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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-KSB/A

(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, 2007

[   ] 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.(Name of small business issuer in its charter)

|Nevada                                                               | 20-1682702                          
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)
|                                                                     |                                     
|Officina 624, Empresarial Mall Ventura, Cra.32#1B                    |                                     
|Sur 51, Medellin, Columbia                                           | N/A                                 
|(Address of principal executive offices)                             | (Zip Code)                          

Issuer's telephone number (305) 726-0602

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

|Title of each class | Name of each exchange on which registered
|------------------- | -----------------------------------------
|Nil                 | Nil                                      

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

Common Shares, par value $0.001(Title of class)

Check whether the issuer is not required to file reports
pursuant to Section 13 or 15(d) of the exchange act [   ]

Note  Checking the box above will not relieve any registrant
required to file reports pursuant to Section 13 or 15(d) of the Exchange Act
from their obligations under those Sections.

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- 2 -

Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12 months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past
90 days. Yes [X]   No [   ]

Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B contained in this form, and no disclosure will
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-KSB or any amendment to this Form 10-KSB. [   ]

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12-b-2 of the Exchange Act).Yes [X]  
No [   ]

State issuer's revenues for its most recent fiscal year. Nil

State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at
which the common equity was sold, or the average bid and asked prices of such
common equity, as of a specified date within 60 days. (See definition of
affiliate in Rule 12b-2 of the Exchange Act.)

Note: If determining whether a person is an affiliate will
involve an unreasonable effort and expense, the issuer may calculate the
aggregate market value of the common equity held by non-affiliates on the basis
of reasonable assumptions, if the assumptions are stated.

45,566,000 common shares @ $0.085(1)= $3,873,110

(1)Average of bid and ask closing prices on April
30, 2007.

(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS)

Check whether the issuer has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange Act after
the distribution of securities under a plan confirmed by a court. Yes [ 
 ]   No [   ]

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

State the number of shares outstanding of each of the issuer's
classes of equity stock, as of the latest practicable date.

51,816,000 common shares issued and outstanding as of April
30 2007

DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference,
briefly describe them and identify the part of the Form 10-KSB (e.g., Part
I, Part II, etc.) into which the document is incorporated: (1) any annual report
to security holders; (2) any proxy or information statement; and (3) any
prospectus filed pursuant to Rule 424(b) or (c) of the Securities Act of
1933 ("Securities Act"). The listed documents should be clearly described for
identification purposes (e.g., annual report to security holders for fiscal
year ended December 24, 1990).

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

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PART I

Item
1.           Description of
Business.

This annual report contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. 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 annual report, the terms "we", "us", "our", and
"Tao" mean Tao Minerals Ltd., unless the context clearly requires otherwise.

Corporate Overview

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".

Corporate History

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.

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.

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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- 4 -

Our Current Business

We are in the mineral resource business. We are currently in
the process of our phase 1 exploration program on our Golondria Gold-Silver
Project.

We are in the business of the acquisition, and exploration of
mineral properties with a view to exploiting any mineral deposits we discover
that demonstrate economic feasibility.

Our plan of operation is to conduct exploration work on our
properties in order to ascertain whether they possess economic quantities of
gold, silver, zinc and copper. There can be no assurance that economic mineral
deposits or reserves, exist on our properties until appropriate exploration work
is done and an economic evaluation based on such work concludes that production
of minerals from the properties is economically feasible.

Mineral property exploration is typically conducted in phases.
Each subsequent phase of exploration work is recommended by a geologist based on
the results from the most recent phase of exploration. Once we have completed
each phase of exploration, we will make a decision as to whether or not we
proceed with each successive phase based upon the analysis of the results of
that program. Our directors will make this decision based upon the
recommendations of the independent geologist who oversees the program and
records the results.

There is no assurance that a commercially viable mineral
deposit exists on any of our properties; 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
an 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 would
constitute a reserve (a reserve is a commercially viable mineral deposit).
Please refer to the section entitled Risk Factors, beginning at page 5 of this
annual report on Form 10-KSB, for additional information about the risks of
mineral exploration.

Employees

As of April 30, 2007, we had no employees other than our directors
  and officers. On April 1, 2006, we entered into consulting agreements with James
  Sikora and Gordon Samson. Each agreement is for a period of one year and will
  automatically renew for an additional one year period unless notice is given
  otherwise. On September 1, 2006 Mr. Gordon Samson resigned as an officer and
  we entered into a one year consulting agreement with Julio De Leon.

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.

Competition

There is aggressive competition within the mineral industry to
discover and acquire properties considered to have commercial potential. We
compete for the opportunity to participate in promising exploration projects
with other entities, many of which have greater resources than us. In addition,
we compete with others in efforts to obtain financing to explore and develop
mineral properties.

Compliance with Government Regulation

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

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- 5 -

exploration of our property.

We are prepared to engage professionals, if necessary, to
ensure regulatory compliance but in the near term expect our activities to
require minimal regulatory oversight. If we expand the scope of our activities
in the future it is reasonable to expect expenditures on compliance to rise.

