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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-K

(Mark One)

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

For the fiscal year ended January 31, 2009

[ ] 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) | (I.R.S. Employer Identification No.)

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

Registrant's telephone number, including area code:
0115-314-2330

Securities registered pursuant to Section 12(b) of the Act:

|Title of Each Class | Name of Each Exchange On Which Registered
|------------------- | -----------------------------------------
|N/A                 | N/A                                      

Securities registered pursuant to Section 12(g) of the Act:

N/A(Title of class)

Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 the Securities Act. Yes [  ]  No [ x ]

Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Act. Yes [  ]  No [ x ]

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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 last 90 days.Yes[ x ] No[ ]

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrant's
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K.[
]

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See definition 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 [ ]   | 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 [  ]  No [ x ]

The aggregate market value of Common Stock held by
non-affiliates of the Registrant on June 15, 2009 was $307,312.21 based on a
$0.0008 closing price for the Common Stock on June 15, 2009. For purposes of
this computation, all executive officers and directors have been deemed to be
affiliates. Such determination should not be deemed to be an admission that such
executive officers and directors are, in fact, affiliates of the Registrant.

Indicate the number of shares outstanding of each of the
registrants classes of common stock as of the latest practicable
date.391,390,265 shares as of June 15, 2009

DOCUMENTS INCORPORATED BY REFERENCE

None.

2

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TABLE OF CONTENTS

|Item
      1.     | Business                                                                                                                 | 4 
|----------------- | ------------------------------------------------------------------------------------------------------------------------ | --
|Item
      1A.    | Risk
      Factors                                                                                                       | 8 
|Item
      1B.    | Unresolved
      Staff Comments                                                                                          | 12
|Item
      2.     | Properties                                                                                                               | 12
|Item
      3.     | Legal
      Proceedings                                                                                                  | 19
|Item
      4.     | Submission
      of Matters to a Vote of Security Holders                                                                | 19
|Item
      5.     | Market
      for Registrants Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities | 19
|Item
      6.     | Selected
      Financial Data                                                                                            | 21
|Item
      7.     | Managements
      Discussion and Analysis of Financial Condition and Results of Operations                              | 21
|Item
      7A.    | Quantitative
      and Qualitative Disclosures About Market Risk                                                         | 26
|Item
      8.     | Financial
      Statements and Supplementary Data                                                                        | 26
|Item
      9.     | Changes
      in and Disagreements With Accountants on Accounting and Financial
      Disclosure                         | 45
|Item
      9A(T). | Controls
      and Procedures                                                                                            | 45
|Item
      9B.    | Other
      Information                                                                                                  | 46
|Item
      10.    | Directors,
      Executive Officers and Corporate Governance                                                             | 46
|Item
      11.    | Executive
      Compensation                                                                                             | 49
|Item
      12.    | Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters               | 51
|Item
      13.    | Certain
      Relationships and Related Transactions, and Director Independence                                          | 52
|Item
      14.    | Principal
      Accounting Fees and Services                                                                             | 52
|Item
      15.    | Exhibits,
      Financial Statement Schedules                                                                            | 53

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PART I

Item 1. Business

This annual 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, including the risks in the
section entitled Risk Factors, that may cause our or our industrys actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements.

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

Our financial statements are stated in United States Dollars
(US$) and are prepared in accordance with United States Generally Accepted
Accounting Principles.

In this annual report, unless otherwise specified, all dollar
amounts are expressed in United States dollars and all references to common
shares refer to the common shares in our capital stock.

As used in this current report and unless otherwise indicated,
the terms "we", "us", "our", Company, and Tao 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.

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

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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.

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.
The Company is obligated to file a registration statement within 45 days of the
closing. Upon the registration statement becoming effective, the 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 the 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.

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.

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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 618,
Empresarial Mall Ventura, Cra.32 #1B Sur 51, Medellin, Columbia. Our telephone
numbers are (305) 726-0602 and 011-574-311-0720.

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

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, 2008, 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 Colombian rebels who
demanded a war tax to permit the development activities to continue. The Company
immediately ceased any efforts at the mine and reported the situation to the
Colombian government and to the issuer of the option. The Company invoked the
force majoure section of the contract and is waiting to see what developments
will take place.

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Competition

We are a mineral resource exploration company. We compete with
other mineral resource exploration companies for financing and for the
acquisition of new mineral properties. Many of the mineral resource exploration
companies with whom we compete have greater financial and technical resources
than those available to us. Accordingly, these competitors may be able to spend
greater amounts on acquisitions of mineral properties of merit, on exploration
of their mineral properties and on development of their mineral properties. In
addition, they may be able to afford more geological expertise in the targeting
and exploration of mineral properties. This competition could result in
competitors having mineral properties of greater quality and interest to
prospective investors who may finance additional exploration. This competition
could adversely impact on our ability to finance further exploration and to
achieve the financing necessary for us to develop our mineral properties.

Compliance with Government Regulation

We are committed to complying with and are, to our knowledge,
in compliance with, all governmental and environmental regulations applicable to
our company and our properties. Permits from a variety of regulatory authorities
are required for many aspects of mine operation and reclamation. We cannot
predict the extent to which these requirements will affect our company or our
properties if we identify the existence of minerals in commercially exploitable
quantities. In addition, future legislation and regulation could cause
additional expense, capital expenditure, restrictions and delays in the
exploration of our properties.

Subsidiaries

We do not have any subsidiaries.

Research and Development Expenditures

We have incurred $0 in research and development expenditures
over the last fiscal year.

Employees

As of May 11, 2009, we had no employees other than our
directors and officers.

On September 1, 2008, we entered into an executive employment
agreement with James Sikora, our president and chief executive officer. The
agreement shall be for a period of thirty-six (36) months.

On September 1, 2008, we entered into a contractor engagement
agreement with Julio De Leon. The agreement shall be for a period of thirty-six
(36) months.

We also engage contractors from time to time to supply work on
specific corporate business and exploration programs.

Consultants are retained on the basis of ability and
experience. Except as set forth above, there is no preliminary agreement or
understanding existing or under contemplation by us (or any person acting on our
behalf) concerning any aspect of our operations pursuant to which any person
would be hired, compensated or paid a finders fee.

Intellectual Property

We do not own, either legally or beneficially, any patent or
trademark.

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Item 1A. Risk Factors

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 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 $7,868 and a working capital
deficit of $1,110,598 as at our year ended January 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

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necessary for us to fund and carry out exploration programs on
the properties. The requirements are substantial. We do not currently have any
arrangements for additional financing and we can provide no assurance to
investors that we will be able to find such financing if required. Obtaining
additional financing would be subject to a number of factors, including market
prices for minerals, investor acceptance of our properties, and investor
sentiment. These factors may make the timing, amount, terms or conditions of
additional financing unavailable to us. The most likely source of future funds
presently available to us is through the sale of equity capital and loans. Any
sale of share capital will result in dilution to existing shareholders.

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

We have not earned any revenues as of the date of this annual
report and have never been profitable. We do not have an interest in any revenue
generating properties. We were incorporated in September 2004 and to date have
been involved primarily in organizational activities and limited exploration
activities. Prior to our being able to generate revenues, we will incur
substantial operating and exploration expenditures without realizing any
revenues. We therefore expect to incur significant losses into the foreseeable
future. We have limited operating history upon which an evaluation of our future
success or failure can be made. Our net loss from inception to our year ended
January 31, 2009 was $7,890,905. We have incurred losses for the year ended
January 31, 2009 of $2,253,352. We recognize that if we are unable to generate
significant revenues from our activities, we will not be able to earn profits or
continue operations. Based upon current plans, we also expect to incur
significant operating losses in the future. We cannot guarantee that we will be
successful in raising capital to fund these operating losses or generate
revenues in the future. We can provide investors with no assurance that we will
generate any operating revenues or ever achieve profitable operations. If we are
unsuccessful in addressing these risks, our business will most likely fail and
our investors could lose their investment.

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

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

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

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

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

9

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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.

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.

10

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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.

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.

11

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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 1B. Unresolved Staff Comments

None.

Item 2. Properties

Executive Offices

Our principal offices are located at Officina 624, Empresarial
Mall Ventura, Cra.32#1B Sur 51, Medellin, Columbia. Our telephone number at our
principal office is 011-574-311-0720. Our office is donated rent free by our
President. We believe that our office space and facilities are sufficient to
meet our present needs and do not anticipate any difficulty securing alternative
or additional space, as needed, on terms acceptable to us.

Mineral Properties

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

Golondria Gold-Silver Project

Acquisition, Location and Access

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

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

12

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

| | 1. | Payment of US$150,000, payable on or before March 15,
      2006 and upon execution of the Definitive Agreement; and                                                                                                                                                                                                                   
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                        
| | 2. | The issuance of 2,500,000 common shares in the capital
      stock of the company, subject to applicable trading restrictions, to Nueva
      California which will be issued either contemporaneous with the payment of
      US$150,000 or within 14 days of the execution of a Definitive Agreement,
      whichever is the earlier.
| |    |                                                                                                                                                                                                                                                                                                                                        
| | 3. | The issuance of 600,000 shares of common stock as
      follows:                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                        
| |    | 300,000 as of August 23, 2006 and 300,000 shares as of
      August 23, 2007.                                                                                                                                                                                                                                                          

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

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

On May 9, 2008 we entered into a second amending agreement
which agreement amended certain terms of the Definitive Agreement. The second
agreement modifies payments of $280,000 which would have to been made from
August 23, 2005 through August 23, 2009 to two payments of $100,000 each on or
before July 1, 2006 and on or before August 1, 2008. The first payment of
$100,000 has been made. As of May 9, 2008 the company has not issued the 600,000
shares of common stock and has not received any notice of default from non
issuance.

Items 1 through 6 of the HOA agreement are deleted. The total
amounts payable to Primecap remains as amended in the first amendment. The
second $100,000 payment is now due on or before August 1, 2008. As of January
31, 2009 the Company has not issued the 300,000 shares of common stock due
August 23, 2006 and the 300,000 shares of common stock due August 23, 2007. The
Company has accrued $51,000 as a liability for the issuance of 300,000 shares of
common stock on August 23, 2006 at $.17 the closing price of the stock as of
such date and $41,100 for the issuance liability of 300,000 shares of common
stock at August 23, 2007 at $$.137 the closing price of the stock at such date.
The Company has no further obligations under the HOA agreement other than those
stated here.

The property is located within a mixture of small-scale mining
and small-scale agricultural lands. Limited accommodations and supplies are
available in Sotomayor, while Pasto acts as the main supply centre. The property
is accessible from Sotomayor by a one-lane gravel road for the first four
kilometres and then by a 1 kilometre ATV trail. Access to Sotomayor is from
Pasto by a secondary gravel road, with travel time estimated to be 4 hrs.
Transportation to Sotomayor is available in Pasto. The gravel roads are suitable
for movement of heavy equipment.

ESTIMATED BUDGET, PHASE 1 PROGRAM

Chronological Schedule

WeeksItem
    Labour
    1
    2
    3
    4
    5
    6
    7
    8
    9
    101
    Historical data
    X


13

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2
    Environmental Review
    
    X
    
    X
    
    X3
    Regional Geological Mapping
    
    
    X4
    Stream Sediment Geochemistry
    
    
    
    X5
    Detailed Geological Mapping
    
    
    
    
    **X**
    X
    X6
    Underground Sampling
    
    
    
    
    
    X
    X7
    Soil Geochemistry
    
    
    
    X8
    Trench Sampling
    
    
    
    
    
    
    
    X9
    Rock Sampling (Prospecting)
    
    
    X10
    Sample Preparation/Analysis
    
    
    
    X
    
    
    X
    X
    X11
    Report
    
    
    
    
    
    
    
    
    
    **X**


Expense Schedule

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


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

14

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POINT
    NORTH
    EASTP.A.
    62.810
    949.7001
    662.003
    949.629.42
    662.003
    949.629.43
    661.003
    948.429.44
    662.003
    948.429.4


The above represents the longitude and latitude of the property
representing 120 hectares. We have obtained a 30 year concession from under
concession number 6927 from the department of Agrominas De Colombia LTDA. Our
property is located in the municipality of Los Andes Sotomayor. We currently are
in the process of exploration and do not have any production facilities.

15

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History

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

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

Property Geology

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

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

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

El Colmillo Gold Project

Acquisition, Location and Access

On July 16, 2008, through our majority owned subsidiary Minera
Tao S.A. (MT), we entered into an amended option agreement with Agrominas De
Colombia, LTDA (AC) 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 MT 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 at an exchange rate of $1,600 pesos for one dollar. 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 AC. After the acquisition price is paid AC
will continue to receive 20% of the mining production. Upon receipt of $1.42
billion pesos by AC the option will be exercised and 80% ownership in the
property will be transferred to MT.

