UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C.
20549 FORM 10-Q (Mark One) RQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGEACT OF 1934 FOR THE
QUARTERLY PERIOD ENDED JULY 31, 2008. OR £TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF
1934 FOR THE
TRANSITION FROM _______ TO ________.  COMMISSION FILE NUMBERNone  TARA MINERALS CORP. (Exact Name of Registrant as Specified in
its Charter)  Nevada
20-5000381(State or other
jurisdiction of
(I.R.S.
Employerincorporation or
organization)
Identification
No.)2162 Acorn
CourtWheaton, IL
 60189
60189(Address of
principal executive offices)
(Zip
code)Issuer's telephone
number: (630) 462-2079 Indicate by check mark whether
the registrant (1) has filed all reports required 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
/X/ No / /  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 o
Accelerated
filer oNon-accelerated
filer o
Smaller
reporting company þ Indicate by check mark whether
the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes  £   No
R As of September 5, 2008, the
Company had 37,350,167 outstanding shares common stock.  1   TARA MINERALS CORP. AND SUBSIDIARY (A
Subsidiary of Tara Gold Resources Corp) (An
Exploration Stage Company)  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE
THREE MONTHS AND NINE MONTHS ENDED JULY
31, 2008 AND JULY 31, 2007 And THE
PERIOD FROM INCEPTION (MAY 12, 2006) THROUGH JULY 31, 2008  2     TABLE OF CONTENTS PART I - FINANCIAL INFORMATION
PageItem
1.  Financial Statements
4Item
2.  Management's Discussion and Analysis or Plan of Operation
14Item
4.  Controls and Procedures
16PART
II - OTHER INFORMATIONItem
1.  Legal Proceedings
17Item
2.  Unregistered Sales of Equity Securities and Use of
Proceeds
17Item
3.  Defaults Upon Senior Securities
17Item
4.  Submission of Matters to a Vote of Security Holders
17Item
5.  Other Information
17Item
6.  Exhibits
17SIGNATURES
18    3    PART I - FINANCIAL INFORMATION  ITEM
1.     FINANCIAL STATEMENTS  TARA
MINERALS CORP. AND SUBSIDIARY (A Subsidiary of Tara Gold Resources
Corp) (An Exploration Stage Company) CONDENSED CONSOLIDATED BALANCE SHEETS  July 31,

October 31,2008

2007ASSETS

(Unaudited)

(Audited)CURRENT ASSETSCash and cash
equivalents
$
97,922
$
953,321Recoverable value
added taxes

434,203

278,030Other
receivables

5,229

4,894Due from related
parties

425,939

411,590Prepaid assets

192

6,903Total
current assets

963,485

1,654,738Construction in Progress

762,501

9,480Land

19,590

19,590Property, equipment and mine development, net of
accumulateddepreciation of $32,311 and
$16,782 at July 31, 2008 andOctober 31, 2007,
respectively

2,161,923

1,540,271Mining deposits

141,712

-Other assets

1,495

-Total
assets
$
4,050,706
$
3,224,079LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESAccounts
payable
$
260
$
5,854Accrued
expenses

52,220

9,500Due to related
parties, current portion

870,210

502,060Total
current liabilities

922,690

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

-

461,400Total
liabilities

922,690

978,814Commitment and contingencies

-

-Minority interest

-

-STOCKHOLDERS EQUITYCommon stock: $0.001
par value; authorized 75,000,000 shares;issued
and outstanding:  37,350,167 and 36,581,000 shares atJuly
31, 2008 and October 31, 2007, respectively

37,350

36,581Additional paid-in
capital

4,908,823

4,418,092Accumulated deficit
during exploration stage

(1,912,128)

