Edgar Filing: TARA GOLD RESOURCES CORP.

j41312010k.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

T ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2011

£ 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: None

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 Web site, 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

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, 2011 was approximately $36,705,000.

As of April 13, 2012, the Company had 102,795,119 outstanding shares of common stock.

Documents incorporated by reference: None

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This report includes "forward-looking statements". All statements other than statements of historical facts included in this report, regarding Tara Minerals’ financial position, business strategy, plans and objectives, are forward-looking statements. Although Tara Minerals believes that the expectations reflected in the forward-looking statements and the assumptions upon which such forward-looking statements are based are reasonable, it can give no assurance that such expectations and assumptions will prove to have been correct.

ITEM 1. BUSINESS.

Tara Gold (the “Company” or “Tara Gold”), was incorporated in 1999 in Nevada as Westnet Communications Group, Inc. On April 1, 2001 the Company acquired MerchantPark Communications, Inc. for shares of its common stock. After this acquisition the Company’s operations involved the development of software which could be used by small businesses for web-site development and hosting.

In March 2002 the Company’s 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 in early 2004 began acquiring oil and gas properties. In 2005 the Company sold its oil and gas properties after it determined that these properties were not economical.

In February 2006, the Company changed its name to Tara Gold Resources.

In May 2005 Tara Gold, through its subsidiary Corporacion Amermin S.A. de C.V. (“Amermin”), began acquiring mining properties in Mexico. In May 2006, the Company formed Tara Minerals Corp. (“Tara Minerals”), which owns 99.9% of the common stock of American Metal Mining S.A. de C.V., a Mexican corporation. Tara Minerals also owns 85% of the common stock of Adit Resources Corp (“Adit”). Tara Gold’s operations in Mexico are conducted through Amermin and American Metal Mining since Mexican law provides that only Mexican corporations are allowed to own mining properties. Tara Gold, through Amermin, focuses primarily on gold mining concessions. American Metal Mining’s primary focus is on industrial minerals, copper, lead, zinc, iron, industrial metals, and other associated metals. All of Tara Gold’s operations in Mexico are conducted through its Mexican subsidiaries. As of December 31, 2011, Tara Gold owned approximately 53% of the outstanding common stock of Tara Minerals.

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

Tara Gold began the distribution of its shares in Tara Minerals to its shareholders. On May 25, 2011 Tara Gold distributed one share of Tara Minerals for every 20 outstanding shares of Tara Gold. Additional distributions will be announced over the 24 months from the March 2011 declaration date until all Tara Minerals shares held by Tara Gold are distributed to Tara Gold’s shareholders.

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

Below is an organizational chart to illustrate the ownership structure of each subsidiary and each property of Tara Gold.

No properties were in joint ventures as of December 31, 2011. See below for the sale of American Copper Mining.

Tara Gold’s plan is to acquire low-cost properties that have the potential to yield high returns.

After acquiring a property and selecting a possible exploration area through its own efforts or with others, Tara Gold will typically compile reports, past production records and geologic surveys concerning the area. Tara Gold will then undertake a field exploration program to determine whether the area merits work. Initial field exploration on a property normally consists of geologic mapping and geochemical and/or geophysical surveys, together with selected sampling to identify host environments that may contain specific mineral occurrences. If an area shows promise, geologic drilling programs may be undertaken to further define the existence of any economic mineralization. If such mineralization is delineated, further work may be undertaken to estimate ore reserves, evaluate the feasibility for the development of the mining project, obtain permits for commercial development, and, if the project appears to be economically viable, proceed to place the deposit into commercial production.

The capital required for exploration and development of mining properties is substantial. Tara Gold plans to finance its future operations through joint venture arrangements with third parties (generally providing that the third party will obtain a specified percentage of Tara Gold’s interest in a certain property in exchange for the expenditure of a specified amount), the sale of Tara Gold properties, Tara Gold’s operations and by the sale of Tara Gold and its subsidiaries’, common stock.

The exploration and development of properties that are joint ventured with third parties are managed by one of the joint venture participants which is designated as the operator. The operator of a mining property generally provides all labor, equipment, supplies and management on a cost plus fee basis and 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 is typically required to pay the costs in proportion to its interests in the property.

In connection with the acquisition of a property, Tara Gold may conduct limited reviews of title and related matters and obtains representations regarding ownership. Although Tara Gold plans to conduct reasonable investigations (in accordance with standard mining practice) of the validity of ownership, it may be unable to acquire good and marketable title to its properties.

Mines have limited lives, which is an inherent risk in the mining business. Although Tara Gold plans to acquire other mining properties, there is a limited supply of desirable mineral lands available in Mexico where Tara Gold would consider conducting exploration and/or production activities. In addition, Tara Gold faces strong competition for new properties from other mining companies, many of which have substantial financial resources, and Tara Gold may be unable to acquire attractive new mining properties on terms that are considered acceptable.

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

As of December 31, 2011 Tara Gold had interests in the mining properties listed below, all of which are located in Mexico. Tara Gold’s interests in the properties are generally in the form of mining concessions granted by the Mexican government. Although Mexican mining concessions are similar, in some respects to unpatented mining claims in the United States, there are differences. See “Mexican Mining Laws and Regulations” below for information concern Mexican mining concessions.

Although Tara Gold believes that each of these properties has deposits of gold, copper, lead, zinc, or iron the properties are in the exploratory state, and with the exception of Don Roman (which is in the operating stage) do not have any known reserves, and may never produce any of these metals in commercial quantities.

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.

Any proposed exploration program for Tara Gold’s properties, with the exception of the Don Roman properties, will typically consist of rock-chip sampling, soil geochemistry, geological mapping, a geophysical survey, trenching, drilling, and resource calculation. Typically, 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) to test the extent and depth of sulphide 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. Drilling results will then be evaluated and a mineral resource calculation will be made. Notwithstanding the above, the exploration program for each property will depend on a number of factors, including the property’s particular geological conditions and the extent of any prior exploration work.

