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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended July 31, 2009

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 000-51922

TAO MINERALS LTD.(Exact name of registrant as specified in its charter)

|Nevada                                                               | 20-1682702                       
|-------------------------------------------------------------------- | ---------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (IRS Employer Identification No.)

|Officina 301 Edeficio El Crusero, Carrera 48, 12
      Sur  148 Medellin Colombia | N/A       
|---------------------------------------------------------------------------------- | ----------
|(Address of principal executive offices)                                           | (Zip Code)

780-669-1456(Registrants
telephone number, including area code)

N/A(Former name, former address and
former fiscal year, if changed since last report)

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. [X]
YES    [   ] NO

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a small
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 [   ]
    
    Accelerated
      filer                 [  
      ]Non-accelerated filer   [   ]
    (Do not check if a smaller reporting company)
    Smaller reporting company [X]


Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act

[   ] YES    [X] NO

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

Check whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after
the distribution of securities under a plan confirmed by a court.

[   ] YES    [   ] NO

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405
of Regulation S-T (§232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post

  such files).

[   ]YES  
[   ]NO

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the
issuers classes of common stock, as of the latest practicable date.
2,736,849 common shares issued and outstanding as of November 6, 2009

1

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.









2

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|TAO MINERALS LTD. and Subsidiary
|--------------------------------
|(An Exploration Stage Company)  
|Consolidated Balance Sheets     
|(Unaudited)                     

|                                                                           |   | July 31    |   |   | January
      31 |  
|-------------------------------------------------------------------------- | - | ---------- | - | - | ---------------- | -
|                                                                           |   | 2009       |   |   | 2009             |  
|                                                                           |   |            |   |   |                  |  
|ASSETS                                                                     |   |            |   |   |                  |  
|Current                                                                    |   |            |   |   |                  |  
|Cash                                                                       | $ | 2,798      |   | $ | 7,868            |  
|Prepaids                                                                   |   | 43,120     |   |   | 46,611           |  
|Total current assets                                                       |   | 45,918     |   |   | 54,479           |  
|                                                                           |   |            |   |   |                  |  
|Property and Equipment                                                     |   | 19,370     |   |   | 16,820           |  
|                                                                           |   |            |   |   |                  |  
|Mineral Properties                                                         |   |            |   |   |                  |  
|Mineral Rights                                                             |   | 129,921    |   |   | 113,420          |  
|Total Mineral Properties                                                   |   | 129,921    |   |   | 113,420          |  
|                                                                           |   |            |   |   |                  |  
|Total assets                                                               | $ | 195,209    |   | $ | 184,719          |  
|                                                                           |   |            |   |   |                  |  
|LIABILITIES AND STOCKHOLDERS DEFICIT                                      |   |            |   |   |                  |  
|Current                                                                    |   |            |   |   |                  |  
|                                                                           |   |            |   |   |                  |  
|Accounts payable and accrued expenses                                      | $ | 369,159    |   | $ | 241,057          |  
|Note Payable                                                               |   | 516,000    |   |   | 500,000          |  
|Derivative liability                                                       |   | 183,255    |   |   | 177,374          |  
|Stock issuance liability                                                   |   | 92,100     |   |   | 92,100           |  
|Other accrued liabilities                                                  |   | 170,237    |   |   | 154,546          |  
|Total current liabilities                                                  |   | 1,330,751  |   |   | 1,165,077        |  
|Note payable long term                                                     |   | 11,163     |   |   | 6,883            |  
|Total liabilities                                                          |   | 1,341,914  |   |   | 1,171,960        |  
|                                                                           |   |            |   |   |                  |  
|STOCKHOLDERS DEFICIT                                                      |   |            |   |   |                  |  
|Share Capital                                                              |   |            |   |   |                  |  
|Authorized:                                                                |   |            |   |   |                  |  
|Preferred stock: $0.001 par value 1,000,000
      shares authorized        |   | -          |   |   | -                |  
|None issued, allotted and outstanding:                                     |   |            |   |   |                  |  
|                                                                           |   |            |   |   |                  |  
|Common stock: $0.001 par value, 552,000,000 shares
      authorized        |   |            |   |   |                  |  
|Issued, allotted and
      outstanding:393,672,.316 and 324,954,369 shares |   |            |   |   |                  |  
|common stock at July 31, 2009 and
      January 31, 2009                   |   | 393,673    |   |   | 324,955          |  
|Additional paid-in capital                                                 |   | 6,790,755  |   |   | 6,791,473        |  
|Accumulated other comprehensive loss                                       |   | (32,280    | ) |   | (32,822          | )
|Deficit accumulated during exploration
      stage                         |   | (8,288,770 | ) |   | (8,060,831       | )
|Total TAO stockholders deficit                                            |   | (1,136,622 | ) |   | (977,225         | )
|Noncontrolling interest                                                    |   | (10,083    | ) |   | (10,016          | )
|Total deficit                                                              |   | (1,146,705 | ) |   | (987,241         | )
|Total liabilities and deficit                                              | $ | 195,209    |   | $ | 184,719          |  