The El Colmillo vein-hosted gold deposit is located in a river
basin which contains La Tinta Gorge, and more specifically in the sub river
basin of the gorge La Blanquita, a tributary of the Nechí River.The concession
covers an area of 296 hectares

16

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ESTIMATED BUDGET, PHASE 1 PROGRAM

In anticipation of our acquisition of our interest in the El
Comillo mining property pursuant to our agreement with Agrominas De Colombia,
LTDA, we are beginning the execution of our plan to upgrade the El Colmillo Gold
Mine by implementing Phase I of the mine upgrade program.

Phase I of the program focuses on the existing mining works.
The mine is currently idle and Phase I activities are designed to accomplish its
reactivation to the extent of its existing full installed capacity. Actions to
accomplish this will include developing the tunnels to increase the throughput
volume of ore and, in concert with that, work to increase knowledge of the
mines characterization in terms of its specific mineralogy to determine the
best approach to the set-up of the upgraded gold recovery circuit.

Total monthly expenses for Phase I are estimated at $68,000 and
will include, in addition to other unnamed items, specific expenditures for
personnel, $16,000; fuel, $14,000; administration, $5,000; dynamite, $4,000 and
an unspecified amount for repairs and adjustments to existing equipment. Capital
costs to be incurred in Phase I are an estimated $12,000 for a jaw crusher and
an estimated $14,000 for a 4 x 4 truck to transport fuel to the mine.

Finally, as part of the reactivation, Tao will be paying the
annual tax for the exploration of the mine known as the  cannon
superficiario.

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

In December 2008 Company personnel at the El Colmillo property
were met by Colombian rebels who demanded a war tax to permit the development
activities to continue. The Company immediately ceased any efforts at the mine
and reported the situation to the Colombian government and to the issuer of the
option. The Company invoked the force majoure section of the contract and is
waiting to see what developments will take place.

17

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POINTP.A.
    7
      o3500.59
    N2
    7
      o3500.00
    N3
    75
      o2000.00
    W4
    75
      o1959.77
    W


Property Geology

Bedrock consists of metamorphic rocks of sericite and graphitic
aluminous schists. Alteration includes sericitization and chloritization, as
well as silicification in the form of quartz. The dominant regional structures
are the North Otú and North Bagre faults, with general directions N°1-14°W.
Locally two faults which trend north-south and dip 60oE have been observed.
These two faults are concordant with the existing mineralization. It is suggest
that they are part of the North Bagre fault system.

At least three veins are recognized in the El Colmillo
mineralized zone. These include El Colmillo vein, La Muela vein and a third
un-named subparallel vein. The first two show their moderate continuity by the
presence of old

18

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mine workings. Some of these are collapsed. In the un-named
vein the continuity is recognized by old workings for about 5 m.

The vein El Colmillo has a strike direction that varies from
N/75oE to N30o-N40oE with a thickness of between 0.20 m and 3.2 m. It is
recognized along its course by small tunnels for a distance of about 300 m.
Those faults associated with the mineralized veins are regional in extent,
suggesting that there is a considerable potential for the mineralization to
extend along those faults for an additional 1.2 km within the concession area
and an additional 1 km outside of the concession.

The mineralization in El Colmillo is vein-hosted. The veins are
composed of milky white quartz, with interleaves and interfingerings of
schistose host rock. There are only minor amounts of sulfides in the examined
levels. Galena is found locally.

Item 3. Legal Proceedings

We know of no material, existing or pending legal proceedings
against us, 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 company.

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

None.

PART II

Item 5. Market for Registrants Common Equity, Related
Stockholder Matters and Issuer Purchases of Equity Securities

Our Common stock is quoted on the OTC Bulletin Board under the
Symbol "TAOL". We received approval on November 22, 2005 for trading under the
symbol TAOM. On March 24, 2006 our symbol was changed to TAOL in connection
with our forward stock split.

The following table reflects the high and low bid information
for our common stock obtained from Stockwatch and reflects inter-dealer prices,
without retail mark-up, markdown or commission, and may not necessarily
represent actual transactions.

The high and low bid prices of our common stock for the periods
indicated below are as follows:

National
      Association of Securities DealersOTC Bulletin BoardQuarter Ended
    High
    LowJanuary 31, 2009
    $0.0039
    $0.001October 31, 2008
    $0.015
    $0.0021July 31, 2008
    $0.099
    $0.0095April 30, 2008
    $0.105
    $0.045January 31, 2008
    $0.14
    $0.05October 31, 2007
    $0.22
    $0.08July 31, 2007
    $0.25
    $0.085April 30, 2007
    $0.11
    $0.061January 31, 2007
    $0.15
    $0.105


On May 8, 2009, the closing price for the common stock as
reported by the quotation service operated by the OTC Bulletin Board was
$.0008.

19

---

As of June 11, 2009, there were approximately 300 holders of
record of our common stock. As of such date, 392,401,265 common shares were
issued and outstanding.

Our common shares are issued in registered form. Continental
Stock Transfer & Trust Company, 17 Battery Place, New York, NY 10004 USA
(Telephone: 212 509 4000) is the registrar and transfer agent for our common
shares.

Dividend Policy

We have not paid any cash dividends on our common stock and
have no present intention of paying any dividends on the shares of our common
stock. Our current policy is to retain earnings, if any, for use in our
operations and in the development of our business. Our future dividend policy
will be determined from time to time by our board of directors.

Equity Compensation Plan Information

We currently do not have an equity compensation plan.

Recent Sales of Unregistered Securities; Use of Proceeds
from Registered Securities

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

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

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

On April 21, 2006 we issued 5,000,000 shares of common stock to
five non-U.S. persons. These shares were issued pursuant to the exemption from
registration requirements of the United States Securities Act of 1933, as
amended (the Securities Act) provided by Section 3(a)(9) of the Securities Act
and/or by Regulation S promulgated thereunder.

During the year ended January 31, 2008, we issued 100,000
shares of common stock which were not registered under the Securities Act of
1933. We issued and registered 4,000,000 shares and 1,190,909 shares of common
stock to consultants and attorneys under two S-8 plans on September 24, 2007 and
April 18, 2008, respectively.

On April 4, 2008, we entered into a Securities Purchase
Agreement with Outboard Investments Ltd. for the sale of 10% convertible notes
(the Notes) in the aggregate principal amount of $1,000,000 (the Purchase
Price) of which $125,000 was advanced on April 9, 2008. The second installment
of $875,000 were to be advanced within 5 days of the effectiveness of a
registration statement filed with the SEC which includes the shares of Common
Stock of the Company into which the Notes are convertible. The Notes bear
interest of 10% per annum and mature on

20

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April 4, 2011. The Notes are convertible into shares of the
Companys common stock at a price equal to 50% percent of the of the average of
the volume weighted average price of the shares of the Companys common Stock
during the five trading days immediately preceding a conversion date. Subsequent
to the agreement, the Company and Outboard Marine mutually rescinded the
agreement and let the initial note for $125,000 stand without any registration
requirement.

The Notes were issued pursuant to Rule 506 of Regulation D
promulgated under the Securities Act of 1933, as amended (the "Act"), and/or
Section 4(2) of the Act.

The issuance of the convertible debenture and the securities
issuable upon conversion of the convertible debenture was made pursuant to the
exemption from registration requirements of the United States Securities Act
of 1933, as amended (the Securities Act) provided by Regulation S
promulgated thereunder. The creditor is not a U.S. person (as that term is
defined in Regulation S).

On October 16, 2008, we 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 issuance of the convertible debenture and the securities
issuable upon conversion of the convertible debenture was made pursuant to the
exemption from registration requirements of the United States Securities Act of
1933, as amended (the Securities Act) provided by Regulation S promulgated
thereunder. The creditor is not a U.S. person (as that term is defined in
Regulation S).

Subsequent to January 31, 2009, we converted $36,000 of the
$500,000 note payable for 67,435,896 of common stock.

Purchase of Equity Securities by the Issuer and Affiliated
Purchasers

We did not purchase any of our shares of common stock or other
securities during our fourth quarter of our fiscal year ended January 31,
2009.

Item 6. Selected Financial Data

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

Item 7. Managements Discussion and Analysis of Financial
Condition and Results of Operations

Plan of Operation

Management plans to focus on Phase I of the mine upgrade
program on the El Colmillo property until a determination of viability at El
Colmillo can be determined. We intend to hold exploration of the Golondrina
property until such time as the viability at El Colmillo can be determined.

Phase I of the program focuses on the existing mining works.
The mine is currently idle and Phase I activities are designed to accomplish its
reactivation to the extent of its existing full installed capacity. Actions to
accomplish this will include developing the tunnels to increase the throughput
volume of ore and, in concert with that, work to increase knowledge of the
mines characterization in terms of its specific mineralogy to determine the
best approach to the set-up of the upgraded gold recovery circuit.

Total monthly expenses for Phase I are estimated at $68,000 and
will include, in addition to other unnamed items, specific expenditures for
personnel, $16,000; fuel, $14,000; administration, $5,000; dynamite, $4,000 and
an

21

---

unspecified amount for repairs and adjustments to existing
equipment. Capital costs to be incurred in Phase I are an estimated $12,000 for
a jaw crusher and an estimated $14,000 for a 4 x 4 truck to transport fuel to
the mine.

Finally, as part of the reactivation, we will be paying the
annual tax for the exploration of the mine known as the cannon
superficiario.

In December 2008 Company personnel at the El Colmillo property
were met by Colombian rebels who demanded a war tax to permit the development
activities to continue. The Company immediately ceased any efforts at the mine
and reported the situation to the Colombian government and to the issuer of the
option. The Company invoked the force majoure section of the contract and is
waiting to see what developments will take place.

Purchase of Significant Equipment

In connection with the implementation of our Phase I program on
the El Colmillo property, we expect to incur costs estimated at $12,000 for a
jaw crusher and an estimated $14,000 for a 4 x 4 truck to transport fuel to the
mine. Other than these costs, we do not intend to purchase any significant
equipment over the next twelve months.

Personnel Plan

We do not expect any material changes in the number of
employees over the next 12 month period (although we may enter into employment
or consulting agreements with our officers or directors). We do and will
continue to outsource contract employment as needed.

Off-Balance Sheet Arrangements

There are 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
investors.

Our principal capital resources have been through the
subscription and issuance of common stock, although we have also used
stockholder loans and advances from related parties.

Results of Operations for the Years Ended January 31, 2009
and 2008

The following summary of our results of operations should be
read in conjunction with our audited financial statements for the years ended
January 31, 2009 and 2008.

Our operating results for the years ended January 31, 2009 and
2008 are summarized as follows:

Year EndedJanuary 312009
    
    
    2008Revenue
    $
    Nil
    
    $
    NilTotal Expenses
    $
    2,253,352
    
    $
    833,424Net Loss
    $
    (2,253,352
    )
    $
    (833,424
    )


Revenues

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

Operating Expenses

Our operating expenses for the year ended January 31, 2009 and
January 31, 2008 are outlined in the table below:

22

---

Year EndedJanuary 312009
    
    
    2008Exploration expenses
    $
    -
    
    $
    9,100Professional fees
    $
    13,420
    
    $
    16,400Director fees
    $
    -
    
    $
    120,000Consulting fees
    $
    217,000
    
    $
    471,000Legal fees
    $
    95,936
    
    $
    178,447General and administrative
    $
    109,416
    
    $
    38,477Impairment charge
    $
    350,000
    
    $
    -


The decrease in operating expenses for the year ended January
31, 2009, compared to the same period in fiscal 2008, was mainly due to the
following: the Company did not expend any efforts in exploration in 2009; the
decrease of $120,000 in directors fees were attributable to stock issued to
directors in 2008 as compared to none issued in 2009; the decrease of $254,000
in consulting fees from 2008 to 2009 was primarily due to the market value of
stock issued to consultants in 2008; and the decrease of $82,511 in legal fees
in 2009 from 2008 was primarily due to cancellation of legal services and
cessation of settling legal fees by issuance of stock. General and
administrative increased by $70,939 primarily with expenses of operations to
support development efforts. Impairment charges increased by $350,000 due to the
inability of the Company to obtain an appraisal of the Golondrina property or
other support for the market value.

Liquidity and Financial Condition

As of January 31, 2009, our total assets were $184,719 and our
total liabilities were $1,171,960 and we had a working capital deficit of
$1,110,598. Our financial statements report a net loss of $2,253,352 for the
year ended January 31, 2009, and a net loss of $7,890,905 for the period from
September 23, 2004 (date of inception) to January 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 atJanuary 31,2009
    
    
    2008Net Cash Used for Operating Activities
    $
    (341,428
    )
    $
    (44,881
    )Net Cash Used In Investing Activities
    $
    (244,425
    )
    $
    3,000Net Cash Provided by Financing Activities
    $
    625,000
    
    $
    NilIncrease In Cash During The Period
    $
    6,305
    
    $
    (41,881
    )


We had cash in the amount of $7,868 as of January 31, 2009 as
compared to $1,563 as of January 31, 2008. We had a working capital deficit of
$1,110,598 as of January 31, 2009 compared to working capital deficit of
$979,182 as of January 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.

