Post by
HHAPPY on Nov 15, 2011 12:29am
TARM files their 10Q for 3rd quarter
VERY INTERESTING!!HERE IS TARM 10Q FOR 3RD QUARTER.LOTS TO DO DD!!Form 10-Q for TARA MINERALS CORP.14-Nov-2011Quarterly ReportITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONTara Minerals was incorporated on May 12, 2006. During the period from its incorporation through September 30, 2011 Tara Minerals generated revenue of $160,421 and incurred expenses of $658,007 in cost of sales; $3,970,986 in exploration expenses and $23,175,368 in operating and general administration expenses. Included in operating and general and administrative expenses is a non-cash charge of $8,464,942 pertaining to the issuance of stock options and bonus plans.Material changes of certain items in Tara Minerals' Statement of Operation for the three months ended September 30, 2011, as compared to the same period last year, are discussed below.Three Months Ended September 30, 2011 September 30, 2010Revenue $ - $ 86,178Cost of revenue - -Exploration expenses 109,123 448,058Operating, general and administrative expenses 1,146,825 3,480,312Net operating loss $ (1,255,948 ) $ (3,842,192 )During the three months ended September 30, 2011, exploration expenses decreased when compared with the same period in 2010. In 2011 the only exploration activities were at the Iron Ore Properties and in 2010 there were extensive exploration activities performed at the Don Roman Groupings. For the three months ended September 30, 2011, exploration expenses consisted of $15,000 for geological consulting, assaying, and field supplies for the Picacho Groupings and $59,000 for mine and smelting operations and other various mine expenses for the Iron Ore Properties. As of September 30, 2010, exploration expenses consisted of $21,000 for geological consulting, assaying, and field supplies for the Picacho Groupings, $427,000 for mine and smelting operations and other various mine expenses for the Don Roman Groupings.Material changes of certain items in Tara Minerals' operating, general and administrative expenses for the three months ended September 30, 2011, as compared to the same period last year, are discussed below.Three Months Ended September 30, 2011 September 30, 2010Bad debt $ 149,105 $ 162,246Investor relations expense 238,250 2,982,827Compensation, officer employment contracts and bonuses 206,438 96,780Legal 36,913 -Professional Fees 184,468 201,702Repair and maintenance 4,249 20,478The decrease in investor relations expense is due to fewer consultants needed for the three months ended September 30, 2011. During 2010 the Company expected to start production and enter the Amex Stock Exchange, consultants were hired to handle investor relations. During the three months ended September 30, 2011 investor relations expenses consisted of $165,000 paid with common stock and $73,250 paid in cash to consultants. During the three months ended September 30, 2010 investor relations expenses consisted of $112,500 paid with common stock, warrants and options valued at $2,756,353 and $113,974 in cash for investor relations at the Tara Minerals level. During the three months ended September 30, 2011 compensation, officer employment contracts $79,438 and officers' compensation of $127,000. As of September 30, 2010 compensation, officer employment contracts consisted of $96,780. Professional fees decreased $17,233 in 2011 because fewer professionals and consultants were needed when compared to 2010. Repairs and maintenance decreased in the three months ended September 30, 2011 because the plant at the Don Roman Groupings stopped operating and during 2010 the Company was working on software to track inventory and parts that is no longer used in 2011.Table of ContentsMaterial changes of certain items in Tara Minerals' Statement of Operation for the nine months ended September 30, 2011, as compared to the same period last year, are discussed below.Nine Months Ended September 30, 2011 September 30, 2010Revenue $ - $ 123,953Cost of revenue - -Exploration expenses 1,497,277 2,336,708Operating, general and administrative expenses 2,803,028 13,166,066Net operating loss $ (4,300,305 ) $ (15,378,821 )During the nine months ended September 30, 2011, Tara Minerals had no revenue or cost of revenue due to activity ceasing at the Don Roman mine in the fourth quarter of 2010. For the nine months September 30, 2011, exploration expenses consisted of $1,159,000 for the purchase of technical data for Centenario, La Verde and La Palma properties (part of the Don Roman Groupings), $16,000 for geological consulting, assaying, and field supplies for the Picacho Groupings, and $322,000 for mine and smelting operations and other various mine expenses for the Don Roman Groupings and the Iron Ore Properties. As of September 30, 2010, exploration expenses consisted of $1,224,000 for the purchase of technical data for the Picacho Groupings, $135,000 for geological consulting, assaying, and field supplies for the Picacho Groupings, $978,000 for mine and smelting operations and other various mine expenses for the Don Roman Groupings.Material changes of certain items in Tara Minerals' operating, general and administrative expenses for the nine months ended September 30, 2011, as compared to the same period last year, are discussed below.Nine Months Ended September 30, 2011 September 30, 2010Bad debt expense $ 96,302 $ 605,284Depreciation expense 208,216 153,434Investor relations expense 321,283 7,316,674Compensation, officer employment contracts and bonuses 1,022,339 3,827,395Professional fees 490,224 640,847Repairs and maintenance 15,193 55,770Rent and rental of equipment 52,989 13,748Bad debt expense decreased for the nine months ended September 30, 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 