Roman property.

 
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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.  The work will be completed under the direction of Steve Eady, the Company’s Chief Geologist.

Additional exploration phases will be conducted after the start of mining and will be paid with revenue generated by concentrate produced from the Don Roman plant.

To maintain the Company’s rights to the Don Roman mining concessions, the Company must:
 
·
make concession tax payment of approximately $48,200 payable in two installments due January and July of each year;
 
·
file yearly Statistical and Technical reports no later than January 31st of each year; and
 
·
file yearly Production/Works Reports no later than May 31st of each year

Pirita Prospect

The Company 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 April 14, 2014, the Company has not spent any money on exploring this property.  Historical exploration was performed by other third parties prior to the Company’s acquisition of this property.

As of April 14, 2014, the Company 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, the Company 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 14, 2014, the Company had not paid the property taxes associated with this prospect and considers this prospect an asset held for disposal.

 
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Dixie Mining District Groupings
 

During 2013, the Company acquired the Black Diamond and Ontario prospects in the Dixie Mining District from an unrelated third party for $650,000. Management internally calls this the Ponderosa Project in the Dixie Mining District.  The Dixie Mining District is located in the state of Idaho in the U.S. The purchase price was paid in full in 2013. The land package consists of 6,741 acres consisting of both patented and unpatented mining claims.

The former owner of the prospects is entitled to receive royalties upon all ore, mineral-bearing rock and other deposits extracted and shipped or milled, treated, and sold from the property in the amount of 3% of the net smelter or mill returns earned from the property prior to December 31, 2014. The royalty agreement provides that the payment of the royalty will terminate upon the independent third party receiving $558,160. If the former owner has not received that amount in royalty payments as of December 31, 2014, the Company is required to pay the difference, if any, between the $558,160 and the amount of royalties received from the Company. No royalty is owed to the former owner if mining on the property is not yet economically feasible.  As of April 14, 2014 based on the amount of exploration conducted it is not yet economically feasible and no royalty payments have been paid.

 
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The prospects are part of the Dixie Mining district which is in the east-central portion of a northeast trending gold mineralized belt in Idaho. The belt, which, is approximately 35 miles wide by 50 miles long is known as the Orogrande Shear Zone and has been mined since the 1860’s.  The district is well known for its placer mines as well as its lode gold quartz veins.  The district is accessible by paved road to within 4 miles of the town of Dixie, Idaho.  The last miles are on maintained dirt road, which is drivable with 2WD truck to both claim groups.  See map above.

In general the area is underlain by metamorphic rocks, probably of pre-Cambrian Belt series, that have been intruded by granitic rocks of the Idaho batholith, which is probably of Cretaceous age. The batholithic rocks are predominately granodiorite and quartz monzonite. The Belt series rocks are quartzite, gneiss, augen gneiss and schists which in places include hornblende sills.

There are numerous northwest-southeast trending quartz veins in the district.  These occur in tension fractures, as small lightly sheared fractures or as short lenses echeloned along wide zones of fracturing and shearing.  Also present are low-grade, but potentially commercial disseminated deposits along the edges of the Orogrande shear zone.  The lode vein deposits are characteristically made up of quartz gangue, locally with pyrite, galena, sphalerite, tetrahedrite, stibnite, chalcopyrite and gold.  Much of the gold is free, especially in the oxidized zones of the veins near the surface.

During the summer of 2013, the veins at both Black Diamond and Ontario were exposed with surface trenching and 930 tons were removed and shipped to a custom mill in Wallace, Idaho for metallurgical testing.  Both properties were prepared for future exploration and definition drilling programs and substantial reclamation was completed.  An office trailer and equipment storage facilities were placed on site at the Ponderosa prospect.  Electrical power is available at the Ponderosa site from the public utility and water is available from a well on site.  For further exploration of the Ontario property, a well will be drilled and electricity provided by a generator.

As of December 31, 2013, the Company has spent $1,411,000 on exploring this property.  Historical exploration was performed by other third parties prior to the Company’s acquisition of this property. At this time neither of the properties has proven reserves.