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

3

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TAO MINERALS LTD. and Subsidiary (An Exploration Stage
Company) Consolidated Statements of Operations(unaudited)

|                                         |   | From Inception Date   |   |   | For the
      Six Months |  
|---------------------------------------- | - | --------------------- | - | - | ------------------------ | -
|                                         |   | of September 23, 2004 |   |   | Ended
      July 31      |  
|                                         |   | to Period Ended July  |   |   |                          |  
|                                         |   | 31, 2009              |   |   | 2009                     |  
|OPERATING EXPENSES                       |   |                       |   |   |                          |  
|Exploration expenses                     | $ | 122,650               |   | $ | -                        |  
|Professional fees                        |   | 226,918               |   |   | 9,700                    |  
|Director fees                            |   | 120,000               |   |   | -                        |  
|Consulting fees                          |   | 934,350               |   |   | 109,500                  |  
|Legal fees                               |   | 276,490               |   |   | 2,107                    |  
|General and administrative               |   | 214,430               |   |   | 48,675                   |  
|Impairment charge                        |   | 4,700,000             |   |   |                          |  
|                                         |   |                       |   |   |                          |  
|LOSS FROM OPERATIONS                     |   | 6,594,838             |   |   | 169,982                  |  
|                                         |   |                       |   |   |                          |  
|Total Operating Expenses                 |   | (6,594,838            | ) |   | (169,982                 | )
|                                         |   |                       |   |   |                          |  
|OTHER INCOME (EXPENSE)                   |   |                       |   |   |                          |  
|Derivative expense                       |   | (83,255               | ) |   | (5,881                   | )
|Loss on settlement of debt               |   | (1,388,151            | ) |   | (34,000                  | )
|Interest expense                         |   | (54,705               | ) |   | (18,378                  | )
|Other loss, net                          |   | (1,071                | ) |   | 222                      |  
|Foreign currency translation gain        |   | 1,531                 |   |   | -                        |  
|                                         |   |                       |   |   |                          |  
|TOTAL OTHER INCOME (EXPENSE)             |   | (1,525,651            | ) |   | (58,037                  | )
|                                         |   |                       |   |   |                          |  
|Net loss for the Period                  |   | (8,120,489            | ) |   | (228,019                 | )
|                                         |   |                       |   |   |                          |  
|Less: net loss attributable to           |   |                       |   |   |                          |  
|noncontrolling interest                  |   | 1,646                 |   |   | 81                       |  
|                                         |   |                       |   |   |                          |  
|Net loss attributable to TAO common      |   |                       |   |   |                          |  
|shareholders                            | $ | (8,118,843            | ) | $ | (227,938                 | )
|                                         |   |                       |   |   |                          |  
|LOSS PER SHARE  BASIC                   |   |                       |   | $ | 0.00                     |  
|WEIGHTED AVERAGE NUMBER OF ISSUED SHARES |   |                       |   |   |                          |  
|BASIC                                    |   |                       |   |   | 368,772,032              |  

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

4

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TAO MINERALS LTD. and Subsidiary (An Exploration Stage
Company) Consolidated Statements of Operations(unaudited)

|                                         |  |  |  |   | For the
      Three Months |  
|---------------------------------------- |  |  |  | - | -------------------------- | -
|                                         |  |  |  |   | Ended July 31              |  
|                                         |  |  |  |   | 2009                       |  
|OPERATING EXPENSES                       |  |  |  |   |                            |  
|Exploration expenses                     |  |  |  | $ | -                          |  
|Professional fees                        |  |  |  |   | 9,700                      |  
|Director fees                            |  |  |  |   | -                          |  
|Consulting fees                          |  |  |  |   | 52,500                     |  
|Legal fees                               |  |  |  |   |                            |  
|General and administrative               |  |  |  |   | 26,527                     |  
|Impairment charge                        |  |  |  |   |                            |  
|LOSS FROM OPERATIONS                     |  |  |  |   | 88,727                     |  
|Total Operating Expenses                 |  |  |  |   | (88,727                    | )
|OTHER INCOME (EXPENSE)                   |  |  |  |   |                            |  
|Derivative expense                       |  |  |  |   | 1,927                      |  
|Loss on settlement of debt               |  |  |  |   |                            |  
|Interest expense                         |  |  |  |   | (14,499                    | )
|Other loss, net                          |  |  |  |   | 37                         |  
|Foreign currency translation gain        |  |  |  |   | -                          |  
|TOTAL OTHER INCOME (EXPENSE)             |  |  |  |   | (12,535                    | )
|Net loss for the Period                  |  |  |  |   | (101,262                   | )
|Less: net loss attributable to           |  |  |  |   |                            |  
|noncontrolling interest                  |  |  |  |   | 14                         |  
|Net loss attributable to TAO common      |  |  |  |   |                            |  
|shareholders                            |  |  |  | $ | (101,248                   | )
|                                         |  |  |  |   |                            |  
|LOSS PER SHARE  BASIC                   |  |  |  | $ | 0.00                       |  
|WEIGHTED AVERAGE NUMBER OF ISSUED SHARES |  |  |  |   |                            |  
|BASIC                                    |  |  |  |   | 342,739,916                |  