23

---

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 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.

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 three months or less when purchased.

Concentration of Credit Risk

The Company has no significant off-balance-sheet concentrations
of credit risk such as foreign exchange contracts, options contracts or other
foreign hedging arrangements. The 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 January 31, 2009, the Company had
capitalized $113,420 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

The 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 the 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 the 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.

24

---

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 the 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 January 31, 2009 and
2008, there were no dilutive securities outstanding. The 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

The 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

The 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 the 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

The 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 in accounting
principle are reported through retrospective application of the new accounting
principle to all prior

25

---

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 the Company and have no effect on the financial
statements.

Item 7A. Quantitative and Qualitative Disclosures About
Market Risk

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

Item 8. Financial Statements and Supplementary Data

26

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Report of Independent  Registered Public Accounting Firm

Shareholders and Board of Directors
  TAO MINERALS, LTD
Medellin, Columbia

I have  audited the accompanying consolidated balance sheets of TAO MINERALS, LTD, and  Subsidiary (an Exploration Stage Company) as of January 31, 2009 and 2008 and  the related consolidated statements of operations, stockholders’ deficiency,  and cash flows for each of the years in the two-year period ended January 31,  2009. TAO MINERALS,LTD’S management is responsible for these financial statements.  My responsibility is to express an opinion on these financial statements based  on my audit.

I  conducted my audit in accordance with the standards of the Public Company  Accounting Oversight Board (United    States).   Those standards require that I plan and perform the audit to obtain  reasonable assurance about whether the financial statements are free of  material misstatement.  The Company is  not required to have, nor was I engaged to perform, an audit of its internal  control over financial reporting.  My  audit included consideration of internal control over financial reporting as a  basis for designing audit procedures that are appropriate in the circumstances,  but not for the purpose of expressing an opinion on the effectiveness of the company’s  internal control over financial reporting.   Accordingly, I express no such opinion.   An audit includes examining, on a test basis, evidence supporting the  amounts and disclosures in the financial statements.  An audit also includes assessing the accounting  principles used and significant estimates made by management, as well as  evaluating the overall financial statement presentation.  I believe that my audit provides a reasonable  basis for my opinion.

In my  opinion, the consolidated financial statements referred to above present  fairly, in all material respects, the financial position of TAO MINERALS, LTD,  and Subsidiary  (an Exploration Stage  Company) as of January 31, 2009, and 2008 and the results of its operations and  its cash flows for each of the years in the two-year period ended January 31,  2009, in conformity with accounting principles generally accepted in the United  States of America.

The accompanying financial  statements have been prepared assuming that the Company will continue as a going  concern.  As discussed in Note 1 to the  financial statements, the Company has suffered recurring losses from operations  and has a net capital deficiency.  These  items raise substantial doubt about its ability to continue as a going  concern.  Management’s plans in regard to  these matters are also described in Note 1.   The financial statements do not include any adjustments that might  result from the outcome of this uncertainty.

|Miami, Florida 					
    June 17, 2009 | /s/ Larry Wolfe
      Larry Wolfe
    Certified Public Accountant
|-------------------------------------- | -----------------------------------------------------------------

27

---

|TAO MINERALS LTD. and Subsidiary
|--------------------------------
|(An Exploration Stage Company)  
|Consolidated Balance Sheets     
|January 31,                     

|                                                                          |   | 2009       |   |   | 2008       |  
|------------------------------------------------------------------------- | - | ---------- | - | - | ---------- | -
|                                                                          |   |            |   |   |            |  
|ASSETS                                                                    |   |            |   |   |            |  
|Current                                                                   |   |            |   |   |            |  
|Cash                                                                      | $ | 7,868      |   | $ | 1,563      |  
|Prepaids                                                                  |   | 46,611     |   |   | 9,500      |  
|Total current assets                                                      |   | 54,479     |   |   | 11,063     |  
|                                                                          |   |            |   |   |            |  
|Property and Equipment                                                    |   | 16,820     |   |   | -          |  
|                                                                          |   |            |   |   |            |  
|Mineral Properties                                                        |   |            |   |   |            |  
|Mineral Rights                                                            |   | 113,420    |   |   | 350,000    |  
|                                                                          |   |            |   |   |            |  
|Total Mineral Properties                                                  |   | 113,420    |   |   | 350,000    |  
|                                                                          |   |            |   |   |            |  
|Total assets                                                              | $ | 184,719    |   | $ | 361,063    |  
|                                                                          |   |            |   |   |            |  
|LIABILITIES AND STOCKHOLDERS DEFICIT                                     |   |            |   |   |            |  
|Current                                                                   |   |            |   |   |            |  
|                                                                          |   |            |   |   |            |  
|Accounts payable and accrued expenses                                     | $ | 241,057    |   |   | 178,145    |  
|Note Payable                                                              |   | 500,000    |   |   | -          |  
|Derivative liability                                                      |   | 177,374    |   |   | -          |  
|Stock issuance liability                                                  |   | 92,100     |   |   | 712,100    |  
|Due to related party                                                      |   | -          |   |   | 100,000    |  
|Other accrued liabilities                                                 |   | 154,546    |   |   | -          |  
|Total current liabilities                                                 |   | 1,165,077  |   |   | 990,245    |  
|Note payable long term                                                    |   | 6,883      |   |   | -          |  
|Total iiabilities                                                         |   | 1,171,960  |   |   | 990,245    |  
|                                                                          |   |            |   |   |            |  
|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:
      324,954,369 and 57,106,909 shares |   |            |   |   |            |  
|of common stock at January 31, 2009 and 2008,
      respectively          |   | 324,955    |   |   | 57,106     |  
|Additional paid-in capital                                                |   | 6,791,473  |   |   | 5,005,441  |  
|Accumulated other comprehensive loss                                      |   | (32,822    | ) |   | -          |  
|Deficit accumulated during exploration
      stage                        |   | (8,060,831 | ) |   | (5,691,729 | )
|Total TAO stockholders deficit                                           |   | (977,225   | ) |   | (629,182   | )
|Noncontrolling interest                                                   |   | (10,016    | ) |   | -          |  
|Total deficit                                                             |   | (987,241   | ) |   | (629,182   | )
|Total liabilities and deficit                                             | $ | 184,719    |   | $ | 361,063    |  

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

28

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

|                                               |   | From Inception Date    |   |   | For the Years    |  
|---------------------------------------------- | - | ---------------------- | - | - | ---------------- | -
|                                               |   | of September 23, 2004  |   |   | Ended January 31 |  
|                                               |   | to Period Ended        |   |   | 2009             |  
|                                               |   | January 31,
      2009 |   |   |                  |  
|                                               |   | (unaudited)            |   |   |                  |  
|OPERATING EXPENSES                             |   |                        |   |   |                  |  
|                                               |   |                        |   |   |                  |  
|Exploration expenses                           | $ | 122,650                |   | $ | -                |  
|Professional fees                              |   | 217,218                |   |   | 13,420           |  
|Director fees                                  |   | 120,000                |   |   | -                |  
|Consulting fees                                |   | 824,850                |   |   | 217,000          |  
|Legal fees                                     |   | 274,383                |   |   | 95,936           |  
|General and administrative                     |   | 165,755                |   |   | 109,416          |  
|Impairment charge                              |   | 4,700,000              |   |   | 350,000          |  
|LOSS FROM OPERATIONS                           |   | 6,424,856              |   |   | 785,772          |  
|Total Operating Expenses                       |   | (6,424,856             | ) |   | (785,772         | )
|OTHER INCOME (EXPENSE)                         |   |                        |   |   |                  |  
|Derivative expense                             |   | (77,374                | ) |   | (77,374          | )
|                                               |   |                        |   |   |                  |  
|Loss on settlement of debt                     |   | (1,354,151             | ) |   | (1,354,151       | )
|                                               |   |                        |   |   |                  |  
|Interest expense                               |   | (36,327                | ) |   | (36,327          | )
|                                               |   |                        |   |   |                  |  
|Other loss, net                                |   | (1,293                 | ) |   | (1.293           | )
|                                               |   |                        |   |   |                  |  
|Foreign currency translation gain              |   | 1,531                  |   |   | -                |  
|                                               |   |                        |   |   |                  |  
|TOTAL OTHER INCOME (EXPENSE)                   |   | (1,467,614             | ) |   | (1,469,145       | )
|                                               |   |                        |   |   |                  |  
|Net loss for the Period                        |   | (7,892,470             | ) |   | (2,254,917       | )
|                                               |   |                        |   |   |                  |  
|Less: net loss attributable to                 |   |                        |   |   |                  |  
|noncontrolling interest                        |   | 1,565                  |   |   | 1,565            |  
|                                               |   |                        |   |   |                  |  
|Net loss attributable to TAO common            |   |                        |   |   |                  |  
|shareholders                                  | $ | (7,890,905             | ) | $ | (2,253,352       | )
|                                               |   |                        |   |   |                  |  
|LOSS PER SHARE  BASIC                         |   |                        |   | $ | (.016            | )
|                                               |   |                        |   |   |                  |  
|WEIGHTED AVERAGE NUMBER OF
      ISSUED SHARES |   |                        |   |   |                  |  
|BASIC                                          |   |                        |   |   | 139,513,897      |  

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

29

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|TAO MINERALS LTD. and Subsidiary                                         |            
|------------------------------------------------------------------------ | -----------
|(An Exploration Stage Company)                                           |            
|Consolidated Statement of Changes in Stockholders'
      Equity          |            
|For the periods September 23, 2004 (Inception) to
      January 31, 2009 | Page 1 of 7

|                                                     |  |              |  |   |         |  |   |              |  |   |             |   |   | Accumulated    |   |   | Total        |  
|---------------------------------------------------- |  | ------------ |  | - | ------- |  | - | ------------ |  | - | ----------- | - | - | -------------- | - | - | ------------ | -
|                                                     |  |              |  |   |         |  |   | Additional   |  |   |             |   |   | Deficit During |   |   | Stock-       |  
|                                                     |  | Common stock |  |   | paid-in |  |   | Subscription |  |   | Exploration |   |   | holders'       |  
|                                                     |  | Shares       |  |   | Amount  |  |   | capital      |  |   | Receivable  |   |   | Stage          |   |   | (deficiency) |  
|                                                     |  |              |  |   |         |  |   |              |  |   |             |   |   |                |   |   |              |  
|Common stock issued to founders for cash             |  |              |  |   |         |  |   |              |  |   |             |   |   |                |   |   |              |  
|($0.001 per share)                                   |  | 54,080,000   |  | $ | 54,080  |  | $ |              |  | $ |             |   | $ | (47,320        | ) | $ | 6,760        |  
|Common stock issued for cash ($0.05 per
      share) |  | 7,836,000    |  |   | 7,836   |  |   | 47,995       |  |   | (425        | ) |   | (6,856         | ) |   | 48,550       |  
|- net loss
      for the year                        |  | -            |  |   | -       |  |   | -            |  |   | -           |   |   | (5,577         | ) |   | (5,577       | )
|                                                     |  |              |  |   |         |  |   |              |  |   |             |   |   |                |   |   |              |  
|Balance,
      January 31, 2005                      |  | 61,916,000   |  | $ | 61,916  |  | $ | 47,995       |  | $ | (425        | ) | $ | (59,753        | ) | $ | 49,733       |  
|                                                     |  |              |  |   |         |  |   |              |  |   |             |   |   |                |   |   | -            |  
|Balance, January 31, 2005                            |  | 61,916,000   |  | $ | 61,916  |  | $ | 47,995       |  | $ | (425        | ) | $ | (59,753        | ) | $ | 49,733       |  
|Subscription receivable cancelled                    |  | -            |  |   | -       |  |   |              |  |   | 425         |   |   | -              |   |   | 425          |  
|- net loss
      for the year                        |  | -            |  |   | -       |  |   |              |  |   | -           |   |   | (48,916        | ) |   | (48,916      | )
|                                                     |  |              |  |   |         |  |   |              |  |   |             |   |   |                |   |   |              |  
|Balance,
      January 31, 2006                      |  | 61,916,000   |  | $ | 61,916  |  | $ | 47,995       |  | $ | -           |   | $ | (108,669       | ) | $ | 1,242        |  