To maintain its unpatented mining claims in good standing, the Company must file with the Bureau of Land Management an annual maintenance fee (of approximately $34,860 for 2014 for all claims within the claim group), a maintenance fee waiver certification, or proof of labor or affidavit of assessment work.

Tania Iron Ore Project

The Company leased the Tania Iron Ore Project in May 2011 in exchange for royalty payments based on production of iron ore.

The Company 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, 2013, the Company 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, 2013, approximately $169,000 had been spent on road access construction, mapping, sampling, and trenching.

As of April 14, 2014, the Company is in the process of terminating this lease.

 
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Las Viboras Dos Iron Ore Project

The Company 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 April 14, 2014, 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 14, 2014, the Company is in the process of terminating the acquisition agreement and the return of the property, or other disposal.  As of April 14, 2014, the Company considers this prospect an asset held for disposal.

Property owned by Adit Resources

Picacho Groupings

On April 4, 2012 the Company sold its 99.99% owned subsidiary, ACM to Yamana Mexico Holdings B.V. (“Yamana”). ACM’s primary asset is the Picacho Groupings located in Sonora, Mexico. The Picacho Groupings consist of the Picacho and Picacho Fractions prospects.

As consideration for the sale of ACM, Yamana paid $7.5 million, minus approximately $780,000 (the amount required to pay the Mexican government to release its tax lien on the Property). In addition, Yamana  surrendered 500,000 Adit’s common shares, and warrants to purchase an additional 250,000 Adit’s common shares, upon the execution of the sale agreement.

Yamana had the option to terminate the Agreement within ten business days prior to May 7, 2013 for any reason. If the Agreement was terminated, Yamana would be required to return ownership of ACM and the underlying property to the Companyt in good standing. If this occurred, the first cash payment made by Yamana would be retained by the Company.

On May 7, 2013, the Company received notice that Yamana was terminating the purchase agreement.

The Company calculated the fair value of the assets purchased and liabilities assumed as follows:

Assets:
  
May 8, 2013
  
Picacho Groupings
   $ 1,571,093  
Improvements (Mine site warehouse)
     18,115  
Liabilities:
        
None
     -  
   Fair market value of net identifiable assets acquired
     1,589,208  
Less: Fair value of the consideration transferred for ACM
     -  
Add:  Release of Adit’s tax liability due to the termination of the purchase
     1,900,763  
Value of assigned gain on bargain acquisition of ACM
   $ 3,489,971  

As of December 31, 2013, the Company has spent $1,392,000 exploring this property.  Historical exploration was performed by other third parties prior to the Company’s acquisition of this property.

 
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To maintain the Company’s rights to the Picacho mining concessions, the Company must:
 
·
make concession tax payment of approximately $69,130 payable in two installments due January and July of each year;
 
·
file yearly Statistical and Technical reports no later than January 31st of each year; and
 
·
file yearly Production/Works Reports no later than May 31st of each year

U.S. Mining Laws and Regulations

In the U.S., unpatented mining claims on unappropriated federal land may be acquired pursuant to procedures established by the Mining Law of 1872 and other federal and state laws.  These acts generally provide that a citizen of the U.S. (including a corporation) may acquire a possessory right to develop and mine valuable mineral deposits discovered upon appropriate 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.  

To maintain its unpatented mining claims in good standing, the Company must file with the Bureau of Land Management (“BLM”) an annual maintenance fee of $140 for each claim, which may change year to year, a maintenance fee waiver certification, or proof of labor or affidavit of assessment work, all in accordance with the laws at the time of filing which may periodically change.

The domestic exploration programs conducted by Tara Gold will be subject to federal, state and local environmental regulations.  The U.S. Forest Service and the BLM 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 the Company 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 the Company and may result in delays, interruptions, or a termination of operations, the extent of which cannot be predicted.

Mining operations in the U.S. 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.

The Company’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. The Company may incur expenditures for land reclamation pursuant to federal and state land restoration laws and regulations.  Under certain circumstances, the Company may be required to close an operation until a particular problem is remedied or to undertake other remedial actions.