With the exception of the Don Roman Groupings, as of March 31, 2012 no plants or other facilities were located on any of the properties.

Tara Gold will contract with qualified personnel to conduct and supervise all aspects of its exploration program.

Tara Gold plans to finance exploration through joint venture or options arrangements with third parties (generally providing that the third party will obtain a specified percentage of Tara Gold’s interest in a certain property in exchange for the expenditure of a specified amount), the sale by Tara Gold of interests in properties, Tara Gold’s operations and by the sale of Tara Gold and its subsidiaries common stock.

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

Unless otherwise noted below, all of the properties below were purchased from non-related third parties.

La Currita Prospect

Tara Gold acquired the La Currita property in May 2005 for an effective purchase price of $1,253,439, plus $180,000 of value-added tax.

The La Currita property covers 65 hectares and is located in Chihuahua approximately 400 kilometers southwest of the city of Chihuahua, northern Mexico. The La Currita property resides within the Sierra Madre Occidental gold belt in the state of Chihuahua, Mexico and is surrounded by Paramount Gold’s San Miguel Property and Coeur D’Alene’s properties.

The La Currita mines were in production between 1983 and 1998. Mining operations resumed in early January 2007 and had terminated by October 2008.

Tara Gold is looking for a joint venture partner which would be willing to fund the development of this prospect. In the alternative, Tara Gold, depending on its ability to raise additional capital, will continue the development of this prospect with its own funds.

Las Minitas, Auriferos, Mariana and Mezquite, and Las Brisas properties are located in the southern part of the state of Sonora, Mexico in the Alamos district, which also resides on the western edge of Sierra Madre Occidental Gold belt. The properties in this group have returned results positive for gold and silver, although reserves have not been calculated.

Las Minitas Prospect

Tara Gold acquired the Las Minitas Prospect in March 2006 for an effective purchase price of $2,427,403, plus $340,000 in value-added tax.

The Las Minitas Prospect is 826.2575 hectares in size and is located in the state of Sonora, Mexico, approximately 40 kilometers northwest of the town of Alamos. The property lies at the western edge of the Sierra Madre Occidental gold-silver belt.

As of December 31, 2011 Tara Gold was in negotiations to amend its agreements relating to the Las Minitas Prospect which may include the termination of this agreement and the return of the property. Per the contract, Tara Gold can only return the property in good standing, which requires all taxes must be paid and the property must be clear of any liabilities. Tara Gold has been unable to pay all related property taxes.

Auriferos V Fraccion 1 and 2 Prospects

In 2007, Tara Gold signed an agreement with Pershimco Resources Ltd. (“Pershimco”) providing Pershimco the option to acquire a 75% interest in the Las Minitas Prospect. In March 2008 Tara Gold and Pershimco agreed to terminate their joint venture with respect to the Las Minitas prospect. The agreement with Pershimco contained a clause that any prospects purchased by Pershimco adjacent to the Las Minitas Prospect would revert to Tara Gold. This resulted in Tara Gold obtaining the Auriferos V Fraccion 1 and 2 Prospects (“Auriferos”), which the Company manages as part of the Las Minitas Prospect.

Should the Company return the Las Minitas Prospect the Company retains ownership of Auriferos.

The Auriferos concessions are 400.7177 hectares in size and is located in the state of Sonora, Mexico, near the town of Alamos and Quiriego.

Mariana and Mezquite Prospect

In March 2008, Pershimco transferred the mineral claims and obligations linked to the Mariana and Mezquite Prospect to Tara Gold. The obligations linked to Mariana and Mezquite are the remaining debt payments of $190,000, which includes value-added taxes of $25,907. The effective purchase price of this property is $171,451 plus value-added taxes.

The Mariana and Mezquite prospect is 276 hectares in size and is located in the state of Sonora, Mexico, near the towns of Alamos and Quiriego.

As of December 31, 2011 Tara Gold was in negotiations to amend its agreements with all vendors relating to Mariana and Mesquite Prospect which may include the termination of this agreement and the return of the property. Per the contract, Tara Gold can only return the property in good standing, which requires all taxes must be paid and the property must be clear of any liabilities. Tara Gold has been unable to pay all related property taxes.

Las Brisas Prospect

Tara Gold acquired the Las Brisas Prospect in August 2007 for an effective purchase price of $3,134, plus $391of 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.

Should the Company return the Las Minitas prospect the Company retains ownership of Las Brisas.

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 properties.

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 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 La Reforma Mining District as well as the stated gold belt that stems from the state of Chihuahua.

The Don Roman Groupings, are located in the northern part of the La Reforma Mining District of north eastern Sinaloa State, Mexico. The predominant rocks in the area are Upper Jurassic-Lower Cretaceous carbonate (limestone) rocks and Tertiary granitic intrusives. The La Reforma Mining District has been mined for more than 300 years, with substantial amounts of precious and base metals produced from numerous mines. In the opinion of Tara Minerals, the district has never been properly explored using present day, industry standard, exploration methods, including geochemistry, geophysics, and geology. Tara Minerals feels that this area may potentially host base metals that were never discovered or exploited due in part to market conditions, lack of technology, and lack of funding.

Continuing evaluation of the Don Roman Groupings has identified numerous mineralized systems at various locations on the property, some of which include a series of parallel northeast trending lead, zinc, silver structures that can be traced for more than 300 meters; an abandoned lead, zinc, silver mine; and historic vein-type gold mineralization. A number of these mineralized structures lie within a complex suite of volcanic-granitic and sedimentary (carbonate) rocks. Preliminary evaluation of the property has indicated the potential for five separate mineral systems each having varying mineral characteristics. Initial sampling has indicated the potential for two lead, zinc, silver systems; two gold copper systems; and one iron ore, gold, copper system.

