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
October 31, 2008  OR  £ TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 Commission File No.
 None  TARA MINERALS CORP (Name of Small
Business Issuer in its charter)  Nevada

20-5000381(State of
incorporation)

(IRS Employer
Identification No.)2162 Acorn
CourtWheaton, IL

60187(Address of
Principal Executive Office)

(Zip
Code)  Registrant's telephone number, including
Area Code:(630) 462-2079 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.
£  Indicate by check mark if the registrant is
not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
£  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 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 Tara Minerals (6,910,167 shares) on December 31,
2008 was -$3,662,400-.  As of January 15, 2009, Tara Minerals had
37,910,167 issued and 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.


2


ITEM 1.  BUSINESS  Tara Minerals plans to explore and develop mining properties which
may be productive of copper, lead, zinc and other industrial metals.
  Tara Minerals was incorporated in Nevada on May 12, 2006 and is in
the exploration stage.  Tara Gold Resources Corp., which is also engaged in the
exploration and development of mining properties in Mexico, owns 82% of Tara
Minerals common stock.  The reason Tara Gold formed Tara Minerals was
that, in the opinion of Tara Gold, some investors prefer gold and silver
projects, while others prefer lead, zinc and silver projects.
 Consequently, capital may be easier to obtain by separating gold
properties from industrial metal properties.  In this regard, Tara Gold has
the first right to acquire any gold or silver prospects and Tara Minerals has
the first right to acquire any industrial metal prospects.  At some point in the future Tara Gold may distribute its shares in
Tara Minerals to its shareholders.  By doing so, the shareholders of Tara
Gold will own two public corporations, one of which is involved in the
exploration of gold and silver properties and the other of which is involved in
the exploration of industrial metal properties.  However, there is no
commitment on the part of Tara Gold to distribute its shares in Tara Minerals
and the distribution of these shares may never occur.  Tara Minerals plans to acquire low-cost properties that have the
potential to yield high returns.  After acquiring a property and selecting
a possible exploration area through its own efforts or with others, Tara
Minerals will typically compile reports, past production records and geologic
surveys concerning the area.  Tara Minerals may then undertake a field
exploration program to determine whether the area merits work.  Initial
field exploration on a property normally consists of geologic mapping and
geochemical and/or geophysical surveys, together with selected sampling to
identify host environments that may contain specific mineral occurrences.
 If an area shows promise, geologic drilling programs may be undertaken in
an effort to locate the existence of economic mineralization.  If
mineralization is delineated, further work will be undertaken to estimate ore
reserves, evaluate the feasibility for the development of the mining project,
obtain permits for commercial development, and, if the project appears to be
economically viable, proceed to place the deposit into commercial
production.  The capital required for exploration and development of mining
properties is substantial.  Tara Minerals plans to finance its future
operations through joint venture arrangements with third parties (generally
providing that the third party will obtain a specified percentage of Tara
Minerals interest in a certain property in exchange for the expenditure of a
specified amount), the sale by Tara Minerals of interests in properties, and by
the sale of common stock.  The exploration and development of properties that are joint
ventured with third parties are normally managed by one of the joint venture
participants which is designated as the operator.  The operator of a mining
property generally provides all labor, equipment, supplies and management on a
cost plus fee basis and often must perform specific tasks over a specified time
period.  Separate fees may be charged to the joint venturers by the
operator and, once certain conditions are met, the joint venturers are typically
required to pay the costs in proportion to their interests in the property.  Tara Minerals properties will typically consist of a variety of
interests including, properties located in foreign countries and unpatented and
patented claims held under lease or owned by Tara Minerals.  Typically, the
rights to properties which Tara Minerals may acquire will be sub-surface rights
which will allow Tara Minerals to explore for, and if warranted, develop the
property.  See Mexican Mining Laws and Regulations below for information
concerning use of surface rights in Mexico for mining operations.  In connection with the acquisition of a property, Tara Minerals
may conduct limited reviews of title and related matters and obtains certain
representations regarding ownership.  Although Tara Minerals plans to
conduct reasonable investigations (in accordance with standard mining practice)
of the validity of ownership, it may be unable to acquire good and marketable
title to its properties.  Mines have limited lives, which is an inherent risk in the mining
business.  Although Tara Minerals plans to acquire other mining properties,
there is a limited supply of desirable mineral lands available in Mexico where
Tara Minerals would consider conducting exploration and/or production
activities.  In addition, Tara Minerals faces strong competition for new
properties from other mining companies, many of which have substantial financial
resources, and grants the ownership of essentially all minerals to the Mexican
nation.  The right to exploit those minerals is given to


1


private parties through concessions issued by the Mexican
government.  The current Mining Law of Mexico was enacted in 1992.
 Concessions are granted on mining lots, the sides of which measure 100
meters, or a multiple of 100, except when adjoining lots (granted when there
were no size requirements) require a smaller size.  An exploration
concession is granted to the first applicant that meets the requirements of the
Mining Law, the most important of which is that the claimed area is deemed to be
free land.  Under the Mining Law, areas that are already covered by
mining concessions or applications for mining concessions are not free, as well
as reserved areas such as the coast and the seabed.  Exploration mining concession applications are filed at government
offices.  Exploration concessions are valid for six years and give their
holders the right to carry out exploration work.  While the concessionaire
may keep the Tara Minerals may be unable to acquire attractive new mining
properties on terms that are considered acceptable.  Tara Minerals owns 99.9% of the capital stock of American Metal
Mining S.A. de C.V., a Mexican corporation.  All of Tara Minerals
operations in Mexico are conducted through American Metal Mining since Mexican
law provides that only Mexican corporations are allowed to own mining
properties. However, when the Pillar de Mocoribo, Don Roman and Lourdes and Las
Nuvias properties were acquired in September and October 2006, American Metal
Mining had not been incorporated.  As a result, the mining properties owned
by Tara Minerals were acquired by Corporacion Amermin, S.A. de C.V., the Mexican
subsidiary of Tara Gold.  These properties were transferred to American
Metal Mining after its formation in December 2006. All references to Tara
Minerals include the operations of American Metal Mining.  As of January 15, 2009 Tara Minerals had a 100% interest in the
mining properties listed below.  Although Tara Minerals believes that each
of these properties has deposits of copper, lead or zinc, the properties are in
the exploratory state, do not have any known reserves, and may never produce any
of these metals in commercial quantities.  The properties are located in the northern part of the La Reforma
Mining District of northeastern Sinaloa State, Mexico.  The predominate
rocks in the area are Upper Jurassic-Lower Cretaceous cabonate (limestone) rocks
and Tertiary granitic intrusives.  The La Reforma Mining District has been
mined for more than 300 years, with substantial amounts of precious and base
metals produced from numerous mines. In the opinion of Tara Minerals, the
district has never been properly explored using present day, industry standard,
exploration methods, including geochemistry, geophysics, and geology. Tara
Minerals feels that this area may potentially host base metals that were never
discovered or exploited due in part to market conditions, lack of technology,
and lack of funding.  All of Tara Minerals projects are located approximately 25
kilometres from the town of Choix, Sinaloa State, Mexico.  The properties
are accessed by driving a 4x4 vehicle on Sinaloa State maintained roads along
the north side of the Rio Fuerte River to the village of Altamira, located in
the center of the La Reforma Mining District.  From Altamira, the road
trends due north to the village of Mocoribo.  The properties can then be
reached by hiking two kilometers from the village.  In October 2006 Tara Minerals properties, with the exception of
the Centenario prospect which had not then been acquired, were visited in the
field by a professional geologist with experience in mineral assessment and
property evaluations in Chihuahua, Durango, Sinaloa and Sonora, Mexico.  The proposed exploration program for each property will 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) to test the extent and
depth of sulfide mineralization those would host copper, lead or zinc. The CSAMT
is an industry standard geophysical technique that has been used successfully to
identify carbonate deposits in Mexico and other locations.  Upon completion
of the exploration program, and if results are positive, a drilling program 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 and Lourdes concession, as of
January 15, 2009 no equipment, plants or other facilities were located on any of
the properties.  Water and power will be required to further explore and,
if warranted, develop Tara Minerals mining prospects.


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Tara Minerals will contract with qualified personnel to conduct
and supervise all aspects of its exploration program.  The exploration programs on the properties will be funded either
through Tara Minerals cash on hand or from operations, proceeds from the sale
of Tara Minerals common stock, or funds obtained from a joint venture
partner.  In Mexico land size is denominated in hectares and weight is
denominated in tonnes.  One hectares is equal to approximately 2.47 acres
and one tonne is equal to 2,200 pounds.  Pilar de Mocoribo Prospect  InSeptember 2006 another subsidiary of Tara Gold Resources Corp., the
Company's parent, acquired the Pilar de Mocribo Prospect (Pilar) from an
unrelated third party for $800,000 plus $120,000 of value added tax. This
property was then assigned to the Company in January 2007. As of October 31,
2008, the Company has extended the Pilar debt contract to extend the final two
payments for one year. Pursuant to the agreement, the Company removed one of the
eight concessions in the Pilar groupings and returned it to Amermin. The Company
is required to repay the other subsidiary of its parent for this mining
concession as follows (plus the applicable value added tax): Fiscal
Year 2009 $   137,609 2010 410,000 $   547,609  The Pilar de Mocoribo prospect is 1,260 hectares in size.
 Preliminary evaluation of the property has identified a series of parallel
NE trending mineralized structures that can be traced for more than 300 meters.
 These mineralized structures lie within a complex suite of
volcanic-granitic and sedimentary (carbonate) rocks.  As of January 15, 2009 a preliminary rock-chip sampling program,
at a cost of approximately $9,000 has been completed on the property. Tara
Minerals plans to delay any further work on this property so that more resources
can be devoted to the Don Roman and Lourdes concession.  Don
Roman and Lourdes Concession  The Don Roman and Lourdes concession, comprised of 331 hectares,
was acquired in October 2006 from an unrelated third party for approximately
$522,000, plus value added taxes of approximately $78,000.  The purchase
price was paid in full in January 2007.  Preliminary evaluation of the property has identified an abandoned
mine and extensive sulfide mineralization within a complex suite of
volcanic-granitic and sedimentary rocks.  Detailed surface sampling and road construction have been
completed a cost of approximately $172,000.  Initial technical assessment work has been completed at the
property, including identification of all permits needed to move towards active
mining and assessing options and costs associated with the design of various
mining systems.  Mining and processing equipment have been purchased and a
plant, which will be capable of processing 200 tonnes per day, is being
constructed.  Water rights for the property have been acquired and
negotiations for an electrical substation to supply power to the plant has been
completed.  Plant completion and initial production is scheduled for
February, 2009.  The following shows the timing and estimated cost for the present
exploration plan for this property:  Projected Phase Completion Estimated Cost  Plant construction, mine preparation and initial February, 2009 $150,000 production


