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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, DC
20549

FORM 10-QSB

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 31, 2007; or

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________to
______________

Commission File Number____000-4995___

TAO MINERALS LTD.(Exact
Name of Small Business Issuer in Its Charter)

|Nevada                          | 20-1682702            
|------------------------------- | ----------------------
|(State or Other Jurisdiction of | (I.R.S. Employer      
|Incorporation or Organization)  | Identification Number)

Officina 624, Empresarial Mall Ventura, Cra.32#1B Sur 51,
Medellin, Columbia (305) 726-0602(Address and telephone number
of principal executive offices and principal place of business)

Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 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 shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports
required to be filed by section 12,13 or 15 of the Exchange Act after
distribution of securities under a plan confirmed by a court [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS

As of December 7, 2007, there were 55,816,000shares of
the issuers common stock and outstanding, par value $0.001.

Transitional Small Business Disclosure Format (Check one): Yes [
] No [X]

---

|INDEX                              |                         |                                                                                                                                                                                                    | Page
|---------------------------------- | ----------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----
|                                   |                         |                                                                                                                                                                                                    |     
|PART 1.FINANCIAL
      INFORMATION |                        
|                                   |                        
|                                   | Item 1.                 | Financial
        Statements                                                                                                                                                                       |     
|                                   |                         |                                                                                                                                                                                                    |     
|                                   |                         | Balance
        Sheets as of October 31, 2007                                                                                                                                                      | F-1 
|                                   |                         |                                                                                                                                                                                                    |     
|                                   |                         | Statement
        of Changes in Stockholders Deficit for the period from September
        23, 2004 (Date of Inception) to October 31, 2007.                                                      | F-2 
|                                   |                         |                                                                                                                                                                                                    |     
|                                   |                         | Statements
        of Operations for the three and nine months ended October 31, 2007 and
        2006, and for the period from September 23, 2004 (Date of inception) to
        October 31, 2007 | F-3 
|                                   |                         |                                                                                                                                                                                                    |     
|                                   |                         | Statements
        of Cash Flows for the nine months ended October 31, 2007 and 2006, and
        for the period September 23, 2004 (Date of inception) to October 31, 2007                        | F-4 
|                                   |                         |                                                                                                                                                                                                    |     
|                                   |                         | Notes
        to Financial Statements                                                                                                                                                              | F-5 
|                                   |                         |                                                                                                                                                                                                    |     
|                                   | Item 2                  | Management
        Discussion and Analysis                                                                                                                                                         | 3   
|                                   |                         |                                                                                                                                                                                                    |     
|                                   | Item 3                  | Controls
        and Procedures                                                                                                                                                                    | 11  
|                                   |                         |                                                                                                                                                                                                    |     
|PART II.                           | OTHER
      INFORMATION | 12                                                                                                                                                                                                
|                                   |                         |                                                                                                                                                                                                   
|                                   | Item 1                  | Legal
        Proceedings                                                                                                                                                                          | 12  
|                                   |                         |                                                                                                                                                                                                    |     
|                                   | Item 2                  | Changes
        in Securities                                                                                                                                                                      | 12  
|                                   |                         |                                                                                                                                                                                                    |     
|                                   | Item 3                  | Defaults
        Upon Senior Securities                                                                                                                                                            | 12  
|                                   |                         |                                                                                                                                                                                                    |     
|                                   | Item 4                  | Submission
        of Matters to a Vote of Security Holders                                                                                                                                        | 12  
|                                   |                         |                                                                                                                                                                                                    |     
|                                   | Item 5                  | Other
        Information                                                                                                                                                                          | 12  
|                                   |                         |                                                                                                                                                                                                    |     
|                                   | Item 6                  | Exhibits
        and Reports on Form 8K                                                                                                                                                            | 13  
|                                   |                         |                                                                                                                                                                                                    |     
|                                   | SIGNATURES              |                                                                                                                                                                                                    | 14  



2

---

TAO MINERALS
LTD.(An Exploration Stage Company)

Unaudited Financial Statements

|Index                                               | Page Number
|--------------------------------------------------- | -----------
|Balance Sheet                                       | F-1        
|Statement of Changes in Stockholders
      Deficit | F-2        
|Statements of Operations                            | F-3        
|Statements of Cash Flows                            | F-4        
|Notes to Financial Statements                       | F-5-6      





---

|TAO MINERALS LTD.             
|------------------------------
|(An Exploration Stage Company)
|Balance Sheet                 

|                                                                          |   | October
      31, |  
|------------------------------------------------------------------------- | - | ----------------- | -
|                                                                          |   | 2007              |  
|                                                                          |   |                   |  
|ASSETS                                                                    |   |                   |  
|Current                                                                   |   |                   |  
|Cash                                                                      | $ | 1,614             |  
|Prepaid
      Expenses                                                    |   | 29,500            |  
|Total current assets                                                      |   | 31,114            |  
|Mineral Properties                                                        |   |                   |  
|Mineral Rights, net                                                       |   | 353,000           |  
|Total Mineral
      Properties                                            |   | 353,000           |  
|                                                                          |   |                   |  
|                                                                          |   |                   |  
|Total assets                                                              | $ | 384,114           |  
|                                                                          |   |                   |  
|LIABILITIES                                                               |   |                   |  
|Current                                                                   |   |                   |  
|Accounts payable and accrued expenses                                     | $ | 114,531           |  
|Due to a related party                                                    |   | 3,000             |  
|Stock issuance liability                                                  |   | 620,000           |  
|Other
      accrued liabilities                                           |   | 183,000           |  
|Total current liabilities                                                 |   | 920,531           |  
|Total Liabilities                                                         |   | 920,531           |  
|                                                                          |   |                   |  
|STOCKHOLDERS EQUITY                                                      |   |                   |  
|Share capital                                                             |   |                   |  
|Authorized:                                                               |   |                   |  
|Preferred stock$0.001 par value1,000, 000
      shares authorized         |   |                   |  
|None issued, allotted and outstanding:                                    |   | -                 |  
|                                                                          |   |                   |  
|Common stock $0.001 par value, 552,000,000 shares
      authorized        |   |                   |  
|Issued, allotted and outstanding:
      55,816,000 shares of common stock |   | 55,816            |  
|Additional paid-in capital                                                |   | 534,095           |  
|Deficit accumulated during exploration stage                              |   | (1,126,328        | )
|Total
      stockholders deficit                                         |   | (536,417          | )
|Total liabilities and stockholders deficit                               | $ | 384,114           |  

The accompanying notes are an integral part of these financial
statements.