Temporary provisional permits have been acquired, the Company continues to work toward procuring definitive permits as production and financing allows. High voltage electrical service has been supplied to an electrical substation which is owned by Tara Minerals and supplies power to operate the plant.

Two circuits capable of producing a minimum of 200 tonnes per day are operational, with a third circuit that can be completed when production makes it necessary. An additional regrind circuit can also be implemented at the appropriate time. The plant, when all circuits are operational, is capable of processing approximately 400 tonnes per day.

In 2010 Tara Minerals began production at the Don Roman plant and extracted lead, zinc, and silver material from its mine and stockpiled it for future processing at the plant. During production in 2010, a limited amount of concentrate was produced and sold. In the fourth quarter of 2010, the plant activity ceased.

As of December 31, 2011 approximately $3,500,000 has been spent on the processing plant facilities, processing equipment, and related mining equipment.

Pirita Prospect

Tara Minerals acquired the Pirita Prospect in June 2009 for an effective purchase price of $250,000, plus value-added tax of $30,000.

The Pirita Prospect is 6,656.1049 hectares in size and is located near the town of Bacoachi, state of Sonora, Mexico and the towns of Urieque and Morelos, state of Chihuahua, Mexico.

As of December 31, 2011 Tara Minerals was in negotiations to amend its agreements relating to the Pirita Prospect which may include the termination of this agreement and the return of the property. Per the contract, Tara Minerals can only return the property if it is in good standing, which requires all taxes must be paid and the property must be clear of any liabilities. Tara Minerals has been unable to pay all applicable property taxes.

Godinez Joint Venture

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

Iron Ore Projects

Tara Minerals raised $750,000 through a royalty rights offering to fund these projects.

Tania Iron Ore Project

Tara Minerals leased the Tania Iron Ore Project in May 2011for royalty payments based on production.

Tara Minerals has the right to remove 6 million tonnes of iron ore concentrate from the property, with renewal rights extending through the life of the property. Tara Minerals had agreed to pay $6 per tonne for the first 500,000 tonnes removed from the property and $7 per tonne thereafter. Tara Minerals has paid $100,000 against future royalty payments.

The property, comprised of 3,233.0147 hectares, is located approximately 33 kilometers southeast, via dirt road from the port of Manzanillo, in the city of Manzanillo, State of Colima, Mexico. The iron ore is contained within decomposed granite with little overburden. The property has not been subjected to modern exploration methods or concentrating processes prior to Tara Minerals.

As of the date of this filing, Tara Minerals was not satisfied with the results of the recoverability of the iron ore content and may let its lease lapse.

Las Viboras Dos Iron Ore Project

Tara Minerals acquired the Las Viboras Dos Iron Ore Project in July 2011 for an effective purchase price of $188,094, plus value-added tax of $30,095.

This property, comprised of 147.9201 hectares, is located near the town of La Huerta, state of Jalisco, Mexico. It is accessible by a 50 kilometer paved highway from Manzanillo towards La Huerta.

The Company is reviewing the property for continued inclusion in its mining property portfolio.

Mina El Champinon Iron Ore Project

In September 2011, Tara Minerals leased the Mina El Champinon Iron Ore Project (“Champinon”) for royalty payments based on production which gives Tara Minerals the right to mine the project for a period of 10 years with an automatic renewal clause.

This property, comprised of 150 hectares, is located approximately 12 kilometers from the Don Roman plant, in Choix, state of Sinaloa, Mexico. The property can be accessed with a regular pick-up truck by driving along a 4 kilometer paved road followed by an 8 kilometer dirt road. Tara's operational team has succeeded in identifying high, medium, and low grade mineralized iron zones. Drilling, mineralogy and design work, with a dual focus of tonnage expansion and production is in progress.

The Champinon deposit host rock is meta0andesite, which has been intruded by granodiorite/monzonite. Along contacts there are skarn mineralized zones formed. In the area of the deposit, there are numerous northwest/southeast trending steeply dipping fault/breccia zones. The kip is to the northeast. The zone at the Champinon deposit appears to be at least 100 meters wide consisting of andradite garnet up to 5 meters wide, vertically inter-layered with zones of high-grade magnetite up to 12 meters wide. The garnet varies from weakly to heavily mineralized with magnetite.

Mapping and sampling of this property is ongoing.

Tara Minerals will semi-annually pay the concession owner a royalty of $5, plus any value-added tax, for each tonne of material sold with a minimum of $300,000 in royalty payments every 6 months. The concession owner has been paid approximately $235,000, plus $38,000 in value-added taxes, as an advance against this royalty as of April 13, 2012.

Properties owned by Adit Resources

Picacho Groupings

The Picacho Groupings, comprised of 7,059.5691 hectares, were acquired in July 2009 and May 2011 for an effective purchase price of approximately $1,457,000, plus value-added tax of approximately $226,000. The Picacho Groupings consist of the Picacho and Picacho Fractions I, II and III properties.

The Picacho Groupings are located approximately 100 kilometers south of the U.S. – Mexico border within the Northern Sierra Madre gold belt, in close proximity to town of Bacoachi, state of Sonora, Mexico. From Bacoachi the concessions can be accessed through a Company maintained road with a regular pick-up truck. The area has a high level of exploration activity and is close to a national paved highway and power grid.

The area is underlain by Tertiary and Cretaceous andesitic, rhyolitic flows and tuffs with ignimbritic and less abundant intrusive porphyritic rocks. Past activity on the Picacho Groupings by various parties has resulted in the construction of at least nine adits, several shafts and raises, numerous workings and diamond drills, remnants of tailings from operations in the 1930´s have been found but most of this material was removed and further beneficiated by prior owners.