nine months ended September 30, 2011 than 2010. The decrease in investor relations expense is due to fewer consultants needed. During 2010 the Company expected to start production and enter the Amex Stock Exchange, consultants were hired to handle investor relations. For the nine months ended September 30, 2011 investor relations expenses consisted of $36,000 paid with options, $165,000 paid with common stock and $120,000 paid in cash to consultants. As of September 30, 2010 investor relations expenses consisted of $4,221,110 paid with common stock for investor relations at the Tara Minerals level and $21,083 paid with common stock for investor relations at the Adit level, options valued at $2,756,353 and the remainder was paid in cash. During the nine months ended September 30, 2011 compensation, officer employment contracts and bonuses consisted of options with a value of $493,000, and officers' compensation of $529,000. During the nine months ended September 30, 2010 compensation, officer employment contracts and bonuses consisted of 2,450,000 options for $3,406,000, $157,000 for stock bonuses and officers' compensation of $264,000. Professional fees decreased $150,000 2011 because fewer professionals and consultants were needed when compared to 2010. Repairs and maintenance decreased in the nine months ended September 30, 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 nine months ended September 30, 2010 the company was working on software to track inventory and parts that is not being 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 nine months ended September 30, 2011 due to rental of an office and apartments in Manzanillo, Colima, where potential Iron Ore Properties are located.Table of ContentsThe following is an explanation of Tara Minerals' material sources and (uses) of cash during the nine months ended September 30, 2011 and 2010:September 30,2011 2010Net cash (used) by operating activities $ (2,213,996 ) $ (2,825,675 )Acquisition of property, plant and equipment (5,522 ) (330,205 )Purchase of mining properties (30,060 ) (25,149 )Payments made for mining deposits (177,734 ) -Sale of common stock 2,272,411 980,043Loans from unrelated and related parties - 727,030Payments toward notes payable (123,093 ) (711,452 )Sale of common stock of subsidiaries 500,000 260,482Iron Ore Properties financial instrument 750,000 -Change in due to/from related parties, net (1,002,587 ) 304,245Shares subscribed 218,000 671,500Cash on hand at beginning of period 157,579 1,230,376Tara Minerals does not know of any trends, events or uncertainties that have had, or are reasonably expected to have, a material impact on its sales, revenues or income from continuing operations, or liquidity and capital resources.Tara Minerals anticipates that its capital requirements during the twelve months ending November 15, 2012 will be:Exploration and Development - Don Roman Groupings $ 1,500,000Exploration and Development - Picacho Groupings 2,500,000Exploration and Development - Iron Ore Properties 750,000Property taxes 95,000General and administrative expenses 400,000Total $ 5,245,000Tara Minerals 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, Tara Minerals has sought to expand and advance the Don Roman Groupings project by acquiring additional highly prospective mineral claims; and by opening up the project to numerous parties that have expressed an interest in the possibility of becoming an operating partner in the further development of the Don Roman Groupings. In April 2011, the Company signed a Letter of Intent (LOI) that would provide the capital and expertise to restart the operations at Don Roman and explore the full potential of the land package we have assembled.In August, a Definitive Agreement was signed that included an option for Carnegie mining to earn a 50% interest in the Don Roman Groupings and an additional option to earn an interest in all Iron Ore Properties located in Mexico, which Tara Minerals controls or may control through this Joint Venture. The Company believes this relationship to be strategic and should serve to develop Don Roman along with our Iron Ore Properties in an aggressive manor. Development aimed at near term production and cash flow remains the Joint Venture's objective, with expansion of production accomplished in Phases. It will also be a priority of the Joint Venture to begin to prove our resources under professional guide lines such as NI43-101 standards. As of November 6, 2011, Carnegie had not earned the 50% interest in the Iron Ore Properties option and was notified that its option on the Iron Ore Properties had expired. Subsequent to this notice Carnegie has requested mediation to which we have agreed./As of November 14, 2011 Tara Minerals was reviewing the Pirita property for continued inclusion as part of the Company's mining property portfolio. No payments toward this property have been made in 2011 and the Company may decide to terminate the purchase agreement and return the property due to its current focus as described above.Table of ContentsTara Minerals' future plans will be dependent upon the amount of capital available to Tara Minerals, the amount of cash provided by its operations, and the extent to which Tara Minerals is able to have joint venture partners pay the costs of exploring and developing its mining properties.Tara Minerals does not have any commitments or arrangements from any person to provide Tara Minerals with any additional capital. If additional financing is not available when needed, Tara Minerals may continue to operate in its present mode or Tara Minerals may need to cease operations. Tara Minerals does not have any plans, arrangements or agreements to sell its assets or to merge with another entity.