 
17
 
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.   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.

To maintain its mining concessions in good standing, the holder of a mining concession must also:

 
·
Make semi-annual concession payments in January and July of each year;

 
·
File annual Statistical and Technical reports no later than January 31st of each year which must include the following:
 
§
Concession name title, surface area, general identification of modifications to the concession. If purchased in the year previous, contract information and whom acquired from, if the contract is still being paid, general terms of contract. If new minerals/metals have been found other than the ones in prior submissions.

 
·
File annual Production/Works Reports no later than May 31st of each year which must include the following:
 
§
Concession name, title surface area, identification of modifications to the concessions, abandonment, reduction whether in exploration or exploitation, tonnes produced, processed and what mineral/metal, whether it was smelted on location or where it was shipped to nationally for processing. Accounting information is used as support for the reports.

 
18
 
The exploration concessions in Mexico are valid for the period of 50 years from the date of issue.  After 50 years, applications can be filed to continue the concession right for another 50 years.  The concession rights to the Company’s Mexican properties expire between February 2047 and November 2061.

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 14, 2014, Tara Gold had 5 employees; Tara Minerals had 8 employees; and American Metal Mining, Tara Mineral’s subsidiary, had 2 employees. Any work related to Amermin was performed by Tara Mineral’s employees.
 
Tara Gold’s website is www.taragoldresources.com

Item 1A.  Risk Factors.

Not applicable.

Item 1B.  Unresolved Staff Comments.

Not applicable.

Item 2.  Properties.

See Item 1.

Item 3.  Legal Proceedings.

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

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

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

On November 10, 2011, Tara Minerals filed a complaint in Clark County, Nevada 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.

 
19
 
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 sought 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. 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 Tara Mineral’s  common stock, which may not be sold until the earlier of: (i) Tara Mineral’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 lead 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 is not aware of any legal proceedings which are threatened or contemplated.

Item 4.  Mine Safety Disclosures

The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act has been included in Exhibit 95 to this Annual Report on Form 10-K.

Item 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

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.

On July 18, 2011, the Securities and Exchange Commission revoked Tara Gold’s registration under the Securities Exchange Act of 1934 and Tara Gold’s stock ceased to trade. In 2012, Tara Gold successfully filed a Form 10 which cleared SEC comments on November 21, 2012. To begin trading once again Tara Gold will work to finalize the 15c-211 process with a market maker in 2014.

As of April 14, 2014 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.

Tara Gold has not paid and do not expect to declare or pay any cash dividends on our common stock in the foreseeable future, and 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 Tara Gold’s Board of Directors, in their discretion, and will depend on our financial condition, operating results, capital requirements and other factors deemed relevant by Tara Gold’s Board of Directors.

 
20
 
During the years ended December 31, 2013 and 2012 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.

Item 6.    Selected Financial Data

Not applicable.

Item 7.    Management’s Discussion and Analysis of Financial Condition and Results of Operation.

Tara Gold was incorporated in October 1999.  During the period from its incorporation through December 31, 2013, Tara Gold generated revenue of approximately $725,000 and incurred expenses of approximately $759,000 in cost of sales, $12,427,000 in exploration expenses and $48,510,000 in operating and general administration expenses.  Included in operating and general and administrative expenses are non-cash charges of approximately $9,200,000 pertaining to the issuance of stock based compensation and stock bonuses of Tara Minerals.

RESULTS OF OPERATIONS

Material changes of certain items in Tara Gold’s Statement of Operations for the year ended December 31, 2013, as compared to the year ended December 31, 2012, are discussed below.

Year  Ended
  
December 31, 2013
    
December 31, 2012
  
(In thousands of U.S. Dollars)
            
Revenue
   $ -     $ -  
Cost of revenue
     -       -  
Exploration expenses
     1,734       1,441  
Operating, general and administrative expenses
     3,406       5,047  
Net operating loss
   $ (5,140 )   $ (6,488 )

For the year ended December 31, 2013, exploration expenses increased due to work performed in the Dixie Mining District and limited work performed at Don Roman (no technical data was acquired during the year); compared to the year ended December 31, 2012, when the Company focused primarily on the Champinon mining concession, including $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. In both periods exploration expenses included expenses for geology consulting, assaying, field supplies other mine expenses and two full time engineers.
 