F-1

---

|TAO MINERALS LTD.                                                       |            
|----------------------------------------------------------------------- | -----------
|(An Exploration Stage Company)                                          | Page 1 of 2
|Statement of Changes in Stockholders' Deficit                           |            
|For the period September 23, 2004 (Inception) to
      October 31, 2007

|                                               |  |              |  |   |         |  |   |              |  |  |             |   |   | Deficit     |   |   | Total        |  
|---------------------------------------------- |  | ------------ |  | - | ------- |  | - | ------------ |  |  | ----------- | - | - | ----------- | - | - | ------------ | -
|                                               |  |              |  |   |         |  |   |              |  |  |             |   |   | Accumulated |   |   |              |  
|                                               |  |              |  |   |         |  |   | Additional   |  |  |             |   |   | During      |   |   | Stock-       |  
|                                               |  | Common stock |  |   | paid-in |  |   | Subscription |  |  | Exploration |   |   | holders'    |  
|                                               |  | Shares       |  |   | Amount  |  |   | capital      |  |  | Receivable  |   |   | Stage       |   |   | (deficiency) |  
|                                               |  |              |  |   |         |  |   |              |  |  |             |   |   |             |   |   |              |  
|                                               |  |              |  |   |         |  |   |              |  |  |             |   |   |             |   |   |              |  
|                                               |  |              |  |   |         |  |   |              |  |  |             |   |   |             |   |   |              |  
|Common stock issued to founders for cash       |  |              |  |   |         |  |   |              |  |  |             |   |   |             |   |   |              |  
|($0.001 per share)                             |  | 54,080,000   |  | $ | 54,080  |  | $ | $            |  |  |             |   | $ | (47,320     | ) | $ | 6,760        |  
|                                               |  |              |  |   |         |  |   |              |  |  |             |   |   |             |   |   |              |  
|Common stock issued for cash ($0.05 per share) |  | 7,836,000    |  |   | 7,836   |  |   | 47,995       |  |  | (425        | ) |   | (6,856      | ) |   | 48,550       |  
|                                               |  |              |  |   |         |  |   |              |  |  |             |   |   |             |   |   |              |  
|                                               |  |              |  |   |         |  |   |              |  |  |             |   |   |             |   |   |              |  
|                                               |  |              |  |   |         |  |   |              |  |  |             |   |   |             |   |   |              |  
|                                               |  |              |  |   |         |  |   |              |  |  |             |   |   |             |   |   | -            |  
|                                               |  |              |  |   |         |  |   |              |  |  |             |   |   |             |   |   |              |  
|- net loss
      for the year                  |  |              |  |   |         |  |   |              |  |  |             |   |   | (5,577      | ) |   | (5,577       | )
|                                               |  |              |  |   |         |  |   |              |  |  |             |   |   |             |   |   |              |  
|                                               |  |              |  |   |         |  |   |              |  |  |             |   |   |             |   |   |              |  
|                                               |  |              |  |   |         |  |   |              |  |  |             |   |   |             |   |   |              |  
|                                               |  |              |  |   |         |  |   |              |  |  |             |   |   |             |   |   |              |  
|Balance, January 31, 2005                      |  | 61,916,000   |  | $ | 61,916  |  | $ | 47,995 $     |  |  | (425        | ) | $ | (59,753     | ) | $ | 49,733       |  

The accompanying notes are an integral part of these
financial statements.

F-2

---

|TAO MINERALS LTD.                                                       |            
|----------------------------------------------------------------------- | -----------
|                                                                        |            
|(An Exploration Stage Company)                                          |            
|Statement of Changes in Stockholders' Deficit                           |            
|For the period September 23, 2004 (Inception) to October
      31, 2007 | Page 2 of 2

|                                                          |  |              |   |   |         |   |   |              |   |   |             |   |   | Accumulated    |   |   | Total        |  
|--------------------------------------------------------- |  | ------------ | - | - | ------- | - | - | ------------ | - | - | ----------- | - | - | -------------- | - | - | ------------ | -
|                                                          |  |              |   |   |         |   |   | Additional   |   |   |             |   |   | Deficit During |   |   | Stock-       |  
|                                                          |  | Common stock |   |   | paid-in |   |   | Subscription |   |   | Exploration |   |   | holders'       |  
|                                                          |  | Shares       |   |   | Amount  |   |   | capital      |   |   | Receivable  |   |   | Stage          |   |   | (deficiency) |  
|                                                          |  |              |   |   |         |   |   |              |   |   |             |   |   |                |   |   |              |  
|Balance, January 31, 2005                                 |  | 61,916,000   |   | $ | 61,916  |   | $ | 47,995       |   | $ | (425        | ) | $ | (59,753        | ) | $ | 49,733       |  
|Subscription receivable cancelled                         |  |              |   |   |         |   |   |              |   |   | 425         |   |   |                |   |   | 425          |  
|- net loss for the year                                   |  |              |   |   |         |   |   |              |   |   |             |   |   | (48,916        | ) |   | (48,916      | )
|Balance, January 31, 2006                                 |  | 61,916,000   |   | $ | 61,916  |   | $ | 47,995       |   | $ | -           |   | $ | (108,669       | ) | $ | 1,242        |  
|Common stock issued for mineral rights on
      April 20, |  | 2,500,000    |   |   | 2,500   |   |   | (2,500       | ) |   | -           |   |   | -              |   |   | -            |  
|2006 at $.01                                              |  |              |   |   |         |   |   |              |   |   |             |   |   |                |   |   |              |  
|Common stock cancelled April 24, 2006                     |  | (12,600,000  | ) |   | (12,600 | ) |   | 12,600       |   |   | -           |   |   | -              |   |   | -            |  
|Net loss for the
      period                             |  |              |   |   |         |   |   |              |   |   |             |   |   | (399,636       | ) |   | (399,636     | )
|                                                          |  |              |   |   |         |   |   |              |   |   |             |   |   |                |   |   |              |  
|Balance, January 31, 2007                                 |  | 51,816,000   |   |   | 51,816  |   |   | 58,095       |   |   | -           |   |   | (508,305       | ) |   | (398,394     | )
|Common stock issued for legal fees and
      services     |  | 4,000,000    |   |   | 4,000   |   |   | 476,000      |   |   | -           |   |   | -              |   |   | 480,000      |  
|Net loss for the
      period                             |  |              |   |   |         |   |   |              |   |   |             |   |   | (618,023       | ) |   | (618,023     | )
|Balance, October 31, 2007                                 |  | 55,816,000   |   | $ | 55,816  |   | $ | 534,095      |   | $ | -           |   | $ | (1,126,328     | ) | $ | (536,417     | )

The accompanying notes are an integral part of these
financial statements.

F-2

---

|TAO MINERALS LTD.             
|------------------------------
|(An Exploration Stage Company)
|Statements of Operations      