3


Las Nuvias Concession  The Las Nuvias prospect is 41 hetares in size and was acquired for
$100,000 plus $15,000 in value added taxes in October 2006 from an unrelated
third party.  The purchase price was paid in full in January 2007.  Preliminary evaluation of the property has identified an abandoned
prospect with historic vein-type mineralization occurring within an older
complex suite of volcanic-granitic and sedimentary rocks. As of January 15, 2009 a preliminary rock-chip sampling program,
at a cost of approximately $9,000 has been completed on the property.
 Since this property is directly south of the Don Ramon and Lourdes
concession, Tara Minerals plans to delay any further work on this property so
that more resources can be devoted to the Don Roman and Lourdes concession.  Centenario Prospect  The Centenario prospect was acquired in November 2008 from an
unrelated third party for $1,894,050 (inclusive of value added taxes of
$247,050), which amount is to be paid in accordance with the following
schedule:  Fiscal Year2009
$
172,5002010

126,5002011

575,0002012

575,0002013

445,050$
1,894,050  The Centenario prospect is 5,400 hectares in size and is adjacent
to Tara Minerals existing mineral claims .  Preliminary evaluation of the
property has indicated the potential for 5 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.  As of January 15, 2009 a preliminary rock-chip sampling program,
at a cost of approximately $15,000 has been completed on the property.  The following shows the timing and estimated cost for the present
exploration plan for this property:  Phase Projected Completion Estimated Cost  Mapping and sampling August, 2009 $75,000  United States Mining Laws and Regulations  In the United States, unpatented mining claims on unappropriated
federal land may be acquired pursuant to procedures established by the Mining
Law of 1872 and other federal and state laws.  These acts generally provide
that a citizen of the United States (including corporations) may acquire a
possessory right to develop and mine valuable mineral deposits discovered upon
unappropriated federal lands, provided that such lands have not been withdrawn
from mineral location, e.g., national parks, military reservations and lands
designated as part of the National Wilderness Preservation System.  The
validity of all unpatented mining claims is dependent upon inherent
uncertainties and conditions.  These uncertainties relate to such
non-record facts as the sufficiency of the discovery of minerals, proper posting
and marking of boundaries, and possible conflicts with other claims not
determinable from descriptions of record.  Prior to discovery of a
locatable mineral thereon, a mining claim may be open to location by others
unless the owner is in possession of the claim.  The domestic exploration programs conducted by Tara Minerals will
be subject to federal, state and local environmental regulations.  The
United States Forest Service and the Bureau of Land Management extensively
regulate mining operations conducted on public lands.  Most operations
involving the exploration for minerals are subject to existing laws and
regulations relating to exploration procedures, safety precautions, employee
health and safety, air


4


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 Minerals may be required to prepare and present
to federal, state, or local authorities data pertaining to the effect or impact
that any proposed exploration or production of minerals may have upon the
environment.  All requirements imposed by any such authorities may be
costly and time-consuming, and may delay commencement or continuation of
exploration or production operations.  Future legislation and regulations are expected to continue to
emphasize the protection of the environment, and, as a consequence, the
activities of Tara Minerals may be more closely regulated to further the cause
of environmental protection.  Such legislation and regulations, as well as
future interpretation of existing laws, may require substantial increases in
capital and operating costs to Tara Minerals and may result in delays,
interruptions, or a termination of operations, the extent of which cannot be
predicted.  Mining operations in the United States are subject to inspection
and regulation by the Mine Safety and Health Administration of the Department of
Labor (MSHA) under provisions of the Federal Mine Safety and Health Act of 1977. Tara Minerals operations will also be subject to regulations
under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended (CERCLA or Superfund), which regulates and establishes
liability for the release of hazardous substances, and the Endangered Species
Act (ESA), which identifies endangered species of plants and animals and
regulates activities to protect these species and their habitats. Tara Minerals
may incur expenditures for land reclamation pursuant to federal and state land
restoration laws and regulations.  Under certain circumstances, Tara
Minerals may be required to close an operation until a particular problem is
remedied or to undertake other remedial actions.  Mexican Mining Laws and Regulations  In Mexico, Article 27 of the Mexican Constitution minerals
obtained in the course of the exploration work, the mine may not be put into
production.  If the concessionaire wishes to continue exploration work
beyond six years, or wishes to go into production, the concessionaire may, at
any time before the expiration of the six year term, request an exploitation
concession, which is valid for 50 years and renewable once for a similar
term.  Mining concessions do not grant the holder right to enter or use
the surface land of the mining lots.  It is therefore necessary to obtain
the permission of the surface owner for that purpose.  Typically, a verbal
authorization with no consideration is granted for prospecting and sample
gathering.  A simple letter agreement or contract is normally used for
drilling, trenching, or basic road building.  For more advanced exploration
activities, a small monetary consideration is normally required.  In some
cases the concessionaire is also required to make minor improvements which
benefit the local community such as fixing a road or fence or building an
earthen dam.  Building and operating a mine requires a more formal
agreement.  If an agreement cannot be reached with the surface owner, the
Mining Law gives the concessionaire the right to request a temporary occupation
of the land or an expropriation (or an easement for the construction of roads,
power lines, water pipes, etc.).  Compensation is set through an appraisal
made by the federal government.  A concessionaires most important obligation is the performance of
assessment work on the mining lots.  A minimum amount of assessment work
measured in monetary terms must be performed each year, depending on the size of
the mining lot and, for an exploration mining concession, the number of years
elapsed since its issue, pursuant to minimum investment tables established by
the Mexican government.  Assessment work may be done either through
expenditures or the sale of minerals.  A report must be filed in May of
every year regarding the work for the previous calendar year.  Lack of
performance of the minimum work will result in the cancellation of the
concession; payment to the government in lieu of required assessment of work is
not allowed.  Concessionaires must comply with federal environmental regulations
which generally require that mining activities be subject to an environmental
impact statement authorization.  Normally an environmental impact statement
authorization can be obtained in six to twelve months from the date of its
filing.  However, mining operations which do not exceed levels established
by the Mexican government are not required to file an environmental impact
statement.  The Mining Law forbids concessionaires from removing mine
timbering and supports and requires compliance with all safety rules promulgated
by the Mexican government.


5


Mexican and foreign individuals, as well as Mexican corporations,
are allowed to hold mining concessions.  Although foreign corporations may
not hold mining concessions, foreign corporations may, however, own Mexican
corporations.  General  Tara Minerals offices are located at 2162 Acorn Court, Wheaton,
IL 60187 and consist of approximately 150 square feet of office space are
supplied free of charge by Francis Richard Biscan, Jr., the President of Tara
Minerals.  As of January 15, 2009 the only employees of Tara Minerals were
its two officers.  Tara Minerals website is www.taraminerals.com.  ITEM 2.
 DESCRIPTION OF PROPERTY  See Item 1.  ITEM 3.  LEGAL
PROCEEDINGS.  Tara Minerals is not involved in any legal proceedings and Tara
Minerals does not know of any legal proceedings which are threatened or
contemplated.  ITEM 4.
 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.  Not Applicable.  ITEM 5. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S
COMMON EQUITY AND OTHER SHAREHOLDER MATTERS.  Since June, 2008 Tara Minerals common stock has been quoted on
the OTC Bulletin Board under the symbol TARM.  Prior to that date, there
was no established trading market for Tara Minerals common stock.  Shown below are the range of high and low closing prices for Tara
Minerals common stock for the periods indicated as reported by FINRA.  The
market quotations reflect inter-dealer prices, without retail mark-up, mark-down
or commissions and may not necessarily represent actual transactions.  Month Ended
High
LowJune 2008
$0.60
$0.51July 2008
$0.75
$0.47August 2008
$0.80
$0.65September 2008
$0.65
$0.30October 2008
$0.39
$0.20  As of January 15, 2009, Tara Minerals had 37,910,167 outstanding
shares of common stock and 63 shareholders.  The
following table lists additional shares of Tara Minerals common stock which may
be issued.  Number of
NoteShares
ReferenceShares issuable
upon exercise of options held by theTara Minerals officers
1,000,000
AShares issuable
upon exercise of warrants soldin
private offering.
1,629,167
B