As consideration for the sale of American Copper, Yamana agreed to pay Adit, in U.S. dollars:

$7.5 million, minus approximately $780,000 (the amount required to pay the Mexican government to release its tax lien on the Property, see Note 5 in the financial statements below), will be deposited into an escrow account and will be released when the Mexican government releases its tax lien on the Property (the “Escrow Release Date”);

Yamana Gold Inc. will surrender 500,000 common shares, and warrants to purchase an additional 250,000 common shares, that it holds in the capital of Adit for cancellation by Adit;

$9.8 million one year after the Escrow Release Date;

During the period ending five years after the Escrow Release Date, $1.0 million for every 100,000 ounces of gold, (whether proved, measured or inferred) (as defined by Canadian Securities Administrators National Instrument 43-101) discovered on the Property. If no gold is defined on the Property three years after the Escrow Release Date, Yamana will make an advance payment of $3 million. Pursuant to this provision of the Agreement, Yamana will pay a maximum of $14 million.

$4.3 million six years after the Escrow Release Date.

Yamana has the option to terminate the agreement within ten business days prior to the one year anniversary of Escrow Release Date for any reason. If the Agreement is terminated, Yamana will be required to return the capital stock of American Copper and the underlying Property to Company in good standing.

United States Mining Laws and Regulations

In the United States, unpatented mining claims on inappropriate federal land may be acquired pursuant to procedures established by the Mining Law of 1872 and other federal and state laws. These acts generally provide that a citizen of the United States (including corporations) may acquire a possessory right to develop and mine valuable mineral deposits discovered upon inappropriate federal lands, provided that such lands have not been withdrawn from mineral location, e.g., national parks, military reservations and lands designated as part of the National Wilderness Preservation System. The validity of all unpatented mining claims is dependent upon inherent uncertainties and conditions. These uncertainties relate to such non-record facts as the sufficiency of the discovery of minerals, proper posting and marking of boundaries, and possible conflicts with other claims not determinable from descriptions of record. Prior to discovery of a locatable mineral thereon, a mining claim may be open to location by others unless the owner is in possession of the claim.

The domestic exploration programs conducted by Tara Gold will be subject to federal, state and local environmental regulations. The United States Forest Service and the Bureau of Land Management extensively regulate mining operations conducted on public lands. Most operations involving the exploration for minerals are subject to existing laws and regulations relating to exploration procedures, safety precautions, employee health and safety, air quality standards, pollution of stream and fresh water sources, odor, noise, dust, and other environmental protection controls adopted by federal, state, and local governmental authorities as well as the rights of adjoining property owners. Tara Gold may be required to prepare and present to federal, state, or local authorities data pertaining to the effect or impact that any proposed exploration or production of minerals may have upon the environment. All requirements imposed by any such authorities may be costly and time-consuming, and may delay commencement or continuation of exploration or production operations.

Future legislation and regulations are expected to continue to emphasize the protection of the environment, and, as a consequence, the activities of Tara Gold may be more closely regulated to further the cause of environmental protection. Such legislation and regulations, as well as future interpretation of existing laws, may require substantial increases in capital and operating costs to Tara Gold and may result in delays, interruptions, or a termination of operations, the extent of which cannot be predicted.

Mining operations in the United States are subject to inspection and regulation by the Mine Safety and Health Administration of the Department of Labor (MSHA) under provisions of the Federal Mine Safety and Health Act of 1977.

Tara Gold’s operations will also be subject to regulations under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (CERCLA or Superfund), which regulates and establishes liability for the release of hazardous substances, and the Endangered Species Act (ESA), which identifies endangered species of plants and animals and regulates activities to protect these species and their habitats. Tara Gold may incur expenditures for land reclamation pursuant to federal and state land restoration laws and regulations. Under certain circumstances, Tara Gold may be required to close an operation until a particular problem is remedied or to undertake other remedial actions.

Mexican Mining Laws and Regulations

In Mexico, Article 27 of the Mexican Constitution grants the ownership of essentially all minerals to the Mexican nation. The right to exploit those minerals is given to private parties through concessions issued by the Mexican government. The current Mining Law of Mexico was enacted in 1992. Concessions are granted on mining lots, the sides of which measure 100 meters, or a multiple of 100, except when adjoining lots (granted when there were no size requirements) require a smaller size.

An exploration concession is granted to the first applicant that meets the requirements of the Mining Law, the most important of which is that the claimed area is deemed to be “free land”. Under the Mining Law, areas that are already covered by mining concessions or applications for mining concessions are not free, as well as reserved areas such as the coast and the seabed.

Exploration mining concession applications are filed at government offices. Exploration concessions are valid for 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, depending on the size of the mining lot and, for an exploration mining concession, the number of years elapsed since its issue, pursuant to minimum investment tables established by the Mexican government. Assessment work may be done either through expenditures or the sale of minerals. A report must be filed in May of every year regarding the work for the previous calendar year. Lack of performance of the minimum work will result in the cancellation of the concession; payment to the government in lieu of required assessment of work is not allowed.

Concessionaires must comply with federal environmental regulations which generally require that mining activities be subject to an environmental impact statement authorization. Normally an environmental impact statement authorization can be obtained in six to twelve months from the date of its filing. However, mining operations which do not exceed levels established by the Mexican government are not required to file an environmental impact statement.

The Mining Law forbids concessionaires from removing mine timbering and supports and requires compliance with all safety rules promulgated by the Mexican government.

Mexican and foreign individuals, as well as Mexican corporations, are allowed to hold mining concessions. Although foreign corporations may not hold mining concessions, foreign corporations may, however, own Mexican corporations.