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

5

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TAO MINERALS LTD. And Subsidiary (An Exploration Stage
Company) Consolidated Statements of Cash Flows                   
(Unaudited)

|                                                       |   | From
      Inception Date |   |   | For the
      Six |   |   | For the
      Six |  
|------------------------------------------------------ | - | ------------------------- | - | - | ----------------- | - | - | ----------------- | -
|                                                       |   | of September 23,          |   |   | Months Ended      |   |   | Months Ended      |  
|                                                       |   | 2004 to Period Ended      |   |   | July 31, 2009     |   |   | July 31, 2008     |  
|                                                       |   | July 31, 2009             |   |   |                   |   |   |                   |  
|Cash Provided by (Used
      for) Operating Activities |   |                           |   |   |                   |   |   |                   |  
|Net (loss) for the period                              | $ | (8,118,663                | ) | $ | (227,938          | ) | $ | (1,747,524        | )
|Stock issued for services                              |   | 682,386                   |   |   |                   |   |   | 79,750            |  
|Loss on settlement of debt                             |   | 1,388,151                 |   |   | 34,000            |   |   | 816,367           |  
|Impairment charges                                     |   | 4,700,000                 |   |   |                   |   |   | -                 |  
|Minority interest in loss                              |   | (11,648                   | ) |   | (67               | ) |   | 515               |  
|Changes in non-cash working
      capital items        |   |                           |   |   |                   |   |   |                   |  
|Prepaids                                               |   | (40,253                   | ) |   | 3,491             |   |   | (5,433            | )
|Discount on Note payable                               |   | (118,117                  | ) |   |                   |   |   |                   |  
|Deferred charges                                       |   | -                         |   |   | -                 |   |   | (97,663           | )
|Accounts payable and accrued                           |   | 538,191                   |   |   | 148,073           |   |   | 72,897            |  
|Derivative liability                                   |   | 183,255                   |   |   | 5,881             |   |   | 787,127           |  
|Cash used by operations                                |   | (796,698                  | ) |   | (36,560           | ) |   | (93,964           | )
|Investing Activities                                   |   |                           |   |   |                   |   |   |                   |  
|Acquisition of subsidiary                              |   | (114,189                  | ) |   | -                 |   |   | -                 |  
|Purchase of fixed assets                               |   | (16,820                   | ) |   | (2,550            | ) |   | -                 |  
|Purchase of mineral rights                             |   | (365,715                  | ) |   | (16,501           | ) |   | (164,829          | )
|Cash used by
      investing activities                |   | (496,724                  | ) |   | (19,051           | ) |   | (164,829          | )
|Financing Activities                                   |   |                           |   |   |                   |   |   |                   |  
|Issuance of debt                                       |   | 1,270,000                 |   |   | 50,000            |   |   | 350,000           |  
|Issuance of common stock                               |   | 55,310                    |   |   | -                 |   |   | -                 |  
|Cash provided by financing activities                  |   | 1,325,310                 |   |   | 50,000            |   |   | 350,000           |  
|                                                       |   |                           |   |   |                   |   |   |                   |  
|Effect of exchange rate on cash                        |   | (33,160                   | ) |   | 541               |   |   | (1,014            | )
|Cash Increase (Decrease)
      During the Period       |   | 2,805                     |   |   | (5,070            | ) |   | 91,207            |  
|Cash, Beginning of Period                              |   | -                         |   |   | 7,868             |   |   | 1,563             |  
|Cash and Equivalent, End of Period                     |   | 2,798                     |   |   | 2,798             |   |   | 91,756            |  

SUPPLEMENTAL CASH FLOWS INFORMATION

The Company did not pay cash for either interest or taxes
for the six months ended July 31, 2009 and 2008.

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

6

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|TAO MINERALS LTD. and Subsidiary                    
|----------------------------------------------------
|(An Exploration Stage Company)                      
|Notes to the
      Consolidated Financial Statements

|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 a cumulative negative cash
      flows from operations of $755,673 since inception and losses of $227,761
      for the six month period ended July 31, 2009. 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 six months ended July
      31, 2009 and 2008, and for the period from September 23, 2004 (inception)
      to July 31, 2009, together with the balance sheet as of July 31, 2009
      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 July 31, 2009 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, 2009.                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | 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,
    2009.                                                                              

|2. | Notes Payable                                                                                                                                                                                                                  
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                
|   | During the six months ended July 31, 2009 the company
      converted $34,000 of principal on its $500,000 note payable, recognizing a
      $34,000 loss on conversion. Also, the company increased its debt by
      $50,000.

|3. | Common Stock                                                                                                                           
|-- | ---------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                        
|   | During the six months ended July 31, 2009 the company
      converted $34,000 of debt by issuing 68,717,947 shares of common
    stock.