Material changes of certain items in Tara Gold’s operating, general and administrative expenses for the year ended December 31, 2013, as compared to the year ended December 31, 2012, are discussed below.

Year Ended
  
December 31, 2013
    
December 31, 2012
  
(In thousands of U.S. Dollars)
            
Bad debt expense
   $ 65     $ 805  
Investment banking and investor relations expense
     376       369  
Compensation, officer employment contracts and bonuses
     882       1,576  
Professional fees
     959       1,159  

 
21

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. Bad debt expense decreased for the year ended December 31, 2013, compared to the year ended December 31, 2012 due to a lower volume of transactions that generate IVA receivables  as the focus of the Company was directed at the Dixie Mining District in the U.S. during 2013 compared to the focus on Champinon in Mexico in 2012.  In addition, allowance for doubtful accounts related to IVA decreased as a result of recoveries of IVA in the amount of $40,489 subsequent to year end.

Investment banking and investor relations expense for the year ended December 31, 2013, compared to the year ended December 31, 2012 was relatively flat year over year with the Company’s continued efforts to obtain equity financing.

The decrease in compensation, officer employment contracts and bonuses were due to the U.S. controller position being outsourced starting in 2012, offset by additional personnel hired during March 2013 and Adit release its CEO and only employee at the end of 2012. Additionally, options vested/awarded decreased for the year ended December 31, 2013 (Tare Minerals’ options valued at $59,645) when compared to the year ended December 31, 2012 (Tara Minerals’ options valued at $244,865 and Adit’s options valued at $429,924).

Professional fees for the year ended December 31, 2013, were due to the payment for legal services related to the initial acquisition and subsequent additions to the Dixie Mining District and the settlement agreement reached with Carnegie related to the Champinon mining concession, in addition to accounting and auditing services performed in the normal course of business. During the year ended December 31, 2012, professional services were due to substantial legal and consulting services used in the negotiations of the agreement for the sale of ACM and services used for the Champinon property, in addition to accounting and auditing services performed in the normal course of business.

LIQUIDITY AND CAPITAL RESOURCES

The following is an explanation of Tara Gold’s material sources and (uses) of cash during the years ended December 31, 2013 and 2012:

   
December 31,
2013
    
December 31,
2012
  
(In thousands of U.S. Dollars)
      
Net cash used in operating activities
   $ (3,482 )   $ (5,751 )
Acquisition of property, plant, equipment, mine development, land and
construction in progress
     (217 )     (563 )
Proceeds from the sale or disposal of assets
     2,200       -  
Purchase of mining concession
     (650 )     -  
Mining deposits
     -       2  
Proceeds from the sale of ACM
     -       7,500  
Investment in ACM
     -       (33 )
Proceeds from notes payable
     150       -  
Payments towards notes payable
     (27 )     (741 )
Payments towards notes payable, related party
     -       (100 )
Change in due to/from related parties, net
     (6 )      (252 ) 
Non-controlling interest – cash from the sale of common stock of subsidiaries
     924       357  
Iron Ore Properties financial instrument
     -       50  
Cash, beginning of period
     957       419  

Tara Gold anticipates that its capital requirements during the year ending December 31, 2014 will be:
 
 
22

 
Tara Minerals
      
Exploration and Development – Don Roman Groupings
   $ 200,000  
Exploration and Development – Picacho Groupings
     160,000  
Exploration and Development -  Dixie Mining District, Idaho
     60,000  
Property taxes
     125,000  
General and administrative expenses
     1,000,000  
         
Tara Gold
        
General and administrative expenses
     375,000  
Total
   $ 1,920,000  

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

During the year ended December 31, 2013, Tara Minerals expanded its holdings into the U.S. by purchasing the Black Diamond and Ontario prospects in the Dixie Mining District.  To date, the land package consists of 6,741 acres of both patented and unpatented mining claims. The optioned claims include previously mined veins with a historic sampling of the exposed outcrops averaging 14 grams/tonne of gold.