|                                       |   | From Date of       |           |   |                  |            |   |                  |            |   |                  |            |   |                  |  
|-------------------------------------- | - | ------------------ | --------- | - | ---------------- | ---------- | - | ---------------- | ---------- | - | ---------------- | ---------- | - | ---------------- | -
|                                       |   | Inception          |           |   |                  |            |   |                  |            |   |                  |            |   |                  |  
|                                       |   | September 23, 2004 |           |   | For the three    |            |   | For the three    |            |   | For the nine     |            |   | For the nine     |  
|                                       |   | to Period Ended    |           |   | Months ended     |            |   | Months ended     |            |   | Months ended     |            |   | Months ended     |  
|                                       |   | October 31, 2007   |           |   | October 31, 2007 |            |   | October 31, 2006 |            |   | October 31, 2007 |            |   | October 31, 2006 |  
|OPERATING EXPENSES                     |   |                    |           |   |                  |            |   |                  |            |   |                  |            |   |                  |  
|Exploration expenses                   | $ | 113,550            |           | $ | -                |            | $ | -                |            | $ | -                |            | $ | -                |  
|Professional fees                      |   | 258,096            |           |   | 15,000           |            |   | 3,225            |            |   | 47,123           |            |   | 36,810           |  
|Consulting fees                        |   | 559,850            |           |   | 345,000          |            |   | 44,940           |            |   | 543,000          |            |   | 100,790          |  
|General and administrative             |   | 142,187            |           |   | 123,646          |            |   | 33,408           |            |   | 27,900           |            |   | 116,053          |  
|Total
      Operating Expenses         |   | 1,073,683          |           |   | 483,646          |            |   | 81,573           |            |   | 618,023          |            |   | 253,653          |  
|LOSS FROM OPERATIONS                   |   | (1,073,683         | )         |   | (483,646         | )          |   | (81,573          | )          |   | (618,023         | )          |   | (253,653         | )
|OTHER EXPENSE                          |   |                    |           |   |                  |            |   |                  |            |   |                  |            |   |                  |  
|Foreign currency translation           |   | 1,531              |           |   | -                |            |   | -                |            |   | -                |            |   | -                |  
|gain
      (loss)                      |   |                    |           |   |                  |            |   |                  |            |   |                  |            |   |                  |  
|Net Loss for the Period                | $ | (1,072,152         | )         | $ | (483,646         | )          | $ | (81,573          | )          | $ | (618,023         | )          | $ | (253,653         | )
|                                       |   |                    |           |   |                  |            |   |                  |            |   |                  |            |   |                  |  
|LOSS PER SHARE  BASIC AND
      FULLY |   | $                  | (.01      | ) | $                | 0.0        |   | $                | (.01       | ) | $                | 0.0        |  
|DILUTED                                |   |                    |           |   |                  |            |   |                  |            |   |                  |            |   |                  |  
|WEIGHTED AVERAGE NUMBER OF             |   |                    | 53,381217 |   |                  | 51,816,000 |   |                  | 52,343,473 |   |                  | 54,850,559 |  
|ISSUED SHARES BASIC and FULLY          |   |                    |           |   |                  |            |   |                  |            |   |                  |            |  
|DILUTED                                |   |                    |           |   |                  |            |   |                  |            |   |                  |            |   |                  |  

The accompanying notes are an integral part of these
financial statements.

F-3

---

|TAO MINERALS LTD.             
|------------------------------
|(An Exploration Stage Company)
|Statements of Cash Flows      

|                                            |   | From Inception Date   |   |   |                        |   |   |                        |  
|------------------------------------------- | - | --------------------- | - | - | ---------------------- | - | - | ---------------------- | -
|                                            |   | of September 23, 2004 |   |   | For the Nine Months    |   |   | For the Nine Months    |  
|                                            |   | to October 31, 2007   |   |   | ended October 31, 2007 |   |   | ended October 31, 2006 |  
|Cash Provided by (Used for)
      Operating |   |                       |   |   |                        |   |   |                        |  
|Activities                                  |   |                       |   |   |                        |   |   |                        |  
|Net loss for the period                     | $ | (1,072,152            | ) | $ | (618,023               | ) | $ | (253,653               | )
|Stock Issued for Services and Legal Fees    |   | 480,000               |   |   | 480,000                |   |   | -                      |  
|Changes in non-cash working capital items   |   |                       |   |   |                        |   |   |                        |  
|Accounts payable and accrued expenses       |   | 197,531               |   |   | 108,193                |   |   | 2,239                  |  
|Prepaid expenses                            |   | (29,500               | ) |   | (12,000                | ) |   | (10,000                | )
|Increase in due from related party          |   | 3,000                 |   |   | -                      |   |   | -                      |  
|Subscription receivable                     |   | 425                   |   |   | -                      |   |   | -                      |  
|Cash used by
      operations               |   | (420,696              | ) |   | (41,830                | ) |   | (261,414               | )
|Investing Activities                        |   |                       |   |   |                        |   |   |                        |  
|Purchase of mineral rights                  |   | (253,000              | ) |   | -                      |   |   | (250,000               | )
|Cash used by investing activities           |   | (253,000              | ) |   | -                      |   |   | (250,000               | )
|Financing Activities                        |   |                       |   |   |                        |   |   |                        |  
|Issuance of debt                            |   | 620,000               |   |   | -                      |   |   | 620,000                |  
|Issuance of common stock for cash           |   | 55,310                |   |   | -                      |   |   |                        |  
|Cash provided by financing activities       |   | 675,310               |   |   | -                      |   |   | 620,000                |  
|Cash Increase (Decrease) During the         |   |                       |   |   |                        |   |   |                        |  
|Period                                      |   | 1,614                 |   |   | (41,830                | ) |   | 108,586                |  
|Cash, Beginning
      of Period             |   | -                     |   |   | 43,444                 |   |   | 2,361                  |  
|Cash End of Period                          | $ | 1,614                 |   | $ | 1,614                  |   | $ | 110,947                |  

During the nine months ended October 31, 2007 and 2006 the
Company did not pay any cash for interest or taxes.

Supplemental Non cash Disclosure:

On January 31, 2007, the Company accrued a $100,000 payment for
Mineral Rights related to its Colombian property.

The accompanying notes are an integral part of these
financial statements.

F-4

---

|TAO MINERALS LTD                     
|-------------------------------------
|(An Exploration Stage Company)       
|Notes to Financial Statements        
|For the period ended October 31, 2007

|1. | Organization and Summary of Significant
      Accounting Policies
|-- | -----------------------------------------------------------------

Nature of Operations and Going
Concern

Tao Minerals, Ltd. (an exploration
stage company) (the Company) was incorporated under the laws of the State of
Nevada on September 23, 2004. The Company is natural resource exploration
company with an objective of acquiring, exploring and if warranted and feasible,
developing natural resource properties.

As reflected in the accompanying
financial statements, the Company is in the exploration stage and has cumulative
negative cash flows from operations of $420,696 since inception and losses of
$618,023 for the nine month period ended October 31, 2007. This raises
substantial doubt about its ability to continue as a going concern. The ability
of the Company to continue as a going concern is dependent on the Companys
ability to raise additional capital and implement its business plan. The
financial statements do not include any adjustments that might be necessary if
the Company is unable to continue as a going concern. Management believes that
actions presently being taken to obtain additional funding and implement its
strategic plans provide the opportunity for the Company to continue as a going
concern.

The financial statements for the nine
and three months ended October 31, 2007 and 2006, and for the period from
September 23, 2004 (inception) to October 31, 2007, together with the balance
sheet as of October 31, 2007 included herein have not been audited by the
Companys independent public accountants. In the opinion of management, all
adjustments necessary to present fairly the financial position at October 31,
2007 and the results of operations and cash flows for the periods presented
herein have been made.

The financial statements included
herein have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been omitted
pursuant to such regulations. These financial statements should be read in
conjunction with the financial statements and notes thereto included in the
Companys Annual Report on Form 10-KSB for the year ended January 31, 2007.

The financial statements of the
Company have been prepared in accordance with accounting principles generally
accepted in the United States of America. Because a precise determination of
many assets and liabilities is dependent upon future events, the preparation of
financial statements for a period necessarily involves the use of estimates
which have been made using careful judgment. Actual results may vary from these
estimates. Prior periods have been adjusted to conform with the presentation of
the financial statements ended July 31, 2007.

|2. | Mineral Properties
|-- | ------------------

Pursuant to the Amending Agreement of
June 30, 2006 the Company was obligated to make a payment of $100,000 on July 1,
2007 to Primecap Resources, Inc. (PR). The Company did not make such payment
but has accrued such obligation as of January 31, 2007. The Company is currently
in talks with PR to extend payment to December 30, 2007. Accrued liabilities of
$183,000 pertain to the terms of the Amending Agreement.