7

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Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.

FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements.
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, 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 unaudited financial statements are stated in United States
Dollars (US$) 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. The following discussion contains
forward-looking statements that reflect our plans, estimates and beliefs. Our
actual results could differ materially from those discussed in the forward
looking statements. Factors that could cause or contribute to such differences
include, but are not limited to, those discussed below and elsewhere in this
quarterly report.

In this quarterly report, unless otherwise specified, all
dollar amounts are expressed in United States dollars. All references to "US$"
refer to United States dollars and all references to "common stock" refer to the
common shares in our capital stock.

As used in this quarterly report, the terms "we", "us", "our"
and "our company" mean Tao Minerals Ltd., unless otherwise indicated.

General Overview and Business Development over the Last
Three Years

We were incorporated in the State of Nevada on September 23,
2004 with authorized capital of 69,000,000 shares of common stock with a par
value of $0.001 and 1,000,000 shares of preferred stock with a par value of
$0.001.

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. Effective
March 24, 2006 our trading symbol on the OTC Bulletin Board was changed from
TAOM to TAOL in connection with the forward stock split.

On April 4, 2008, we entered into a promissory note conversion
agreement with Outboard Investments Ltd., pursuant to which we agreed to provide
for certain conversion provisions related to that certain promissory note issued
by our company. The promissory note originally evidenced an interest free loan
received by our company from Epsom Investment Services N.V. in the amount of
$620,000. On April 4, 2008, the promissory note was transferred to Outboard
Investments Ltd. pursuant to that certain debt sale agreement. Pursuant to the
conversion agreement, the promissory note is convertible into shares of our
companys common stock at a price equal to 30% of the lowest closing bid price
of the shares of our companys common stock during the five trading days
immediately preceding the conversion date. In the event of a failure by our
company to honor any conversion requests by Outboard, Outboard shall have the
right to demand payment of all outstanding amounts under the promissory note
which amounts shall be paid within 5 days.

8

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The promissory note conversion agreement also provides that
Outboard may have the right to require our company to redeem the promissory note
in cash at 110% of the outstanding principal amount, together with all accrued
and unpaid interest in the event (A) our company challenges, disputes or denies
the right of Outboard to effect the conversion of the promissory note or
otherwise dishonors or rejects a conversion request, and (B) any third party
asserts any claim which seeks to challenge, deny, enjoin, limit, modify or
dispute the right of Outboard to effect any conversions under the promissory
note.

Outboard shall not be obligated to effect conversions under the
conversion agreement in the event such conversion will result in Outboard being
deemed to be the beneficial owner of more than 4.99% .

On October 4, 2008, our company and Outboard Investments Ltd.
jointly agreed to enter into a cancellation agreement in regards to the
$1,000,000 financing.

On July 16, 2008, through our majority owned subsidiary Minera
Tao S.A., we entered into an amended option agreement with Agrominas De
Colombia, LTDA to acquire 80% of a mining interest called El Comillo in
Antioquia Colombia. The agreement amended the terms of the original option
agreement entered into by Minera Tao on October 2, 2007, and subsequently
extended on April 18, 2008.

Under the terms of the amended option agreement, the purchase
  price of the option is $1.42 billion Colombian pesos or approximately US$825,000
  dollars. We paid $80,000,000 pesos (approximately US$50,000) upon closing of
  the option agreement and are obligated to pay $40,000,000 pesos on the 15th
  of every month until $320,000,000 pesos has been paid. Thereafter 20% of production
  will be paid until $1.1 billion pesos have been received by Agrominas De Colombia.
  After the acquisition price is paid Agrominas De Colombia will continue to receive
  20% of the mining production. Upon receipt of $1.42 billion pesos by Agrominas
  De Colombia the option will be exercised and 80% ownership in the property will
  be transferred to Minera Tao. To date, we have paid to Agrominas De Colombia
  $240,000,000 pesos (or US$120,000).

From inception on September 23, 2004 to present, we have
engaged in no significant operations other than organizational activities,
acquiring and staking our properties, preparing the registrations of our
securities and planning Phase 1 of the exploration work on our Whale Mine Claims
and acquiring our Golondria Gold-Silver Project and El Comillo mining
property.

On April 23, 2008 we entered into a securities purchase
agreement for the sale of $1,000,000 convertible note at 10% with a maturity of
2 years. We received $125,000 upon the closing and issued a note for the amount.
Our company is obligated to file a registration statement within 45 days of the
closing. Upon the registration statement becoming effective, our company will
receive the balance of the $875,000. The note carries a conversion feature that
calls for 50% of the average volume weighted price of the shares for the five
trading days prior to conversion. Conversion is at the option of the holder.
Subsequent to the $125,000 funding our company and the purchaser agreed to
terminate the agreement and let the $125,000 note stand on its own.