(2,220,782)Other comprehensive
income

93,971

11,374Total
stockholders equity

3,128,016

2,245,265Total
liabilities and stockholders equity
$
4,050,706
$
3,224,079   See Accompanying Notes to
these Condensed Consolidated Financial Statements.  4    TARA MINERALS
CORP. AND SUBSIDIARY (A Subsidiary of Tara Gold Resources
Corp) (An Exploration Stage Company) CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE LOSS  For
the Three months ended
For
the Three months ended
For
the Nine months ended
For
the Nine months ended
From
inception
May
12, 2006 toJuly
31,
July
31,
July
31,
July
31,
July
31,2008
2007
2008
2007
2008(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)Mining
revenues:
$
                -

$
                -

$
                -

$
                -

$
                -Cost of
revenue:Exploration
expenses
2,715

57,269

32,901

104,757

157,071Operating,
general, and administrative expenses:Operating,
general, and administrative expenses
168,951

47,154

440,943

1,311,166

2,562,049Total
operating, general, and administrative expenses
168,951

47,154

440,943

1,311,166

2,562,049Net operating
loss
(171,666)

(104,423)

(473,844)

(1,415,923)

(2,719,120)Non-operating
(income) expense:Interest
(income)
(7,164)

(2,089)

(32,782)

(15,341)

(57,595)Other
(income)
(750,004)

-

(750,198)

(12)

(750,210)Interest
expense
117

92,436

482

92,675

818(757,051)

90,347

(782,498)

77,322

(806,987)Minority
interest
-

-

-

5

5Net
income (loss)
585,385

(194,770)

308,654

(1,493,240)

(1,912,128)Other
comprehensive income:Foreign
currency translation
57,888

91,122

82,597

97,782

93,971Comprehensive
loss
$       643,273

$    (103,648)

$      391,251

$  (1,395,458)

$    (1,818,157)Net
income (loss) per share, basic
$  
          0.02

$     
    (0.01)

$ 
          0.01

$      
    (0.05)Weighted
average number of shares of common
stock
outstanding, basic
38,010,149

30,000,000

37,613,902

30,000,000Net
income (loss) per share, diluted
$
          0.02

$         (0.01)

$            0.01

$          (0.05)Weighted
average number of shares of common
stock
outstanding, diluted
39,010,149

30,000,000

38,613,902

30,000,000     See Accompanying Notes to
these Condensed Consolidated Financial Statements.  5    TARA MINERALS CORP. AND SUBSIDIARY (A Subsidiary of Tara Gold Resources
Corp) (An Exploration Stage Company) CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  From inceptionNine mos.

Nine mos.

(May 12, 2006)Ended

Ended

throughJuly 31, 2008

July 31,2007

July 31, 2008(Unaudited)

(Unaudited)

(Unaudited)Cash Flows From Operating Activities:Net income
(loss)
$
308,654
$
(1,493,240)
$
(1,912,128)Adjustments to
reconcile net lossto
cash used in operating activities:Depreciation
expense

15,529

11,717

32,311Stock based
compensation

-

1,164,173

1,164,173Common stock issued
for services

-

-

750,000Minority
Interest

-

5

5Cancellation of
common shares for settlement

(750,000)

-

(750,000)Changes in assets and
liabilities(Increase)
in recoverable value added taxes

(156,173)

(58,343)

(227,988)(Increase)
in other receivables

(335)

-

(5,229)Decrease
(increase) in prepaid expenses

6,711

(4,778)

(192)(Increase)
in other assets

(1,495)

(8,302)

(1,495)(Decrease)
Increase in accounts payable

(5,594)

10,526

260Increase
in accrued expenses

42,720

9,106

52,219Net
cash used in  operating activities

(539,983)

(369,136)

(898,064)Cash Flows from Investing Activities:Acquisition of
land

-

-

(19,590)Purchase of mining
concession

(16,417)

-

(40,652)Payments made for
construction in progress

(753,021)

-

(762,501)Acquisition of
machinery

(20,764)

(8,282)

(29,046)Payments toward
mining deposits

(141,712)

-

(141,712)Net
cash used in investing activities

(931,914)