6


A.    See Item 11 of this report for information
concerning the terms of these options.       B. Between March 2008 and October 20, 2008 Tara Minerals sold
1,119,167 Units at a price of $0.60 per Unit.  Each Unit consisted of one
share of Tara Minerals common stock and one warrant.  Each warrant
entitles the holder to purchase one share of Tara Minerals common stock at a
price of $0.90 per share during the one year period following the sale of the
Units, and at a price of $1.20 per share during the second year following the
sale of the Units.  The warrants expire two years after their issuance.  Between October 2008 and November 21, 2008 Tara Minerals sold
510,000 Units at a price of $0.20 per Unit.  Each Unit consisted of one
share of Tara Minerals common stock and one warrant.  Each warrant
entitles the holder to purchase one share of Tara Minerals common stock at a
price of $0.20 per share during the two year period following the sale of the
Units.  The warrants expire two years after their issuance.  With the exception of the shares held by Tara Gold Resources and
the shares referenced in Note B above, all outstanding shares of Tara Minerals
are freely tradable. . 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.  ITEM 6. SELECTED FINANCIAL DATA  Not applicable.  ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND PLAN OF OPERATION  Tara Minerals was incorporated on May 12, 2006.  During the
period from its incorporation through October 31, 2007 Tara Minerals did not
generate any revenue and incurred $124,170 in exploration expenses and
$2,121,442 in operating and general administration expenses.  Included in
operating and general and administrative expenses is a non-cash charge of
$1,164,173 pertaining to the issuance of stock options.  Between December 2006 and February 2007 Tara Minerals raised
$2,540,000 from the sale of 5,081,000 shares of its common stock to private
investors.  In
January 2008 Tara Minerals issued 1,200,000 shares of its common stock to an
unrelated third party for mining equipment.  Between March 2008 and October 20, 2008 Tara Minerals sold
1,119,167 Units at a price of $0.60 per Unit.  Each Unit consisted of one
share of Tara Minerals common stock and one warrant.  Each warrant
entitles the holder to purchase one share of Tara Minerals common stock at a
price of $0.90 per share during the one year period following the sale of the
Units, and at a price of $1.20 per share during the second year following the
sale of the Units.  The warrants expire two years after their issuance.  Between October 2008 and November 21, 2008 Tara Minerals sold
510,000 Units at a price of $0.20 per Unit.  Each Unit consisted of one
share of Tara Minerals common stock and one warrant.  Each warrant
entitles the holder to purchase one share of Tara Minerals common stock at a
price of $0.20 per share during the two year period following the sale of the
Units.  The warrants expire two years after their issuance.  Tara Minerals plan of operation is described in Item 1 of this
report.


7


Tara
Minerals anticipates that its capital requirements during the twelve months
ending October 31, 2009 will be:  Exploration and Development  Pilar de Mocoribo
property
$
0Property payments and taxes  Pilar de Mocoribo
property

137,609Exploration and Development  Don Ramon property

150,000Exploration and Development  Las Nuvias property

0Exploration and Development -  Centenario
property

75,000Property payments and taxes  Centenario property

172,500General and administrative expenses

350,000Total
$
885,109  Tara Minerals has started construction on a plant which will have
the capability of processing 200 tonnes of material a day from the Don Roman and
Lourdes prospect.  Tara Minerals believes that its cash on hand will satisfy its
working capital needs until March, 2009.   After that time, Tara
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.  Tara 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 anticipates that it will need to hire 15 new
employees during the twelve-month period ending October 31, 2009 primarily to
run mining operations.  Tara Minerals does not have any commitments or arrangements from
any person to provide Tara Minerals with any additional capital.  If
additional financing is not available when needed, Tara Minerals may continue to
operate in its present mode or Tara Minerals may need to cease operations.
 Tara Minerals does not have any plans, arrangements or agreements to sell
its assets or to merge with another entity.  See Note 1 to the financial statements included as part of this
report for a description of Tara Minerals accounting policies and recent
accounting pronouncements.  ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET
RISK  Not applicable.  ITEM 8 FINANCIAL STATEMENTS    TARA
MINERALS CORP. AND SUBSIDIARY (A
Subsidiary of Tara Gold Resources Corp.) (An
Exploration Stage Company)  CONSOLIDATED FINANCIAL STATEMENTS FOR THE
YEARS ENDED OCTOBER 31, 2008 AND 2007 And THE
PERIOD FROM INCEPTION (MAY 12, 2006) THROUGH OCTOBER 31, 2008


8


TARA
MINERALS CORP. AND SUBSIDIARY (A
Subsidiary of Tara Gold Resources Corp.) (An
Exploration Stage Company) Contents  REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
10FINANCIAL
STATEMENTS:Consolidated
Balance Sheets
11Consolidated
Statements of Operations and Comprehensive Loss
12Consolidated
Statements of Stockholders Equity
13Consolidated
Statements of Cash Flows
15Notes
to the Consolidated Financial Statements
17    9        REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM   To the
Board of Directors and Stockholder of Tara
Minerals Corp. and Subsidiary  We have
audited the accompanying consolidated balance sheets of Tara Minerals Corp. (a
Nevada corporation) as of October 31, 2008 and 2007, and the related
consolidated statements of operations and comprehensive loss, stockholders'
equity, and cash flows for the years ended October 31, 2008 and 2007, and for
the period from inception (May 12, 2006) through October 31, 2008. 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.  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 audits to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement.The Company is not required to have,
nor were we engaged to perform, an audit of its internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances but not for the purpose of expressing an opinion on the
effectiveness of the Companys internal control over financial reporting.
Accordingly, we express no such opinion.An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the consolidated financial statements. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall consolidated financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.  In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Tara Minerals Corp. as of
October 31, 2008 and 2007, and the results of its operations and its cash flows
for the years ended October 31, 2008 and 2007, and the period from inception
(May 12, 2006) through October 31, 2008 in conformity with accounting principles
generally accepted in the United States of America.  Mendoza Berger & Company, LLP  /s/
Mendoza Berger & Company, LLP   Irvine,
California January
28, 2009


10


TARA
MINERALS CORP. AND SUBSIDIARY (A
Subsidiary of Tara Gold Resources Corp.) (An
Exploration Stage Company) CONSOLIDATED BALANCE SHEETS **** October 31,
2008

October 31,
2007AssetsCurrent assets:Cash and cash
equivalents
$
48,802
$
953,321Recoverable value
added taxes

352,316

278,030Other
receivables

5,226

4,894Due from related
parties, net

430,100

411,590Prepaid assets

150

6,903Total current assets

836,594

1,654,738Land

19,590

19,590Property, equipment and mine development, net of
accumulated depreciationof $37,679 and $16,782 at October
31, 2008 and 2007, respectively

2,807,244

1,549,751Deposits

133,000

-Other assets

1,170

-Total assets
$
3,797,598
$
3,224,079Liabilities and stockholders equityCurrent liabilities:Accounts payable
$
38,782
$
5,854Accrued
expenses

47,773

9,500Due to related
parties, current portion

354,844

502,060Total current liabilities

441,399

517,414Due to related parties, non-current portion

503,388

461,400Total liabilities

944,787

978,814Minority Interest

-

-Commitments and contingencies

-

-Stockholders equity:Common stock: $.001 par value; authorized
75,000,000 shares; issued andoutstanding: 37,350,167 and 36,581,000 shares
 at October 31, 2008 and2007, respectively

37,350

36,581Additional paid-in
capital

4,908,823

4,418,092Common stock
subscribed

88,000

-Deficit
accumulated during exploration stage

(2,008,481)

(2,220,782)Other
comprehensive income

(172,881)

11,374Total stockholders equity

2,852,811

2,245,265Total liabilities and stockholders
equity
$
3,797,598
$
3,224,079    See Accompanying Notes to these Financial Statements.


11


TARA
MINERALS CORP. AND SUBSIDIARY (A
Subsidiary of Tara Gold Resources Corp.) (An
Exploration Stage Company) CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS **** For the year
ended

For the year
ended

From inception
(May 12, 2006) toOctober 31,

October 31,

October 31,2008

2007

2008Mining revenues:
$
-
$
-
$
-Cost of revenue:Exploration
expenses

35,904

124,170

160,074Operating, general,
and administrative expenses:Other
operating, general, and administrative expenses

541,966

2,121,442

2,663,408Total
operating, general, and administrative expenses

541,966

2,121,442

2,663,408Net
operating loss

(577,870)

(2,245,612)

(2,823,482)Non-operating
(income) expense:Interest
(income)

(39,974)

(24,813)

(64,787)Other
(income)

(750,197)

(12)

(750,209)(790,171)

(24,825)

(814,996)Minority
interest

-

(5)

(5)Net income (loss)

212,301

(2,220,782)

(2,008,481)Provision
for income taxes

-

-

-Other comprehensive income:Foreign
currency translation

(184,255)

11,374

(172,881)Comprehensive
income (loss)
$
28,046
$
(2,209,408)
$
(2,181,362)Net
income (loss) per share, basic
$
0.01
$
(0.07)Net
income (loss) per share, diluted
$
0.01
$
(0.07)Weighted
average number of shares, basic

37,547,608

30,896,356Weighted
average number of shares, diluted

38,547,608

30,896,356     See Accompanying Notes to these Financial Statements.