On June 11, 2008 we issued a $500,000, 8% convertible debenture
to Tuxedo Holdings which was payable by July 31, 2008. All or any portion of the
amounts due under the convertible debenture may be converted at any time, at the
option of the holder, into common shares of our company at a conversion price of
seventy five percent (50%) of the average of the three lowest closing bid prices
of our common stock for the five trading days immediately prior to the date that
we receive notice of conversion of the convertible debenture.

On October 16, 2008, we entered into an agreement to issued a
$500,000 8% convertible debenture to Galleon Investments Ltd. All or any portion
of the amounts due under the convertible debenture, which matures 90 days from
the advancement date, may be converted at any time, at the option of the holder,
into common shares of our company at a conversion price of seventy five percent
(75%) of the average of the three lowest closing bid prices of our common stock
for the five trading days immediately prior to the date that we receive notice
of conversion of the convertible debenture. The Note was to be funded by
December 31, 2008, however the note was not funded by that date.

9

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We are a start-up, exploration stage company and have not yet
generated or realized any revenues from our business operations. We must raise
cash in order to implement our plan and stay in business.

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.

The address of our principal executive office is Officina 301
Edeficio El Crusero, Carrera 48, 12 Sur  148 Medellin Colombia. Our telephone
numbers is 0115-314-2330.

Our common stock is quoted on the OTC Bulletin Board under the
symbol "TAOL".

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.

Our mineral resource properties consist of exploration claims
located in Columbia (Risaldo La Golondrina D14-082 mineral property located in
Narino, Colombia) ( El Colmillo mineral property located in Antioquia,
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-Q, for additional information about the risks of mineral exploration.

On July 13, 2009, Julio De Leon resigned as a director and
chief financial officer of our company and Julio C. Calle was appointed chief
financial officer of our company.

Our Current Business

We are an exploration stage company that has not yet generated
or realized any revenues from our business operations. We had concentrated our
recent exploration efforts on the La Golondrina Property in Columbia over our
fiscal year ending January 31, 2009. In July, 2008 we acquired a mineral right
in the El Colmillo property in Colombia. In October, 2009, our company decided
to employ our efforts in exploration of the El Colmillo property for the next 12
months and will hold exploration of the Golondrina property until a
determination of viability at El Colmillo can be determined. In December 2008,
company personnel at the El Colmillo property were met by

10

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Colombian rebels who demanded a war tax to permit the
development activities to continue. Our company immediately ceased any efforts
at the mine and reported the situation to the Colombian government and to the
issuer of the option. Our company invoked the force majeure section of the
contract and is waiting to see what developments will take place.

Results of Operations

Three Months Ended July 31, 2009 and 2008

The following summary of our results of operations should be
read in conjunction with our consolidated financial statements for the quarter
ended July 31, 2009 which are included herein.

Our operating results for the three months ended July 31, 2009,
for the three months ended July 31, 2008 and the changes between those periods
for the respective items are summarized as follows:

Three Months Ended July
      31, 2009
    Three Months Ended July
      31, 2008
    Change Between Three Month
      Period Ended July 31, 2009 and July 31,
      2008Revenue
    $                                    
      Nil
    $                                    
      Nil
    $                                    
      NilProfessional fees
    $                                
      9,700
    $                               24,030
    $                             
      (14,030)Consulting fees
    $                               52,500
    $                               48,000
    $                                  4,500Legal fees
    $                                    
      Nil
    $                               21,039
    $                             
       (21,039)General and
      administrative
    $                               26,527
    $                               24,361
    $                                 
      2,166Derivative expense
    $                                
      1,927
    $                          
       (673,355)
    $                             
      675,282Loss on settlement
      of debt
    $                                    
      Nil
    $                           
      (816,367)
    $                              816,367Interest expense
    $                            
       (14,499)
    $                              
       (9,244)
    $                                 
      5,255Other loss
    $                                    
       37
    $                                    
      Nil
    $                                      
      37Net Income (Loss)
      $                           
        (101,262)
      $                         
        (1,498,966)
      $                          
        1,397,704


Our consolidated financial statements report a net loss of
$101,262 for the three month period ended July 31, 2009 compared to a net loss
of $1,498,966 for the three month period ended July 31, 2008. Our losses have
decreased primarily resulting from a decrease in professional and legal fees and
derivative expense and losses on settlement of debt.

Six Months Ended July 31, 2009 and 2008

The following summary of our results of operations should be
read in conjunction with our consolidated financial statements for the quarter
ended July 31, 2009 which are included herein.