The Company was obligated to make a $
40,000 payment and issue 300,000 shares of common stock to PR at August 23,
2007. To date, the Company has not made any payments or issued stock to PR. The
Company is currently in negotiations to extend the payment and issuance of stock
to December 30, 2007.

F-5

---

|TAO MINERALS LTD                     
|-------------------------------------
|(An Exploration Stage Company)       
|Notes to Financial Statements        
|For the period ended October 31, 2007

|3. | Equity
|-- | ------

On September 21, 2007 The Board of
Directors agreed to issue 4,000,000 shares of common stock to consultants,
attorneys, and Directors for past services performed for the Company. The Stock
was valued at $.12 the closing bid price for the day.

F-6

---

|Item 2. | Managements Discussion and Analysis and
      Plan of Operation.
|------- | -----------------------------------------------------------------

FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements as
that term is defined in the Private Securities Litigation Reform Act of 1995.
These statements relate to future events or our future financial performance. In
some cases, you can identify forward-looking statements by terminology such as
may, should, expects, plans, anticipates, believes, estimates,
predicts, potential or continue or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, including the risks in the
section entitled Risk Factors, that may cause our or our industrys actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Except as required by
applicable law, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform these
statements to actual results.

Our financial statements are stated in United States dollars
and are prepared in accordance with United States generally accepted accounting
principles. The following discussion should be read in conjunction with our
financial statements and the related notes that appear elsewhere in this
quarterly report.

In this quarterly report, unless otherwise specified, all
references to common shares refer to the common shares in our capital stock
and the terms we, us and our mean Tao Mining Ltd.

Overview

We are in the mineral resource business. This business
generally consists of three stages: exploration, development and production.
Mineral resource companies that are in the exploration stage have not yet found
mineral resources in commercially exploitable quantities, and are engaged in
exploring land in an effort to discover them. Mineral resource companies that
have located a mineral resource in commercially exploitable quantities and are
preparing to extract that resource are in the development stage, while those
engaged in the extraction of a known mineral resource are in the production
stage. Our company is in the exploration stage.

Mineral resource exploration can consist of several stages. The
earliest stage usually consists of the identification of a potential prospect
through either the discovery of a mineralized showing on that property or as the
result of a property being in proximity to another property on which exploitable
resources have been identified, whether or not they are or have in the past been
extracted.

After the identification of a property as a potential prospect,
  the next stage would usually be the acquisition of a right to explore the area
  for mineral resources. This can consist of the outright acquisition of the land
  or the acquisition of specific, but limited, rights to the land (e.g., a license,
  lease or concession). After acquisition, exploration would probably begin with
  a surface examination by a prospector or professional geologist with the aim
  of identifying areas of potential mineralization, followed by detailed geological
  sampling and mapping of this showing with possible geophysical and geochemical
  grid surveys to establish whether a known trend of mineralization continues
  through un-exposed portions of the property (i.e., underground), possibly trenching
  in these covered areas to allow sampling of the underlying rock. Exploration
  also commonly includes systematic regularly spaced drilling in order to determine
  the extent and grade of the mineralized system at depth and over a given area,
  as well as gaining underground access by ramping or shafting in order to obtain
  bulk samples that would allow one to determine the ability to recover various
  commodities from the rock. Exploration might culminate in a feasibility study
  to ascertain if the mining of the minerals would be economic. A feasibility
  study is a study that reaches a conclusion with respect to the economics of
  bringing a mineral resource to the production stage.

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Our mineral resource properties consist of exploration claims
located in Nevada (Whale Mine property) and in Columbia (Risaldo La
Golondrina D14-082 mineral property located in Narino, Colombia). There is no
assurance that a commercially viable mineral deposit exists on any of our
properties, and further exploration is required before we can evaluate whether
any exist and, if so, whether it would be economically and legally feasible to
develop or exploit those resources. Even if we complete our current exploration
program and we are successful in identifying a mineral deposit, we would be
required to spend substantial funds on further drilling and engineering studies
before we could know whether that mineral deposit will constitute a reserve (a
reserve is a commercially viable mineral deposit). Please refer to the section
entitled Risk Factors, of this quarterly report on Form 10-QSB, for additional
information about the risks of mineral exploration.

PLAN OF OPERATIONS AND CASH REQUIREMENTS

We are an exploration stage company that has not yet generated
or realized any revenues from our business operations. We have concentrated our
recent exploration efforts on the La Golondrina Property in Columbia and we
intend to focus primarily on this property over the remaining time period ending
January 31, 2008.

There is no assurance that a commercially viable mineral
deposit exists on any of our properties, including the La Golondrina Property,
or that we will be able to identify any mineral resource on any of these
properties that can be developed profitably. Even if we do discover commercially
exploitable levels of mineral resources on any of our properties there can be no
assurance that we will be able to enter into commercial production of our
mineral properties:

Golondria Gold-Silver Project

Acquisition, Location and Access

On February 1, 2006 we executed a letter agreement with
Primecap Resources and Nueva California S.A., concerning the acquisition of an
interest in the Risaraldo La Golondrina D14-082 property located in Narino,
Colombia.

On March 5, 2006, we entered into an Assignment Agreement dated
effective February 28, 2006 (the Definitive Agreement), with Primecap
Resources Inc., of Las Vegas, Nevada, (Primecap), concerning the acquisition of
Primecaps option (the Option), to acquire a 100% interest in the Risaldo La
Golondrina D14-082 mineral property located in Narino, Colombia (the
Property). Primecap had been granted the Option by Nueva California S.A., of
Medellin, Colombia, pursuant to the terms and conditions of a Heads of Agreement
dated August 23, 2004 (the HOA).

The Definitive Agreement provides for the assignment of the
Option for the following consideration:

| | 1. | Payment of US$150,000, payable on or before March 15,
      2006 and upon execution of the Definitive Agreement; and                                                                                                                                                                                                                   
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                        
| | 2. | The issuance of 2,500,000 common shares in the capital
      stock of the company, subject to applicable trading restrictions, to Nueva
      California which will be issued either contemporaneous with the payment of
      US$150,000 or within 14 days of the execution of a Definitive Agreement,
      whichever is the earlier.

In addition, we will assume Primecaps financial obligations
under the HOA.

On March 15, 2006, we entered into an amending agreement (the
Amending Agreement) which agreement amended certain terms of the Definitive
Agreement. The Amending Agreement provides for an extension to the payment terms
such that the $150,000 payment time of March 15, 2006 was extended to April 15,
2006. The payment was made on April 10, 2006. On April 21, 2006 we issued
2,500,000 common shares to Nueva California SA pursuant to the terms of the
Definitive Agreement.

The property is located within a mixture of small-scale mining
  and small-scale agricultural lands. Limited accommodations and supplies are
  available in Sotomayor, while Pasto acts as the main supply centre. The property
  is accessible from Sotomayor by a one-lane gravel road for the first four kilometres
  and then by a 1 kilometre ATV

4

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trail. Access to Sotomayor is from Pasto by a secondary gravel
road, with travel time estimated to be 4 hrs. Transportation to Sotomayor is
available in Pasto. The gravel roads are suitable for movement of heavy
equipment.