Intellectual Property

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

RISK FACTORS

Much of the information included in this annual report includes
or is based upon estimates, projections or other forward-looking statements.
Such forward-looking statements include any projections or estimates made by us
and our management in connection with our business operations. While these
forward-looking statements, and any assumptions upon which they are based, are
made in good faith and reflect our current judgment regarding the direction of
our business, actual results will almost always vary, sometimes materially, from
any estimates, predictions, projections, assumptions, or other future
performance suggested herein. We undertake no obligation to update
forward-looking statements to reflect events or circumstances occurring after
the date of such statements.

Such estimates, projections or other forward-looking
statements involve various risks and uncertainties as outlined below. We
caution readers of this transitional annual report that important factors in
some cases have affected and, in the future, could materially affect actual
results and cause actual results to differ materially from the results expressed
in any such estimates, projections or other forward-looking statements. In
evaluating us, our business and any investment in our business, readers should
carefully consider the following factors.

Risks Associated With Our Business

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

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

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 $43,444 and working capital
deficit of $ 751,934 as of our year ended January 31, 2007. We currently do not
generate revenues from our operations. Our business plan calls for substantial
investment and cost in connection with the acquisition and exploration of our
mineral properties currently under lease and option. Any direct acquisition of
the claim under lease or option is subject to our ability to obtain the
financing necessary for us to fund and carry out exploration programs on the
properties. The requirements are substantial. We do not currently have any
arrangements for additional financing and we can provide no assurance to
investors that we will be able to find such financing if required. Obtaining
additional financing would be subject to a number of factors, including market
prices for minerals, investor acceptance of our properties, and investor
sentiment. These

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- 6 -

factors may make the timing, amount, terms or conditions of
additional financing unavailable to us. The most likely source of future funds
presently available to us is through the sale of equity capital and loans. Any
sale of share capital will result in dilution to existing shareholders.

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

We have not earned any revenues as of the date of this annual
report and have never been profitable. We do not have an interest in any revenue
generating properties. We were incorporated in September 2004 and to date have
been involved primarily in organizational activities and limited exploration
activities. Prior to our being able to generate revenues, we will incur
substantial operating and exploration expenditures without realizing any
revenues. We therefore expect to incur significant losses into the foreseeable
future. We have limited operating history upon which an evaluation of our future
success or failure can be made. Our net loss from inception to our year ended
January 31, 2007 is $4,829,129. 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 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.

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- 7 -

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

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

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

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

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

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

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

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

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

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

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

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not presently aware of any specific material environmental
constraint affecting our properties that would preclude the economic development
or operation of any specific property.

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

Risks Associated with Our Common Stock

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

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

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

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

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

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sell our stock.

Other Risks

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

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

Trends, Risks and Uncertainties

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

Item
2.           Description of
Property.

Executive Offices

Our principal offices are located at Officina 618, 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 our properties, or that we will be able to identify any
mineral resource on our properties that can be developed profitably. Even if we
do discover commercially exploitable levels of mineral resources on our
properties, which is unlikely, there can be no assurance that we will be able to
enter into commercial production of our mineral properties.

The Whale Mine Claims

Acquisition and Location

On October 22, 2004 entered into a purchase and sale agreement
with Multimetal Mining Corp. of Las Vegas, to acquire a 100% interest in two
mineral claims collectively known as the Whale Mine property which consist of
two state mineral claims comprising of 40 acres. A mineral claim refers to a
specific section of land over which a title holder owns rights to exploration in
the ground. These claims are registered in the name of Multimetal Mining Corp.
and are in good standing. In order to maintain title to the While Mine claims
subsequent to this date, we must conduct at least $100 in exploration on each
claim per year and file proof of labor with the State by September 1 of each
successive year. In addition, a maintenance fee of $100 per annum is required by
the Federal Bureau of Land Management.

Multimetal Mining Corp. holds these claims on our behalf.
Multimetal Mining Corp. does not retain any right to the claims. There are no
underlying interests in the property

The Whale Mine claims are located in the Yellow Pine Mining
District, Nevada, located 30 miles southwest of Las Vegas, Nevada and
approximately six miles west of Goodsprings of the western slopes of the Spring
Mountains.

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- 10 -

The typically desert climate makes for relatively high
temperatures and low precipitation. The property lies in a region of moderate
rolling hills with local incised narrow canyons. Elevations locally range from
3200 feet to 4300 feet. Vegetation consists mainly of desert shrubs and cactus.
Sources of water are available from valley wells.

Specifics of the claims are as follows:

|Claim Name | Mining District               | Co-ordinates              
|---------- | ----------------------------- | --------------------------
|           |                               |                           
|Whale 1    | Yellow Pine, Clark County, NV | 35 Degree 48 N Latitude  
|           |                               | 115 Degree 31 W Longitude
|           |                               |                           
|Whale 2    | Yellow Pine, Clark County, NV | 35 Degree 48 N Latitude  
|           |                               | 115 Degree 31 W Longitude

History

The Whale Mine claims were first discovered in 1904. Between
1912 and 1943, a recorded 339,727 pounds of zinc, 40,642 pounds of lead and 202
ounces of silver were recovered from the property. Since 1964, the area has been
mainly dormant. In 1981, the property and surrounding area were explored by
VLF-EM and geochemical surveys but results were unavailable.

There is no equipment or other infrastructure facilities
located on the Whale Mine claims.

VLF-EM surveys consist of two separate surveys: very low
frequency and electromagnetic surveys. Very low frequency surveys use radio
waves to determine whether rocks on a mineral property conduct electricity.