12





TARA
MINERALS CORP. AND SUBSIDIARY (A
Subsidiary of Tara Gold Resources Corp.) (An
Exploration Stage Company) CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY  Common Stock
Additional
Paid In
Common
Stock
Other
Comprehensive
Accumulated
Deficit DuringShares
Amount
Capital
Subscribed
Income
Exploration Stage
TotalBalance at inception (May 12, 2006)
-
$
          -
$
               -
$
               -
$
                    -
$
                       -
$
                -Founders shares, issued October 31, 200630,000,000
30,000
(30,000)
-
-
-
-Net income
-
-
-
-
-
-
-Balance at October 31, 2006
30,000,000
30,000
(30,000)
-
-
-
-Common stock sold for cash
5,081,000
5,081
2,535,419
-
-
-
2,540,500Common stock issued for services
1,500,000
1,500
748,500
-
-
-
750,000Stock based compensation (stock options)-
-
1,164,173
-
-
-
1,164,173Foreign currency translation
-
-
-
-
11,374
-
11,374Net loss
-
-
-
-
-
(2,220,782)
(2,220,782)Balance at October 31, 2007
36,581,000
$ 36,581
$   4,418,092
$
               -
$
          11,374
$
         (2,220,782)
$
  2,245,265    See Accompanying Notes to these Financial
Statements.


13


TARA
MINERALS CORP. AND SUBSIDIARY (A
Subsidiary of Tara Gold Resources Corp.) (An
Exploration Stage Company) CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY (CONTINUED)   Common Stock
Additional
Common Stock
Other
Comprehensive
Accumulated
Deficit DuringShares
Amount
Paid In Capital
Subscribed
Income
Exploration Stage
TotalBalance at October 31, 2007
36,581,000
$   36,581
$
   4,418,092
$
                   -
$
        11,374
$
     (2,220,782)
$   2,245,265Common stock sold for cash
1,069,167
1,069
640,431
-
-
-
641,500Common stock issued for equipment
1,200,000
1,200 0
598,800
-
-
-
600,000Cancelled shares
(1,500,000)
(1,500)
(748,500)
-
- -
-
(750,000)Common stock subscribed (340,000 shares)
- -
- -
- -
88,000
- -
-
88,000Foreign currency translation
-
-
-
-
(184,255)
-
(184,255)Net income
-
-
-
-
-
212,301
212,301Balance at October 31, 2008
37,350,167
$   37,350
$   4,908,823
$
        88,000
$
     (172,881)
$
     (2,008,481)
$
   2,852,811    See
Accompanying Notes to these Financial Statements.


14


TARA
MINERALS CORP. AND SUBSIDIARY (A
Subsidiary of Tara Gold Resources Corp.) (An
Exploration Stage Company) CONSOLIDATED STATEMENTS OF CASH FLOWS  From
InceptionFor the
year ended
October 31,

For the
year ended
October 31,

(May 12, 2006)
through
October 31,2008

2007

2008Cash flows from operating activities:Net income (loss)
$
212,301
$
(2,220,782)
$
(2,008,481)Adjustments to reconcile net loss to net cash usedin operating activities:Depreciation

20,897

16,782

37,679Stock based
compensation

-

1,164,173

1,164,173Common stock paid
for services

(750,000)

750,000

-Changes
in assets and liabilities:Minority
interest

-

5

-(Increase)
in recoverable value added taxes

(74,286)

(71,815)

(352,316)(Increase)
in other receivables

(331)

(4,894)

(5,226)(Increase)
decrease in prepaid expenses

6,753

(6,903)

(150)(Increase)
in other assets

(1,170)

-

(1,170)Increase
in accounts payable

32,928

5,854

38,782Increase
in accrued expenses

38,272

9,500

47,772Net cash used in
operating activities

(514,636)

(358,080)

(1,078,937)Cash flows from investing
activities:Acquisition of
land

-

(19,590)

(19,590)Payments made for
construction in progress

(630,547)

(9,480)

(640,027)Deposits toward
mining concessions

(133,000)

-

(133,000)Acquisition of
machinery

(40,791)

(8,282)

(216,144)Net cash used in
investing activities

(804,338)

(37,352)

(1,008,761)Cash flows from financing
activities:Cash from the
sale of common stock

641,500

2,540,500

3,182,000Payments toward
equipment financing

-

(160,026)

-Change in due
to/from related parties, net

(130,790)

(1,043,090)

(960,619)Common stock
subscribed

88,000

-

88,000Minority interest
in net assets of subsidiary

-

(5)

-Net cash provided
by financing activities

598,710

1,337,379

2,309,381Effect of exchange rate changes on
cash

(184,255)

11,374

(172,881)Cash and cash equivalents:Net increase
(decrease)

(904,519)

953,321

48,802Beginning of
period

953,321

-

-End of
period
$
48,802
$
953,321
$
48,802   See Accompanying Notes to these
Financial Statements.  15     TARA
MINERALS CORP. AND SUBSIDIARY (A
Subsidiary of Tara Gold Resources Corp.) (An
Exploration Stage Company) STATEMENTS OF CASH FLOWS (CONTINUED)  From
InceptionFor the
year ended
October 31,

For the
year ended
October 31,

(May 12, 2006)
through
October 31,2008

2007

2008SUPPLEMENT DISCLOSURE OF CASH
FLOW INFORMATIONInterest
paid
$
-
$
-
$
-Income
taxes paid
$
-
$
-
$
-NON-CASH TRANSACTIONSIssuance
of common stock for equipment
$
600,000
$
-
$
600,000Acquisition
of property and equipment through debt
$
-
$
167,072
$
167,072Purchase
of mining concession paid by debt trelated
party plus capitalized interest
$
7,053
$
1,381,700
$
1,388,753Recoverable
value-added taxes incurred through
$additional
debt and due to related party
$
-
$
206,215
$
206,215Stock-based
compensation
$
-
$
1,164,173
$
1,164,173   See Accompanying Notes to these Financial Statements.