In 2014, the Company’s primary focus is achieving commercial production. Now that the Don Roman District, which houses the Don Roman Groupings, is unencumbered, in any way, by the Carnegie litigation, and because of underground development that will be needed in the Dixie district to further that project, it has been determined that the best path is advancing the Don Roman district to production. There has been extensive preproduction planning for the Don Roman District, and the business plan has been developed and mapped out for execution. The preproduction surface level work has resulted in the identification of additional potential start-up mill feed material for processing.

In support of this plan, on January 9, 2014, Tara Minerals’  entered into an Investment Agreement with Panormus Trust and Investments Ltd. and Mediterranea Trust Ltd., collectively referred to as “MTI”. The Agreement grants MTI the right to invest in Tara Minerals through the purchase of up to $2,025,000 in the restricted common stock of the Company at $0.30 per share and a targeted loan of $4,725,000 for the development of the Don Roman Groupings (the "Don Roman Project Loan").

The targeted Don Roman Project Loan will be used to advance the Don Roman Groupings to commercial production and is payable from 49% of the net income realized from the minerals recovered from the concession area of the Don Roman Groupings.  Initially, MTI’s 49% net income interest will be designated as loan repayment.  Once the loan has been repaid, MTI will continue to receive 49% of the net income realized from the Don Roman Groupings.

The Company and MTI formed a Management Committee which oversees operations based on a committee approved Business Plan. The loan proceeds will be released from a segregated account based on approved expenditures. 
 
In written communication, Panormus Trust and Investments Ltd. and MTI have acknowledged that they have experienced some administrative and managerial challenges that have resulted in a delay in the release of funds. They have also acknowledged that the challenges have been resolved; the Company has agreed to give them until April 30, 2014 to fund.

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.

On May 25, 2011, Tara Gold commenced distributing its shares of Tara Minerals to its shareholders by distributing one share of Tara Minerals for every 20 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.

After Tara Gold has distributed all of its Tara Minerals shares, Tara Gold will not have any interest in the properties owned by Tara Minerals.
 
 
23
 
On July 18, 2011, the Securities and Exchange Commission revoked Tara Gold’s registration under the Securities Exchange Act of 1934 and Tara Gold’s stock ceased to trade. In 2012, Tara Gold successfully filed a Form 10 which cleared SEC comments on November 21, 2012. To begin trading once again Tara Gold will work to finalize the 15c-211 process with a market maker in 2014.

As of the date of this filing, the Company is still reviewing the Pirita, Tania and Las Viboras Dos properties for continued inclusion as part of the Company’s mining property portfolio. No payments toward Pirita were made in 2013 or 2012. The Company may decide to terminate the purchase/lease agreements and return the properties. The Company is currently 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.
 
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 except as disclosed in the subsequent event footnote in the financial statement included in Item 8.  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, 2013, 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 U.S. 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 allowed 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.

 
24
 
Property, Plant, Equipment, Mine Development and Land

Mining concessions and acquisitions, exploration and development costs relating to mineral properties with proven reserves 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 April 14, 2014, no events have occurred that would require the write-down of any assets. In addition, the carrying amounts of the Company’s mining properties 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.

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 an event takes place that removes the temporary element the Company appropriately reclassifies the instrument to debt or equity.

The Company periodically assesses its 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.

 
25
 
Reclamation and Remediation Costs (asset retirement obligations)

Reclamation costs are allocated to expense over the life of the related assets and are periodically adjusted to reflect changes in the estimated present value resulting from the passage of time and revisions to the estimates of either the timing or amount of the reclamation and abandonment costs.

Future remediation costs for reprocessing plant and buildings are accrued based on management’s best estimate, at the end of each period, of the undiscounted costs expected to be incurred at a site. Such cost estimates include, where applicable, ongoing remediation, maintenance and monitoring costs. Changes in estimates are reflected in earnings in the period an estimate is revised.