Almost all of the precious and base metals that we seek are
above average conductors of electricity and will affect VLF readings. Electro
magnetic surveys involve measuring the strength of the earths magnetic field.
Variations in the magnetic readings on a property may indicate the increased
likelihood of precious or base minerals in the area.

Geochemical surveys consist of the collection of chip samples
and grab samples from property areas with the most potential to host
economically significant mineralization based on past exploration results. Grab
samples are soil samples or pieces of rock that appear to contain precious
metals such as gold and silver, or industrial metals such as zinc and lead. All
samples gathered will be sent to a laboratory where they are crushed and
analyzed for metal content.

There is no exploration currently being conducted on the Whale
Mine claims. We expect to commence an initial phase of exploration on the claims
in the summer or fall of 2007. To date, we have not incurred any exploration
expenditures on the claims. We made a cash payment of $3,000 to the owner of the
claims in order to acquire them.

Property Geology

The principal ores of the Whale Mine claims are the oxidized
zinc, lead and silver ores. They contain smithsonite, cerussite and galena with
small amounts of other minor ores with variable silver contents. Smithsonite,
also known as zinc carbonate, is a zinc bearing rock that is typically green in
color. Cerussite, or lead carbonate, is a dense, clear, lead-bearing rock.
Galena, or lead sulfide, is a silver-gray, silver and lead ore. Some galena
occurrences may contain up to 1% silver in place of lead.

Geological Assessment Report

We retained Mr. William G. Timmins, a professional engineer, to
complete an initial evaluation of the property and to prepare a geological
summary report on the Whale Mine property. He most recently attended the
property in August 2004.

Based on his review of data relating to the Whale Mine
property, Mr. Timmins concluded that the Whale Mine

---

- 11 -

property warrants further exploration, given the previous
discovery of significant grades of zinc, lead and silver mineralization. He
recommends a two-phase exploration program to further evaluate the Property.

Phase I would consist of compiling past exploration data and
sampling areas of the property that were previously explored. Sampling consists
of a consulting geologist gathering soil or pieces of rock that appear to
contain precious metals such as gold and silver. All samples gathered are sent
to a laboratory where they are crushed and analyzed for metal content. By
analyzing past exploration data relating to the property, our consulting
geologist will be able to identify specific areas of the claims that have the
greatest potential to host economic mineralization. Subsequent exploration will
be focused on such areas.

Phase II would consist of geological mapping and geophysical
test surveys. Geological mapping involves plotting previous exploration data
relating to the Whale Mine Property on a map in order to determine the best
property locations to conduct subsequent exploration work.

Geophysical surveying is the search for mineral deposits by
measuring the physical property of near-surface rocks, and looking for unusual
responses caused by the presence of mineralization. Electrical, magnetic,
gravitational, seismic and radioactive properties are the ones most commonly
measured. These surveys will provide us with information about the rocks that
lie below that surface of the property and allow us to determine whether certain
mineralization found on the exposed rocks may continue at depth.

Accessibility

Access to the area is by Interstate Highway 15 from Las Vegas
southwest to Jean. Goodsprings is accessible by paved road from Jean, a distance
of seven miles to the northwest, travel west along a paved road for about six
miles towards the village of Sandy, then a short dirt road to the main workings
of the property.

Infrastructure

There is no power source located on the Whale Mine claims. We
will need to use portable generators if we require a power source for the
exploration of the property.

Budget

Approximate costs for the recommended two phase program are as
following:

|Phase One:                       |   |            | 
|-------------------------------- | - | ---------- | 
|                                 |   |            | 
|Geological Mapping:              | $ | 10,000.00  | 
|Geological geophysical surveys:  | $ | 5,000.00   | 
|Trenching and Sampling:          | $ | 10,000.00  | 
|Mobilization and Demobilization: | $ | 3,000.00   | 
|Reports, Maps, etc:              | $ | 2,000.00   | 
|Lodging, etc:                    | $ | 2,000.00   | 
|Contingency:                     | $ | 4,000.00   | 
|                                 |   |            | 
|Total Phase I Costs:             | $ | 36,000.00  | 
|                                 |   |            | 
|Phase Two:                       |   |            | 
|                                 |   |            | 
|Diamond Drilling:                |   |            | 
|Estimated: 2000 Ft @ $35Ft       | $ | 70,000.00  | 
|Mobilization and Demobilization: | $ | 10,000.00  | 
|Reports, Assays, etc:            | $ | 10,000.00  | 
|Contingency:                     | $ | 15,000.00  | 
|                                 |   |            | 
|Total Phase II Costs:            | $ | 105,000.00 | 
|                                 |   |            | 
|Total Program Costs:             | $ | 141,000.00 | 

---

- 12 -

Phase one of the recommended geological program will be funded
from borrowings . Most of the fees during phase one will be for the initial
mapping, surveys and sampling on the property. In order to proceed with the
Phase two exploration program, we will need to raise additional capital. We
anticipate that additional funding will be required in the form of equity
financing from the sale of our common stock. However, we cannot provide
investors with any assurance that we will be able to raise sufficient funding
from the sale of our common stock to fund the second phase of the exploration
program. We do not have any arrangements in place for any future equity
financing.