16


TARA MINERALS CORP. AND SUBSIDIARY (A
Subsidiary of Tara Gold Resources Corp.) (An
Exploration Stage Company) NOTES
TO CONSOLDIATED FINANCIAL STATEMENTS   Note
1. Nature
of Business and Significant Accounting Policies  Nature of business and principles of consolidation:  Tara
Minerals Corp. (the Company) was organized May 12, 2006 under the laws of the
State of Nevada. The Company currently is engaged in the acquisition,
exploration and development of mineral resource properties in Mexico. The
Company owns 99.9% of common stock of American Metal Mining, S.A. de C.V. (the
subsidiary), which was established in December 2006 and operates in México.
The Company currently has no revenue-producing operations and, in accordance
with Statement of Financial Accounting Standard (SFAS) No. 7, Accounting and
Reporting by Development Stage Enterprises, is considered an Exploration
Stage Company.  Tara
Minerals Corp. is a wholly-owned subsidiary of Tara Gold Resources Corp., a
publicly traded company listed on the pink sheets of the U.S. public securities
market and has an October 31 fiscal year end.  The
consolidated financial statements include the financial statements of the
Company and its 99.9% owned subsidiary. All amounts are in U.S. dollars unless
otherwise indicated. All significant inter-company balances and transactions
have been eliminated in consolidation.  The
subsidiarys functional currency is the Mexican Peso. As a result, the financial
statements of the subsidiary have been re-measured from Mexican pesos into U.S.
dollars using (i) current exchange rates for monetary asset and liability
accounts, (ii) historical exchange rates for non-monetary asset and liability
accounts, (iii) historical exchange rates for revenues and expenses associated
with non-monetary assets and liabilities and (iv) the weighted average exchange
rate of the reporting period for all other revenues and expenses. In addition,
foreign currency transaction gains and losses resulting from U.S. dollar
denominated transactions are eliminated. The resulting re-measurement loss is
recorded to other comprehensive income.  Current
and historical exchange rates are not indicative of what future exchange rates
will be and should not be construed as such.  Relevant exchange rates used in the preparation of the financial
statements for the subsidiary are as follows for the years ended October 31,
2008 and 2007, respectively (Mexican peso per one U.S. dollar).  October 31, 2008Current
exchange rate
Ps.
12.8342Weighted
average exchange rate for the period ended
Ps.
10.7471  October 31, 2007Current
exchange rate
Ps.
10.7198Weighted
average exchange rate for the period ended
Ps.
10.9300  Other
comprehensive income (loss) for the years ended October 31, 2008 and 2007 is
$(184,255) and $11,374, respectively, and is primarily the result of foreign
currency exchange differences.    17    TARA MINERALS CORP. AND SUBSIDIARY (A
Subsidiary of Tara Gold Resources Corp.) (An
Exploration Stage Company) NOTES
TO CONSOLDIATED FINANCIAL STATEMENTS    The
Companys significant accounting policies are:  Estimates  The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.  Cash and Cash Equivalents  For the Statements of Cash Flows, all highly liquid investments
with maturity of three months or less are considered to be cash equivalents.
There were no cash equivalents as of October 31, 2008. As of October 31, 2007,
the Company held a certificate of deposit in the amount of $808,365.  Recoverable Value-Added Taxes (IVAT)  Impuesto al Valor Agregadotaxes (IVAT) are recoverable
value-added taxes charged by the Mexican government on goods sold and services
rendered at a rate of 15%. Under certain circumstances, these taxes are
recoverable by filing a tax return. Amounts paid for IVAT are tracked and held
as receivables until the funds are remitted. The total amount of IVAT receivable
as of October 31, 2008 and 2007 are $352,316 and $278,030, respectively.  Property and Equipment and Mining Concessions  Mining concessions and acquisitions, exploration and development
costs relating to mineral properties will be deferred until the properties are
brought into production, at which time they will be amortized on the unit of
production method based on estimated recoverable reserves. 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
annually for indicators of impairment such as adverse changes to any of the
following:   estimated recoverable ounces of copper, lead, zinc, silver or
other precious minerals  estimated future commodity prices  estimated expected future operating costs, capital expenditures
and reclamation expenditures  A write-down to fair value is recorded when the expected future
cash flow is less than the net book value of the property or when events or
changes in the property indicate that carrying amounts are not recoverable. This
analysis is completed as needed, and at least annually. As of the date of this
filing no events have occurred that would require the write-down of any assets.
In addition, the carrying amounts of the groups assets is reviewed at each
balance sheet date to determine whether there is any indication of impairment.
If such indication of impairment exists, the assets recoverable amount will be
reduced to its estimated fair value. As of October 31, 2008 and 2007,
respectively, no indications of impairment existed.   18    TARA MINERALS CORP. AND SUBSIDIARY (A
Subsidiary of Tara Gold Resources Corp.) (An
Exploration Stage Company) NOTES
TO CONSOLDIATED FINANCIAL STATEMENTS   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 is recorded at cost and
depreciated on a straight-line basis over their estimated useful lives from 3 
10 years.  Reclassifications and Adjustments  Certain reclassifications, which have no effect on net income
(loss), have been made in the prior period financial statements to conform to
the current presentation.  Specifically, the Company has reclassified
approximately $10,500 out of Other Income and into Operating, General and
Administrative Expenses, relating to the reimbursement of freight costs for
machinery currently in construction in progress.  Revenue recognition  Revenue from the sale of concentrate and industrial metals will be
recognized when ownership passes to the purchaser at which time the following
conditions are met:  i) persuasive evidence that an agreement exists. ii) the risks and rewards of ownership pass to the purchaser including
delivery of the product. iii) the selling price is fixed and determinable. iv) collectivity is reasonably assured.  Reclamation and remediation costs (asset retirement
obligations)  In August 2001, the FASB issued Statements of Financial Accounting
Standards (SFAS) No. 143, Accounting for Asset Retirement Obligations,
which established a uniform methodology for accounting for estimated reclamation
and abandonment costs. Reclamation costs are allocated to expense over the life
of the related assets and are periodically adjusted to reflect changes in the
estimates present value resulting from the passage of time and revisions to the
estimates of either the timing or amount of the reclamation and abandonment
costs.  Future remediation costs for reprocessing plant and buildings are
accrued based on managements best estimate at the end of each period of the
undiscounted costs expected to be incurred at a site. Such cost estimates
include, where applicable, ongoing care, maintenance and monitoring costs.
Changes in estimates are reflected in earnings in the period an estimate is
revised. There were no reclamation and remediation costs accrued as of October
31, 2008 or October 31, 2007.  Exploration
expenses  Exploration costs not directly associated with proven reserves on
our mining concessions are charged to operations as incurred.  Stock-based
compensation  The Company adopted SFAS No. 123 (revised 2004), Share-Based
Payment (SFAS 123(R)), which requires the measurement and recognition of
compensation expense for all share-based awards made to employees and directors,
including employee stock options and shares issued through its employee stock
purchase plan, based on estimated fair values. See Footnote 7 for a description
of the Companys stock compensation plans.  19    TARA MINERALS CORP. AND SUBSIDIARY (A
Subsidiary of Tara Gold Resources Corp.) (An
Exploration Stage Company) NOTES
TO CONSOLDIATED FINANCIAL STATEMENTS   Income
taxes  Income taxes are provided for using the liability method of
accounting in accordance with SFAS No. 109 Accounting for Income Taxes. A
deferred tax asset or liability is recorded for all temporary differences
between financial and tax reporting. Temporary differences are the differences
between the reported amounts of assets and liabilities and their tax basis.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized. Deferred tax assets and liabilities are
adjusted for the effect of changes in tax laws and rates on the date of
enactment.  During the year ended October 31, 2008, the Company adopted
Financial Accounting Standards Board (FASB) Interpretation No. 48, Accounting
for Uncertainty in Income Taxes ,(FIN 48), which supplements SFAS No.
109, Accounting for Income Taxes, by defining the confidence level that a tax
position must meet in order to be recognized in the financial statements. The
Interpretation requires that the tax effects of a position be recognized only if
it is more-likely-than-not to be sustained based solely on its technical
merits as of the reporting date. The more-likely-than-not threshold represents a
positive assertion by management that a company is entitled to the economic
benefits of a tax position. If a tax position is not considered
more-likely-than-not to be sustained based solely on its technical merits no
benefits of the tax position are to be recognized. Moreover, the
more-likely-than-not threshold must continue to be met in each reporting period
to support continued recognition of a benefit. With the adoption of FIN 48,
companies are required to adjust their financial statements to reflect only
those tax positions that are more-likely-than-not to be sustained. Any necessary
adjustment would be recorded directly to retained earnings and reported as a
change in accounting principle.  Upon adoption of FIN 48 as of November 1, 2008, the Company
had no gross unrecognized tax benefits that, if recognized, would favorably
affect the effective income tax rate in future periods. At October 31, 2008
the amount of gross unrecognized tax benefits before valuation allowances and
the amount that would favorably affect the effective income tax rate in future
periods after valuation allowances were $0. These amounts consider the guidance
in FIN 48-1, Definition of Settlement in FASB Interpretation No. 48. The
Company has not accrued any additional interest or penalties as a result of the
adoption of FIN 48.  Net loss per common share  Net loss per share is calculated in accordance with SFAS No. 128,
Earnings Per Share. The weighted-average number of common shares
outstanding during each period is used to compute basic loss per share. Diluted
loss per share is computed using the weighted averaged number of shares and
dilutive potential common shares outstanding. Dilutive potential common shares
are additional common shares assumed to be exercised. Potentially dilutive
common shares consist of employee stock options and are excluded from the
diluted earnings per share computation in periods where the Company has incurred
a net loss.  Basic net loss per common share is based on the weighted average
number of shares of common stock outstanding since inception. As of October 31,
2007, the Company had no potentially dilutive common shares due to net loss.   20    TARA MINERALS CORP. AND SUBSIDIARY (A
Subsidiary of Tara Gold Resources Corp.) (An
Exploration Stage Company) NOTES
TO CONSOLDIATED FINANCIAL STATEMENTS   The
following table reconciles basic earnings per share and diluted earnings per
share and the related weighted average number of shares as of October 31,
2008:  For the Year Ended
October 31, 2008Income
(Numerator)
Shares
(Denominator)
Per-Share
AmountNet income
$    
  212,301Basic EPS:Income available to common stockholders
$    
  212,301
37,547,608
$ 
        0.01Stock options
-
1,000,000Diluted EPS:Income available to common stockholdersplus assumed
conversions
$    
  212,301
38,547,608
$ 
        0.01
  Recent
Accounting Pronouncements  In December 2007, the FASB issued SFAS No. 141 (R), Business
Combinations (revised 2007) (SFAS No. 141 (R)). SFAS 141 (R) applies the
acquisition method of accounting for business combinations established in SFAS
141 to all acquisitions where the acquirer gains a controlling interest,
regardless of whether consideration was exchanged. Consistent with SFAS 141,
SFAS 141 (R) requires the acquirer to fair value the assets and liabilities of
the acquiree and record goodwill on bargain purchases, with the main difference
being the application to all acquisitions where control is achieved. SFAS 141
(R) is effective for financial statements issued for fiscal years beginning
after December 15, 2008.  The Company is evaluating the impact of adoption
of SFAS 141(R) may have on its financial statements.  In December 2007, the FASB issued SFAS No. 160, Noncontrolling
Interests in Consolidated Financial Statementsan amendment of ARB No. 51
(SFAS No. 160). SFAS 160 requires companies with noncontrolling interests to
disclose such interests clearly as a portion of equity but separate from the
parents equity. The noncontrolling interests portion of net income must also
be clearly presented on the Income Statement. SFAS 160 is effective for
financial statements issued for fiscal years beginning after December 15, 2008
and will be adopted by the Company in the first quarter of fiscal year 2009. The
Company does not expect that the adoption of SFAS 160 will have a material
impact on its financial condition or results of operations.  In March 2008, the Financial Accounting Standards Board (FASB)
issued FASB Statement No 161, "Disclosures about Derivative Instruments and
Hedging Activities, an amendment of SFAS No. 133 (SFAS 161). SFAS 161 applies
to all derivative instruments and non-derivative instruments that are designated
and qualify as hedging instruments pursuant to paragraphs 37 and 42 of SFAS 133
and related hedged items accounted for under SFAS 133. SFAS 161 requires
entities to provide greater transparency through additional disclosures about
how and why an entity uses derivative instruments, how derivative instruments
and related hedged items are accounted for under SFAS 133 and its related
interpretations, and how derivative instruments and related hedged items affect
an entitys financial position, results of operations, and cash flows. SFAS 161
is effective as of the beginning of an entitys first fiscal year that begins
after November 15, 2008. The Company does not expect that the adoption of SFAS
161 will have a material impact on our financial condition or results of
operations.  In May 2008, the FASB issued Statement of Financial Accounting
Standards No. 162, The Hierarchy of Generally Accepted Accounting Principles,
(SFAS 162). SFAS 162 identifies the sources of accounting  21    TARA MINERALS CORP. AND SUBSIDIARY (A
Subsidiary of Tara Gold Resources Corp.) (An
Exploration Stage Company) NOTES
TO CONSOLDIATED FINANCIAL STATEMENTS   principles and the framework for selecting the principles used in
the preparation of financial statements of non-governmental entities that are
presented in conformity with generally accepted accounting principles in the
United States of America. SFAS 162 will be effective 60 days after the Security
and Exchange Commission approves the Public Company Accounting Oversight Boards
amendments to AU Section 411. The Company does not anticipate the adoption of
SFAS 162 will have an impact on its financial statements.  In May 2008, the FASB issued SFAS No. 163, Accounting for
Financial Guarantee Insurance Contracts  an interpretation of FASB Statement
No. 60 (SFAS 163). SFAS 163 requires that an insurance enterprise recognize a
claim liability prior to an event of default (insured event) when there is
evidence that credit deterioration has occurred in an insured financial
obligation. This Statement also clarifies how Statement 60 applies to financial
guarantee insurance contracts, including the recognition and measurement to be
used to account for premium revenue and claim liabilities. Those clarifications
will increase comparability in financial reporting of financial guarantee
insurance contracts by insurance enterprises. This Statement requires expanded
disclosures about financial guarantee insurance contracts. The accounting and
disclosure requirements of the Statement will improve the quality of information
provided to users of financial statements. SFAS 163 will be effective for
financial statements issued for fiscal years beginning after December 15, 2008.
The Company does not expect the adoption of SFAS 163 will have a material impact
on its financial condition or results of operation. In June 2008, the FASB issued FASB Staff Position EITF 03-6-1,
Determining Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities, (FSP EITF 03-6-1). FSP EITF 03-6-1 addresses
whether instruments granted in share-based payment transactions are
participating securities prior to vesting, and therefore need to be included in
the computation of earnings per share under the two-class method as described in
FASB Statement of Financial Accounting Standards No. 128, Earnings per Share.
FSP EITF 03-6-1 is effective for financial statements issued for fiscal years
beginning on or after December 15, 2008 and earlier adoption is prohibited. The
Company is required to adopt FSP EITF 03-6-1 in the first quarter of 2009 and is
currently evaluating the impact that FSP EITF 03-6-1 will have on its financial
statements.  Note
2. Property,
equipment and mine development October 31,
2008
October 31,
2007Land
$                19,590
$
   