(8,282)

(993,501)Cash Flows from Financing Activities:Cash from the sale of
common stock

641,501

2,540,500

3,182,000Payments toward
equipment financing

-

(160,026)

(160,026)Change in due to/from
related parties, net

(107,600)

(1,040,787)

(1,126,453)Minority interest,
net assets of subsidiary

-

(5)

(5)Net
cash provided by financing activities

533,901

1,339,682

1,895,516Effect of exchange rate on cash

82,597

97,782

93,971Net
increase (decrease) in cash

(855,399)

1,060,046

97,922Cash, beginning of period

953,321

-

-Cash, end of period
$
97,922
$
1,060,046
$
97,922    See Accompanying Notes to
these Condensed Consolidated Financial Statements.  6   TARA MINERALS CORP. AND SUBSIDIARY (A Subsidiary of Tara Gold Resources
Corp) (An Exploration Stage Company) CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)  From inceptionNine mos.

Nine mos.

(May 12, 2006)Ended

Ended

ThroughJuly 31, 2008

July 31,2007

July 31, 2008(Unaudited)

(Unaudited)

(Unaudited)Supplemental Information:Interest paid
$
16,416
$
-
$
16,416Income taxes paid
$
-
$
-
$
-Non-cash Investing and Financing
Transactions:Acquisition of property and
equipment through debt
$
-
$
167,072
$
167,072Purchase of mining concession paid bydebt to related party plus
capitalized interest
$
-
$
1,381,700
$
1,357,463Recoverable value-added taxes incurred
throughAdditional debt and
due to related party
$
-
$
206,215
$
206,215Purchase of mining equipment with common
stock
$
600,000
$
-
$
600,000           See Accompanying Notes to
these Condensed Consolidated Financial Statements.                     7    TARA MINERALS CORP. AND SUBSIDIARY (A
Subsidiary of Tara Gold Resources Corp) (An Exploration Stage Company) NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  Note
1. Nature
of Business and Significant Accounting Policies  Nature of business and principles of consolidation:  The accompanying Condensed Consolidated Financial Statements of
Tara Minerals Corp. (the Company) should be read in conjunction with the
Companys Annual Report on Form 10-KSB/A for the year ended October 31, 2007.
Significant accounting policies disclosed therein have not changed.  The accompanying Condensed Consolidated Financial Statements and
the related footnote information are unaudited.  In the opinion of
management, they include all normal recurring adjustments necessary for a fair
presentation of the condensed consolidated balance sheets of the Company at July
31, 2008 and October 31, 2007, the condensed consolidated statements of
operations for the three and nine months ended July 31, 2008 and 2007 and the
condensed consolidated statements of cash flows for the nine months ended July
31, 2008 and 2007. Results of operations reported for interim periods are not
necessarily indicative of results for the entire year.  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 the 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 limited 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.  The Company is a subsidiary of Tara Gold Resources, Corp.  The consolidated financial statements include the financial
statements of the Company and 99.9% owned subsidiary. All amounts are in U.S.
dollars unless otherwise indicated. All significant intercompany balances and
transactions have been eliminated in consolidation.  The subsidiarys functional currency is the U.S. dollar. As a
result, the financial statements of the subsidiary have been remeasured from
Mexican pesos into U.S. dollars using (i) current exchange rates for monetary
asset and liability accounts, (ii) historical exchange rates for nonmonetary
asset and liability accounts, (iii) historical exchange rates for revenues and
expenses associated with nonmonetary 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 remeasurement gain or loss is recorded in other comprehensive (loss)
income.  The financial statements of the subsidiary should not be construed
as representations that Mexican pesos have been, could have been or may in the
future be converted into U.S. dollars at such rates or any other rates.  Relevant exchange rates used in the preparation of the financial
statements for the subsidiary are as follows for the nine months ended July 31,
2008 (Mexican pesos per one U.S. dollar).  July 31, 2008Current
exchange rate
Ps.
10.0340Weighted
average exchange rate for the nine months ended
Ps.
10.6295
   8   TARA MINERALS CORP. (A
Subsidiary of Tara Gold Resources Corp) (An Exploration Stage Company) NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS   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.  Recent Accounting
Pronouncements  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 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.  9    TARA MINERALS CORP. (A
Subsidiary of Tara Gold Resources Corp) (An Exploration Stage Company) NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS    Note
2. Property,
equipment and mine development July 31, 2008
October 31, 2007Land
$
      