We intend to retain William Timmins, a professional geologist,
to undertake the proposed exploration on the Whale Mine claims given his
familiarity with the property area. We do not have any verbal or written
agreement regarding the retention of Mr. Timmins for this exploration program,
though he has indicated that if he is available, he is prepared to provide his
services. Mr. Timmins will provide us with the potential costs for compliance
and environmental costs when he prepares his report.

Compliance with Government Regulation

We will be required to comply with all regulations, rules and
directives of governmental authorities and agencies applicable to the
exploration of minerals in the United States generally, and in Nevada
specifically.

We will have to sustain the cost of reclamation and
environmental mediation for all exploration work undertaken. The amount of these
costs is not known at this time as we do not know the extent of the exploration
program that will be undertaken beyond completion of the currently planned work
programs. Because there is presently no information on the size, tenor, or
quality of any resource or reserve at this time, it is impossible to assess the
impact of any capital expenditures on earnings or our competitive position in
the event a potentially economic deposit is discovered.

If we enter into production, the cost of complying with permit
and regulatory environment laws will be greater than in the exploration phases
because the impact on the project area is greater. Permits and regulations will
control all aspects of any production program if the project continues to that
stage because of the potential impact on the environment. Examples of regulatory
requirements include:

| |  | Water discharge will have to meet
      water standards;                                                                                 
| | - | -----------------------------------------------------------------------------------------------------------------------------------------
| |  | Dust generation will have to be
      minimal or otherwise re- mediated;                                                                 
| |  | Dumping of material on the
      surface will have to be re- contoured and re-vegetated;                                                 
| |  | An assessment of all material to
      be left on the surface will need to be environmentally benign;                                    
| |  | Ground water will have to be
      monitored for any potential contaminants;                                                             
| |  | The socio-economic impact of the
      project will have to be evaluated and if deemed negative, will have to be
      re- mediated; and,
| |  | There will have to be an impact
      report of the work on the local fauna and flora.                                                   

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).

---

- 13 -

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

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

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

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

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

ESTIMATED BUDGET, PHASE 1 PROGRAM Chronological
Schedule

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


---

- 14 -

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
      $189012
      Administration- Medellin
      1
      $1000
      12
      $4000/mo
      $6000TOTAL
      $52,450


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

|Point | North   | East     
|----- | ------- | ---------
|P.A.  | 662.810 | 949.700  
|1     | 662.003 | 949.629.4
|2     | 662.003 | 949.629.4
|3     | 661.003 | 948.429.4
|4     | 662.003 | 948.429.4

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.

Item
3.           Legal
Proceedings.

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

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

None.



---

- 16 -

PART II

Item
5.           Market for Common
Equity and Related Stockholder Matters.

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 Yahoo! Finance 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
      Dealers OTC Bulletin BoardQuarter Ended(1)
    High
    LowJanuary 31, 2007
    $.15
    $.105October 31, 2006
    $.95
    $.73July 31, 2006
    $2.16
    $.75April 30, 2006
    $1.52
    $.29


(1)Our common stock received approval for quotation
on November 22, 2005. The first trade occurred March 16, 2006.

On April 30, 2007, the closing price for the common stock as
reported by the quotation service operated by the OTC Bulletin Board was $.085.

As of April 30, 2007, there were 44 holders of record of our
common stock. As of such date, 51,816,000 common shares were issued and
outstanding.

Our common shares are issued in registered form. Empire Stock
Transfer Inc., 7251 West Lake Mead Boulevard, Suite 300, Las Vegas, Nevada
89128-8351 (Telephone: 775.562.4091; Facsimile: 775.974.1444) is the registrar
and transfer agent for our common shares.

---

- 17 -

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.

Recent Sales of Unregistered Securities

During the year ended January 31, 2007, we did not issue any
equity securities which were not registered under the Securities Act of 1933.
Subsequent to the year ended January 31, 2007 we issued the following equity
securities which were not registered under the Securities Act of 1933:

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.

Equity Compensation Plan Information

We currently do not have an equity compensation plan.

Item
6.           Plan of
Operation.

Overview

You should read the following discussion of our financial
condition and results of operations together with the consolidated audited
financial statements and the notes to consolidated audited financial statements
included elsewhere in this filing prepared in accordance with accounting
principles generally accepted in the United States. This discussion contains
forward-looking statements that reflect our plans, estimates and beliefs. Our
actual results could differ materially from those anticipated in these
forward-looking statements.

Plan of Operations

We are an exploration stage company that has not yet generated
or realized any revenues from our business

---

- 18 -

operations.

We are an exploration company and we will be structuring our
acquisitions of mineral rights so that individual properties can be optioned for
exploration and subsequently acquired at reasonable cost if justified by
exploration results. Properties which we determine do not warrant further
exploration or development expenditures are divested, typically without further
financial obligation to us. Although we believe that our exploration properties
may contain significant mineralization, our analysis of most of these properties
is at a preliminary stage and some or all of the properties may not advance to a
development stage. The activities performed to date at these properties often
have involved the analysis of data from previous exploration efforts by others,
supplemented by our own exploration programs

There is no assurance that a commercially viable mineral
deposit exists on any of our properties, 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, which is unlikely, there can be no assurance that we will
be able to enter into commercial production of our mineral properties.

Purchase of Significant Equipment

We do not anticipate the purchase or sale of any plant or
significant equipment during the next twelve-month period.