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

30

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|TAO MINERALS LTD. and Subsidiary                                        |            
|----------------------------------------------------------------------- | -----------
|(An Exploration Stage Company)                                          |            
|Consolidated Statement of Changes in Stockholders'
      Equity         |            
|For the period September 23, 2004 (Inception) to January
      31, 2009 | Page 2 of 7

|                                                                  |  |              |   |   |         |   |   |              |  |   |             |  |   | Accumulated    |   |   | Total        |  
|----------------------------------------------------------------- |  | ------------ | - | - | ------- | - | - | ------------ |  | - | ----------- |  | - | -------------- | - | - | ------------ | -
|                                                                  |  |              |   |   |         |   |   | Additional   |  |   |             |  |   | Deficit During |   |   | Stock-       |  
|                                                                  |  | Common stock |   |   | paid-in |   |   | Subscription |  |   | Exploration |  |   | holders'       |  
|                                                                  |  | Shares       |   |   | Amount  |   |   | capital      |  |   | Receivable  |  |   | Stage          |   |   | (deficiency) |  
|Balance, January 31, 2006                                         |  | 61,916,000   |   | $ | 61,916  |   | $ | 47,995       |  | $ | -           |  | $ | (108,669       | ) | $ | 1,242        |  
|Common stock issued for mineral rights on April 20,               |  | 2,500,000    |   |   | 2,500   |   |   | 4,347,500    |  |   | -           |  |   | -              |   |   | 4,350,000    |  
|2006 at $.01                                                      |  |              |   |   |         |   |   |              |  |   |             |  |   |                |   |   |              |  
|Common stock cancelled April 24, 2006                             |  | (12,600,000  | ) |   | (12,600 | ) |   | 12,600       |  |   | -           |  |   | -              |   |   | -            |  
|Net loss for the period                                           |  |              |   |   |         |   |   |              |  |   |             |  |   | (4,749,636     | ) |   | (4,749,636   | )
|                                                                  |  |              |   |   |         |   |   |              |  |   |             |  |   |                |   |   |              |  
|Balance, January 31, 2007                                         |  | 51,816,000   |   | $ | 51,816  |   | $ | 4,408,095    |  | $ | -           |  | $ | (4,858,305     | ) | $ | (398,394     | )
|Balance, January 31, 2007                                         |  |              |   |   |         |   |   |              |  |   |             |  |   |                |   |   |              |  
|Common stock issued for services to
          officers, directors |  |              |   |   |         |   |   |              |  |   |             |  |   |                |   |   |              |  
|and consultants on September 25, 2007 at $.12                     |  | 3,500,000    |   |   | 3,500   |   |   | 416,500      |  |   | -           |  |   | -              |   |   | 420,000      |  
|Common stock issued for legal fees on
          September 25,     |  |              |   |   |         |   |   |              |  |   |             |  |   |                |   |   |              |  
|2007 at $.12                                                      |  | 500,000      |   |   | 500     |   |   | 59,500       |  |   | -           |  |   | -              |   |   | 60,000       |  
|Common stock issued for legal services on
          January 15,   |  |              |   |   |         |   |   |              |  |   |             |  |   |                |   |   |              |  
|2008 at $.095                                                     |  | 1,090,909    |   |   | 1,090   |   |   | 102,546      |  |   | -           |  |   | -              |   |   | 103,636      |  
|Common stock issued for services on January
          15, 2008    |  | 200,000      |   |   | 200     |   |   | 18,800       |  |   | -           |  |   | -              |   |   | 19,000       |  
|At $.095                                                          |  |              |   |   |         |   |   |              |  |   |             |  |   |                |   |   |              |  
|Net loss for the period                                           |  | --           |   |   | -       |   |   | -            |  |   | -           |  |   | (833,424       | ) |   | (833,424     | )
|                                                                  |  |              |   |   |         |   |   |              |  |   |             |  |   |                |   |   |              |  
|Balance, January 31, 2008                                         |  | 57,106,909   |   | $ | 57,106  |   | $ | 5,005,441    |  | $ | -           |  | $ | (5,691,729     | ) | $ | (629,182     | )

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

31

---

|TAO MINERALS, LTD. and
          Subsidiary                                     |            
|------------------------------------------------------------------------------- | -----------
|(An Exploration Stage Company)                                                  |            
|Consolidated Statement of Changes in Stockholders
          Equity             |            
|For the period from September23, 2004 (inception) to
          January 31, 2009 | Page 3 of 7

|                                                           |  |              |  |  |         |  |  |               |  |  |             |  |  | Accumulated    |   |  |          |  
|---------------------------------------------------------- |  | ------------ |  |  | ------- |  |  | ------------- |  |  | ----------- |  |  | -------------- | - |  | -------- | -
|                                                           |  |              |  |  |         |  |  | Additional    |  |  | Accumulated |  |  | Deficit During |   |  | Total    |  
|                                                           |  | Common Stock |  |  | Paid in |  |  | Comprehensive |  |  | Exploration |  |  | Stockholders  |  
|                                                           |  | Shares       |  |  | Amount  |  |  | Capital       |  |  | Adjustment  |  |  | Stage          |   |  | Equity   |  
|                                                           |  |              |  |  |         |  |  |               |  |  |             |  |  |                |   |  |          |  
|Balance, January 31, 2008                                  |  | 57,106,909   |  |  | 57,106  |  |  | 5,005,441     |  |  | -           |  |  | (5,691,729     | ) |  | (629,182 | )
|                                                           |  |              |  |  |         |  |  |               |  |  |             |  |  |                |   |  |          |  
|Common stock issued for legal services
          April 21, |  |              |  |  |         |  |  |               |  |  | -           |  |  | -              |   |  |          |  
|2008 @ $.055                                               |  | 1,450,000    |  |  | 1,450   |  |  | 78,300        |  |  |             |  |  |                |   |  | 79,750   |  
|                                                           |  |              |  |  |         |  |  |               |  |  |             |  |  |                |   |  |          |  
|Common stock issued for conversion of debt                 |  |              |  |  |         |  |  |               |  |  |             |  |  |                |   |  |          |  
|April 24, 2008 @ $.048                                     |  | 2,500,000    |  |  | 2,500   |  |  | 117,500       |  |  | -           |  |  | -              |   |  | 120,000  |  
|                                                           |  |              |  |  |         |  |  |               |  |  |             |  |  |                |   |  |          |  
|Common stock issued for conversion of
          debt       |  |              |  |  |         |  |  |               |  |  |             |  |  |                |   |  |          |  
|May 9, 2008 @ $.05                                         |  | 3,333,333    |  |  | 3,333   |  |  | 163,334       |  |  | -           |  |  | -              |   |  | 166,667  |  
|                                                           |  |              |  |  |         |  |  |               |  |  |             |  |  |                |   |  |          |  
|Common stock issued for conversion of debt                 |  |              |  |  |         |  |  |               |  |  |             |  |  |                |   |  |          |  
|May 20, 2008 @ $.04                                        |  | 4,166,666    |  |  | 4,167   |  |  | 162,500       |  |  | -           |  |  | -              |   |  | 166,667  |  
|                                                           |  |              |  |  |         |  |  |               |  |  |             |  |  |                |   |  |          |  
|Common stock issued for conversion of
          debt       |  |              |  |  |         |  |  |               |  |  |             |  |  |                |   |  |          |  
|May2 9, 2008 @ $.03                                        |  | 3,888,888    |  |  | 3,889   |  |  | 112,778       |  |  | -           |  |  | -              |   |  | 116,667  |  
|                                                           |  |              |  |  |         |  |  |               |  |  |             |  |  |                |   |  |          |  
|Common stock issued for conversion of debt                 |  |              |  |  |         |  |  |               |  |  |             |  |  |                |   |  |          |  
|June 9, 2008 @ $.03                                        |  | 3,888,888    |  |  | 3,889   |  |  | 112,778       |  |  | -           |  |  | -              |   |  | 116,667  |  
|                                                           |  |              |  |  |         |  |  |               |  |  |             |  |  |                |   |  |          |  
|Common stock issued for conversion of
          debt       |  |              |  |  |         |  |  |               |  |  |             |  |  |                |   |  |          |  
|June 12, 2008 @ $.02                                       |  | 4,166,666    |  |  | 4,167   |  |  | 79,166        |  |  | -           |  |  | -              |   |  | 83,333   |  
|                                                           |  |              |  |  |         |  |  |               |  |  |             |  |  |                |   |  |          |  
|Common stock issued for conversion of debt                 |  |              |  |  |         |  |  |               |  |  |             |  |  |                |   |  |          |  
|June 13, 2008 @ $.007                                      |  | 4,166,666    |  |  | 4,167   |  |  | 25,000        |  |  | -           |  |  | -              |   |  | 29,167   |  
|                                                           |  |              |  |  |         |  |  |               |  |  |             |  |  |                |   |  |          |  
|Common stock issued for conversion of
          debt       |  |              |  |  |         |  |  |               |  |  |             |  |  |                |   |  |          |  
|June 25, 2008 @ $.016                                      |  | 3,888,888    |  |  | 3,889   |  |  | 58,333        |  |  | -           |  |  | -              |   |  | 62,222   |  

The accompanying notes are an integral part of these
      financial statements

32

---

|TAO MINERALS, LTD. and Subsidiary                                               |            
|------------------------------------------------------------------------------- | -----------
|(An Exploration Stage Company)                                                  |            
|Consolidated Statement of Changes in Stockholders
          Equity             |            
|For the period from September23, 2004 (inception) to
          January 31, 2009 | Page 4 of 7

|                                                          |  |              |  |  |         |  |  |               |  |  |             |  |  | Accumulated    |  |  |        | 
|--------------------------------------------------------- |  | ------------ |  |  | ------- |  |  | ------------- |  |  | ----------- |  |  | -------------- |  |  | ------ | 
|                                                          |  |              |  |  |         |  |  | Additional    |  |  | Accumulated |  |  | Deficit During |  |  | Total  | 
|                                                          |  | Common Stock |  |  | Paid in |  |  | Comprehensive |  |  | Exploration |  |  | Stockholders  | 
|                                                          |  | Shares       |  |  | Amount  |  |  | Capital       |  |  | Adjustment  |  |  | Stage          |  |  | Equity | 
|                                                          |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|Common stock issued for conversion of debt
          July |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|2, 2008 @ $.015                                           |  | 4,000,000    |  |  | 4,000   |  |  | 56,000        |  |  | -           |  |  |                |  |  | 60,000 | 
|                                                          |  |              |  |  |         |  |  |               |  |  |             |  |  | -              |  |  |        | 
|Common stock issued for conversion of debt July           |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|8, 2008 @ $.014                                           |  | 4,358,974    |  |  | 4,359   |  |  | 56,667        |  |  | -           |  |  | -              |  |  | 61,026 | 
|                                                          |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|Common stock issued for conversion of debt
          July |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|14, 2008 @ $.012                                          |  | 4,444,444    |  |  | 4,444   |  |  | 48,889        |  |  | -           |  |  | -              |  |  | 53,333 | 
|                                                          |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|Common stock issued for conversion of debt July           |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|16, 2008 @ $.011                                          |  | 4,358,974    |  |  | 4,359   |  |  | 43,590        |  |  | -           |  |  | -              |  |  | 47,949 | 
|                                                          |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|Common stock issued for conversion of debt
          July |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|18, 2008 @ $.011                                          |  | 5,000,000    |  |  | 5,000   |  |  | 50,000        |  |  | -           |  |  | -              |  |  | 55,000 | 
|                                                          |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|Common stock issued for conversion of debt July           |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|24, 2008 @ $.011                                          |  | 4,848,898    |  |  | 4,849   |  |  | 48,488        |  |  | -           |  |  | -              |  |  | 53,337 | 
|                                                          |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|Common stock issued for conversion of debt                |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|August 1, 2008 @ $.01                                     |  | 5,263,158    |  |  | 5,263   |  |  | 47,369        |  |  | -           |  |  | -              |  |  | 52,632 | 
|                                                          |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|Common stock issued for conversion of debt                |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|August 14, 2008 @ $.01                                    |  | 5,555,555    |  |  | 5,556   |  |  | 50,000        |  |  | -           |  |  | -              |  |  | 55,556 | 
|                                                          |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|Common stock issued for conversion of debt                |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|September 3, 2008 @ $.006                                 |  | 6,000,000    |  |  | 6,000   |  |  | 30,000        |  |  | -           |  |  | -              |  |  | 36,000 | 