           19,590Mining
concessions:Pilar
(a)
$
    
        767,013
$    
         759,960Don
Ramon (b)
521,739
521,739Las
Nuvias (c )
100,000
100,000Mining
concessions
1,388,752
1,381,699Construction in
Progress
640,027
9,480Machinery and
equipment
816,144
175,3542,844,923
1,566,533Less  accumulated
depreciation
(37,679)
(16,782)$
    
     2,807,244
$   
      1,549,751
  a. In September 2006 another subsidiary of Tara Gold Resources Corp.,
the Companys parent, acquired the Pilar de Mocribo Prospect (Pilar) from an
unrelated third party for $800,000 plus $120,000 of value added tax. This
property was then assigned to the Company in January 2007. The Company is
required to repay the other subsidiary of its parent for this mining concession
as follows (including the applicable value added tax):    22    TARA MINERALS CORP. AND SUBSIDIARY (A
Subsidiary of Tara Gold Resources Corp.) (An
Exploration Stage Company) NOTES
TO CONSOLDIATED FINANCIAL STATEMENTS    Fiscal Year2009
$
137,6092010

410,000$
547,609  In accordance with Accounting Principles Board Opinion 21
Interest on Receivables and Payables (APB21), the future payments of
the total payment amount of $800,000 has been discounted using the incremental
borrowing rate of 5.01%. As of October 31, 2008, the present value of future
payments is as follows:  Debt

IVAT

TotalTotal remaining debt
$
     
    547,609

$    
    
      82,141

$
        
    629,750Imputed
interest
(32,986)

-

(32,986)Present value of
future payments
514,623

82,141

596,764Less: current
portion
(114,723)

(20,641)

(135,364)$
    
     399,900

$
          
    61,500

$
       
    461,400
  Approximately $55,000 in payments toward the note were capitalized
as imputed interest as of October 31, 2008.  As of October 31, 2008, the last two payments for the Pilar mining
concession due from Amermin were modified and extended for exactly one
year.Pursuant to the agreement, the Company removed one of the eight concessions
in the Pilar groupings and returned it to Amermin  b. On January 8, 2007 the Company amended its October 2006 agreement
to acquire the Don Roman Prospect (Don Roman) from an unrelated third party for
$521,739 plus $78,261 of value added tax. The purchase price was paid in full in
January 2007.  This property was assigned to the Company in January 2007 by
the Companys parent. In October 2007, the Company purchased five hectares of
land adjacent to the Don Roman property to build a mill, equipment yard, and
campsite for construction and mining. Construction activities on this land began
in October 2007. As of October 31, 2008 and 2007, construction in progress was
valued at $640,027 and $9,480, respectively. In October of 2007, the Company
entered into an agreement with an independent third party to purchase
construction equipment for the development and operation of the Don Roman
Property. Pursuant to this agreement, the Company issued 1,200,000 shares of
common stock at a fair value of $600,000 during the first quarter of 2008.  c. On January 8, 2007 the Company acquired the Las Nuvias Prospect
(Las Nuvias) for $100,000 plus $15,000 of value added tax from an unrelated
third party. The purchase price was paid in full in January 2007. This property
was assigned to the Company in January 2007 by the Companys parent.  Note
3. Mining
Deposits  As of October 31, 2008, the Company paid a deposit of $133,000
toward the involvement in a mining project. In November 2008, the formal
agreement relating to the mining project was executed.  Note
4. Income
Taxes  We did not provide any current or deferred U.S. federal income tax
provision or benefit for any of the periods presented because we have
experienced operating losses since inception, and taxable income for the 2008
fiscal year was offset by net operating loss carry forwards. We provided a full
valuation allowance on the net deferred  23    TARA MINERALS CORP. AND SUBSIDIARY (A
Subsidiary of Tara Gold Resources Corp.) (An
Exploration Stage Company) NOTES
TO CONSOLDIATED FINANCIAL STATEMENTS   tax asset, consisting of net operating loss carry forwards,
because management has determined that it is more likely than not that we will
not earn income sufficient to realize the deferred tax assets during the carry
forward period. The total net operating loss to be carried forward at October
31, 2008 is $755,000.  The components of the Companys deferred tax asset as of October
31, 2008 and October 31, 2007 are as follows:  2008

2007Net operating
loss carry forward
$
755,000
$
760,000Valuation
allowance

(755,000)

(760,000)Net deferred
tax asset
$
-
$
-  A
reconciliation of the statutory income taxes rates and the effective rate is as
follows:  2008

2007Tax
at statutory rate (blended US and MX)
33%

34%Valuation
allowance
(33%)