Personnel Plan

We do not anticipate any significant changes in the number of
employees during the next twelve-month period.

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.

Financial Condition, Liquidity and Capital Resources

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

At January 31, 2007, we had working capital deficit of
$751,394, compared to working capital deficit of $1,758 as at January 31, 2006.

At January 31, 2007, our total current assets were $60,944
which consisted of cash and prepaid expenses compared to total current assets of
$2,361 at January 31, 2006.

At January 31, 2007, our total current liabilities were
$812,338, compared to total current liabilities of $4,119 as at January 31,
2006.

For the year ended January 31, 2007, we posted losses of $
399,636 compared to $48,916 at January 31, 2006 and to $ 454,129 since
incorporation. The principal components of the loss for the year ended January
31, 2007 were an impairment charge, professional fees, exploration costs and
expenses, and general and administrative.

At January 31, 2007, we had cash on hand of $43,444 compared to
$2,361 as at January 31, 2006.

Cash Requirements

We will require additional funds to implement our growth
strategy in exploration operations. These funds may be raised through equity
financing, debt financing, or other sources, which may result in further
dilution in the equity ownership of our shares. There is still no assurance that
we will be able to maintain operations at a level sufficient

---

- 19 -

for an investor to obtain a return on his investment in our
common stock. Further, we may continue to be unprofitable.

Going Concern

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

We have historically incurred losses, and through January 31,
2007 have incurred cumulative losses of $4,829,129 from our inception. Because
of these historical losses, we will require additional working capital to
develop our business operations. We intend to raise additional working capital
through private placements, public offerings, bank financing and/or advances
from related parties or shareholder loans.

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

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

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

APPLICATION OF CRITICAL ACCOUNTING POLICIES

Our 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 financial statements is critical to an understanding of our financials.

In preparing financial statements in conformity with generally
accepted accounting principles, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements and revenues and expenses during the reported period. Actual results
could differ from those estimates.

General and Administration Expenses

General and Administration expenses are written off to
operations when incurred.

Translation of Foreign Currency

The functional currency and the reporting currency is the
United States Dollar. Monetary assets and liabilities are translated at the
current rate of exchange. The weighted average exchange rate for the period is
used to translate revenue, expenses, and gains or losses from the functional
currency to the reporting currency.

The gain or loss on translation is reported as a separate
component of stockholders' equity and is not recognized in

---

- 20 -

net income. Gains or losses on re-measurement are recognized in
current net income. Gains or losses from foreign currency transactions are
recognized in current net income.

Fixed assets are measured at historical exchange rates that
existed at the time of the transaction. Depreciation is measured at historical
exchange rates that existed at the time the underlying fixed asset was acquired.
Capital accounts are translated at their historical exchange rates when the
capital stock is issued.

The effect of exchange rate changes on cash balances is
reported in the statement of cash flows as a separate part of the reconciliation
of change in cash and cash equivalents during the year.

Mining Properties and Exploration Costs

Exploration costs and costs of acquiring mineral properties are
charged to operations in the year in which they are incurred, except where these
costs relate to specific properties for which economically recoverable resources
are estimated to exist, in which case they are capitalized.

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 Cost

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.

Environment Remedial Liability

SOP 96-1 provides accounting guidance for environmental
remedial liabilities. The Company does not own any properties that are subject
to environmental remedial liabilities, and accordingly, management is not aware
of any known environmental remedial liabilities as at May 1, 2007.

Recently Issued Accounting Standards

In May 2005, the FASB issued Statement of Financial Accounting
Standard No. 154 ("FAS 154"), "Accounting Changes and Error Corrections"  a
replacement of APB No. 20, "Accounting Changes" and FAS No. 3, "Reporting
Accounting Changes in Interim Financial Statements". FAS 154 provides guidance
on the accounting for and reporting of accounting changes and error corrections.
APB Opinion 20 previously required that most voluntary changes in accounting
principle to be recognized by including in the net income of the period of the
change the cumulative effect of changing to the new accounting principle. FAS
154 requires retrospective application to prior periods' financial statements of
a voluntary change in accounting principle unless it is impracticable. FAS 154
is effective for accounting changes and corrections of errors made in fiscal
years beginning after December 15, 2005. We estimate that the adoption of FAS
154 will not have a significant impact on our results of operations, financial
condition and liquidity.

On December 16, 2004, the Financial Accounting Standards Board
(FASB) issued FASB Statement No. 123 (revised 2004) "Share-Based Payment"
("123(R)"), which in revision of FASB Statement No. 123, "Accounting For
Stock-Based Compensation". Statement 123(R) supersedes APB Opinion No. 25,
"Accounting For Stock Issued To Employees", and amends FASB Statements No. 95,
"Statement of Cash Flows". Generally the approach in FASB Statement 123(R) is
similar to the approach described in Statement 123. However, Statement 123(R)
requires all

---

- 21 -

share-based payments to employees, including grant of employees
stock options, to be recognized in the income statements based on their fair
value. Pro-forma disclosure is no longer an alternative. Statement 123(R) must
be adopted no later than the period beginning after December 15, 2005. Early
adoption will be permitted in periods in which financial statements have not yet
been issued. We adopted Statement 123(R) on January 1, 2006.