The accompanying notes are an integral part of these
      financial statements

33

---

|TAO MINERALS, LTD. and Subsidiary                                               |           
|------------------------------------------------------------------------------- | ----------
|(An Exploration Stage Company)                                                  |           
|Consolidated Statement of Changes in Stockholders
          Equity             |           
|For the period from September23, 2004 (inception) to
          January 31, 2009 | Page 5 of7

|                                                     |  |              |  |  |         |  |  |               |  |  |             |  |  | Accumulated    |  |  |        | 
|---------------------------------------------------- |  | ------------ |  |  | ------- |  |  | ------------- |  |  | ----------- |  |  | -------------- |  |  | ------ | 
|                                                     |  |              |  |  |         |  |  | Additional    |  |  | Accumulated |  |  | Deficit During |  |  | Total  | 
|                                                     |  | Common Stock |  |  | Paid in |  |  | Comprehensive |  |  | Exploration |  |  | Stockholders  | 
|                                                     |  | Shares       |  |  | Amount  |  |  | Capital       |  |  | Adjustment  |  |  | Stage          |  |  | Equity | 
|                                                     |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|Common stock issued for conversion of debt           |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|September 30, 2008 @ $.0055                          |  | 6,666,666    |  |  | 6,667   |  |  | 30,000        |  |  | -           |  |  | -              |  |  | 36,667 | 
|                                                     |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|Common stock issued for conversion of debt           |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|September 9, 2008 @ $.007                            |  | 6,000,000    |  |  | 6,000   |  |  | 36,000        |  |  | -           |  |  | -              |  |  | 42,000 | 
|                                                     |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|Common stock issued for conversion of debt           |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|October 2, 2008 @ $.006                              |  | 6,666,666    |  |  | 6,667   |  |  | 33,333        |  |  | -           |  |  | -              |  |  | 40,000 | 
|                                                     |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|Common stock issued for conversion of debt           |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|October 6, 2008 @ $.005                              |  | 7,333,333    |  |  | 7,333   |  |  | 29,334        |  |  | -           |  |  | -              |  |  | 36,667 | 
|                                                     |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|Common stock issued for conversion of
          debt |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|October 7, 2008 @ $.005                              |  | 8,000,000    |  |  | 8,000   |  |  | 32,000        |  |  | -           |  |  | -              |  |  | 40,000 | 
|                                                     |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|Common stock issued for conversion of debt           |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|October 9, 2008 @ $.005                              |  | 8,666,666    |  |  | 8,667   |  |  | 34,656        |  |  | -           |  |  | -              |  |  | 43,323 | 
|                                                     |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|Common stock issued for conversion of debt           |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|October 13, 2008 @ $.0035                            |  | 8,571,429    |  |  | 8,571   |  |  | 21,429        |  |  | -           |  |  | -              |  |  | 30,000 | 
|                                                     |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|Common stock issued for conversion of debt           |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|October 15, 2008 @ $.0035                            |  | 8,571,429    |  |  | 8,571   |  |  | 21,429        |  |  | -           |  |  | -              |  |  | 30,000 | 
|                                                     |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|Common stock issued for conversion of debt           |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|October 16, 2008 @ $.0035                            |  | 9,523,810    |  |  | 9,524   |  |  | 23,809        |  |  | -           |  |  | -              |  |  | 33,333 | 

The accompanying notes are an integral part of these
      financial statements

34

---

|TAO MINERALS, LTD. and Subsidiary                                               |           
|------------------------------------------------------------------------------- | ----------
|(An Exploration Stage Company)                                                  |           
|Consolidated Statement of Changes in Stockholders
          Equity             |           
|For the period from September23, 2004 (inception) to
          January 31, 2009 | Page 6 of7

|                                      |  |              |  |  |         |  |  |               |  |  |             |  |  | Accumulated    |  |  |        | 
|------------------------------------- |  | ------------ |  |  | ------- |  |  | ------------- |  |  | ----------- |  |  | -------------- |  |  | ------ | 
|                                      |  |              |  |  |         |  |  | Additional    |  |  | Accumulated |  |  | Deficit During |  |  | Total  | 
|                                      |  | Common Stock |  |  | Paid in |  |  | Comprehensive |  |  | Exploration |  |  | Stockholders  | 
|                                      |  | Shares       |  |  | Amount  |  |  | Capital       |  |  | Adjustment  |  |  | Stage          |  |  | Equity | 
|Common stock issued for conversion of |  | debt         |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|October 17, 2008 @ $.0035             |  | 9,523,810    |  |  | 9,524   |  |  | 23,809        |  |  | -           |  |  | -              |  |  | 33,333 | 
|                                      |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|Common stock issued for conversion of |  | debt         |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|October 20, 2008 @ $.0035             |  | 10,476,190   |  |  | 10,476  |  |  | 26,191        |  |  | --          |  |  | -              |  |  | 36,667 | 
|                                      |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|Common stock issued for conversion of |  | debt         |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|October 23, 2008 @ $.0035             |  | 10,476,190   |  |  | 10,476  |  |  | 26,191        |  |  | -           |  |  | -              |  |  | 36,667 | 
|                                      |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|Common stock issued for conversion of |  | debt         |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|October 29, 2008 @ $.0025             |  | 12,000,000   |  |  | 12,000  |  |  | 18,000        |  |  | -           |  |  | -              |  |  | 30,000 | 
|                                      |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|Common stock issued for conversion of |  | debt         |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|October 30, 2008 @ $.0025             |  | 12,328,717   |  |  | 12,329  |  |  | 18,254        |  |  | -           |  |  | -              |  |  | 30,583 | 
|                                      |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|Common stock issued for conversion of |  | debt         |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|November 4, 2008 @ $.0025             |  | 13,698,630   |  |  | 13,699  |  |  | 20,548        |  |  | -           |  |  | -              |  |  | 34,247 | 
|                                      |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|Common stock issued for conversion of |  | debt         |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|November 10, 2008 @ $.0024            |  | 13,698,630   |  |  | 13,699  |  |  | 19,178        |  |  | -           |  |  | -              |  |  | 32,877 | 
|                                      |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|Common stock issued for conversion of |  | debt         |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|November 17, 2008 @ $.0024            |  | 13,698,630   |  |  | 13,699  |  |  | 19,178        |  |  | -           |  |  | -              |  |  | 32,877 | 
|                                      |  |              |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|Common stock issued for conversion of |  | debt         |  |  |         |  |  |               |  |  |             |  |  |                |  |  |        | 
|November 25, 2008 @ $.0015            |  | 13,333,333   |  |  | 13,333  |  |  | 6,667         |  |  | -           |  |  | -              |  |  | 20,000 | 

The accompanying notes are an integral part of these
      financial statements

35

---

|TAO MINERALS, LTD. and Subsidiary                                               |            
|------------------------------------------------------------------------------- | -----------
|(An Exploration Stage Company)                                                  |            
|Consolidated Statement of Changes in Stockholders
          Equity             |            
|For the period from September23, 2004 (inception) to
          January 31, 2009 | Page 7 of 7

|                                           |  |              |  |   |          |  |   |               |  |   |             |   |   | Accumulated    |   |   |            |  
|------------------------------------------ |  | ------------ |  | - | -------- |  | - | ------------- |  | - | ----------- | - | - | -------------- | - | - | ---------- | -
|                                           |  |              |  |   |          |  |   | Additional    |  |   | Accumulated |   |   | Deficit During |   |   | Total      |  
|                                           |  | Common Stock |  |   | Paid in  |  |   | Comprehensive |  |   | Exploration |   |   | Stockholders  |  
|                                           |  | Shares       |  |   | Amount   |  |   | Capital       |  |   | Adjustment  |   |   | Stage          |   |   | Equity     |  
|Common stock issued for conversion of debt |  |              |  |   |          |  |   |               |  |   |             |   |   |                |   |   |            |  
|December 10, 2008 @ $.0014                 |  | 13,333,333   |  |   | 13,333   |  |   | 5,334         |  |   | -           |   |   | -              |   |   | 18,667     |  
|                                           |  |              |  |   |          |  |   |               |  |   |             |   |   |                |   |   |            |  
|                                           |  | -            |  |   | -        |  |   | -             |  |   | -           |   |   | (115,750       | ) |   | (115.750   | )
|Acquisition of Subsidiary                  |  |              |  |   |          |  |   |               |  |   |             |   |   |                |   |   |            |  
|                                           |  |              |  |   |          |  |   |               |  |   |             |   |   |                |   |   |            |  
|Loss for the period                        |  | -            |  |   | -        |  |   | -             |  |   | -           |   |   | (2,253,352     | ) |   | (2,253,352 | )
|                                           |  |              |  |   |          |  |   |               |  |   |             |   |   |                |   |   |            |  
|Foreign currency adjustment                |  | -            |  |   | -        |  |   | -             |  |   | (32,822     | ) |   | -              |   |   | (32,822    | )
|                                           |  |              |  |   |          |  |   |               |  |   |             |   |   |                |   |   |            |  
|                                           |  |              |  |   |          |  |   |               |  |   |             |   |   |                |   |   |            |  
|Balance, January 31, 2009                  |  | 324,954,369  |  | $ | $324,955 |  | $ | 6,791,473     |  | $ | (32,822     | ) | $ | (8,060,831     | ) | $ | (977,225   | )

The accompanying notes are an integral part of these
financial statements

36

---

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

|                                                 |   | From Inception Date        |   |   |              |   |   |              |  
|------------------------------------------------ | - | -------------------------- | - | - | ------------ | - | - | ------------ | -
|                                                 |   | of September 23,           |   |   | For the Year |   |   | For the Year |  
|                                                 |   | 2004 to Period
      Ended |   |   | Ended        |   |   | Ended        |  
|                                                 |   | January 31,
      2009     |   |   | January 31,  |   |   | January 31,  |  
|                                                 |   | (unaudited)                |   |   | 2009         |   |   | 2008         |  
|Cash Provided by (Used for)
      Operating      |   |                            |   |   |              |   |   |              |  
|Activities                                       |   |                            |   |   |              |   |   |              |  
|Net (loss) for the period                        | $ | (7,890,905                 | ) | $ | (2,253,352   | ) | $ | (833,424     | )
|Stock issued for services                        |   | 682,386                    |   |   | 79,750       |   |   | 602,636      |  
|Loss on settlement of debt                       |   | 1,354,151                  |   |   | 1,354,151    |   |   | -            |  
|Impairment charges                               |   | 4,700,000                  |   |   | 350,000      |   |   | -            |  
|Minority interest in loss                        |   | (11,581                    | ) |   | (11,581      | ) |   | -            |  
|Changes in non-cash working capital items        |   |                            |   |   |              |   |   |              |  
|Prepaids                                         |   | (46,611                    | ) |   | (37,111      | ) |   | 8,000        |  
|Discount on Note payable                         |   | (118,117                   | ) |   | (118,117     | ) |   | -            |  
|Accounts payable and accrued                     |   | 388,128                    |   |   | 117,458      |   |   | 177,907      |  
|Derivative
      liability                       |   | 177,374                    |   |   | 177,374      |   |   | -            |  
|Cash used by operations                          |   | (765,175                   | ) |   | (341,428     | ) |   | (44,881      | )
|Investing Activities                             |   |                            |   |   |              |   |   |              |  
|Acquisition of subsidiary                        |   | (114,189                   | ) |   | (114,185     | ) |   | -            |  
|Purchase of fixed assets                         |   | (16,820                    | ) |   | (16,820      | ) |   | -            |  
|Purchase of mineral rights                       |   | (363,440                   | ) |   | (113,420     | ) |   | 3,000        |  
|Cash used by investing activities                |   | (494,445                   | ) |   | (244,425     | ) |   | 3,000        |  
|Financing Activities                             |   |                            |   |   |              |   |   |              |  
|Stock issuance liability                         |   | 1,245,000                  |   |   | 625,000      |   |   | -            |  
|Issuance of common stock                         |   | 55,310                     |   |   |              |   |   | -            |  
|Cash provided by
      financing activities      |   | 1,300,310                  |   |   | 625,000      |   |   | -            |  
|                                                 |   |                            |   |   |              |   |   |              |  
|Efect of exchange rate on cash                   |   | (32,822                    | ) |   | (32,822      | ) |   |              |  
|Cash Increase (Decrease) During the
      Period |   | 7,868                      |   |   | 6,305        |   |   | (41,881      | )
|Cash, Beginning
      of Period                  |   | -                          |   |   | 1,563        |   |   | 43,444       |  
|Cash and Equivalent, End of Period               |   | 7,868                      |   |   | 7,868        |   |   | 1,563        |  

SUPPLEMENTAL ASH FLOWS INFORMATION

During the fiscal year ended January 31, 2007 the Company
acquired a mineral lease in Colombia as follows:

Issuance of stock (2,500,000 shares of
      common)
    $
    4,350,000Assumption of liabilities
    
    100,000Cash Payments
    
    250,000Total
    $
    4,700,000


The Company did not pay cash for either interest or taxes
for the fiscal years ended January 31, 2009 and 2008.