ESTIMATED BUDGET, PHASE 1 PROGRAM

Chronological Schedule

WeeksItem
    Labour
    1
    2
    3
    4
    5
    6
    7
    8
    9
    101
    Historical data
    X2
    Environmental Review
    
    X
    
    X
    
    X3
    Regional Geological Mapping
    
    
    X4
    Stream Sediment Geochemistry
    
    
    
    X5
    Detailed Geological Mapping
    
    
    
    
    X
    X
    X6
    Underground Sampling
    
    
    
    
    
    X
    X7
    Soil Geochemistry
    
    
    
    X8
    Trench Sampling
    
    
    
    
    
    
    
    X9
    Rock Sampling (Prospecting)
    
    
    X10
    Sample Preparation/Analysis
    
    
    
    X
    
    
    X
    X
    X11
    Report
    
    
    
    
    
    
    
    
    
    X


Expense Schedule

ITEM
    
    #
    Cost/wk
    # Wks
    $US/day
    Total $US
    Comments1
    Senior Geologist
    1
    $1400
    6
    $200
    $84002
    Junior Geologist
    2
    $875
    6
    $125
    $105003
    Labourers
    6
    $140
    6
    $7
    $50404
    Stream sample Analysis
    50
    
    
    $20/sample
    $1000
    ICP+AuFA5
    Soil sample analysis
    50
    
    
    $20/sample
    $1000
    ICP+AuFA6
    Underground sample
      analysis
    200
    
    
    $20/sample
    $4000
    ICP+AuFA7
    Trenching/backhoe
    1
    $1500
    1
    $45/hr
    $1500
    RetroCAT1008
    Food
    9
    $180
    6
    $20
    $97209
    Transportation
    1
    $400
    6
    
    $2400
    Campero 4X410
    Accommodation
    9
    $35
    6
    $5
    $189011
    OfficeManagement-
      local
    1
    $1000
    3
    
    $100012
    Administration-
      Medellin
    1
    $1000
    12
    $4000/mo
    $6000TOTAL
    
    
    
    
    $52,450


The proposed program is exploratory in nature as there are no
  proven reserves currently.

5

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History

Historically gold has been mined in the country since
pre-Columbian times. Exploration of the Sierra Nevada de Santa Marta area, along
the north coast of the country, was conducted by Alonso de Ojeda, one of the
companions of Columbus. His work revealed the large amounts of precious metals
held by the local Indians and led to the rapid Spanish colonization of the west
coast and interior of South America. Much of Colombia was thus conquered and a
number of towns established by 1539. Pasto was founded in 1537. From that time
the population has spread out along the major river valleys, searching for land
to cultivate and precious metals to mine, eventually reaching the valleys of
tributaries of the Rio Pacual, where the town of Sotomayor was established.
There are no government records of historical mining activity in the area of the
Golondrina property

The Golondrina property was acquired by Colombian mining
company Barro Blanco S.A Barro Blanco S.A. also acquired the Nueva Esparta
property which lies approximately 4 kilometres to the east. Several other
properties exist in the area of these two properties. Latingold optioned several
properties from Barro Blanco S.A. and carried out exploration on those
properties. This work included surface and underground mapping and sampling, as
well as a Lithium-Bismuth surface geochemical survey. In 1998 Latingold
abandoned its option.

Property Geology

The Golondrina Gold-Silver property is underlain by Dagua Group
fine-grained layered quartzites (siliceous clastic sediments) of Cretaceous age.
These contain minor basalt flows and diabase dikes of the same age. Intruded
into these sediments is a small (2 km X 0.5 km) biotite-hornblende tonalite body
of Tertiary age. It is associated with the larger Vergel STock, which is found 7
kilometers to the northwest. The intrusion has a 100 meter wide hornfelsed
contact aureole against the sediments.

Mineralization on the Golondrina Project is confined to milky
white quartz veins which contain disseminated sulphides. These sulphides include
pyrite, chalcopyrite (copper) and galena (lead). Vein widths range between 5 and
50 centimeters.

We have not found any other mineral properties either for
staking or purchasing but will seek other mineral properties during the next
year so to diversify our holdings. Any staking and/or purchasing of mineral
properties may involve the issuance of substantial blocks of our shares. We have
no intentions of purchasing for cash or other considerations any mineral
properties from our officers and/or directors.

The Whale Mine Claims

The Company abandoned the Whale Mine Property in the third
quarter.

Financial Condition, Liquidity and Capital
Resources

Our principal capital resources have been through the issuance
of common stock, although we may use shareholder loans, advances from related
parties, or borrowing in the future.

At October 31, 2007, we had working capital deficit of
($889,417), compared to a working capital deficit of ($505,411) as at October
31, 2006.

At October 31, 2007, our total current assets were $31,114
which consisted of cash and prepaid expenses, compared to total current assets
of $120,497 as at October 31, 2006.

At October 31, 2007, our total current liabilities were
$920,531, including $620,000 from a financing received without issuing common
stock, compared to total current liabilities of $626,538 as at October 31,
2006.

For the three month period ended October 31, 2007, we posted
losses of $483,646 compared to $81,573 for the three months ended October 31,
2006.

For the nine month period ended October 31, 2007, we posted losses
  of $618,023 compared to $253,653 for the nine

6

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months ended October 31, 2006 and to $1,072,152 since
incorporation.

At October 31, 2007, we had cash on hand of $ 1,614 compared to
$110,947 as at October 31, 2006.

Cash Requirements

We will require additional funds to implement our growth
strategy in exploration operations. These funds may be raised through equity
financing, debt financing, or other sources, which may result in further
dilution in the equity ownership of our shares. There is still no assurance that
we will be able to maintain operations at a level sufficient for an investor to
obtain a return on his investment in our common stock. Further, we may continue
to be unprofitable.

Going Concern

Due to our being an exploration stage company and not having
generated revenues, in their Notes to our financial statements for the year
ended January 31, 2007, our independent auditors included an explanatory
paragraph regarding concerns about our ability to continue as a going
concern.

We have historically incurred losses, and through October 31,
2007 have incurred losses of $ 1,072,152 from our inception. Because of these
historical losses, we will require additional working capital to develop our
business operations. We intend to raise additional working capital through
private placements, public offerings, bank financing and/or advances from
related parties or shareholder loans.

The continuation of our business is dependent upon obtaining
further financing and achieving a break even or profitable level of operations.
The issuance of additional equity securities by us could result in a significant
dilution in the equity interests of our current or future stockholders.
Obtaining commercial loans, assuming those loans would be available, will
increase our liabilities and future cash commitments.

There are no assurances that we will be able to either (1)
achieve a level of revenues adequate to generate sufficient cash flow from
operations; or (2) obtain additional financing through either private
placements, public offerings and/or bank financing necessary to support our
working capital requirements. To the extent that funds generated from operations
and any private placements, public offerings and/or bank financing are
insufficient, we will have to raise additional working capital. No assurance can
be given that additional financing will be available, or if available, will be
on terms acceptable to us. If adequate working capital is not available we may
not increase our operations.

These conditions raise substantial doubt about our ability to
continue as a going concern. The financial statements do not include any
adjustments relating to the recoverability and classification of asset carrying
amounts or the amount and classification of liabilities that might be necessary
should we be unable to continue as a going concern.