General

Tara Gold’s offices are located at 375 N. Stephanie St., Bldg. 2 Ste. #211, Henderson, NV 89014 of office space supplied free of charge by Lynda R. Keeton-Cardno, Chief Financial Officer of Tara Gold and Tara Minerals.

As of the date of this filing Tara Gold (including Tara Minerals) has 8 employees. American Metal Mining has 4 employees. All personnel for Amermin and American Copper Mining are subcontract labor.

Tara Gold’s website is www.taragoldresources.com

ITEM 1A. RISK FACTORS.

There is no assurance that any of Tara Gold’s remaining properties will be capable of producing precious or industrial metals in commercial quantities.

There is no assurance that Tara Gold will remain current or file its periodic Exchange Act filings.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

Not applicable.

ITEM 2. PROPERTIES.

See Item 1.

ITEM 3. LEGAL PROCEEDINGS.

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

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

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

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

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

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

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

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

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

On November 10, 2011, Tara Minerals filed a complaint against Carnegie seeking a declaration that Carnegie failed to properly exercise its option to acquire an interest in the iron ore properties. Carnegie is required to respond to the complaint on or before March 21, 2012.

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

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

ITEM 4. MINE SAFETY DISCLOSURES.

None.

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. As a result of the SEC’s stop trading order, Tara Gold’s common stock was removed from the Pink Sheets and through September 30, 2011 traded only on an unsolicited basis.

As a result of the Commission’s ruling on July 18, 2011 (see Item 3 above), all trading in Tara Gold’s stock ceased.

Shown below are the ranges of high and low sales prices for Tara Gold’s common stock for the periods indicated as reported by FINRA and as reported on www.stockwatch.com. The market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commissions and may not necessarily represent actual transactions.

Quarter Ended	High		Low
March 31, 2010	$	0.74	$	0.36
June 30, 2010	$	0.68	$	0.05
September 30, 2010	$	0.62	$	0.30
December 31, 2010	$	0.49	$	0.26
March 31, 2011	$	0.50	$	0.26
June 30, 2011	$	0.47	$	0.20
September 30, 2011	$	0.45	$	0.40
December 31, 2011	Not reported		Not reported

As of April 13, 2012 Tara Gold had 102,795,119 outstanding shares of common stock and 78 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.

Holders of common stock are entitled to receive dividends as may be declared by the Board of Directors. Tara Minerals’ Board of Directors is not restricted from paying any dividends but is not obligated to declare a dividend. No dividends have ever been declared and it is not anticipated that dividends will ever be paid.

Recent Sales of Unregistered Securities and Use of Proceeds

None.

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, 2011 Tara Gold generated revenue of approximately $725,000 and incurred expenses of approximately $759,000 in cost of sales, $9,252,000 in exploration expenses and $40,057,000 in operating and general administration expenses. Included in operating and general and administrative expenses are non-cash charges of approximately $8,464,000 pertaining to the issuance of stock based compensation and stock bonuses of Tara Minerals.

Material changes of certain items in Tara Gold’s Statement of Operations for the year ended December 31, 2011, as compared to the same period last year, are discussed below.

Twelve Months Ended	December 31, 2011			December 31, 2010
(In thousands of U.S. Dollars)
Revenue	$	-		$	160
Cost of revenue		-			658
Exploration expenses		2,901			2,033
Operating, general and administrative expenses		5,788			17,471
Net operating loss	$	(8,689	)	$	(20,002	)

In 2010 Tara Minerals began production at the Don Roman plant and extracted lead, zinc, and silver ore from its mine and stockpiling it for future processing at its processing plant. During production in 2010, a limited amount of concentrate was produced and sold. In the fourth quarter of 2010, the plant activity ceased. The sharp decrease in Tara Minerals’ net operating loss is a direct result of the suspension of plant operations at the end of 2010.

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

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

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

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

Year Ended	December 31, 2011		December 31, 2010
(In thousands of U.S. Dollars)
Bad debt expense	$	850	$	1,610
Depreciation expense		299		250
Investment banking and investor relations expense		577		7,701
Compensation, officer employment contracts and bonuses		1,730		4,671
Other taxes and penalties		283		390
Professional fees		1,235		1,433
Repairs and maintenance		28		59
Rent and rental of equipment		82		19

Bad debt expense decreased for the year ended December 31, 2011 due to the renegotiation of an agreement which included IVA and caused an adjustment of IVA Receivables, allowance and bad debt expense. Depreciation expense increased as more plant and equipment was in service during the year ended December 31, 2011 than 2010.

The decrease in investment banking and investment banking and investor relations expense is due to fewer consultants needed in 2011. During 2010 the Company expected to start production and apply for listing on the NYSE Amex. In anticipation of these events, consultants were hired to handle investor relations. For the year ended December 31, 2011 investor relations expenses consisted of $36,000 paid with options, $400,950 paid with common stock and $141,000 paid in cash to consultants. As of December 31, 2010 investor relations expenses consisted of $4,397,000 paid with common stock for investor relations at the Tara Minerals level and $26,000 paid with common stock for investor relations at the Adit level, total options valued at $3,079,000 and the remainder was paid in cash.

During the year ended December 31, 2011 compensation, officer employment contracts and bonuses consisted of options and stock bonuses with a value of $816,000, and officers’ compensation of $1,542,000. During the year ended December 31, 2010 compensation, officer employment contracts and bonuses consisted of options with a value of $3,541,000, $344,500 for stock bonuses and officers’ compensation of $667,000.

Other taxes and penalties in 2011 consisted of all tax for properties in the amount of $115,000 were brought current; payroll taxes and related penalties were recognized in the amount of $163,000 and the additional $5,000 were other taxes that resulted from the normal course of business. Other taxes and penalties in 2010 consisted of accrued payroll taxes, accrued taxes related to the Tara Gold U.S. Federal IRS Audit other taxes that resulted from the normal course of business.