Our operating results for the six months ended July 31, 2009,
for the six months ended July 31, 2008 and the changes between those periods for
the respective items are summarized as follows:

Six months Ended July
      31, 2009
    Six months Ended July
      31, 2008
    Change Between Six Month Period
      Ended July 31, 2009 and July 31, 2008Revenue
      $                           
           Nil
      $                               Nil
      $                               Nil


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Six months Ended July
      31, 2009
    Six months Ended July
      31, 2008
    Change Between Six Month Period
      Ended July 31, 2009 and July 31, 2008Professional fees
    $                      
                9,700
    $                               24,030
    $                          
        (14,330)Consulting fees
    $                     
             109,500
    $                               96,000
    $                               13,500Legal fees
    $                  
                   
      2,107
    $                               87,854
    $                      
            (85,747)General and
      administrative
    $                          
          48,675
    $                               26,057
    $                               22,618Net Income (Loss)
      $                           (228,019)
      $                     
           (1,747,526)
      $                      
           1,517,507


Our accumulated losses increased to $(8,120,489) as of July 31,
2009. Our consolidated financial statements report a net loss of $228,019 for
the six month period ended July 31, 2009 compared to a net loss of $1,747,526
for the six month period ended July 31, 2008. Our losses have decreased
primarily resulting from a decrease in professional and legal fees and
derivative expense and losses on settlement of debt.

Revenues

We have not earned any revenues since our inception and we do
not anticipate earning revenues in the near future.

Liquidity and Financial Condition

As of July 31, 2009, our total assets were $195,209 and our
total liabilities were $1,341,914 and we had a working capital deficit of
$1,284,833. Our financial statements report a net loss of $228,019 for the
quarter ended July 31, 2009, and a net loss of $8,120,489 for the period from
September 23, 2004 (date of inception) to July 31, 2009.

We have suffered recurring losses from operations. The
continuation of our company is dependent upon our company attaining and
maintaining profitable operations and raising additional capital as needed. In
this regard we have raised additional capital through equity offerings and loan
transactions.

| | Cash Flows                                             |   |          |   |   | As at    |  
| | ------------------------------------------------------ | - | -------- | - | - | -------- | -
| |                                                        |   | July 31, |   |   |          |  
| |                                                        |   | 2009     |   |   | 2008     |  
| |                                                        |   |          |   |   |          |  
| | Net Cash (Used) Provided by Operating
      Activities | $ | (36,560  | ) | $ | (93,964  | )
| | Net Cash Used In Investing Activities                  | $ | (19,051  | ) | $ | (164,829 | )
| | Net Cash Provided by Financing Activities              | $ | 50,000   |   | $ | 350,000  |  
| | Cash Increase (Decrease) In Cash During The Period     | $ | (5,070   | ) | $ | 91,207   |  

We had cash in the amount of $2,798 as of July 31, 2009 as
compared to $91,756 as of July 31, 2008. We had a working capital deficit of
$1,284,833 as of July 31, 2009 compared to working capital deficit of $1,656,046
as of July 31, 2008.

Our principal sources of funds have been from sales of our
common stock and short term loans.

Contractual Obligations

As a smaller reporting company, we are not required to
provide tabular disclosure obligations.

Going Concern

We have not yet achieved profitable operations and are
dependent on our ability to raise capital from stockholders or other sources to
meet our obligations and repay our liabilities arising from normal business
operations when they become due, in their report on our audited financial
statements for the year ended January 31, 2009, our independent

12

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auditors included an explanatory paragraph regarding concerns
about our ability to continue as a going concern. Our financial statements
contain additional note disclosure describing the circumstances that lead to
this disclosure by our independent auditors.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that is material to
stockholders.

Critical Accounting Policies

Our consolidated financial statements and accompanying notes
are prepared in accordance with generally accepted accounting principles in the
United States. Preparing financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets,
liabilities, revenue, and expenses. These estimates and assumptions are affected
by management's application of accounting policies. We believe that
understanding the basis and nature of the estimates and assumptions involved
with the following aspects of our consolidated financial statements is critical
to an understanding of our financials.

Cash Equivalents

For purposes of the statement of cash flows cash equivalents
usually consist of highly liquid investments which are readily convertible into
cash with maturity of six months or less when purchased.

Concentration of Credit Risk

Our company has no significant off-balance-sheet concentrations
of credit risk such as foreign exchange contracts, options contracts or other
foreign hedging arrangements. Our company maintains the majority of its cash
balances with one financial institution, in the form of demand deposits.

Mineral Interest

Pursuant to SFAS No. 141 and SFAS No. 142, as amended by EITF
04-02, mineral interest associated with other than owned properties are
classified as tangible assets. As of July 31, 2009, our company had capitalized
$129,921 related to the mineral rights. The mineral rights will be amortized
using the units-of-production method when production at each project commences.

Long-Lived Assets

Our company accounts for long-lived assets under the Statements
of Financial Accounting Standards Nos. 142 and 144 Accounting for Goodwill and
Other Intangible Assets and Accounting for Impairment or Disposal of
Long-Lived Assets (SFAS No. 142 and 144). In accordance with SFAS No. 142 and
144, long-lived assets, goodwill and certain identifiable intangible assets held
and used by our company are reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be
recoverable. For purposes of evaluating the recoverability of long-lived assets,
goodwill and intangible assets, the recoverability test is performed under the
methods identified in SFAS 144 and Emerging Issues Task Force 04-03.