Risks Associated With Our Business

We have a limited operating history and as a result there is
no assurance we can operate on a profitable basis.

We have a limited operating history and must be considered in
  the exploration stage. Our company's operations will be subject to all the risks
  inherent in the establishment of an exploration stage enterprise and the uncertainties
  arising from the absence of a significant operating history. Potential investors
  should be aware of the difficulties normally encountered by mineral exploration
  companies and the high rate of failure of such enterprises. The likelihood of
  success must be considered in light of the problems, expenses, difficulties,
  complications and delays encountered in connection with the exploration of the
  mineral properties that we plan to undertake. These potential problems include,
  but are not limited to, unanticipated problems relating to exploration, and
  additional costs and expenses that may exceed current estimates. The expenditures
  to be made by us in the exploration of the mineral claims may not result in
  the discovery of mineral deposits. Problems such as unusual or unexpected formations
  of rock or land and other conditions are involved in mineral exploration and
  often result in unsuccessful exploration efforts. If the results of our exploration
  do not reveal viable commercial mineralization, we may decide to abandon our
  claims and acquire new claims for new exploration or cease operations. The acquisition
  of additional claims will be dependent upon us possessing capital resources
  at the time in order to purchase such claims. If no funding is available, we
  may be forced to abandon our operations. No assurance can be given that we may
  be able to operate on a profitable basis.

7

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If we do not obtain additional financing, our business will fail and our investors could lose their investment.

We had cash in the amount of $1,614 and working capital deficit of $889,417 as of the period ended October 31, 2007. We currently do not generate revenues from our operations. Our business plan calls for substantial investment and cost in
connection with the acquisition and exploration of our mineral properties currently under lease and option. Any direct acquisition of the claim under lease or option is subject to our ability to obtain the financing necessary for us to fund and
carry out exploration programs on the properties. The requirements are substantial. We do not currently have any arrangements for additional financing and we can provide no assurance to investors that we will be able to find such financing if
required. Obtaining additional financing would be subject to a number of factors, including market prices for minerals, investor acceptance of our properties, and investor sentiment. These factors may make the timing, amount, terms or conditions of
additional financing unavailable to us. The most likely source of future funds presently available to us is through the sale of equity capital and loans. Any sale of share capital will result in dilution to existing shareholders.

Because there is no assurance that we will generate revenues, we face a high risk of business failure.

We have not earned any revenues as of the date of this annual report and have never been profitable. We do not have an interest in any revenue generating properties. We were incorporated in September 2004 and to date have been involved primarily in
organizational activities and limited exploration activities. Prior to our being able to generate revenues, we will incur substantial operating and exploration expenditures without realizing any revenues. We therefore expect to incur significant
losses into the foreseeable future. We have limited operating history upon which an evaluation of our future success or failure can be made. Our net loss from inception to our year ended January 31, 2007 was $454,129. We have incurred additional
losses for the nine month period ended October 31, 2007 of $618,023. We recognize that if we are unable to generate significant revenues from our activities, we will not be able to earn profits or continue operations. Based upon current plans,
we also expect to incur significant operating losses in the future. We cannot guarantee that we will be successful in raising capital to fund these operating losses or generate revenues in the future. We can provide investors with no assurance that
we will generate any operating revenues or ever achieve profitable operations. If we are unsuccessful in addressing these risks, our business will most likely fail and our investors could lose their investment.

Because of the speculative nature of the exploration of natural resource properties, there is substantial risk that this business will fail.

There is no assurance that any of the claims we explore or acquire will contain commercially exploitable reserves of minerals. Exploration for natural resources is a speculative venture involving substantial risk. Hazards such as unusual or
unexpected geological formations and other conditions often result in unsuccessful exploration efforts. We may also become subject to significant liability for pollution, cave-ins or hazards, which we cannot insure or which we may elect not to
insure.

Our foremost project is located in Colombia where mineral exploration activities may be affected in varying degrees by political and government regulations which could have a negative impact on our ability to continue our operations.

Certain projects in which we have interests are located in
  Colombia. Mineral exploration activities in Colombia may be affected in varying
  degrees by political instabilities and government regulations relating to the
  mining industry. Any changes in regulations or shifts in political conditions
  are beyond our control and may adversely affect our business. Operations may
  be affected in varying degrees by government regulations with respect to restrictions
  on production, price controls, export controls, income taxes, expropriations
  of property, environmental legislation and mine safety. The status of Colombia
  as a developing country may make it more difficult for us to obtain any required
  financing for our projects. The effect of all these factors cannot be accurately
  predicted. Notwithstanding the progress achieved in restructuring Colombia political
  institutions and revitalizing its economy, the present administration, or any
  successor government, may not be able to sustain the progress achieved. While
  the Colombian economy has experienced growth in recent years, such growth may
  not continue in the future at similar rates or at all. If the economy of Colombia
  fails to continue its growth or suffers a recession, we may not be able to continue
  our operations in that country. We do not carry political risk insurance.

8

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If we cannot compete successfully for financing and for qualified managerial and technical employees, our exploration program may suffer.

Our competition in the mining industry includes large established mining companies with substantial capabilities and with greater financial and technical resources than we have. As a result of this competition, we may be unable to acquire additional
financing on terms we consider acceptable. We also compete with other mining companies in the recruitment and retention of qualified managerial and technical employees. If we are unable to successfully compete for financing or for qualified
employees, our exploration program may be slowed down or suspended.

There are no known reserves of minerals on our mineral claims and we cannot guarantee that we will find any commercial quantities of minerals.

We have not found mineral reserves on our claims and there can be no assurance that any of the mineral claims we are exploring contain commercial quantities of any minerals. Even if we identify commercial quantities of minerals in any of our claims,
there can be no assurance that we will be able to exploit the reserves or, if we are able to exploit them, that we will do so on a profitable basis.

If we are unable to hire and retain key personnel, we may not be able to implement our business plan.

Our success is also largely dependent on our ability to hire highly qualified personnel. This is particularly true in highly technical businesses such as mineral exploration. These individuals are in high demand and we may not be able to attract the
personnel we need. In addition, we may not be able to afford the high salaries and fees demanded by qualified personnel, or may lose such employees after they are hired. Failure to hire key personnel when needed, or on acceptable terms, would have a
significant negative effect on our business.

Inability of our officers and directors to devote sufficient time to the operation of the business may limit our company's success.

Presently some of our officers and directors allocate only a portion of their time to the operation of our business. If the business requires more time for operations than anticipated or the business develops faster than anticipated, the officers
and directors may not be able to devote sufficient time to the operation of the business to ensure that it continues as a going concern. Even if this lack of sufficient time of our management is not fatal to our existence, it may result in limited
growth and success of the business.

Because of the inherent dangers involved in mineral exploration, there is a risk that we may incur liability or damages as we conduct our business.

The exploration of valuable minerals involves numerous hazards. As a result, we may become subject to liability for such hazards, including pollution, cave-ins and other hazards against which we cannot insure or against which we may elect not to
insure. The payment of such liabilities may have a material adverse effect on our financial position.

Our independent certified public accounting firm, in their Notes to the audited financial statements for the year ended January 31, 2007 states that there is a substantial doubt that we will be able to continue as a going concern.

