Thursday, March 18, 2010

Tara Minerals: On A Tear-A

In keeping with this week's theme of pointing out some interesting ideas in the junior precious metals space, we introduce a very unknown company called Tara Minerals Corp. (TARM).

Lately Tara has been quietly vaulting higher.  The stock closed yesterday at $2.50 despite having sold for about $.50 as recently as September 2009.  Tara is, as far as I can tell, completely unknown to most precious metals afficionados, but seems destined to hit the radar screens of the invesment community in short order.

The Company was organized May 12, 2006 and is engaged in the acquisition, exploration and development of mineral resource properties in Mexico.  The Company owns 100% (minus one share) of common stock of American Metal Mining, S.A. de C.V., which was established in December 2006 and operates in México.   All of Tara Minerals’ operations in Mexico are conducted through American Metals Mining, since Mexican law provides that only Mexican corporations are allowed to own mining properties.

Tara Minerals has an interest in several gold/zinc/lead/silver mining properties.  The properties are located in the northern part of the La Reforma Mining District of northeastern Sinaloa State, Mexico, which has been mined for more than 300 years.  The Company believes that this area may potentially host base metals that were never discovered, or exploited, as the result of market conditions, lack of technology, and lack of funding.

Tara Minerals is fully funded and focused on generating revenue from its 100% owned high-grade Gold, Zinc, Lead and Silver Don Roman project.  Production began in the third quarter of 2009 and is expected to generate significant revenue - allowing the financing of all near-term exploration and production goals.

In 2010, the Company is expecting to produce approximately 900,000 ounces of Silver and 24 million pounds of Lead and Zinc concentrate.  The value per tonne of mined rock is currently approximately $350 versus a cost of $80.  Tara has also discovered a rich vein of Gold in its San Felipe property.

Tara's CEO and President is Robert Wheatley, former Director of North and Central American Exploration for Yamana Gold (AUY).

The Company has approximately 50 million shares outstanding, however, 80% is owned by parent company Tara Gold, leaving a fairly small float of approximately 8 million shares.  Tara Mineral expects to seek listing on the American Stock Exchange, which requires a period of greater than 10 consecutive days with a $2 or better share price.  If this listing is realized, the Company will obtain greater access to capital markets and investor accessibility.

For full disclosures purposes, I am currently a shareholder of TARM.

While most investors in precious metals companies will be rewarded, the upcoming environment will prove especially conducive to those who find and select the "sleepers".  Tara Minerals appears to be one of them.

Happy investing!

Marko's Take

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