Foreign Currency Translation

The accounts of our company are translated in accordance with
Statement of Financial Accounting Standard No. 52, which requires that foreign
currency assets and liabilities be translated using the exchange rates in effect
at the balance sheet date. Results of operations are translated using the
average rates prevailing throughout the period. The effects of unrealized
exchange rate fluctuations on translating foreign currency assets and
liabilities into U.S. dollars are accumulated as the accumulated other
comprehensive adjustment in shareholders equity.

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Environmental Costs

Environmental expenditures that relate to current operations
are expensed or capitalized as appropriate. Expenditures that relate to an
existing condition caused by past operations, and which do not contribute to
current or future revenue generation, are expensed. Liabilities are recorded
when environmental assessments and/or remedial efforts are probable, and the
cost can be reasonably estimated. Generally, the timing of these accruals
coincides with the earlier of completion of a feasibility study or our companys
commitments to plan of action based on the then known facts.

Loss per Share

Basic and diluted net loss per common share is computed based
upon the weighted average common shares outstanding as defined by Financial
Accounting Standards No. 128, Earnings Per Share. As of July 31, 2009 and
2008, there were no dilutive securities outstanding. Our company has a $625,000
convertible debentures which can be converted to common stock. These shares have
not been included in any weighted average computations since the effect would be
anti-dilutive.

Income Taxes

Our company accounts for income taxes under the Statement of
Financial Accounting Standards No. 109, Accounting for Income Taxes
(Statement 109). Under Statement 109, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled. Under
Statement 109, the effect on deferred tax assets and liabilities of a change in
tax rates is recognized in income in the period that includes the enactment
date.

Business Segments

Our company operates in one segment and therefore segment
information is not presented.

Mining Properties and Exploration Costs

Exploration costs are charged to operations in the year in
which they are incurred. Costs of acquiring mineral properties are capitalized
until such time commencement of production commences or a determination that
such property is not commercially viable.

Mining properties are, upon commencement of production,
amortized over the estimated life of the ore body to which they relate or are
written off if the property is abandoned or if there is considered to be a
permanent impairment in value.

Investments in mining properties over which our company has
significant influence but not joint control are accounted for using the equity
method.

Site Restoration and Post Closure Costs

Expenditures related to ongoing environmental and reclamation
activities are expensed, as incurred, unless previously accrued. Provisions for
future site restoration and reclamation and other post closure costs in respect
of operating facilities are charged to operations over the estimated life of the
operating facility, commencing when a reasonably definitive estimate of the cost
can be made.

Accounting Changes and Error Corrections

Our company follows Accounting Changes and Error Corrections in
accordance with Statement of Financial Accounting Standards # 154 which replaced
APB 20 and Statement of Financial Accounting Standards #3. Changes

14

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in accounting principle are reported through retrospective
application of the new accounting principle to all prior periods. Errors in the
financial statements of a prior period discovered subsequent to their issuance
shall be reported as a prior-period adjustment by restating the prior period.

Recently Issued Accounting Standards

Statement of Financial Accounting Standards (SFAS) No. 151,
Inventory Costs  an amendment of ARB No. 43, Chapter 4 SFAS No. 152,
Accounting for Real Estate Time-Sharing Transactions - an amendment of FASB
Statements No. 66 and 67, SFAS No. 153, Exchanges of Non-monetary Assets  an
amendment of APB Opinion No. 29, and SFAS No. 123 (revised 2004), Share-Based
Payment, were recently issued. SFAS No. 151, 152, 153 and 123 (revised 2004)
have no current applicability to our company and have no effect on the financial
statements.

Item 3.   Quantitative Disclosures About Market
Risks

As a smaller reporting company, we are not required to
provide the information required by this Item.

Item 4T. Controls and Procedures.

Managements Report on Disclosure Controls and
Procedures

We maintain disclosure controls and procedures that are
designed to ensure that information required to be disclosed in our reports
filed under the Securities Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms, and that such information
is accumulated and communicated to our management, including our president (who
is acting as our principal executive officer) and our chief financial officer
(who is acting as our principal financial officer and principle accounting
officer) to allow for timely decisions regarding required disclosure.

As of July 31, 2009, the end of our quarter covered by this
report, we carried out an evaluation, under the supervision and with the
participation of our president (who is acting as our principal executive
officer) and our chief financial officer (who is acting as our principal
financial officer and principle accounting officer), of the effectiveness of the
design and operation of our disclosure controls and procedures. Based on the
foregoing, our president (who is acting as our principal executive officer) and
our chief financial officer (who is acting as our principal financial officer
and principle accounting officer) (our principal executive officer and our
principal financial officer and principle accounting officer) concluded that our
disclosure controls and procedures were effective as of the end of the period
covered by this quarterly report.

Changes in Internal Control over Financial
Reporting

There have been no changes in our internal controls over
financial reporting that occurred during the quarter ended July 31, 2009 that
have materially or are reasonably likely to materially affect, our internal
controls over financial reporting.