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.

Income Taxes

Income taxes are provided for using the asset and liability method of accounting in accordance with the Income Taxes Topic of the FASB ASC. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized by management. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The computation of limitations relating to the amount of such tax assets, and the determination of appropriate valuation allowances relating to the realization of such assets, are inherently complex and require the exercise of judgment. As additional information becomes available, management continually assesses the carrying value of our net deferred tax assets.

Item 7A.  Quantitative and Qualitative Disclosure about Market Risk

Not applicable.
 
 
26
 
Item 8.  Financial Statements and Supplementary Data.



TARA GOLD RESOURCES CORP. AND SUBSIDIARIES
 (An Exploration Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR
THE YEARS ENDED DECEMBER 31, 2013 AND 2012
AND
THE PERIOD FROM INCEPTION (OCTOBER 14, 1999) THROUGH DECEMBER 31, 2013


28
   
FINANCIAL STATEMENTS:
  
   
29
   
30
   
31
   
39
   
41
 
 
 
 
 
 
 
27
 

 
Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders
Tara Gold Resources Corp.

We have audited the accompanying consolidated balance sheets of Tara Gold Resources Corp. as of December 31, 2013 and 2012, and the related statements of operations and comprehensive loss, statements of cash flows, and statements of shareholder’s deficit for each of the years then ended and the period from inception (May 12, 2006) to December 31, 2013.  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 audits. The consolidated financial statements of Tara Gold Resources Corp. from inception (May 12, 2006) 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 audits 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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Tara Minerals Corp.  as of  December 31, 2013 and 2012, and the related statements of operations and comprehensive loss, statements of cash flows, and statements of shareholder’s deficit for each of the years then ended and the period from inception (May 12, 2006) to December 31, 2013, in conformity with accounting principles generally accepted in the United States of America.


/s/ StarkSchenkein, LLP
StarkSchenkein, LLP

Denver, Colorado
April 14, 2014
 
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)
CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. Dollars)

   
December 31, 2013
    
December 31, 2012
  
             
Assets
            
Current assets:
            
Cash
  
$
82
    
$
957
  
Other receivables, net
    
306
      
304
  
Due from related parties, net of due to
    
95
      
89
  
Deferred tax asset, current portion
    
-
      
3,323
  
Other current assets
    
138
      
54
  
Assets held for disposal, net
    
32
      
132
  
Total current assets
    
653
      
4,859
  
                 
Property, plant, equipment, mine development, land and construction in progress, net
    
7,452
      
8,878
  
Mining deposits
    
-
      
27
  
Deferred tax asset, non-current portion
    
-
      
2,961
  
Other assets
    
-
      
25
  
Total assets
  
$
8,105
    
$
16,750
  
                 
Liabilities and Stockholders’ Equity
                
Current liabilities:
                
Accounts payable and accrued expenses
  
$
2,670
    
$
3,460
  
Notes payable, current portion
    
188
      
1,114
  
       Convertible notes payable, net
    
76
      
-
  
Total current liabilities
    
2,934
      
4,574
  
Notes payable, non-current portion
    
28
      
722
  
Total liabilities
    
2,962
      
5,296
  
                 
Iron Ore Properties financial instrument, net
    
-
      
600
  
                 
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
    
(26,633
)
    
(22,720
)
Accumulated other comprehensive loss
    
(144
)
    
(377
)
Total Tara Gold stockholders’ deficit
    
(15,887
)
    
(12,207
)
Non-controlling interest
    
21,030
      
23,061
  
Total stockholders’ equity
    
5,143
      
10,854
  
Total liabilities and stockholders’ equity
  
$
8,105
    
$
16,750
  

See accompanying notes to these consolidated financial statements.
 