Our independent certified public accounting firm, Infante & Company, state in their Notes to the audited financial statements for the year ended January 31, 2007, that we have experienced significant losses since inception. Failure to arrange
adequate financing on acceptable terms and to achieve profitability would have an adverse effect on our financial position, results of operations, cash flows and prospects, there is a substantial doubt that we will be able to continue as a going
concern.

Because the probability of an individual prospect ever having reserves is extremely remote, any funds spent on exploration will probably be lost.

The probability of an individual prospect ever having reserves
  is extremely remote. In all probability our properties do not contain any reserves.
  As such, any funds spent on exploration will probably be lost which result in
  a loss of your investment.

9

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We are subject to various government regulations and environmental concerns.

We are subject to various government and environmental regulations.  Permits from a variety of regulatory authorities are required for many aspects of exploration, mining operations and reclamation. We cannot predict the extent to which future
legislation and regulation could cause additional expense, capital expenditures, restrictions, and delays in the development of our U.S. or Colombian properties, including those with respect to unpatented mining claims.

Our activities are not only subject to extensive federal, state and local regulations controlling the exploration and mining of mineral properties, but also the possible effects of such activities upon the environment. Future legislation and
regulations could cause additional expense, capital expenditures, restrictions and delays in the development of our properties, the extent of which cannot be predicted.  Also, as discussed above, permits from a variety of regulatory authorities are
required for many aspects of mine operation and reclamation.  In the context of environmental permitting, including the approval of reclamation plans, we must comply with known standards, existing laws and regulations that may entail greater or
lesser costs and delays, depending on the nature of the activity to be permitted and how stringently the regulations are implemented by the permitting authority. We are not presently aware of any specific material environmental constraint affecting
our properties that would preclude the economic development or operation of any specific property.

If we become more active on our properties, it is reasonable to expect that compliance with environmental regulations will increase our costs. Such compliance may include feasibility studies on the surface impact of the our proposed operations;
costs associated with minimizing surface impact, water treatment and protection, reclamation activities, including rehabilitation of various sites, on-going efforts at alleviating the mining impact on wildlife, and permits or bonds as may be
required to ensure our compliance with applicable regulations. It is possible that the costs and delays associated with such compliance could become so prohibitive that we may decide to not proceed with exploration, development, or mining operations
on any of our mineral properties.

Risks Associated with Our Common Stock

Trading on the OTC Bulletin Board may be volatile and sporadic, which could depress the market price of our common stock and make it difficult for our stockholders to resell their shares.

Our common stock is quoted on the OTC Bulletin Board service of the National Association of Securities Dealers. Trading in stock quoted on the OTC Bulletin Board is often thin and characterized by wide fluctuations in trading prices, due to many
factors that may have little to do with our operations or business prospects. This volatility could depress the market price of our common stock for reasons unrelated to operating performance. Moreover, the OTC Bulletin Board is not a stock
exchange, and trading of securities on the OTC Bulletin Board is often more sporadic than the trading of securities listed on a quotation system like Nasdaq or a stock exchange like Amex. Accordingly, shareholders may have difficulty reselling any
of the shares.

Our stock is a penny stock. Trading of our stock may be restricted by the SECs penny stock regulations and the NADSDs sales practice requirements, which may limit a stockholders ability to buy and sell our stock.

Our stock is a penny stock. The Securities and Exchange Commission
  has adopted Rule 15g-9 which generally defines penny stock to be
  any equity security that has a market price (as defined) less than $5.00
  per share or an exercise price of less than $5.00 per share, subject to
  certain exceptions. Our securities are covered by the penny stock rules, which
  impose additional sales practice requirements on broker-dealers who sell to
  persons other than established customers and accredited investors.
  The term accredited investor refers generally to institutions with
  assets in excess of $5,000,000 or individuals with a net worth in excess
  of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
  with their spouse. The penny stock rules require a broker-dealer, prior to a
  transaction in a penny stock not otherwise exempt from the rules, to deliver
  a standardized risk disclosure document in a form prepared by the SEC which
  provides information about penny stocks and the nature and level of risks in
  the penny stock market. The broker-dealer also must provide the customer with
  current bid and offer quotations for the penny stock, the compensation of the
  broker-dealer and its salesperson in the transaction and monthly account statements
  showing the market value of each penny stock held in the customers account.
  The bid and offer quotations, and the broker-dealer and salesperson compensation
  information, must be given to the customer orally or in writing prior to effecting
  the transaction and must be given to the customer in writing before or with
  the customers confirmation. In addition, the penny stock rules require
  that prior to a transaction in a penny stock not otherwise exempt from these

10

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rules, the broker-dealer must make a special written
determination that the penny stock is a suitable investment for the purchaser
and receive the purchasers written agreement to the transaction. These
disclosure requirements may have the effect of reducing the level of trading
activity in the secondary market for the stock that is subject to these penny
stock rules. Consequently, these penny stock rules may affect the ability of
broker-dealers to trade our securities. We believe that the penny stock rules
discourage investor interest in and limit the marketability of our common
stock.

In addition to the penny stock rules promulgated by the
Securities and Exchange Commission, the NASD has adopted rules that require that
in recommending an investment to a customer, a broker-dealer must have
reasonable grounds for believing that the investment is suitable for that
customer. Prior to recommending speculative low priced securities to their
non-institutional customers, broker-dealers must make reasonable efforts to
obtain information about the customers financial status, tax status, investment
objectives and other information. Under interpretations of these rules, the NASD
believes that there is a high probability that speculative low priced securities
will not be suitable for at least some customers. The NASD requirements make it
more difficult for broker-dealers to recommend that their customers buy our
common stock, which may limit your ability to buy and sell our stock.

Other Risks

Because some of our officers and directors are located in
non-U.S. jurisdictions, you may have no effective recourse against the non U.S.
officers and directors for misconduct and may not be able to enforce judgment
and civil liabilities against our officers, directors, experts and
agents.

Some of our directors and officers are nationals and/or
residents of countries other than the United States, specifically Canada and
Colombia, and all or a substantial portion of such persons assets are located
outside the United States. As a result, it may be difficult for investors to
enforce within the United States any judgments obtained against our officers or
directors, including judgments predicated upon the civil liability provisions of
the securities laws of the United States or any state thereof.

Trends, Risks and Uncertainties

We have sought to identify what we believe to be the most
significant risks to our business, but we cannot predict whether, or to what
extent, any of such risks may be realized nor can we guarantee that we have
identified all possible risks that might arise. Investors should carefully
consider all of such risk factors before making an investment decision with
respect to our common stock.

|Item 3. | Disclosure Controls and Procedures
|------- | ----------------------------------

As required by Rule 13a-15 under the Exchange Act, we have
carried out an evaluation of the effectiveness of the design and operation of
our companys disclosure controls and procedures as of the end of the period
covered by this quarterly report, October 31, 2007. This evaluation was carried
out under the supervision and with the participation of our companys
management, including our companys president and chief executive officer. Based
upon that evaluation, our companys president and chief executive officer
concluded that our companys disclosure controls and procedures are effective as
at the end of the period covered by this report. There have been no significant
changes in our companys internal controls or in other factors, which could
significantly affect internal controls subsequent to the date we carried out our
evaluation.