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

37

---

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

|1. | Organization and Summary of Significant Accounting
      Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | This summary of accounting policies for Tao Minerals Ltd.
      is presented to assist in understanding the Company's financial
      statements. The accounting policies conform to generally accepted
      accounting principles and have been consistently applied in the
      preparation of the financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | 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
      flow from operations of $765,175 for the period from September 23, 2004 to
      January 31, 2009 and negative working capital of $1,110,598 at January 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 is seeking to obtain additional financing
      or private placement to fund thw Companys operations.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|2. | Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Accounting Estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The preparation of financial statements in conformity
      with generally accepted accounting principles requires management to make
      estimates and assumptions that affect the reported amount of assets and
      liabilities and disclosure of contingent assets and liabilities at the
      date of the financial statements and the reported amount of revenues and
      expenses during the period. Actual results may differ from those
      estimates.                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Basis of Presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | These consolidated financial statements include the
      accounts of TAO Minerals, LTD (Parent or TAO) and its majority owned
      subsidiary, Minera TAO, SA (Minera),. Collectively, the consolidated
      entities are referred to herein as the (Company). All significant
      inter-company transactions have been eliminated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | 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 three months or less when
      purchased.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Concentration of Credit Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The Company has no significant off-balance-sheet
      concentrations of credit risk such as foreign exchange contracts, options
      contracts or other foreign hedging arrangements. The Company maintains the
      majority of its cash balances with one financial institution, in the form
      of demand deposits.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

38

---

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

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 January 31, 2009, the
Company had capitalized $113,420 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

The 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 the 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 the 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.

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 the 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
January 31, 2009 and 2008, there were no dilutive securities outstanding. The
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

The 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

The Company operates in one segment and
therefore segment information is not presented.

39

---

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

|   | 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 the 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The 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 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                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Recent Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | 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 the
      Company and have no effect on the financial statements.                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|3. | Acquisition of Mineral Rights                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Golondrina Property                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | On October 22, 2004, the Company acquired the mining
      rights to two claims collectively known as the Whale Mine property for a
      purchase price of $3,000. The Company received rights to all minerals
      contained in the Whale Mine property. During the year ended January 31,
      2008 the Company abandoned the property and wrote off the capitalized
      amount of $3,000.                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | On February 28, 2006, we entered into an Assignment
      Agreement (the Definitive Agreement), with Primecap Resources Inc., of
      Las Vegas, Nevada, (Primecap), concerning the acquisition of Primecaps
      option (the Option), to acquire a 100% interest in the Risaldo La
      Golondrina D14-082 mineral property located in Narino, Colombia (the
      Property). Primecap had been granted the Option by Nueva California
      S.A., of Medellin, Colombia, pursuant to the terms and conditions of a
      Heads of Agreement dated August 23, 2004 (the HOA).                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The Definitive Agreement provides for the assignment of
      the Option for the following consideration:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Payment of US$150,000, payable on or before March 15,
      2006 and upon execution of the Definitive Agreement; (extended to April
      15, 2006 and paid on April 13, 2006) and the issuance of 2,500,000 common
      shares in the capital stock of the company, subject to applicable trading
      restrictions, to Nueva California which will be issued either
      contemporaneous with the payment of US$150,000 or within 14 days of the
      execution of a Definitive Agreement, whichever is the earlier. On April
      10, 2006 we issued the 2,500,000 common shares In addition, we will assume
      Primecaps financial obligations under the HOA. The obligations under the
      HOA are:

40

---

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

| | 1.  | US$30,000.00 upon execution of the HOA, which amount has
      been paid;                      
| | --- | -----------------------------------------------------------------------------------------------
| |     |                                                                                                
| | 2.  | US$20,000.00 on or before August 23, 2005, which amount
      has been paid;                   
| |     |                                                                                                
| | 3.  | US$32,000.00 on or before August 23, 2006;                                                     
| |     |                                                                                                
| | 4.  | US$40,000.00 on or before August 23, 2007;                                                     
| |     |                                                                                                
| | 5.  | US$48,000.00 on or before August 23, 2008; and                                                 
| |     |                                                                                                
| | 6.  | US$160,000.00 on or before August 23, 2009.                                                    
| |     |                                                                                                
| | 7.  | 200,000 shares of the Assignor, as of August 23, 2004,
      which issuance has been completed;
| |     |                                                                                                
| | 8.  | 200,000 shares of the Assignor, as of August 23, 2005,
      which issuance has been completed;
| |     |                                                                                                
| | 9.  | 300,000 shares of the Assignor, as of August 23,
    2006;                                     
| |     |                                                                                                
| | 10. | 300,000 shares of the Assignor, as of August 23,
    2007                                      

On, June 30, 2006 we entered into an
amending agreement (the Agreement) which Agreement amended certain terms of an
assignment agreement (the Assignment Agreement) dated February 28, 2006,
between our Company and Primecap Resources Inc. of Nevada, as amended by an
amending agreement dated March 15, 2006.

The Agreement amends the total
consideration that our Company is to pay Primecap Resources Inc. (Primecap) as
to $100,000 on or before July 1, 2006 and $100,000 on or before July 1, 2007.
This Agreement satisfys our obligation in assuming the above noted financial
obligations under the HOA. The first $100,000 payment has been made.

On May 9, 2008 we entered into a second
amending agreement which clarifies the first amending agreement as follows:
Items 1 through 6 of the HOA agreement are deleted. The total amounts payable to
Primecap remains as amended in the first amendment. The second $100,000 payment
is now due on or before August 1, 2008. As of January 31, 2009 the Company has
not issued the 300,000 shares of common stock due August 23, 2006 and the
300,000 shares of common stock due August 23, 2007. The Company has accrued
$51,000 as a liability for the issuance of 300,000 shares of common stock on
August 23, 2006 at $.17 the closing price of the stock as of such date and
$41,100 for the issuance liability of 300,000 shares of common stock at August
23, 2007 at $$.137 the closing price of the stock at such date. The Company has
no further obligations under the HOA agreement other than those stated here.

El Colmillo Property

On September 13, 2006 Minera entered
into an option agreement with Agronomicas de Colombia (ADC) to acquire a
mineral rights concession from Colombia for a gold mine called El Colmillo int
the municipality of Antioquia, Colombia. On April 2008 Minera obtained a six
month extension and on July 15, 2008 a modification of the original terms was
obtained. The terms of the contract are now as follows:

| | 1) | Payment of $80,000,000 Colombian pesos (COP)
      (approximately $50,000 US)                                                                                                    
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                    
| | 2) | Payment of $40,000,000 COP (approximately $25,000 US)on
      the 15thof every month until the initial and monthly payments
      reach $320,000,000COP (approximately $200,000 US)
| |    |                                                                                                                                                                                    
| | 3) | A royalty of 40% of net production until $1,100,000,000
      COP (approximately $687,500 US) has been paid.                                                                       

When 80% of item 3 has been reached ADC
will pass legal title of the concession to Minera and will receive a 20% net
royalty as long as the concession is maintained.

| | 4) | Minera has paid $240,000,000 COP (approximately $150,000
      US) through December 2008 of the $320,000,000 COP (approximately $200,000
      US). During the month of December 2008 Minera
personnel
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

41

---

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

|   | were met at the site by Colombian
      rebels that demanded a war tax. The Company immediately stopped its
      development efforts and reported the activity to the authorities. A force
      majure clause in the contract allows Minera to cease operations until the
      cause that activates this clause is resolved.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4. | Related Party                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Effective September 1, 2009 we entered into new 3 year
      management agreements with two directors and officers of the company for
      $10,000 per month and $9,000 per month to provide financial services one
      year. Each contract calls for annual renewals at the same rate if not
      modified. The contract call for each officer to receive options to acquire
      33,000,000 million shares of common stock exerciseable evenly over three
      years. The contract also calls for the issuance of 500,000 and 300,000
      shares of preferred stock to the two officers. As of January 31, 2009 the
      preferred stock nor the options have been issued.                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | The Golondrina property was acquired from a Company
      controlled by James Sikora our current president. At the time of the
      acquisition Mr. Sikora was not related to the Company. The Company owes
      the related party $100,000 which is due on demand and non interest
      bearing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | On July 15, 2008, the Company entered into a six month
      management agreement for services in Colombia with an entity controlled by
      an officer of the Company for a monthly fee of $5,000. The contract will
      automatically renew for another six months at a monthly rate of
    $7,500.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | As of January 31, 2009 the Company has payables to
      related parties and their affiliates of $350,306.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|5. | Notes Payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | 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. The Company is obligated to file a registration
      statement within 45 days of the closing. Upon the registration statement
      becoming effective, the 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 the Company and the purchaser agreed to terminate the
      agreement and let the $125,000 note stand on its own.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | In June 2008 the company entered into a short term note
      payable due in July 31, 2008 at an interest rate of 8%. The Company was
      not able to repay the note on July 31, 2008 and it converted to a demand
      note. As of January 31, 2009 the holder of the note has not made demands
      for payment. The Company is currently negotiating with the principal to
      extend the maturity of the note. The following table details the Companys
      obligations.                                                                                                                                                                                                                                                                                                                                                       

Note payable, demand, bearing interest at8%
    $
    500,000Total Short Term Loan
    $
    500,000Note payable, due April 23, 2010, interestat 10%
    $
    125,000Discount on note payable
    
    (118,117
    )Total Long term Loan
    $
    6,883


|6. | Common Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | On March 13, 2006, the board of directors of our company
      approved an eight (8) for one (1) forward stock split (the "Forward Stock
      Split") of our authorized, issued and outstanding common stock. The
      Forward Stock Split was effective with the Secretary of State of Nevada on
      March 24, 2006. The record date was set at March 23, 2006. As a result,
      our authorized capital increased from 69,916000 shares of common 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

42

---

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

|   | increased from 7,739,500 shares of common stock to
      61,916,000 shares of common stock. The financial statements and notes have
      been changed to reflect the retroactive effect of the 8 to 1 forward stock
      split which has been accounted for as a stock dividend.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | On April 10, 2006 the Company entered into a private
      placement subscription agreement to sell 1,000,000 shares of stock with a
      non detachable warrant to acquire 1 share of common stock for a $1.25. As
      of January 31, 2008, the Company has received $620,000 for which common
      stock has not been issued to the subscriber. During fiscal 2009 the note
      was sold by the investor and a new investor acquired the note with a
      modification to convert such note at a 70% discount. The note was retired
      prior to January 31, 2009 by the issuance of 266,307,410 shares of common
      stock at various prices.On April 21, 2006 a director of the Company
      contributed 2,200,000 pre-split shares of the Companys common stock.
      These shares amounted to 17,600,000 post split shares of which the
      director distributed 5,000,000 shares to 4 directors and the remaining
      12,600,000 shares were cancelled. The conversions resulted in a $1,354,151
      loss on the settlement of the $620,000 liability.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | On April 10, 2006 we issued the 2,500,000 common shares
      for the acquisition of an option to acquire mining rights in Colombia. The
      shares were recorded at $4,350,000. (see correction of an error footnote
      8)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | 2007 Employee and Consultant Stock Plan S-8
      Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | On September 24, 2007, the Company registered 6,000,000
      shares of common stock pursuant to its consultant and employee plan. The
      Company issued 4,000,000 shares under this plan to consultants, directors,
      and attorneys.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | During fiscal 2007 the Company registered the 2008
      Employee and consultant stock Plan registering 6,000,000 shares to be used
      for employees and consultants. Pursuant to such plan the Company issued
      1,190,909 shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|7. | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | As of January 31, 2009, the Company had a net operating
      loss carryforward for income tax reporting purposes of approximately
      $2,683,000 that may be offset against future taxable income through 2028.
      Current tax laws limit the amount of loss available to be offset against
      future taxable income when a substantial change in ownership occurs.
      Therefore, the amount available to offset future taxable income may be
      limited. No tax benefit has been reported in the financial statements,
      because the Company believes there is a 50% or greater chance the
      carryforwards will expire unused. Accordingly, the potential tax benefits
      of the loss carryforwards are offset by a valuation allowance of the same
      amount                                                                                                                                                                                                                                                                                      

2009
    
    
    2008Deferred tax assets:Net operating loss carryforwards
    $
    7,891,000
    
    $
    5,692,000Gross deferred tax assets
    
    2,683,000
    
    
    1,935,000Less: valuation allowance
    
    (2,683,000
    )
    
    (1,935,000
    )Net deferred tax asset
    $
    --
    
    $
    --


A reconciliation of the differences
between the effective income tax rate and the statutory federal tax rate
follows:

2009
    
    
    2008Tax expense (benefit)
    
    34.00%
    
    
    34.00%at U.S. statutory rateState taxes, net of
    
    --
    
    
    --federal benefitChange in valuation
    
    (34.00
    )
    
    (34.00
    )allowance0.00 %
    
    
    0.00 %


43

---

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

|8. | Error Correction and Impairment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Error Correction                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | On April 10, 2006 we issued the 2,500,000 common shares
      for the acquisition of an option to acquire mining rights in Colombia The
      Company initially had valued these shares at $0 pursuant to its belief
      that it acquired the property from a party who became a related party
      after the transaction and SFAS 57 related party transactions applied. Upon
      further consideration the company is of the opinion that such shares
      should have been valued at $1.74 (market price at time of issuance) with
      the total stock value at $4,350,000. The effect of this is an accounting
      error under Statement of Financial Accounting Standards (SFAS) 154
      correction of an error. The financial statements have restated to show the
      effects of this change. The following table indicates the changes to line
      items in the previous issued financial statements at January 31,
    2007.