Statement 123(R) permits public companies to adopt its
requirements using one of two methods:

- A "Modified Prospective" method in which compensation cost is recognized
  beginning with the effective date (a) based on the requirements of Statement
  123(R) for all share-based payments granted after the effective date and (b)
  based on the requirements of Statement 123 for all awards granted to employees
  prior to the effective date of Statement 123(R) that remains unvested on the
  effective date.
- A "Modified Retrospective" method which includes the requirements of the
  modified prospective method described above but also permits entities to
  restate, based on the amounts previously recognized under Statement 123 for
  purpose of pro-forma disclosure, all periods presented.

We adopted Statement 123(R) using the modified prospective
method.

We are unable to estimate the future impact that Statement
123(R) will have on our financial position, results of operations or cash flows
due to unknown events, such as the type and number of share-based payments that
will be granted, their terms, and their vesting periods.

In March 2005, the SEC released SEC Staff Accounting Bulletin
No. 107, "Share-Based Payment" ("SAB 107"). SAB-107 provides the SEC staff's
position regarding the application of Statement 123(R), which contains
interpretive guidance related to the interaction between Statement 123R and
certain SEC rules and regulations, and also provides the staff's views regarding
the valuation of share-based payment arrangements for public companies. SAB 107
highlights the importance of disclosures made related to the accounting for
share-based payment transactions.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

Our 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.

Item 7.
F          inancial Statements.

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

The following financial statements are filed as part of this
annual report:

| | Report of Independent
      Registered Public Accounting Firms  
| | ----------------------------------------------------------------
| |                                                                 
| | Balance Sheets                                                  
| |                                                                 
| | Statements of Changes in
      Stockholders' Equity (Deficiency)
| |                                                                 
| | Statements of Operations                                        
| |                                                                 
| | Statements of Cash Flows                                        
| |                                                                 
| | Notes to the
      Consolidated Financial Statements            

---

F-1









TAO MINERALS LTD.(An Exploration Stage Company)

Audited Financial Statements
(Expressed in U.S. Dollars)

January 31, 2007 and 2006

| | Index                                                          | Page Number
| | -------------------------------------------------------------- | -----------
| |                                                                |            
| | Report
      of Independent Registered Public Accounting Firms | F-1        
| |                                                                |            
| | Balance
      Sheets                                           | F-2        
| |                                                                |            
| | Statement
      of Changes in Stockholders Equity             | F-3-4      
| |                                                                |            
| | Statements
      of Operations                                 | F-5        
| |                                                                |            
| | Statements
      of Cash Flows                                 | F-6        
| |                                                                |            
| | Notes
      to Consolidated Financial Statements               | F-7-11     

---

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of TAO MINERALS,
LTD

We have audited the accompanying balance sheet of TAO MINERALS,
LTD (an Exploration Stage Company) as of January 31, 2006, and the related
statements of income, stockholders equity, and cash flows for the year ended
January 31, 2006. These financial statements are the responsibility of the
companys management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we 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 were we engaged to perform, an audit of its
internal control over financial reporting. Our 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, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provide a
reasonable basis for our opinion.

In our opinion, based on our audit , the
  financial statements referred to above present fairly, in all material respects,
  the financial position of TAO MINERALS, LTD (an Exploration Stage Company) as of
  January 31, 2006, and the results of its operations and its cash flows for the
  year then ended 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
2 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 2. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.

De Leon & Company, P.A.

Pembroke Pines, Florida

April 14, 2006

---

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of TAO MINERALS,
LTD

We have audited the accompanying balance sheet of TAO MINERALS,
LTD (an Exploration Stage Company) as of January 31, 2007, and the related
statements of income, stockholders equity, and cash flows for the year ended
January 31, 2007. These financial statements are the responsibility of the
Companys management. Our responsibility is to express an opinion on these
financial statements based on our audit. The financial statements of TAO
MINERALS, LTD, as of January 31, 2006 were audited by other auditors whose
report dated April 14, 2006, on those statements included an explanatory
paragraph that described the accompanying financial statements have been issued
assuming that the Company will continue as a going concern and that the Company
does not have the necessary working capital to implement its business plan,
which raises substantial doubt as to its ability to continue as a going
concern.

We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we 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 were we engaged to perform, an audit of its
internal control over financial reporting. Our 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, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, based on our audit, the financial statements
referred to above present fairly, in all material respects, the financial
position of TAO MINERALS, LTD (an Exploration Stage Company) as of January 31,
2007, and the results of its operations and its cash flows for the year then
ended 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.