         19,590
$
   
          19,590Mining
concessions:Pilar
(a)
$
     
        776,377
$
   
        759,960Don
Roman
521,739
521,739Las
Nuvias
100,000
100,000Mining
concession
1,398,116
1,381,699Machinery and
equipment
796,118
175,3542,194,234
1,557,053Less 
accumulated depreciation
(32,311)
(16,782)$
      
    2,161,923
$
  
       1,540,271
  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 $920,000 ($800,000 principle plus $120,000
value added tax (IVAT)).  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):  2008 $   626,126  In accordance with Accounting Principles Board Opinion 21,
Interest on Receivables and Payables (APB 21), the future payments of
the total payment amount of $800,000 has been discounted using the incremental
borrowing rate of 5.01%. As of July 31, 2008, the present value of future
payments is as follows:  Debt

IVAT

TotalFuture
payments
$
           
  565,000

$         
      84,750

$
          
  649,750Imputed
interest
(23,624)

-

(23,624)Present value
of current debt
$
       
      541,376

$
          
    84,750

$
         
   626,126
  Note 3. 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 of 1,200,000 common
shares for mining equipment valued at $600,000 or $0.50 per share and 1,068,967
common shares for $641,499 or an average of $0.60 per share.  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.      10    TARA MINERALS CORP. (A
Subsidiary of Tara Gold Resources Corp) (An Exploration Stage Company) NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS   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.  Basic net loss per common share is based on the weighted average
number of shares of common stock outstanding since inception.  The
following table reconciles basic earnings per share and diluted earnings per
share and the related weighted average number of shares as of July 31, 2008:  For the Three Months
Ended July 31, 2008Income
(Numerator)
Shares
(Denominator)
Per-Share
AmountNet income
$    
    585,385Basic EPS:Income available to common stockholders
$  
      585,385
38,010,149
$
    
     0.02Options -
Biscan

750,000Options -
Brown
-
250,000Diluted EPS:Income available to common stockholdersplus assumed
conversions
$   
     585,385
39,010,149
$   
       0.02  For the Nine Months
Ended July 31, 2008Income
(Numerator)
Shares
(Denominator)
Per-Share
AmountNet income
$    
    308,654Basic EPS:Income available to common stockholders
$
        308,654
37,613,902
$           0.01Options -
Biscan

750,000Options -
Brown
-
250,000Diluted EPS:Income available to common stockholdersplus assumed
conversions
$
        308,654
38,613,902
$   
       0.01  There were no potentially dilutive shares as of July 31, 2007.  Note
4. Income
Taxes  During the year ended October 31, 2007, 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  11    TARA MINERALS CORP. (A
Subsidiary of Tara Gold Resources Corp) (An Exploration Stage Company) NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS   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.  The Company did not provide any current or deferred U.S. federal
income tax provision or benefit for any of the periods presented because the
Company has experienced operating losses since inception. The Company provided a
full valuation allowance on the net deferred tax asset, consisting of net
operating loss carry forwards, because management has determined that it is
more-likely-than-notthat the Company will not earn income sufficient to
realize the deferred tax assets during the carry forward period. The
components of the Companys deferred tax asset as of July 31, 2008 and October
31, 2007 are as follows: 2008
2007Net operating
loss carry forward
$
     