Disclosure controls and procedures are controls and other procedures
  that are designed to ensure that information required to be disclosed in our
  companys reports filed or submitted under the Exchange Act is recorded,
  processed, summarized and reported, within the time periods specified in the
  Securities and Exchange Commissions rules and forms. Disclosure controls
  and procedures include, without limitation, controls and procedures designed
  to ensure that information required to be disclosed in our companys reports
  filed under the Exchange Act is accumulated and communicated to management,
  including our companys president and chief executive officer as appropriate,
  to allow timely decisions regarding required disclosure

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PART II - OTHER INFORMATION

|Item 1. | Legal Proceedings.
|------- | ------------------

We know of no material, active or pending legal proceedings
against our company, nor are we involved as a plaintiff in any material
proceeding or pending litigation. There are no proceedings in which any of our
directors, officers or affiliates, or any registered or beneficial shareholder,
is an adverse party or has a material interest adverse to our interest.

|Item 2. | Unregistered Sales of Equity Securities and
      Use of Proceeds.
|------- | ------------------------------------------------------------------

On February 1, 2006 we entered into an agreement with Primecap
Resources Inc. and Nueva California S.A. concerning the acquisition of an
interest in the Risaraldo La Golondrina D14-082 property located in Narino,
Colombia. On March 5, 2006, we entered into an Assignment Agreement dated
effective February 28, 2006 (the Definitive Agreement), with Primecap
Resources Inc., of Las Vegas, Nevada, (Primecap), concerning the acquisition of
Primecaps option (the Option), to acquire a 100% interest in the Risaldo La
Golondrina D14-082 mineral property located in Narino, Colombia (the
Property). Primecap had been granted the Option by Nueva California S.A., of
Medellin, Colombia, pursuant to the terms and conditions of a Heads of Agreement
dated August 23, 2004 (the HOA).

Pursuant to the terms of the Definitive Agreement, we issued
2,500,000 shares of our capital stock to Nueva California. In issuing the
shares, we relied on the exemption from registration requirements of the United
States Securities Act of 1933, as amended, provided by Regulation S promulgated
thereunder.

On March 13, 2006, our board of directors approved an eight (8)
for one (1) forward stock split of our authorized, issued and outstanding common
stock. The forward stock split became effective with the Secretary of State of
Nevada on March 24, 2006. As a result, our authorized capital increased from
69,000,000 shares of common stock with a par value of $0.001 and 1,000,000
Preferred A stock with a par value of $0.001 to 552,000,000 shares of common
stock with a par value of $0.001 and 1,000,000 Preferred A stock with a par
value of $0.001. Our issued and outstanding share capital increased from
7,739,500 shares of common stock to 51,816,000 shares of common stock.

On September 21, 2007 we issued 4,000,000 shares to consultants
and attorneys for services under an S-8 plan.

|**Item 3.** | Defaults Upon Senior Securities.
|----------- | --------------------------------

None.

|**Item 4.** | Submission of Matters to a Vote of
      Security Holders.
|----------- | ----------------------------------------------------------

None.

|**Item 5.** | Other Information.
|----------- | ------------------

On April 1, 2006 we appointed James Sikora and Gordon Samson to
our Board of Directors as President and Chief Financial Officer
respectively.

Effective September 1, 2006 Mr. Gordon Samson resigned as the
Chief Financial Officer of the Company. The Board of Directors appointed Mr.
Julio De Leon as Chief Financial Officer on September 1, 2006.

On September 1, 2006 De Leon & Company, P.A. resigned as
  our independent accountant and the Company appointed Infante & Company as
  our independent accountant ( see 8-K dated September 1, 2006 which was filed
  on September 5, 2006).

12

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|**Item 6.** | Exhibits.
|----------- | ---------

Exhibits required by Item 601 of Regulation S-B

|Exhibit Number | Description                                                                                                                                                                                                                          
|-------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3)            | (i) Articles
        of Incorporation; and (ii) Bylaws                                                                                                                                                                               
|3.1            | Articles of Incorporation (incorporated
        by reference from our Form SB-2 Registration Statement, filed on March
        24, 2005).                                                                                            
|3.2            | Bylaws (incorporated
        by reference from our Form SB-2 Registration Statement, filed on March
        24, 2005).                                                                                                               
|3.3            | Certificate of Change (incorporated
        by reference from our Current Report on Form 8-K, filed on March 24, 2006).                                                                                                              
|(10)           | Material Contracts                                                                                                                                                                                                                   
|10.1           | Purchase and Sale Agreement dated
        October 22, 2004 (incorporated by reference from our Amendment No. 1 on
        Form SB-2/A Registration Statement, filed on April 28, 2005).                                              
|10.2           | Letter Agreement
        dated February 1, 2006 between our company and Nueva California S.A. and
        Primecap Resources Inc. (incorporated by reference from our Current Report
        on Form 8-K, filed on February 6, 2006).
|10.3           | Assignment Agreement dated February
        28, 2006 between our company and Primecap Resources Inc. (incorporated
        by reference from our Current Report on Form 8-K, filed on March 10, 2006).                               
|10.4           | Amending Agreement
        dated March 15, 2006 between our company and Primecap Resources Inc. (incorporated
        by reference from our Current Report on Form 8-K, filed on March 20, 2006).                                    
|10.5           | Consulting Agreement dated April
        1, 2006 between our company and James Sikora (incorporated by reference
        from our Current Report on Form 8-K, filed on April 20, 2006)                                               
|10.6           | Consulting Agreement
        dated April 1, 2006 between our company and Gordon Samson (incorporated
        by reference from our Current Report on Form 8-K, filed on April 20, 2006)                                              
|10.7           | Amending Agreement Dated June
        30, 2006 between our Company and Primecap Resources Inc. (incorporated
        by reference from our Current Report on Form 8-K, filed on July 14, 2006).                                      
|10.8           | Consulting Agreement
        dated September 1, 2006 between our company and Julio De Leon                                                                                                                                           
|(31)           | 302 Certification                                                                                                                                                                                                                    
|31.1*          | Section
        302 Certification under Sarbanes-Oxley Act of 2002 of James Sikora.                                                                                                                                                  
|31.2*          | Section
        302 Certification under Sarbanes-Oxley Act of 2002 of Julio De Leon.                                                                                                                                                 
|(32)           | 906 Certification                                                                                                                                                                                                                    
|32.1*          | Section
        906 Certification under Sarbanes-Oxley Act of 2002 of James Sikora.                                                                                                                                                  
|32.2*          | Section
        906 Certification under Sarbanes-Oxley Act of 2002 of Julio De Leon.                                                                                                                                                 

*Filed herewith

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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.

TAO MINERALS INC.

|By:                                        | /s/ James Sikora  | 
|------------------------------------------ | ----------------- | 
|President and Director                     |                  
|Principal Executive Officer                |                  
|Date: 12/17/07                             |                  
|                                           |                  
|By:                                        | /s/ Julio De Leon | 
|Chief Financial Officer and
      Director |                  
|Principal Financial Officer                |                  
|Date: 12/17/07                             |                  

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.

|By:                                        | /s/ James Sikora  | 
|------------------------------------------ | ----------------- | 
|President and Director                     |                  
|Principal Executive Officer                |                  
|Date: 12/17/07                             |                  
|                                           |                  
|By:                                        | /s/ Julio De Leon | 
|Chief Financial Officer and
      Director |                  
|Principal Accounting Officer               |                  
|Date: 12/17/07                             |                  



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