Description
    As previously Issued
    Correction of Error
    As RestatedMineral Rights
    $
      350,000
    $                -
    $                -Change in value of stock Issued to purchaser
    
    4,350,000Impairment charge
    
    (4,350,000)
    350,000Additional Paid in
      Capital
    58,095Stock issued for
      mineral rights
    
    4,350,000
    4,408,095Accumulated Deficit During Development Stage
    (508,305)Impairment Charge
    
    (4,350,000)
    (4,858,305)


|   | Impairment Charges                                                                                                                                                                                                                                                 
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                    
|   | During the year ended January 31, 2009 the Company wrote
      off the $350,000 capitalized cost of the Golondrina property. The Company
      has not been fiscally able to obtain an appraisal or other means of
      valuing the market value of such property.
|   |                                                                                                                                                                                                                                                                    
|9. | Subsequent Event                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                    
|   | Subsequent to January 31, 2009, the Company received
      advances of $50,000 on a promissory note which was to have been funded by
      December 31, 2008. Currently the Company is in talks with the principal
      regarding new terms.                      
|   |                                                                                                                                                                                                                                                                    
|   | Subsequent to January 31, 2009 the Company converted
      $36,000 of the $500,000 note payable for 67,435,896 of common
  stock.                                                                                                                                  

44

---

Item 9. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure

On February 20, 2008, our company was informed by our
independent accounting firm (Infante & Company. PA) that they would not be
performing the audit of our financial statements for the year ended January 31,
2008.

Infante & Company. PAs report on the financial statements
for the year ended January 31, 2007 did not contain an adverse opinion or
disclaimer of opinion. Such report was not qualified or modified as to
uncertainty, audit scope, or accounting principles except that the reports
stated that they were prepared assuming that our company will continue as a
going concern, as to which our companys recurring operating losses raised
substantial doubt.

During the fiscal year ended January 31, 2007, there were no
disagreements between our company and Infante & Company, PA, on any matter
of accounting principles or practices, financial statement disclosure or
auditing scope of procedure, which disagreements, if not resolved to the
satisfaction of Infante & Company, PA , would have caused it to make
reference to the subject matter of the disagreements in connection with its
report on our financial statements for the year then ended.

Subsequent to the February 20, 2008 resignation of Infante
& Company, PA, the previous independent registered public accounting firm
our company, on April 12, 2008, our board of directors approved the engagement
of Larry Wolfe, Certified Public Accountant as our independent registered public
accounting firm for our companys fiscal year ended January 31, 2008 and January
31, 2009.

We have not changed our auditors since our last year end and we
have not had any disagreements with our auditors.

Item 9A (T). 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. In
designing and evaluating our disclosure controls and procedures, our management
recognizes that any controls and procedures, no matter how well designed and
operated, can provide only reasonable assurance of achieving the desired control
objectives, and our management is required to apply its judgment in evaluating
the cost-benefit relationship of possible controls and procedures. Because of
its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Therefore, even those systems determined to be
effective can provide only reasonable assurance with respect to financial
statement preparation and presentation. Projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.

As of January 31, 2009, the end of our fiscal year 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) concluded that our disclosure controls and
procedures were effective as of the end of the period covered by this annual
report.

Managements Report on Internal Control over Financial
Reporting

Our management is responsible for establishing and maintaining
adequate internal control over financial reporting. Responsibility, estimates
and judgments by management are required to assess the expected benefits and
related

45

---

costs of control procedures. The objectives of internal control
include providing management with reasonable, but not absolute, assurance that
assets are safeguarded against loss from unauthorized use or disposition, and
that transactions are executed in accordance with managements authorization and
recorded properly to permit the preparation of consolidated financial statements
in conformity with accounting principles generally accepted in the United
States. Our management assessed the effectiveness of our internal control over
financial reporting as of January 31, 2009. In making this assessment, our
management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in Internal
Control-Integrated Framework. Our management has concluded that, as of
January 31, 2009, our internal control over financial reporting is. Our
management reviewed the results of their assessment with our Board of
Directors.

This annual report does not include an attestation report of
our companys registered public accounting firm regarding internal control over
financial reporting. Managements report was not subject to attestation by our
companys registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit our company to provide only
managements report in this annual report.

Inherent limitations on effectiveness of
controls

Internal control over financial reporting has inherent
limitations which include but is not limited to the use of independent
professionals for advice and guidance, interpretation of existing and/or
changing rules and principles, segregation of management duties, scale of
organization, and personnel factors. Internal control over financial reporting
is a process which involves human diligence and compliance and is subject to
lapses in judgment and breakdowns resulting from human failures. Internal
control over financial reporting also can be circumvented by collusion or
improper management override. Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements on a
timely basis, however these inherent limitations are known features of the
financial reporting process and it is possible to design into the process
safeguards to reduce, though not eliminate, this risk. Therefore, even those
systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation. Projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.

Changes in Internal Control over Financial
Reporting

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

Item 9B. Other Information

Subsequent to January 31, 2009, we received advances of $50,000
on a promissory note which was to have been funded by December 31, 2008.
Currently we are in talks with the principal regarding new terms.

Subsequent to January 31, 2009, we converted $36,000 of the
$500,000 note payable for 67,435,896 of common stock.

PART III

Item 10. Directors, Executive Officers and Corporate
Governance

All directors of our company hold office until the next annual
meeting of the security holders or until their successors have been elected and
qualified. The officers of our company are appointed by our board of directors
and hold office until their death, resignation or removal from office. Our
directors and executive officers, their ages, positions held, and duration as
such, are as follows:

46

---

Name
    Position Held with the Company
    Age
    Date First Elected or
      AppointedJames Sikora
    President & Director
    50
    February 1, 2006Julio De Leon
    Chief Financial Officer and
      Director
    57
    September 1, 2006Duncan Bain
    Director
    54
    March 5, 2006Walter (Terry) Plummer
    Director
    69
    March 14, 2006


Business Experience

The following is a brief account of the education and business
experience during at least the past five years of each director, executive
officer and key employee of our company, indicating the persons principal
occupation during that period, and the name and principal business of the
organization in which such occupation and employment were carried out.

James Sikora, President and Director

Mr. Sikora was appointed a director on February 1, 2006 and was
appointed our president on March 5, 2006.

Over a four-year career, Mr. Sikora supervised drill floor
operations on locations throughout Canada and the United States in the high
Arctic and offshore Newfoundland and Nova Scotia. Mr. Sikora completed offshore
safety, offshore survival and oilfield firefighting courses. Mr. Sikora became
Hydril Canadian tubular sales and service manager from 1985 to 1987 and
completed an extensive in-house sales and management training program at Hydril
Technology Center Houston.

In 1987, upon completion of the Canadian securities course Mr.
Sikora joined the equities brokerage business with McNeil Mantha. Mr. Sikora
joined Nesbitt Thompsons Edmonton office shortly thereafter, and over the
following three years Mr. Sikora became a licensed commodities broker and
options broker in addition to providing equities trading for his client
base.

In 1990, Mr. Sikora left the brokerage industry to pursue a
career in public company finance and consulting. Over 15 years, Mr. Sikora has
worked with numerous public companies, providing financing from US, Canadian and
European sources in addition to guiding management decision-making on mining
projects all over the world.

In 2004 Mr. Sikora became president of Primecap Resources Inc.
a private company seeking exploration projects in Colombia.

Julio De Leon, Chief Financial Officer and
Director

Mr. De Leon was appointed as a director and chief financial
officer on September 1, 2006.

Mr. De Leon is a Certified Public Accountant, Certified
Management Accountant and Certified in Financial Management. Mr. De Leon is the
owner of De Leon & Company, P.A., a Certified Public Accounting firm, which
he founded in June 2002. Mr. De Leon was Senior Manager of Weinberg &
Company, PA, a Certified Public Accounting firm, from June 2001 until June 2002,
when he formed De Leon & Company, P.A. In addition to being a partner in his
accounting firm, Mr. De Leon served as a consultant to Hard to Treat Diseases.
Mr. De Leon received a bachelors degree in business administration from Bernard
Baruch College in New York and his Master in Business Administration from the
University of Miami. He is a member of the American Institute of Certified
Public Accountants, the Florida Institute of Certified Public Accountants, the
Institute of Management Accountants and the Association of Fraud Examiners.

47

---

Duncan Bain, Director

Mr. Bain was appointed a director on March 5, 2006.

Mr. Bain holds a P.Geo designation, is a fellow of the
Geological Association of Canada and is a member of the Prospectors and
Developers Association of Canada.

Walter (Terry) Plummer, Director

Mr. Plummer was appointed a director on March 14, 2006.

Mr. Plummer is the president of RMS-Ross Corporation, a company
engaged in machinery manufacturing and repairs, specializing in gold recovery
equipment. Mr. Plummer founded RMS-Ross Corporation in 1982. From February 1998
to June 2001, Mr. Plummer was a director and the president of Consolidated
Silver Tusk Mines Ltd., a junior mining exploration company listed on the TSX
Venture Exchange. Mr. Plummer is a member of the Canadian Institute of Mining
and a member of the Canadian Mineral Processing Association. Mr. Plummer also
sits on the board of General Gold Corporation, an exploration stage company in
the business of acquisition and exploration of mineral properties.

Family Relationships

There are no family relationships between any of our directors,
executive officers and proposed directors or executive officers.

Involvement in Certain Legal Proceedings

None of our directors, executive officers, promoters or control
persons has been involved in any of the following events during the past five
years:

|1. | any bankruptcy petition filed by or against any business
      of which such person was a general partner or executive officer either at
      the time of the bankruptcy or within two years prior to that
  time;                                                                                                           
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                               
|2. | any conviction in a criminal proceeding or being subject
      to a pending criminal proceeding, excluding traffic violations and other
      minor offences;                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                               
|3. | being subject to any order, judgment or decree, not
      subsequently reversed, suspended or vacated, of any court of competent
      jurisdiction, permanently or temporarily enjoining, barring, suspending or
      otherwise limiting his involvement in any type of business, securities or
      banking activities; or
|   |                                                                                                                                                                                                                                                                                                                               
|4. | being found by a court of competent jurisdiction in a
      civil action, the Securities and Exchange Commission or the Commodity
      Futures Trading Commission to have violated a federal or state securities
      or commodities law, and the judgment has not been reversed, suspended, or
      vacated.              

Compliance with Section 16(a) of the Securities Exchange Act
of 1934

Section 16(a) of the Securities Exchange Act of 1934 requires
our executive officers and directors and persons who own more than 10% of our
common stock to file with the Securities and Exchange Commission initial
statements of beneficial ownership, reports of changes in ownership and annual
reports concerning their ownership of our common stock and other equity
securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and
greater than 10% shareholders are required by the SEC regulations to furnish us
with copies of all Section 16(a) reports that they file.

Based solely on the reports received by the Company and on
written representations from certain reporting persons, we believe that the
directors, executive officers and persons who beneficially own more than 10% of
the Companys

48

---

common stock during the fiscal year ended January 31, 2009 have
been in compliance with Section 16(a), with the exception of the following:

Name
    Number of Late Reports
    Number of Transactions Not
      Reported on a Timely Basis
    Failure to File Required
      FormsJames Sikora
    1(1)
    1(1)
    1(1)Julio De Leon
    Nil
    Nil
    NilDuncan Bain
    Nil
    Nil
    NilWalter (Terry) Plummer
    1(1)
    1(1)
    1(1)


| | (1) | The executive officer, director or holder of 10% or more
      of our common stock filed a late Form 3  Initial Statement of Beneficial
      Ownership of Securities.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

Code of Ethics

We adopted a Code of Ethics applicable to all of our directors,
officers, employees and consultants, which is a "code of ethics" as defined by
applicable rules of the SEC. Our Code of Ethics is attached as an exhibit this
annual report on Form 10-K. If we make any amendments to our Code of Ethics
other than technical, administrative, or other non-substantive amendments, or
grant any waivers, including implicit waivers, from a provision of our Code of
Ethics to our chief executive officer, chief financial officer, or certain other
finance executives, we will disclose the nature of the amendment or waiver, its
effective date and to whom it applies in a Current Report on Form 8-K filed with
the SEC.