     650,000
$
      760,000Valuation
allowance
(650,000)
(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 U.S. and MX)
34%
34%Valuation
allowance
(34%)
(34%)-
-
  Upon adoption of FIN 48 as of November 1, 2007, the
Company had no gross unrecognized tax benefits that, if recognized, would
favorably affect the effective income tax rate in future periods.  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.  The Company files income tax returns in the United States and
certain states in the United States and certain foreign jurisdictions.  The
Company is currently finalizing its year end tax return for October 31, 2007.
 These U. S. federal and foreign jurisdiction income tax returns for the
years ended October 31, 2007 and 2006 are considered open tax years as of the
date of these condensed consolidated financial statements.  No income tax
returns are currently under examination by any tax authorities. Note 5. Mining Deposits As of July 31, 2008, the Company paid a deposit of $141,712 toward
the involvement in a mining project.  As of August 26, 2008, the formal
agreement relating to the mining project has not been executed and both the
Company and the third party are in negotiations to finalize the agreement. Note 6. Related Party Transactions The Company is a subsidiary of Tara Gold Resources, Corp.  As
of July 31, 2007 another subsidiary of Tara Gold Resources, Corp., Corporacion
Amermin, S.A. de C.V. (Amermin), made the arrangements to purchase the Pilar,
Don Ramon and Las Nuvias 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 will
make payments to Amermin and Amermin will make payments related to the original
purchase  12    TARA MINERALS CORP. (A
Subsidiary of Tara Gold Resources Corp) (An Exploration Stage Company) NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS   agreement for the Pilar mining concession described in Note 2a
above.  Due to related parties, current for Pilar is $626,126 as of July
31, 2008.  In January 2007, Amermin paid the entire balance of Don Roman and
Las Nuvias concessions.  Per the assignment agreement, transferring the
property to American Metal Mining, the Company will make payments to Amermin to
repay for the amounts paid plus related IVAT.  As of July 31, 2008 the
Company owed Amermin $210,000, which is included in the Due to Related Parties,
current portion.  As of July 31, 2008, the Company lent $425,939 in cash to Amermin
and other related parties in the form of short-term loans. The receivables,
denoted as due from related parties on the balance sheet, accrue at an annual
interest rate of 6.5% and are payable in October 2008.  As of 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 are
payable in September 2008.  An officer of the Company provides office space and administrative
services without charge.  Such costs are immaterial to the financial
statements and accordingly, have not been reflected therein.  American
Metal Mining shares office space with Amermin in Mexico at no charge.
 These costs are also immaterial.   13


ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
PLAN OF OPERATION  Tara Minerals was incorporated on May 12, 2006 and is involved in
the exploration and development of mining properties which may have various
industrial metals including silver, copper, lead, and zinc.  Tara Minerals
is in the exploration stage.  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 valued at $600,000 to an unrelated third party for mining
equipment.  In April 2008, Tara Minerals sold 833,134 shares of its common
stock for cash of $500,000 to unrelated third parties for an average of $0.60
per share.  In July 2008, Tara Minerals sold 235,833 shares of its common
stock for cash of $141,500 to unrelated third parties for an average of $0.60
per share.  As of August 26, 2008 Tara Minerals had a 100% interest in the
Pilar de Mocoribo, Don Roman and Lourdes, and Las Nuvias mining properties
listed below.  Although Tara Minerals believes that each of these
properties has deposits of silver, 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.  All of Tara Minerals properties are located approximately 25
kilometers from the town of Choix, Sinaloa State, Mexico.  In Mexico, land size is denominated in hectares and weight is
denominated in tonnes.  One hectare is equal to approximately 2.47 acres
and one tonne is equal to 2,200 pounds.  Pilar de Mocoribo
Prospect  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 June 6, 2008 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 major
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 is 331 hectares in size.
 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 at cost of approximately $172,000.    Permits needed to move towards active mining, assessing
exploitation options, and costs associated with the design of various mining and
recovery systems have been obtained.  Mining and processing equipment have
been purchased and the plant, which will be capable of processing a minimum of
200 tonnes per day, is nearing completion.  Water rights for the property
have been acquired and a well