TARA GOLD RESOURCES CORP. AND SUBSIDIARIES
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS
(In thousands of U.S. dollars, except share amounts)

   
December 31,
2013
    
December 31,
2012
    
From Inception
October 14, 1999 to
December 31, 2013
  
                   
Revenues
                  
      Revenue from website development and software
   $ -     $ -     $ 168  
      Mining revenues
     -       -       557  
Total revenues
     -       -       725  
Cost of revenue
     -       -       759  
Gross margin
     -       -       (34 )
Exploration expenses
     1,734       1,441       12,427  
Operating, general, and administrative expenses
     3,406       5,047       48,510  
Net operating loss
     (5,140 )     (6,488 )     (60,971 )
                         
Non-operating income (expense):
                        
      Interest income
     51       32       426  
      Interest  expense
     (254 )     (16 )     (1,509 )
      Settlement loss, net
     (1,065 )     -       (931 )
      Loss on extinguishment of debt, net
     (7 )        (637 )       (2,193 )
      Gain on deconsolidation, dissolution and sale of joint venture
interest
     -       -       21,036  
      Gain (loss) on disposal of assets
     1,018       (2 )     613  
      Gain on acquisition of mining concession
     -       -       100  
      Realized loss on the sale of marketable securities
     -       -       (5,099 )
      Gain on sale of net cash flow interest
     -       -       197  
      Gain on Tara Minerals stock dividend
     -       -       1,028  
      Impairment of long lived asset
     (28 )     (171 )     (199 )
      Gain on bargain acquisition of ACM
     3,490       -       3,490  
      Other income
     -       2       1,347  
Total non-operating loss (income)
     3,205       (792 )     18,306  
Loss before income taxes
     (1,935 )     (7,280 )     (42,665 )
      Income tax (provision) benefit
     (6,284 )     727       345  
Loss from continuing operations
     (8,219 )     (6,553 )     (42,320 )
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
     (8,219 )     (2,977 )     (39,765 )
                         
     Net gain (loss) attributable to non-controlling interest
     4,306       (123 )     13,132  
                         
Net loss attributable to Tara Gold’s shareholders
     (3,913 )     (3,100 )     (26,633 )
                         
Other comprehensive gain (loss):
                        
     Foreign currency translation gain (loss)
     233       69       (144 )
     Total comprehensive loss
   $ (3,680 )   $ (3,031 )   $ (26,777 )
                         
Net loss per share, basic and diluted
   $ (0.08 )   $ (0.03 )        
                         
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)
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
From inception (October 14, 1999) to December 31, 2013
 (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 STOCKHOLDERS’ EQUITY
From inception (October 14, 1999) to December 31, 2013
 (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 STOCKHOLDERS’ EQUITY
From inception (October 14, 1999) to December 31, 2013
 (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 STOCKHOLDERS’ EQUITY
From inception (October 14, 1999) to December 31, 2013
 (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 STOCKHOLDERS’ EQUITY
From inception (October 14, 1999) to December 31, 2013
 (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 STOCKHOLDERS’ EQUITY
From inception (October 14, 1999) to December 31, 2013
 (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 STOCKHOLDERS’ EQUITY
From inception (October 14, 1999) to December 31, 2013
 (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 )     (637 )
                                                 
Unrealized loss on investments
     -       -       -       -       978       978  
                                                 
Net income
     -       -       -       5,795       -       5,795  
                                                 
Balance as of December 31, 2008
     101,995,119       102       11,135       1,147       (1,268 )     11,116  
                                                 
Issuance of common stock for services
     800,000       1       1,040       -       -       1,041  
                                                 
Foreign currency translation gain
     -       -       -       -       214       214  
                                                 
Unrealized loss on investments
     -       -       -       -       618       618  
                                                 
Net loss
     -       -       -       (4,440 )     -       (4,440 )
                                                 
Balance as of December 31, 2009
     102,795,119     $ 103     $ 12,175     $ (3,293 )   $ (436 )   $ 8,549  

See accompanying notes to these consolidated financial statements.

TARA GOLD RESOURCES CORP. AND SUBSIDIARIES
(An Exploration Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
From inception (October 14, 1999) to December 31, 2013
 (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 as of December 31, 2009
     102,795,119     $ 103     $ 12,175     $ (3,293 )   $ (436 )   $ 8,549  
                                                 
Foreign currency translation loss
     -       -       -       -