PART II - OTHER INFORMATION

Item 1.   Legal Proceedings.

We know of no material, existing 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 1A. Risk Factors

Much of the information included in this quarterly report
includes or is based upon estimates, projections or other "forward looking
statements". Such forward looking statements include any projections or
estimates made by us and

15

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our management in connection with our business operations.
While these forward-looking statements, and any assumptions upon which they are
based, are made in good faith and reflect our current judgment regarding the
direction of our business, actual results will almost always vary, sometimes
materially, from any estimates, predictions, projections, assumptions or other
future performance suggested herein.

Such estimates, projections or other "forward looking
statements" involve various risks and uncertainties as outlined below. We
caution the reader that important factors in some cases have affected and, in
the future, could materially affect actual results and cause actual results to
differ materially from the results expressed in any such estimates, projections
or other "forward looking statements".

Our common shares are considered speculative during the
development of our new business operations. Prospective investors should
consider carefully the risk factors set out below.

Risks Associated With Our Business

All of our properties are in the exploration stage. There is
no assurance that we can establish the existence of any mineral resource on any
of our properties in commercially exploitable quantities. Until we can do so, we
cannot earn any revenues from operations and if we do not do so we will lose all
of the funds that we expend on exploration. If we do not discover any mineral
resource in a commercially exploitable quantity, our business could fail.

Despite exploration work on our mineral properties, we have not
established that any of them contain any mineral reserve, nor can there be any
assurance that we will be able to do so. If we do not, our business could
fail.

A mineral reserve is defined by the Securities and Exchange
Commission in its Industry Guide 7 (which can be viewed over the Internet at
http://www.sec.gov/divisions/corpfin/forms/industry.htm#secguide7) as
that part of a mineral deposit which could be economically and legally extracted
or produced at the time of the reserve determination. The probability of an
individual prospect ever having a "reserve" that meets the requirements of the
Securities and Exchange Commission's Industry Guide 7 is extremely remote; in
all probability our mineral resource property does not contain any 'reserve' and
any funds that we spend on exploration will probably be lost.

Even if we do eventually discover a mineral reserve on one or
more of our properties, there can be no assurance that we will be able to
develop our properties into producing mines and extract those resources. Both
mineral exploration and development involve a high degree of risk and few
properties which are explored are ultimately developed into producing mines.

The commercial viability of an established mineral deposit will
depend on a number of factors including, by way of example, the size, grade and
other attributes of the mineral deposit, the proximity of the resource to
infrastructure such as a smelter, roads and a point for shipping, government
regulation and market prices. Most of these factors will be beyond our control,
and any of them could increase costs and make extraction of any identified
mineral resource unprofitable.

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

16

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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.

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 $2,798 and a working capital
deficit of $1,284,833 as at our quarter ended July 31, 2009. 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
quarterly 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 quarter ended
July 31, 2009 was $8,120,489. We have incurred losses for the quarter ended July
31, 2009 of $228,019. 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,

17

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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.

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.

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, 2009
states that there is a substantial doubt that we will be able to continue as a
going concern.

Our independent certified public accounting firm state in their
  Notes to the audited financial statements for the year ended January 31, 2009,
  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.

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.

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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 Financial Industry Regulatory Authority. 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 their shares.

Our stock is a penny stock. Trading of our stock may be
restricted by the SECs penny stock regulations and FINRA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 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.

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In addition to the penny stock rules promulgated by the
Securities and Exchange Commission, the Financial Industry Regulatory Authority
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 Financial Industry Regulatory Authority believes that there
is a high probability that speculative low-priced securities will not be
suitable for at least some customers. The Financial Industry Regulatory
Authority 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 2.   Unregistered Sales of Equity Securities
and Use of Proceeds

None.

Item 3.   Defaults Upon Senior Securities.

None.

Item 4.   Submission of Matters to a Vote of
Security Holders.

None.

Item 5.   Other Information

On July 13, 2009, Julio De Leon resigned as a director and
chief financial officer of our company and Julio C. Calle was appointed chief
financial officer of our company.

Item 6.   Exhibits.

Exhibits required by Item 601 of Regulation S-K

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|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 C. Calle.                                                                                                                                                
|               |                                                                                                                                                                                                                                      
|(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 C. Calle.                                                                                                                                                

* Filed herewith

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

| | TAO MINERALS LTD.                                                   
| | --------------------------------------------------------------------
| |                                                                     
| |                                                                     
| |                                                                     
| |                                                                     
| | /s/
      James Sikora                                              
| | James Sikora                                                        
| | President, Chief Executive Officer and Director                     
| | (Principal Executive Officer)                                       
| | Date: November 12, 2009                                             
| |                                                                     
| |                                                                     
| |                                                                     
| |                                                                     
| | /s/
      Julio C. Calle                                            
| | Julio C. Calle                                                      
| | Chief Financial Officer                                             
| | (Principal Financial Officer and Principal
      Accounting Officer)
| | Date: November 12, 2009                                             

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