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to
supply water to the plant is nearing completion.  High voltage electrical
service has been supplied to an electrical substation which will supply power to
operate the Plant.  Plant completion and initial production is scheduled
for the fourth quarter of 2008.  Las Nuvias Concession  The Las Nuvias prospect is 41 hectares in size.  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 August 26, 2008 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 Roman and Lourdes concession, Tara
Minerals plans to delay any major work on this property so that more resources
can be devoted to the Don Roman and Lourdes concession.  Results of Operation  During the period from its incorporation through July 31, 2008
Tara Minerals did not generate any revenue and incurred $157,071 in exploration
expenses and $2,562,049 in operating and general administration expenses.
 Included in operating and general and administrative expenses are non-cash
charges of $1,164,173 pertaining to the issuance of stock options. Tara Minerals
also booked a non-cash gain of $750,000 as other income pursuant to a settlement
agreement for the cancellation of common stock.  Liquidity and Capital Resources  Tara Minerals anticipated that its approximate capital
requirements during the year ending October 31, 2009 are shown below.  The
anticipated capital requirements do not include any amounts which Tara Minerals
will be required to spend if it acquires the any other potential properties or
investments in any other potential projects:  Exploration and Development  Pilar de Mocoribo property $ 25,000 Property payments and taxes  Pilar de Mocoribo property 509,750 Exploration and Development  Don Roman property 3,125,000 Exploration and Development  Las Nuvias property 25,000 General and administrative expenses 687,500 Total $ 4,372,250  Tara Minerals believes that its cash on hand will satisfy its
working capital needs until the start of production of Don Ramon begins in the
fourth quarter.   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 20 new
employees by October 31, 2008.  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


15


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.  ITEM 4T.
  CONTROLS AND PROCEDURES  Francis Richard Biscan, Jr., Tara Minerals Principal Executive
Officer and Clifford A. Brown, Tara Minerals Principal Financial Officer, have
evaluated the effectiveness of Tara Minerals disclosure controls and procedures
(as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934) as of the
end of the period covered by this report, and in their opinion Tara Minerals
disclosure controls and procedures are effective.  There were no changes in Tara Minerals internal controls over
financial reporting that occurred during the fiscal quarter that have materially
affected, or are reasonably likely to materially affect, Tara Minerals internal
control over financial reporting.


16


PART II OTHER INFORMATION  ITEM
1.      LEGAL PROCEEDINGS  None.  ITEM
2.       UNREGISTERED SALE OF EQUITY SECURITIES
AND USE OF PROCEEDS  In
January 2008, the Company issued 1,200,000 shares of its common stock to an
unrelated third party for mining equipment.  In
April 2008, the Company sold 833,334 shares of its common stock to a group of
private investors for $500,000 cash or an average of $0.60 per share.  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.  In July
2008, the Company issued sold 235,833 shares of its common stock to a group of
private investors for $141,500 cash or an average of $0.60 per share.  The
Company relied upon the exemption provided by Section 4(2) of the Securities Act
of 1933 in connection with the issuance of the shares referred to above.  ITEM
3.      DEFAULTS UPON SENIOR SECURITES  None.  ITEM
4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS  None.  ITEM
5.     OTHER INFORMATION  None.  ITEM
6.     EXHIBITS  (a) Exhibits Number Exhibit  31 Rule
13a-14(a) Certifications  32 Section
1350 Certifications


17


SIGNATURES   In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized on September 9, 2008.  TARA
MINERALS CORP.    By:
  /s/ Francis Richard Biscan Jr. Francis
Richard Biscan, Jr., President
and Chief Executive Officer    By:
  /s/ Clifford A. Brown Clifford
A. Brown, Principal
Financial and Accounting Officer


18