Professional fees decreased in 2011 due to decreased because fewer professionals and consultants were needed when compared to 2010. Legal fees included within this caption increased in 2011 due to increased legal expenses, see Item 3 above.

Repairs and maintenance decreased in the year ended December 31, 2011 because the plant at the Don Roman Groupings stopped operating; therefore the Company spent less on repairs and maintenance of machinery and other plant and mining equipment. During the year ended December 31, 2010 the Company was working on software to track inventory and parts was not used in 2011; the plant at the Don Roman Groupings was operating and more repairs and maintenance expenses were incurred.

Rent and rental equipment increased during the year ended December 31, 2011 due to rental of an office and apartments in Manzanillo, Colima, where potential Iron Ore Properties are located.

The following is an explanation of Tara Gold’s material sources and (uses) of cash (in thousands of U.S. dollars) during the years ended December 31, 2011 and 2010:

	December 31,
	2011			2010
Net cash used in operating activities	$	(3,789	)	$	(3,108	)
Acquisition of property, plant and equipment		(8	)		(268	)
Purchase of mining properties		(211	)		(25	)
Sale of marketable securities		44			-
Loans from third and related parties		-			480
Repayment of loans		(135	)		(761	)
Sale of common stock of subsidiaries		3,508			2,372
Proceeds from Iron Ore financial instrument		750			-
Cash on hand at beginning of period		193			1,451

Tara Gold does not know of any trends, events or uncertainties that have had, or are reasonably expected to have, a material impact on its sales, revenues or income from continuing operations, or liquidity and capital resources.

Tara Gold anticipates that its capital requirements during the twelve months ending December 31, 2012 will be:

Tara Minerals
Exploration and Development – Don Roman Groupings	$	1,250,000
Exploration and Development - Picacho Groupings (through date of sale)		225,000
Exploration and Development – Iron Ore Projects		1,500,000
Property taxes		150,000
General and administrative expenses		500,000

Tara Gold
Property taxes		34,000
General and administrative expenses		500,000
Total	$	4,159,000

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

Tara Gold will need to obtain additional capital if it is unable to generate sufficient cash from its operations or find joint venture partners to fund all or part of its exploration and development costs.

In 2011, the Company announced the appointment of Mr. Steve Eady as the Company's Chief Geologist and Mr. Tom Claridge as Senior Mining and Plant Engineer. Based on the Company’s additional expertise in- house the Company expects to explore and develop the iron ore projects with an emphasis on production in 2012.

Mr. Eady is an accomplished geologist and has been working in mining since 1973. His past experience includes mineralogy, geology, ore reserve development, leach testing, feasibility studies and geological related development research. He has worked in the past for Inspiration Consolidated Copper Company, and on numerous exploration and development projects at Phelps Dodge Mining / Freeport-McMoRan Copper & Gold Inc.

Mr. Claridge is an accomplished project manager with over 20 years of experience in mine operations, plant design, and water treatment all over the world. His experience includes mineral resource evaluations, conceptual and feasibility reports, metallurgical test programs, economic evaluations and mine and process development of engineering projects for major and junior mining companies. His past employers include Hanlon Engineering & Architecture Inc. and Phelps Dodge Mining / Freeport-McMoRan Copper & Gold Inc.

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

Tara Gold’s future plans will be dependent upon the amount of capital available to Tara Gold, the amount of cash provided by it and its subsidiaries operations, and the extent to which Tara Gold is able to have joint venture partners pay the costs of exploring and developing its mining properties.

Tara Gold does not have any commitments or arrangements from any person to provide Tara Gold with any additional capital. If additional financing is not available when needed, Tara Gold may continue to operate in its present mode or Tara Gold may need to cease operations. Tara Gold does not have any plans, arrangements or agreements to sell its assets or to merge with another entity.

See Note 1 to the financial statements included as part of this report for a description of Tara Gold’s accounting policies and recent accounting pronouncements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

Not applicable.

ITEM 8. FINANCIAL STATEMENTS.

TARA GOLD RESOURCES CORP. AND SUBSIDIARIES

(An Exploration Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

FOR

THE YEARS ENDED DECEMBER 31, 2011 AND DECEMBER 31, 2010

AND

THE PERIOD FROM INCEPTION (OCTOBER 14, 1999) THROUGH DECEMBER 31, 2011

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	22

FINANCIAL STATEMENTS:

Consolidated Balance Sheets	24

Consolidated Statements of Operations and Comprehensive Loss	25

Consolidated Statements of Stockholders’ Deficit	26

Consolidated Statements of Cash Flows	34

Notes to the Consolidated Financial Statements	37

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders’

of Tara Gold Resources Corp., Inc. and Subsidiaries,

We have audited the accompanying consolidated balance sheet of Tara Gold Resources Corp., Inc. (an exploration stage company) (a Nevada corporation) and subsidiaries as of December 31, 2011, and the related consolidated statements of operations and comprehensive loss, stockholders' equity, and cash flows for the year then ended and the period from inception (October 14, 1999) through December 31, 2011. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. The financial statements of Tara Gold Resources Corp., Inc. and subsidiaries from inception (October 14, 1999) through December 31, 2010, were audited by other auditors whose report there on dated April 18, 2011, expressed an unqualified opinion on those statements.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Tara Gold Resources Corp, Inc. and subsidiaries as of December 31, 2011, and the results of its operations and its cash flows for the year then ended and for the period from inception (October 14, 1999) through December 31, 2011, in conformity with accounting principles generally accepted in the United States of America.