Audit Committee and Audit Committee Financial Expert

Our board of directors has determined that Julio De Leon
qualifies as an "audit committee financial expert" as defined in Item
407(d)(5)(ii) of Regulation S-K, and is "independent" as the term is used in
Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange Act of 1934, as
amended.

We believe that the members of our board of directors are
collectively capable of analyzing and evaluating our financial statements and
understanding internal controls and procedures for financial reporting. We
believe that retaining an independent director who would qualify as an "audit
committee financial expert" would be overly costly and burdensome and is not
warranted in our circumstances given the early stages of our development and the
fact that we have not generated any material revenues to date. In addition, we
currently do not have nominating, compensation or audit committees or committees
performing similar functions nor do we have a written nominating, compensation
or audit committee charter. Our board of directors does not believe that it is
necessary to have such committees because it believes the functions of such
committees can be adequately performed by our board of directors.

Item 11. Executive Compensation

The particulars of the compensation paid to the following
persons:

| | (a) | our principal executive officer;                                                                                                                                                                                                    
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                     
| | (b) | each of our two most highly compensated executive
      officers who were serving as executive officers at the end of the years
      ended January 31, 2009 and 2008; and                                                          
| |     |                                                                                                                                                                                                                                     
| | (c) | up to two additional individuals for whom disclosure
      would have been provided under (b) but for the fact that the individual was not serving as our executive
officer at the end of the years ended January 31, 2009 and 2008,

49

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who we will collectively refer to as the named executive
officers of our company, are set out in the following summary compensation
table, except that no disclosure is provided for any named executive officer,
other than our principal executive officers, whose total compensation did not
exceed $100,000 for the respective fiscal year:

SUMMARY COMPENSATION
      TABLEName
      and Principal Position
    Year
    Salary ($)
    Bonus ($)
    Stock Awards
      ($)
    Option Awards
      ($)
    Non-
      Equity Incentive Plan Compensa-tion ($)
    Change in
      Pension Value and Nonqualified
      Deferred **Compensation**Earnings
      ($)
    All
      Other **Compensa-** tion
      ($)
    Total ($)James Sikora(1)President
    2009 2008
    116,000 80,000
    Nil N/A
    Nil N/A
    Nil N/A
    Nil N/A
    Nil N/A
    Nil N/A
    116,000 80,000Julio De Leon Chief Financial
      Officer
    2009 2008
    101,000 72,000
    Nil N/A
    Nil N/A
    Nil N/A
    Nil N/A
    Nil N/A
    Nil N/A
    101,000 72,000


|(1) | Mr. Sikora was appointed president on March 5,
    2006.                     
|--- | -----------------------------------------------------------------------------
|    |                                                                              
|(2) | Mr. De Leon was appointed Chief Financial Officer on
      September 1, 2006.

Other than as set out below, there are no arrangements or plans
in which we provide pension, retirement or similar benefits for directors or
executive officers. Our directors and executive officers may receive share
options at the discretion of our board of directors in the future. We do not
have any material bonus or profit sharing plans pursuant to which cash or
non-cash compensation is or may be paid to our directors or executive officers,
except that share options may be granted at the discretion of our board of
directors.

On September 1, 2008, we entered into an executive employment
agreement with James Sikora, our president and chief executive officer. Pursuant
to the terms of the agreement, we agree to pay to Mr. Sikora an annual salary of
$120,000 and issue to Mr. Sikora 500,000 shares of preferred A stock. In
addition, Mr. Sikora is eligible to earn a cash bonus of up to $150,000 for each
twelve month period during the employment term. The agreement shall be for a
period of thirty-six (36) months.

On September 1, 2008, we entered into a contractor engagement
agreement with Julio De Leon. Pursuant to the terms of the agreement, we agree
to pay to Mr. De Leon an annual salary of $108,000 and issue to Mr. De Leon
300,000 shares of preferred A stock. In addition, Mr. De Leon is eligible to
earn a cash bonus of up to $120,000 for each twelve month period during the
employment term. The agreement shall be for a period of thirty-six (36) months.

Stock Option Grants to our Named Executive Officers

As at January 31, 2009, our company did not have a stock option
plan and our company did not grant any stock options to any named executive
officers during the years ended January 31, 2009 or 2008.

50

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Outstanding Equity Awards at Fiscal Year End

There were no outstanding equity awards granted to any named
executive officer as of January 31, 2009 or 2008.

Aggregated Option Exercises in Last Fiscal Year and Fiscal
Year-End Values

There were no options outstanding, and hence no options
exercised, by any named executive officers during the years ended January 31,
2009 or 2008.

Compensation of Directors

We do not have any agreements for compensating our directors
for their services in their capacity as directors, although such directors are
expected in the future to receive stock options to purchase shares of our common
stock as awarded by our board of directors.

Pension, Retirement or Similar Benefit Plans

There are no arrangements or plans in which we provide pension,
retirement or similar benefits for directors or executive officers. We have no
material bonus or profit sharing plans pursuant to which cash or non-cash
compensation is or may be paid to our directors or executive officers, except
that stock options may be granted at the discretion of the board of directors or
a committee thereof.

Indebtedness of Directors, Senior Officers, Executive
Officers and Other Management

None of our directors or executive officers or any associate or
affiliate of our company during the last two fiscal years, is or has been
indebted to our company by way of guarantee, support agreement, letter of credit
or other similar agreement or understanding currently outstanding.

Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters

The following table sets forth, as of May 11, 2009, certain
information with respect to the beneficial ownership of our common shares by
each shareholder known by us to be the beneficial owner of more than 5% of our
common shares, as well as by each of our current directors and executive
officers as a group. Each person has sole voting and investment power with
respect to the shares of common stock, except as otherwise indicated. Beneficial
ownership consists of a direct interest in the shares of common stock, except as
otherwise indicated.

Name and Address of Beneficial Owner
    Amount and Nature of
      Beneficial Ownership
    Percentage of
      Class(1)James Sikora Officina 618, Empresarial mall Ventura
      Cra. 32 #1B Sur 51 Medellin, Colombia
    3,500,000
    .0089%Duncan Bain 49 Midale Crescent
      London, ON, Canada M5X 3C2
    1,000,000
    .0025%Walter (Terry) Plummer 1804 Lindell
      Avenue Lindell Beach, BC, Canada V2R 4W7
    1,000,000
    .0025%Julio De Leon 510 NW 159thLane Pembroke Pines, FL 33028
    1,750,000
    .0045%


51

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Name and Address of Beneficial Owner
    Amount and Nature of
      Beneficial Ownership
    Percentage of
      Class(1)Directors and Executive Officers as a
      Group(1)
    7,250,000
    .0185%


|(1) | Under Rule 13d-3, a beneficial owner of a security
      includes any person who, directly or indirectly, through any contract,
      arrangement, understanding, relationship, or otherwise has or shares: (i)
      voting power, which includes the power to vote, or to direct the voting of
      shares; and (ii) investment power, which includes the power to dispose or
      direct the disposition of shares. Certain shares may be deemed to be
      beneficially owned by more than one person (if, for example, persons share
      the power to vote or the power to dispose of the shares). In addition,
      shares are deemed to be beneficially owned by a person if the person has
      the right to acquire the shares (for example, upon exercise of an option)
      within 60 days of the date as of which the information is provided. In
      computing the percentage ownership of any person, the amount of shares
      outstanding is deemed to include the amount of shares beneficially owned
      by such person (and only such person) by reason of these acquisition
      rights. As a result, the percentage of outstanding shares of any person as
      shown in this table does not necessarily reflect the persons actual
      ownership or voting power with respect to the number of shares of common
      stock actually outstanding on June 15, 2009. As of June 15, 2009, there
      were 391,390,265 shares of our companys common stock issued and
      outstanding.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Item 13. Certain Relationships and Related Transactions, and
Director Independence

Except as disclosed herein, no director, executive officer,
shareholder holding at least 5% of shares of our common stock, or any family
member thereof, had any material interest, direct or indirect, in any
transaction, or proposed transaction since the year ended January 31, 2009, in
which the amount involved in the transaction exceeded or exceeds the lesser of
$120,000 or one percent of the average of our total assets at the year end for
the last three completed fiscal years.

Director Independence

We currently act with four directors, consisting of James
Sikora, Duncan Bain, Walter (Terry) Plummer and Julio De Leon. We have
determined that Duncan Bain and Walter (Terry) Plummer are each an independent
director as defined in NASDAQ Marketplace Rule 4200(a)(15).

We do not have a standing audit, compensation or nominating
committee, but our entire board of directors acts in such capacities. We believe
that our members of our board of directors are capable of analyzing and
evaluating our financial statements and understanding internal controls and
procedures for financial reporting. The board of directors of our company does
not believe that it is necessary to have an audit committee because we believe
that the functions of an audit committee can be adequately performed by the
board of directors. In addition, we believe that retaining an independent
director who would qualify as an audit committee financial expert would be
overly costly and burdensome and is not warranted in our circumstances given the
early stages of our development.

Item 14. Principal Accounting Fees and Services

The aggregate fees billed for the most recently completed
fiscal year ended January 31, 2009 and for fiscal year ended January 31, 2008
for professional services rendered by the principal accountant for the audit of
our annual financial statements and review of the financial statements included
in our quarterly reports on Form 10-Q and services that are normally provided by
the accountant in connection with statutory and regulatory filings or
engagements for these fiscal periods were as follows:

52

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Year Ended January 31 2009
      ($)
    2008 ($)Audit Fees
    13,500
    17,500Audit Related Fees
    4,000
    NilTax Fees
    17,500
    NilAll Other Fees
    Nil
    NilTotal
    17,500
    17,500


Our board of directors pre-approves all services provided by
our independent auditors. All of the above services and fees were reviewed and
approved by the board of directors either before or after the respective
services were rendered.

Our board of directors has considered the nature and amount of
fees billed by our independent auditors and believes that the provision of
services for activities unrelated to the audit is compatible with maintaining
our independent auditors independence.

PART IV

Item 15. Exhibits, Financial Statement Schedules

|(a) | Financial Statements
|--- | --------------------
|    |                     
|    | (1)                 
|    |                     
|    | (2)                 
|    |                     
|(b) | Exhibits            

|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).

53

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|Exhibit Number | Description                                                                                                                                                                                                   
|-------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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                                                                                                                    
|10.9           | Code of Business Conduct and Ethics                                                                                                                                                                           
|(31)           | 302 Certification                                                                                                                                                                                             
|31.1*          | Section
        302 Certification under Sarbanes-Oxley Act of 2002 of James Sikora.                                                                                                                           
|31.2*          | Section
        302 Certification under Sarbanes-Oxley Act of 2002 of Julio De Leon.                                                                                                                          
|(32)           | 906 Certification                                                                                                                                                                                             
|32.1*          | Section
        906 Certification under Sarbanes-Oxley Act of 2002 of James Sikora.                                                                                                                           
|32.2*          | Section
        906 Certification under Sarbanes-Oxley Act of 2002 of Julio De Leon.                                                                                                                          

*filed herewith.

54

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

| | TAO MINERALS LTD.                                                   
| | --------------------------------------------------------------------
| |                                                                     
| |                                                                     
| |                                                                     
| |                                                                     
| | /s/
      James Sikora                                              
| | James Sikora                                                        
| | President, Chief Executive Officer and Director                     
| | (Principal Executive Officer)                                       
| | Date: June 17, 2009                                                 
| |                                                                     
| |                                                                     
| |                                                                     
| |                                                                     
| | /s/
      Julio De Leon                                             
| | Julio De Leon                                                       
| | Chief Financial Officer and Director                                
| | (Principal Financial Officer and Principal
      Accounting Officer)
| | Date: June 17, 2009                                                 

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

|Signature              | Title                                  | Date         
|---------------------- | -------------------------------------- | -------------
|                       |                                        |              
|                       | President, Chief Executive Officer and |              
|/s/ James Sikora       | Director                               | June 17, 2009
|James Sikora           |                                        |              
|                       |                                        |              
|                       |                                        |              
|/s/ Julio De Leon      | Chief Financial Officer and Director   | June 17, 2009
|Julio De Leon          |                                        |              
|                       |                                        |              
|                       |                                        |              
|/s/ Duncan Brian       | Director                               | June 17, 2009
|Duncan Bain            |                                        |              
|                       |                                        |              
|                       |                                        |              
|/s/ Walter Plummer     | Director                               | June 17, 2009
|Walter (Terry) Plummer |                                        |              

55

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