/s/ Infante & Company

Hollywood, Florida

May 11, 2007

---

F-2

TAO MINERALS LTD.(An
Exploration Stage Company)Balance Sheets January 31,

|                                                                     |   | 2007     |   |   | 2006     |  
|-------------------------------------------------------------------- | - | -------- | - | - | -------- | -
|                                                                     |   |          |   |   |          |  
|ASSETS                                                               |   |          |   |   |          |  
|Current                                                              |   |          |   |   |          |  
|Cash                                                                 | $ | 43,444   |   | $ | 2,361    |  
|Prepaids                                                             |   | 17,500   |   |   | -        |  
|Total current assets                                                 |   | 60,944   |   |   | 2,361    |  
|Mineral Properties                                                   |   |          |   |   |          |  
|Mineral Rights                                                       |   | 353,000  |   |   | 3,000    |  
|Total Mineral
      Properties                                       |   | 353,000  |   |   | 3,000    |  
|                                                                     |   |          |   |   |          |  
|                                                                     |   |          |   |   |          |  
|Total assets                                                         | $ | 413,944  |   | $ | 5,361    |  
|                                                                     |   |          |   |   |          |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                 |   |          |   |   |          |  
|Current                                                              |   |          |   |   |          |  
|                                                                     |   |          |   |   |          |  
|Accounts payable and accrued expenses                                | $ | 6,338    |   | $ | 1,119    |  
|Due to a related party                                               |   | 3,000    |   |   | 3,000    |  
|Other accrued liability                                              |   | 183,000  |   |   | -        |  
|Stock issuance liability                                             |   | 620,000  |   |   | -        |  
|Total current
      liabilities                                      |   | 812,338  |   |   | 4,119    |  
|Total Liabilities                                                    | $ | 812,338  |   | $ | 4,119    |  
|                                                                     |   |          |   |   |          |  
|STOCKHOLDERS EQUITY                                                 |   |          |   |   |          |  
|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:                                    |   |          |   |   |          |  
|51,816,000 and 61,916,000 shares of common stock at January 31, 2007 |   | 51,816   |   |   | 61,916   |  
|and 2006, respectively                                               |   |          |   |   |          |  
|Additional paid-in capital                                           |   | 58,095   |   |   | 47,995   |  
|Deficit
      accumulated during exploration stage                   |   | (508,305 | ) |   | (108,669 | )
|Total stockholders equity                                           |   | (398,394 | ) |   | 1,242    |  
|Total
      liabilities and stockholders equity                     | $ | 413,944  |   | $ | 5,361    |  

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

---

|F-3                                                                     
|------------------------------------------------------------------------
|                                                                        
|                                                                        
|                                                                        
|TAO MINERALS LTD.                                                       
|(An Exploration Stage Company)                                          
|Statement of Changes in Stockholders' Equity                            
|For the periods September 23, 2004 (Inception) to January
      31, 2007
|(Inception Through January 31, 2005 Unaudited)                          

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

Theaccompanyingnotes are anintegralpart of thesefinancialstatements.

---

|F-4                                                                    
|-----------------------------------------------------------------------
|                                                                       
|                                                                       
|TAO MINERALS LTD.                                                      
|                                                                       
|(An Exploration Stage Company)                                         
|Statement of Changes in Stockholders' Equity                           
|For the period September 23, 2004 (Inception) to January
      31, 2007
|(Inception Through
      January 31, 2005 Unaudited)                   

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

Theaccompanyingnotes are anintegralpart of thesefinancialstatements.

---

F-5

TAO MINERALS LTD.(An
Exploration Stage Company)Statements of Operations (Expressed in
U.S. Dollars)

|                                         |   | From Inception Date  |   |       |                        |   |       |            |  
|---------------------------------------- | - | -------------------- | - | ----- | ---------------------- | - | ----- | ---------- | -
|                                         |   | of September 23,     |   |       | For the Year           |  
|                                         |   | 2004 to Period Ended |   |       | Ended
      January 31 |  
|                                         |   | January 31,2007      |   |       |                        |   |       |            |  
|                                         |   | (Unaudited)          |   |       | 2007                   |   |       | 2006       |  
|                                         |   |                      |   |       |                        |   |       |            |  
|OPERATING EXPENSES                       |   |                      |   |       |                        |   |       |            |  
|                                         |   |                      |   |       |                        |   |       |            |  
|Exploration expenses                     | $ | 113,550              |   | $     | 83,000                 |   | $     | 27,250     |  
|                                         |   |                      |   |       |                        |   |       |            |  
|Professional fees                        |   | 187,398              |   |       | 171,059                |   |       | 12,139     |  
|                                         |   |                      |   |       |                        |   |       |            |  
|Consulting fees                          |   | 136,850              |   |       | 133,850                |   |       | 3,000      |  
|                                         |   |                      |   |       |                        |   |       |            |  
|General and administrative               |   | 17,862               |   |       | 11,727                 |   |       | 6135       |  
|                                         |   |                      |   |       |                        |   |       |            |  
|Total Operating Expenses                 |   | 455,660              |   |       | 399,636                |   |       | 48,416     |  
|                                         |   |                      |   |       |                        |   |       |            |  
|LOSS FROM OPERATIONS                     |   | (455,660             | ) |       | (399,,636              | ) |       | (48,416    | )
|                                         |   |                      |   |       |                        |   |       |            |  
|OTHER EXPENSE                            |   |                      |   |       |                        |   |       |            |  
|                                         |   |                      |   |       |                        |   |       |            |  
|Foreign currency translation gain(loss)  |   | 1,531                |   |       | -                      |   |       | (500       | )
|                                         |   |                      |   |       |                        |   |       |            |  
|Provision for income taxes               |   | -                    |   |       | -                      |   |       | -          |  
|                                         |   |                      |   |       |                        |   |       |            |  
|Net (loss) for the Period                | $ | (454,129             | ) | $     | (399,636               | ) | $     | (48,916    | )
|                                         |   |                      |   |       |                        |   |       |            |  
|LOSS PER SHARE  BASIC                   |   |                      |   | **$** | ****(.01               | ) | **$** | ****(.00   | )
|                                         |   |                      |   |       |                        |   |       |            |  
|WEIGHTED AVERAGE NUMBER OF ISSUED SHARES |   |                      |   |       | 54,140,110             |   |       | 61,916,000 |  