Wilson Morgan LLP

/s/ Wilson Morgan LLP

Irvine, California

April 13, 2012

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders’

of Tara Gold Resources Corp., Inc. and Subsidiaries,

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Tara Gold Resources Corp, Inc. and subsidiaries as of December 31, 2010, and the results of their operations and their cash flows for the year then ended and for the period from inception (October 14, 1999) through December 31, 2010, in conformity with accounting principles generally accepted in the United States of America.

/s/ Mendoza Berger & Company, LLP

Mendoza Berger & Company, LLP

Irvine, CA

April 18, 2011

TARA GOLD RESOURCES CORP. AND SUBSIDIARIES

(An Exploration Stage Company)

CONSOLIDATED BALANCE SHEETS

(In thousands of U.S. Dollars)

	December 31, 2011			December 31, 2010
Assets
Current assets:
Cash	$	419		$	193
Other receivables, net		539			1,212
Marketable securities		-			450
Deferred tax asset, current		4,041			-
Other current assets		117			1
Total current assets		5,116			1,856
Property, plant, equipment, mine development, and land, net		11,084			12,358
Mining deposits		204			53
Deferred tax, non-current portion		2,475			2,931
Goodwill		12			12
Other assets		35			161
Total assets	$	18,926		$	17,371

Liabilities and Stockholders’ equity
Current liabilities:
Accounts payable and accrued expenses	$	2,858		$	2,675
Notes payable, current portion		2,607			994
Notes payable related party, current portion		100			100
Due to related parties, net of due from		156			259
Total current liabilities		5,721			4,028
Notes payable, non-current portion		69			3,021
Total liabilities		5,790			7,049

Iron Ore Properties financial instrument, net		570			-

Stockholders’ deficit:
Common stock: $0.001 par value; authorized 150,000,000 shares; issued and outstanding 102,795,119 and 102,795,119 shares		103			103
Additional paid-in capital		10,787			12,175
Accumulated deficit during exploration stage		(19,620	)		(17,060	)
Accumulated other comprehensive loss		(446	)		(514	)
Total Tara Gold stockholders’ deficit		(9,176	)		(5,296	)
Non-controlling interest		21,742			15,618
Total equity		12,566			10,322
Total liabilities and equity	$	18,926		$	17,371

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)

	For the Year Ended December 31,						From inception October 14, 1999 to December 31,
	2011			2010			2011
Revenues
Revenue from website development and software	$	-		$	-		$	168
Mining revenues		-			160			557
Total revenues		-			160			725
Cost of revenue		-			658			759
Gross margin		-			(498	)		(34	)
Exploration expenses		2,901			2,033			9,252
Operating, general, and administrative expenses		5,788			17,471			40,057
Net operating loss		(8,689	)		(20,002	)		(49,343	)
Non-operating (income) expense:
Interest (income)		(31	)		(26	)		(343	)
Interest expense		28			450			1,239
Settlement expense		-			-			(134	)
Loss on extinguishment of debt		-			-			766
(Gain) on deconsolidation of joint venture		-			-			(8,661	)
(Gain) on sale of joint venture interest		-			-			(3,112	)
(Gain) on dissolution of joint venture		(100	)		-			(9,263	)
Loss on disposal of assets		4			-			403
(Gain) on acquisition of mining concession		-			-			(100	)
Loss on conversion of note payable		-			783			783
Realized loss on the sale of marketable securities		389			-			5,099
(Gain) on sale of net cash flow interest		-			-			(197	)
(Gain) on TARM Stock Dividend, net of noncontrolling interest		(1,028	)		-			(1,028	)
Other (income)		(20	)		(757	)		(1,345	)
		(758	)		450			(15,893	)
Loss before income taxes		(7,931	)		(20,452	)		(33,450	)
Income tax provision (benefit), net of expense		(3,585	)		(1,015	)		(5,902	)
Loss from continuing operations		(4,346	)		(19,437	)		(27,548	)
Discontinued operations
Income from operations of discontinued oil properties (including loss on disposal of $7)		-			-			17
Loss from operations of La Escuadra		-			-			(1,038	)

Net loss		(4,346	)		(19,437	)		(28,569	)
Add: Net loss attributable to non-controlling interest		1,786			5,670			8,949
Net loss attributable to Tara Gold shareholders’		(2,560	)		(13,767	)		(19,620	)

Other comprehensive income (loss):
Foreign currency translation		68			(78	)		(446	)
Comprehensive loss	$	(2,492	)	$	(13,845	)	$	(20,066	)

Net loss per share, basic and diluted	$	(0.04	)	$	(0.19	)
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 SHAREHOLDERS’ DEFICIT

From inception (October 14, 1999) to December 31, 2011

(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	)

Currency translation adjustment		-		-		-			-			1		1

Net loss		-		-		-			(418	)		-		(418	)

Balance at December 31, 2001		18,160,400	$	18	$	662		$	(427	)	$	1	$	254

See accompanying notes to these consolidated financial statements.

TARA GOLD RESOURCES CORP. AND SUBSIDIARIES

(An Exploration Stage Company)

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ DEFICIT

From inception (October 14, 1999) to December 31, 2011

(In thousands of U.S. dollars, except share amounts)

(Continued)

	Common Stock				Additional Paid In		Accumulated Deficit During			Accumulated Other Comprehensive		Total Stockholders’
	Shares		Amount		Capital		Exploration Stage			Deficit		Deficit

Balance at December 31, 2001		18,160,400	$	18	$	662	$	(427	)	$	1	$	254

Issuance of common stock for services		2,336,500		2		22		-			-		24

Issuance of common stock for debt		5,844,976		6		272		-			-		278

Issuance of Common stock for cash		6,000,000		6		23		-			-		29

Net Loss		-		-		-		(677	)		-		(677	)

Balance at December 31, 2002		32,341,876		32		979		(1,104	)		1		(92	)

Issuance of Common stock for cash		3,754,848		4		53		-			-		57

Issuance of common stock for debt		9,019,445		9		189		-			-		198

Net loss		-		-		-		(156	)		-		(156	)

Balance at December 31, 2003		45,116,169	$	45	$	1,221	$	(1,260	)	$	1	$	7

See accompanying notes to these consolidated financial statements.