(34%)-%

-%  SFAS No. 109 requires a valuation allowance to be recorded when,
under the standard; it is more likely than not that the deferred tax assets will
be realized. The future use of deferred tax assets is dependent on the future
taxable profits which arise from taxable temporary timing differences. The
Company does not believe all its deferred tax assets are fully realizable
based on managements projections, therefore a valuation allowance has been
provided for the remaining deferred tax assets arising from past net
operating losses.  Per Internal Revenue Code Section 382, in the event of a
change of ownership, the availability of the Companys net operating loss carry
forwards may be subject to an annual limitation against taxable income in future
periods, which could substantially limit the eventual utilization of these net
operating loss carry forwards.  The net federal operating loss carry forward will expire in 2026.
This carry forward may be limited upon the consummation of a business
combination under IRC Section 381 or certain ownership changes, as defined in
IRC Section 382. Note
5. Related
Party Transactions  The Company is a subsidiary of Tara Gold Resources Corp. As of
April 30, 2007 another subsidiary of Tara Gold Resources Corp., Corporacion
Amermin, S.A. de C.V. (Amermin), made the arrangements to purchase all
properties listed in Note 2. These properties were assigned to the Companys
subsidiary American Metal Mining, S.A. de C.V (American Metal Mining) as of
January 2007. American Metal Mining makes payments to Amermin and Amermin makes
payments related to the original purchase agreement for the Pilar mining
concession described in Note 2a above. Due to related parties current and
non-current portions are $354,844 and $503,388 at October 31, 2008. Due to
related parties current and non-current portions were$502,060 and $461,400,
respectively, as of October 31, 2007.  24    TARA MINERALS CORP. AND SUBSIDIARY (A
Subsidiary of Tara Gold Resources Corp.) (An
Exploration Stage Company) NOTES
TO CONSOLDIATED FINANCIAL STATEMENTS    In January 2007, Amermin paid the entire balance of Don Ramon and
Las Nuvias concessions described in notes 2b and 2c above. Per the assignment
agreement, transferring the property to American Metal Mining, the Company makes
payments to Amermin to repay for the amounts paid plus related value added
taxes. As of October 31, 2008 the Company owed Amermin $210,000, which is
included in the Due to related parties, current portion.  In July 31, 2008, the Company borrowed $34,084 in cash from
Amermin in the form of short-term loans. The payables, denoted as due to related
parties on the balance sheet, accrue at an annual interest rate of 6.5% and were
payable in September 2008. As of October 31, 2008, $6,623 is still due to
Amermin. This amount is included in our Due to Related Parties account.  Note
6. Stockholders
Equity  The authorized common stock of the Company consists of 75,000,000
shares with par value of $0.001. In 2008, the Company issued 1,200,000 common
shares for mining equipment valued at $600,000 (See Footnote 2) or $0.50 per
share and 1,069,167 common shares for $641,500 for cash or an average of $0.60
per share.  In January 2007, the Company signed a marketing agreement with an
independent third party with compensation of 1,500,000 common shares valued at
$0.50 per share. On October 31, 2007, these shares were issued for a total value
of $750,000. In June 2008, the Company settled a claim against a former vendor.
The settlement agreement called for the return of 1,5000,000 shares of the
Companys common stock, valued at $750,000, as payment in full of the Companys
claim. The Company recorded a $750,000 gain on the settlement, which was
recorded as other income on the Consolidated Statement of Operations, and
cancelled the shares.  Between March 2008 and October 20, 2008 Tara Minerals sold 340,00
units at a price of $0.60 per Unit. Each Unit consisted of one share of Tara
Minerals common stock and one warrant. Each warrant entitles the holder to
purchase one share of Tara Minerals common stock at a price of $0.90 per share
during the one year period following the sale of the Units, and at a price of
$1.20 per share during the second year following the sale of the Units. The
warrants expire two years after their issuance.  In February 2007, the Company issued stock options to the officers
of the Company. There were no stock options issued in 2008. See footnote 7.  Note
7. Stock
Compensation  On
February 1, 2007, the Company adopted the following stock option plans: · Incentive
Stock Option Plan · Nonqualified
Stock Option Plan · Stock
Bonus Plan  The Companys 2007 stock option plans, which are shareholder
approved, permit the grant of share options and shares to its officers for up to
1,000,000 shares of common stock with an exercise price of $.05 to two of the
Companys officers for compensation which expire February 1, 2010. The fair
value of each option award is estimated on the date of grant using the
Black-Scholes option valuation model that uses the assumptions noted in the
following table. Expected volatilities are based on volatilities from the
Companys traded common stock. The expected term of options granted is estimated
at half of the contractual term as noted in the individual option agreements and
represents the period of time that options granted are expected to be
outstanding.  The risk-free  25    TARA MINERALS CORP. AND SUBSIDIARY (A
Subsidiary of Tara Gold Resources Corp.) (An
Exploration Stage Company) NOTES
TO CONSOLDIATED FINANCIAL STATEMENTS   rate for the periods within the contractual life of the option is
based on the U.S. Treasury bond rate in effect at the time of grant for bonds
with maturity dates at the estimated term of the options. The value of the
options was charged against operating expense.  2008Expected volatility
163.90%Weighted-average volatility
163.90%Expected dividends
0Expected term (in years)
2.7Risk-free rate
4.92%  A summary of option activity under the Plan as of October 31,
2008, and changes during the period then ended is presented below:  Options
Shares
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Term
Aggregate
Intrinsic
ValueOutstanding at October 31, 2006
-Granted
1,000,000
$         0.05Exercised
-
-Forfeited or expired
-
-Outstanding at October 31, 2007
1,000,000
$
        0.05
2.7
$  1,164,173Exercisable at October 31, 2007
1,000,000
$
        0.05
2.7
$  1,164,173  Options
Shares
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Term
Aggregate
Intrinsic
ValueOutstanding at October 31, 2007
1,000,000Granted
-
-Exercised
-
-Forfeited or expired
-
-Outstanding at October 31, 2008
1,000,000
$
        0.05
2.7
$  1,164,173Exercisable at October 31, 2008
1,000,000
$
        0.05
2.7
$  1,164,173  There
were no options granted in 2008. All shares were vested at October 31, 2008.  26    TARA MINERALS CORP. AND SUBSIDIARY (A
Subsidiary of Tara Gold Resources Corp.) (An
Exploration Stage Company) NOTES
TO CONSOLDIATED FINANCIAL STATEMENTS    Note
8. Subsequent
Events  In November 2008, the Company executed an agreement to acquire
eight mining concessions known as Centenario from an independent third party.
The properties total 5,400 hectares and were purchased for a total of
$1,894,050, including $247,050 in value added taxes to be paid in cash. The
final agreement was amended; however, the amendment was not executed as of the
date of this filing.  Between March 2008 and October 20, 2008 Tara Minerals sold 340,000
units at a price of $0.60 per Unit.  Each Unit consisted of one share of
Tara Minerals common stock and one warrant. Each warrant entitles the holder to
purchase one share of Tara Minerals common stock at a price of $0.90 per share
during the one year period following the sale of the Units, and at a price of
$1.20 per share during the second year following the sale of the Units. The
warrants expire two years after their issuance.  Between October 31, 2008 and November 21, 2008 Tara Minerals sold
220,000 units at a price of $0.20 per Unit. Each Unit consisted of one share of
Tara Minerals common stock and one warrant.  Each warrant entitles the
holder to purchase one share of Tara Minerals common stock at a price of $0.20
per share during the two year period following the sale of the Units.  The
warrants expire two years after their issuance.    27      ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.  Not applicable.  ITEM
9A. and 9A(T).  CONTROLS AND PROCEDURES  Under the direction and with the participation of Tara Minerals
management, Tara Minerals carried out an evaluation of the effectiveness of the
design and operation of its disclosure controls and procedures as of October 31,
2008.  Tara Minerals maintains disclosure controls and procedures that are
designed to ensure that information required to be disclosed in its periodic
reports with the Securities and Exchange Commission is recorded, processed,
summarized and reported within the time periods specified in the SECs rules and
regulations, and that such information is accumulated and communicated to Tara
Minerals management, including its principal executive officer and principal
financial officer, as appropriate, to allow timely decisions regarding required
disclosure.  Tara Minerals disclosure controls and procedures are designed
to provide a reasonable level of assurance of reaching its desired disclosure
control objectives.  Managements Report on Internal Control Over Financial
Reporting  Tara Minerals management is responsible for establishing and
maintaining adequate internal control over financial reporting and for the
assessment of the effectiveness of internal control over financial reporting. As
defined by the Securities and Exchange Commission, internal control over
financial reporting is a process designed by, or under the supervision of Tara
Minerals principal executive officer and principal financial
officer and implemented by Tara Minerals Board of Directors, management
and other personnel, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of Tara Minerals financial
statements in accordance with U.S. generally accepted accounting principles.  Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.  Tara Minerals management evaluated the effectiveness of its
internal control over financial reporting as of October 31, 2008 based on
criteria established in Internal Control - Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission, or the COSO
Framework. Managements assessment included an evaluation of the design of Tara
Minerals internal control over financial reporting and testing of the
operational effectiveness of those controls.  Based on this evaluation, Tara Minerals management concluded that
Tara Minerals internal control over financial reporting was effective as of
October 31, 2008.  There was no change in Tara Minerals internal control over
financial reporting that occurred during the quarter ended October 31, 2008 that
has materially affected, or is reasonably likely to materially affect, Tara
Minerals internal control over financial reporting.  This report does not include an attestation report of Tara
Minerals independent registered public accounting firm regarding internal
control over financial reporting. Management's report was not subject to
attestation by Tara Minerals independent registered public accounting firm
pursuant to temporary rules of the SEC that permit Tara Minerals to provide only
managements report on internal control in this report.  28       ITEM 9B. OTHER INFORMATION  Not applicable.  ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL  PERSONS  Name

Age

PositionFrancis R. Biscan

47

President, Chief Executive Officer and a DirectorClifford A. Brown

57

Principal Financial Officer and a
Director  The directors of Tara Minerals serve in such capacity until the
first annual meeting of Tara Minerals shareholders and until their successors
have been duly elected and qualified.  The officers of Tara Minerals serve
at the discretion of Tara Minerals directors. The principal occupations of Tara Minerals officers, directors
and consultants, during the past several years, are as follows:  Francis Richard Biscan Jr. has been an officer and director
of Tara Minerals since May 2006.  Between 1997 and August 2003 Mr. Biscan
was an independent financial consultant, providing advice to public and private
companies in the areas of capital formation and mergers and acquisitions.
 Mr. Biscan has also been an officer and director of Tara Gold Resources
Corp. since August 2003.  Clifford A. Brown has been an officer and director of Tara
Minerals since May 2006.  Since 1989 Mr. Brown has been the President of
Clifford A. Brown and Co., a firm which provides accounting and consulting
services and sells accounting software.  Since 1993 Mr. Brown has served as
the treasurer and Board member of Restoration Ministries, Inc., a non-profit
corporation with 33 different ministries in Chicago.  Mr. Brown has also
been an officer and director of Tara Gold Resources Corp. since November 2004.
 Mr. Brown has been a certified public accountant since 1981.  Tara Minerals does not have a compensation committee.  Tara
Minerals Board of Directors serves as its Audit Committee.  Clifford A.
Brown is Tara Minerals financial expert.  Since Mr. Brown is an officer
and director of Tara Minerals, Mr. Brown is not independent as that term is
defined in section 121(A) of the listing standards of the American Stock
Exchange.  None of Tara Minerals directors are independent as that term is
defined in section 121(A) of listing standards of the American Stock
Exchange.  Tara Minerals has adopted a Code of Ethics applicable to its
principal executive, financial, and accounting officers and persons performing
similar functions.  29       ITEM 11.  EXECUTIVE COMPENSATION  The following table shows the compensation paid or accrued during
the year ended October 31, 2008 to the executive officers of Tara Minerals.  All OtherStock
Option
AnnualFiscal
Salary
Bonus
Awards
Awards
CompensationName and Principal Position
Year
(1)
(2)
(3)
(4)
(5)
TotalFrancis R. Biscan,
2008
-
-
-
-
-
-President and
2007
-
-
-
$873,130
-
$873,130Chief Executive OfficerClifford A. Brown,
2008
`-
-
-
-
-
-Principal Financial Officer
2007
-
-
-
$291,043
-
$291,043  (1) The dollar value of base salary (cash and non-cash) received. (2) The dollar value of bonus (cash and non-cash) received. (3) During the periods covered by the table, the value of Tara
Minerals shares issued as compensation for services to the persons listed in
the table. (4) The value of all stock options granted during the periods covered
by the table.  See Note 7 to the financial statements included as part of
this report for details concerning the assumptions used in determining the value
of these options.  See the Stock Option and Bonus Plans - Summary section
below for other information concerning these stock options. (5) All other compensation received that Tara Minerals could not
properly report in any other column of the table.  Tara Minerals does not have employment agreements with any of its
officers.  The following shows the amounts that Tara Minerals expects to pay
to its officers during the twelve month period ending October 31, 2009, and the
time these persons plan to devote to Tara Minerals business.  Tara
Minerals does not have employment agreements with any of its officers.  Proposed
Time to be
Devoted toName
Compensation
Tara Minerals BusinessFrancis Richard Biscan, Jr.
$60,000
20 hours / weekClifford A. Brown
$24,000
20 hours / week  Long-Term Incentive Plans.  Tara Minerals does not
provide its officers or employees with pension, stock appreciation rights,
long-term incentive or other plans and has no intention of implementing any of
these plans for the foreseeable future.  30       Employee Pension, Profit Sharing or other Retirement Plans.
 Tara Minerals does not have a defined benefit, pension plan, profit
sharing or other retirement plan, although it may adopt one or more of such
plans in the future.  Compensation of Directors.  Tara Minerals directors
did not receive any compensation for their services as directors during the
fiscal year ended October 31, 2008.  Stock Option and Bonus Plans  Tara Minerals has
adopted stock option and stock bonus plans.  A summary description of these
plans follows.  In some cases these Plans are collectively referred to as
the Plans.  Incentive Stock Option Plan.  Tara Minerals Incentive
Stock Option Plan authorizes the issuance of shares of Tara Minerals common
stock to persons that exercise options granted pursuant to the Plan.  Only
Tara Minerals employees may be granted options pursuant to the Incentive Stock
Option Plan.  The option exercise price is determined by Tara Minerals
directors but cannot be less than the market price of Tara Minerals common
stock on the date the option is granted.  Non-Qualified Stock Option Plan.  Tara Minerals
Non-Qualified Stock Option Plan authorizes the issuance of shares of Tara
Minerals common stock to persons that exercise options granted pursuant to the
Plan.  Tara Minerals employees, directors, officers, consultants and
advisors are eligible to be granted options pursuant to the Plan, provided
however that bona fide services must be rendered by such consultants or advisors
and such services must not be in connection with the offer or sale of securities
in a capital-raising transaction.  Stock Bonus Plan.  Tara Minerals Stock Bonus Plan
allows for the issuance of shares of common stock to its employees, directors,
officers, consultants and advisors.  However bona fide services must be
rendered by the consultants or advisors and such services must not be in
connection with the offer or sale of securities in a capital-raising
transaction.  Summary.  The following lists, as of January 15, 2009,
the options granted pursuant to the Plans.  Each option represents the
right to purchase one share of Tara Minerals common stock.  Total
SharesShares
Reserved for
Shares
RemainingReserved
Outstanding
Issued as
Options/SharesName of Plan
Under Plans
Options
Stock Bonus
Under PlansIncentive Stock
Option Plan
1,000,000
-
N/A
1,000,000Non-Qualified Stock
Option Plan
2,000,000
1,000,000
N/A
1,000,000Stock Bonus
Plan
750,000
N/A
-
750,000  Tara Minerals stock option and bonus plans have not been approved
by its shareholders.  31      The following lists the unexercised options which were outstanding
as of January 15, 2009 and held by the Tara Minerals officers and directors.
 All of the options listed below were granted on February 1, 2007 pursuant
to Tara Minerals Non-Qualified Stock Option Plan.  Shares underlyingunexercised options which are
Exercise
ExpirationName
Exercisable
Unexercisable
Price
DateFrancis Richard Biscan, Jr.
750,000
-
$0.05
2/01/10Clifford A. Brown
250,000
-
$0.05
2/01/10   ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERS MATTERS  The following table lists, as of January 15, 2009, those persons
owning beneficially 5% or more of Tara Minerals common stock, the number and
percentage of outstanding shares owned by each director and officer of Tara
Minerals and by all officers and directors as a group.  Unless otherwise
indicated, each owner has sole voting and investment powers over his shares of
common stock.  Name and Address
Number of Shares (1)
Percent of ClassFrancis Richard Biscan, Jr. (2)
750,000
2%2162 Acorn CourtWheaton, IL 60187Clifford A. Brown (2)
250,000
1%313 Arbor AvenueWest Chicago, IL
60185Tara Gold Resources
Corp. (2)
30,000,000
79%2162 Acorn
CourtWheaton, IL
60187All officers and directors as a
group (2 persons)
1,000,000
3%  (1) Includes shares issuable upon the exercise of options held by the
following persons:  Shares Issuable
UponName

Exercise of
OptionsFrancis Richard
Biscan, Jr.

750,000Clifford A.
Brown

250,000 (2) Francis Richard Biscan, Jr., and Clifford A. Brown control Tara
Gold Resources Corp.   32       ITEM
13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.  The following table lists all shares of Tara Minerals common
stock, which have been sold as of January 15, 2009.  NumberShareholder
of Shares

Date
ConsiderationTara Gold Resources Corp.
30,000,000
(1)
5/25/06
$0 Founders SharesQualico Capital Corp
1,500,000

1/30/07
Investor relations servicesPrivate Investors
5,081,000

12/06 to 2/07
$0.50 per shareNorthern Development Ltd
1,200,000

1/09/08
Mining equipmentPrivate Investors
1,119,167

3/08 to 10/08
(2)Private Investors
510,000

10/08 to 11/08
(3)  (1) These shares were cancelled as of June 30, 2008.  (2) Between March 2008 and October 20, 2008 Tara Minerals sold
1,119,167 Units at a price of $0.60 per Unit.  Each Unit consisted of one
share of Tara Minerals common stock and one warrant.  Each warrant
entitles the holder to purchase one share of Tara Minerals common stock at a
price of $0.90 per share during the one year period following the sale of the
Units, and at a price of $1.20 per share during the second year following the
sale of the Units.  The warrants expire two years after their issuance.  (3) Between October 2008 and November 21, 2008 Tara Minerals sold
510,000 Units at a price of $0.20 per Unit.  Each Unit consisted of one
share of Tara Minerals common stock and one warrant.  Each warrant
entitles the holder to purchase one share of Tara Minerals common stock at a
price of $0.20 per share during the two year period following the sale of the
Units.  The warrants expire two years after their issuance.  Tara Gold Resources Corp., the controlling shareholder of Tara
Minerals, is also engaged in the exploration and development of mining
properties in Mexico.  Tara Gold Resources has the first right to acquire
any gold or silver mining prospects.  Tara Minerals has the first right to
acquire any mining prospect which may be productive of metals other than gold or
silver.  ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES  Mendoza Berger & Company, LLP. audited Tara Minerals
financial statements for the years ended October 31, 2008 and 2007.  The
following table shows the aggregate fees billed to Tara Minerals during the
years ended October 31, 2008 and 2007 by Mendoza Berger.  2008

2007Audit Fees
$
63,433
$
72,750Audit-Related Fees
$
0
$
0Financial Information
Systems
$
0
$
0Design and Implementation
Fees
$
0
$
0Tax Fees
$
0
$
275All Other Fees
$
0
$
0
  Audit
fees represent amounts billed for professional services rendered for the audit
of Tara Minerals annual financial statements and the review of Tara Golds
interim financial statements.  Before Mendoza Berger was engaged by Tara
Gold to render these services, the engagement was approved by Tara Minerals
Directors.   33      ITEM 15.
 EXHIBITS  Exhibit Number Exhibit Name  3.1 Articles of Incorporation (1) 3.2 Bylaws (1) 4.1 Incentive Stock Option Plan (1) 4.2 Non-Qualified Stock Option Plan (1) 4.3 Stock Bonus Plan (1) 4.4 Non  Qualified Stock Option Plan, as amended (2) 10.1 Acquisition Agreement  Pilar de Mocoribo property (1) 10.2 Acquisition Agreement  Don Ramon property (1) 10.3 Acquisition Agreement  Las Nuvias property (1) 10.4 Consulting Agreement with Qualico Capital (1) 10.5 Assignments of mining properties (3) 10.6 Acquisition Agreement  Centenario Prospect * 10.7 Equipment Purchase Agreement, dated October 3, 2007 (4) 21 Subsidiaries (1) 31.1 Rule 13a-14(a) Certifications - CEO * 31.2 Rule 13a-14(a) Certifications  CFO * 32 Section 1350 Certifications *  *       Filed herewith  (1) Incorporated by reference to the same exhibit filed with Tara
Minerals registration statement on Form SB-2 (File #333-143512)
on 06/05/2007  (2) Incorporated by Reference to Exhibit 4.2 filed with Tara Minerals
Form S-8 on 07/09/2008  (3) to be filed by amendment  (4) Incorporated by reference to Exhibit 10.6 of Tara Minerals annual
report on Form 10-KSB for the fiscal year ended  October 31, 2007 on
01/22/2008     34


SIGNATURES  In
accordance with Section 13 or 15(a) of the Exchange Act, the Registrant has
caused this Report to be signed on its behalf by the undersigned, thereunto duly
authorized on the 28th day of January 2009.  TARA MINERALS CORP.   By   /s/ Francis Richard Biscan
Jr. Francis Richard Biscan, Jr., President   By  /s/ Clifford A. Brown Clifford A. Brown, Principal Financial and Accounting Officer  Pursuant to the requirements of the Securities Act of l934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.  Title Date  /s/ Francis Richard Biscan Jr. Francis Richard Biscan, Jr. Director January 28, 2009   /s/ Clifford A. Brown Clifford A. Brown Director January 28, 2009