TARA GOLD RESOURCES CORP. AND SUBSIDIARIES

(An Exploration Stage Company)

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ DEFICIT

From inception (October 14, 1999) to December 31, 2011

(In thousands of U.S. dollars, except share amounts)

(continued)

	Common Stock						Additional Paid In		Accumulated Deficit During			Accumulated Other Comprehensive		Total Stockholders’
	Shares			Amount			Capital		Exploration Stage			Deficit		Deficit

Balance at December 31, 2003		45,116,169		$	45		$	1,221	$	(1,260	)	$	1	$	7

Issuance of common stock for cash		2,807,000			3			161		-			-		164

Issuance of common stock for services		3,010,000			3			147		-			-		150

Stock cancelled		(1,200,000	)		(1	)		1		-			-		-

Share subscriptions received		-			-			-		-			-		148

Net loss		-			-			-		(373	)		-		(373	)

Balance at December 31, 2004		49,733,169		$	50		$	1,530	$	(1,633	)	$	1	$	96

See accompanying notes to these consolidated financial statements.

TARA GOLD RESOURCES CORP. AND SUBSIDIARIES

(An Exploration Stage Company)

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ DEFICIT

From inception (October 14, 1999) to December 31, 2011

(In thousands of U.S. dollars, except share amounts)

(Continued)

	Common Stock				Additional Paid In		Accumulated Deficit During			Accumulated Other Comprehensive			Total Stockholders’
	Shares		Amount		Capital		Exploration Stage			Deficit			Deficit

Balance at December 31, 2004		49,733,169	$	50	$	1,530	$	(1,633	)	$	1		$	96

Issuance of common stock for services		6,472,984		6		273		-			-			279

Issuance of common stock for cash		13,506,001		14		431		-			-			445

Share subscriptions delivered		-		-		-		-			-			(113	)

Common stock for mining concession finders’ fees		200,000		-		8		-			-			8

Warrants for mining concession finders’ fees		-		-		4		-			-			4

Beneficial conversion feature		-		-		207		-			-			207

Foreign currency translation loss		-		-		-		-			(7	)		(7	)

Net loss		-		-		-		(935	)		-			(935	)

Balance at December 31, 2005		69,912,154	$	70	$	2,453	$	(2,568	)	$	(8	)	$	(16	)

See accompanying notes to these consolidated financial statements.

TARA GOLD RESOURCES CORP. AND SUBSIDIARIES

(An Exploration Stage Company)

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ DEFICIT

From inception (October 14, 1999) to December 31, 2011

(In thousands of U.S. dollars, except share amounts)

(CONTINUED)

	Common Stock				Additional Paid In		Accumulated Deficit During			Accumulated Other Comprehensive			Total Stockholders’
	Shares		Amount		Capital		Exploration Stage			Deficit			Deficit

Balance at December 31, 2005		69,912,154	$	70	$	2,453	$	(2,568	)	$	(8	)	$	(16	)

Issuance of common stock for services		2,251,250		2		228		-			-			230

Issuance of common stock for cash		7,440,433		7		1,753		-			-			1,760

Share subscriptions delivered		634,615		1		41		-			-			7

Conversion of convertible debt to stock		3,700,000		4		187		-			-			191

Beneficial conversion feature		-		-		185		-			-			185

Foreign currency translation loss		-		-		-		-			(32	)		(32	)

Unrealized loss on investments		-		-		-		-			(449	)		(449	)

Net loss		-		-		-		361			-			361

Balance as of December 31, 2006		83,938,452	$	84	$	4,847	$	(2,207	)	$	(487	)	$	2,237

See accompanying notes to these consolidated financial statements.

TARA GOLD RESOURCES CORP. AND SUBSIDIARIES

(An Exploration Stage Company)

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ DEFICIT

From inception (October 14, 1999) to December 31, 2011

(In thousands of U.S. dollars, except share amounts)

(Continued)

	Common Stock				Additional Paid In		Accumulated Deficit During			Accumulated Other Comprehensive			Total Stockholders’
	Shares		Amount		Capital		Exploration Stage			Deficit			Deficit

Balance at December 31, 2006		83,938,452	$	84	$	4,847	$	(2,207	)	$	(487	)	$	2,237

Issuance of common stock for services		600,000		1		607		-			-			608

Issuance of common stock for cash		2,217,500		2		885		-			-			887

Issuance of common stock for exercise of warrants and receipt of cash		4,443,333		4		2,249		-			-			2,253

Stock based compensation		-		-		1,164		-			-			1,164

Conversion of convertible debt to stock		2,316,667		2		67		-			-			69

Conversion of convertible debt to stock subscription and related settlement expense		-		-		-		-			-			342

Stock bonus payable		-		-		-		-			-			126

Stock issued for additional ownership interest in Amermin		1,500,000		2		598		-			-			600

Foreign currency translation gain		-		-		-		-			25			25

Unrealized loss on investments		-		-		-		-			(1,147	)		(1,147	)

Net loss		-		-		-		(2,441	)		-			(2,441	)

Balance as of December 31, 2007		95,015,952	$	95	$	10,417	$	(4,648	)	$	(1,609	)	$	4,723

See accompanying notes to these consolidated financial statements.

TARA GOLD RESOURCES CORP. AND SUBSIDIARIES

(An Exploration Stage Company)

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ DEFICIT

From inception (October 14, 1999) to December 31, 2011

(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		-		-		-