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

---

F-6

TAO MINERALS LTD.(An
Exploration Stage Company)Statements of Cash Flows 
  (Expressed in U.S. Dollars)

|                                                |   | From Inception Date  |   |  | For the Year     |   |  | For the Year     |  
|----------------------------------------------- | - | -------------------- | - |  | ---------------- | - |  | ---------------- | -
|                                                |   | of September 23,     |   |  | Ended January 31 |   |  | Ended January 31 |  
|                                                |   | 2004 to Period Ended |   |  |                  |   |  |                  |  
|                                                |   | January 31, 2007     |   |  |                  |   |  |                  |  
|                                                |   | (Unaudited)          |   |  | 2007             |   |  | 2006             |  
|                                                |   |                      |   |  |                  |   |  |                  |  
|Cash Provided by (Used for) OperatingActivities |   |                      |   |  |                  |   |  |                  |  
|                                                |   |                      |   |  |                  |   |  |                  |  
|Net (loss) for the period                       | $ | (454,129             | ) |  | (399,636         | ) |  | (48,916          | )
|                                                |   |                      |   |  |                  |   |  |                  |  
|Changes in non-cash working capital items       |   |                      |   |  |                  |   |  |                  |  
|                                                |   |                      |   |  |                  |   |  |                  |  
|Prepaids                                        |   | (17,500              | ) |  | (17,500          | ) |  |                  |  
|                                                |   |                      |   |  |                  |   |  |                  |  
|Accounts payable and accrued                    |   | 89,338               |   |  | 88,219           |   |  | (3,081           | )
|                                                |   |                      |   |  |                  |   |  |                  |  
|Increase in due from a related party            |   | 3,000                |   |  | -                |   |  | 3,000            |  
|                                                |   |                      |   |  |                  |   |  |                  |  
|Subscription receivable                         |   | 425                  |   |  | -                |   |  | 425              |  
|                                                |   |                      |   |  |                  |   |  |                  |  
|Cash used by operations                         |   | (378,866             | ) |  | (328,917         | ) |  | (48,572          | )
|                                                |   |                      |   |  |                  |   |  |                  |  
|Investing Activities                            |   |                      |   |  |                  |   |  |                  |  
|                                                |   |                      |   |  |                  |   |  |                  |  
|Purchase of mineral rights                      |   | (253,000             | ) |  | (250,000         | ) |  | -                |  
|                                                |   |                      |   |  |                  |   |  |                  |  
|Cash used by investing activities               |   | (253,000             | ) |  | (250,000         | ) |  | -                |  
|                                                |   |                      |   |  |                  |   |  |                  |  
|Financing Activities                            |   |                      |   |  |                  |   |  |                  |  
|                                                |   |                      |   |  |                  |   |  |                  |  
|Stock issuance liability                        |   | 620,000              |   |  | 620,000          |   |  | -                |  
|                                                |   |                      |   |  |                  |   |  |                  |  
|Issuance of common stock                        |   | 55,310               |   |  | -                |   |  | -                |  
|                                                |   |                      |   |  |                  |   |  |                  |  
|Cash provided by financing activities           |   | 675,310              |   |  | 620,000          |   |  |                  |  
|                                                |   |                      |   |  |                  |   |  |                  |  
|Cash Increase During the Period                 |   | 43,444               |   |  | 41,083           |   |  | (48,572          | )
|                                                |   |                      |   |  |                  |   |  |                  |  
|Cash, Beginning of Period                       |   | -                    |   |  | 2,361            |   |  | 50,933           |  
|                                                |   |                      |   |  |                  |   |  |                  |  
|Cash and Equivalent, End of Period              |   | 43,444               |   |  | 43,444           |   |  | 2,361            |  

SUPPLEMENTAL ASH FLOWS INFORMATIONDuring 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)
    
    0Assumption of liabilities
    $
    100,000Cash Payments
    
    250,000Total
    $
    350,000


The Company did not pay cash for either interest or taxes
for the fiscal years ended January 31, 2007 and 2006. The accompanying notes
are an integral part of these financial statements.

---

F-7

|TAO MINERALS LTD                             
|---------------------------------------------
|(An Exploration Stage Company)               
|Notes to Financial Statements                
|For the years ended January 31, 2007 and 2006
|                                             

|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 $ 378,866 for the period from September 23, 2004
      to January 31, 2007 and negative working capital of $751,394 at January
      31, 2007. This raises substantial doubt about its ability to continue as a
      going concern. The ability of the Company to continue as a going concern
      is dependent on the Companys ability to raise additional capital and
      implement its business plan. The financial statements do not include any
      adjustments that might be necessary if the Company is unable to continue
      as a going concern.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | Management believes that actions presently being taken to
      obtain additional funding and implement its strategic plans provide the
      opportunity for the Company to continue as a going concern.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|**2.** | Significant Accounting
Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

| | (a) | 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.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (b) | 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.                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (c) | 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.                                                                                                                                            

---

F-8

|TAO MINERALS LTD                             
|---------------------------------------------
|(An Exploration Stage Company)               
|Notes to Financial Statements                
|For the years ended January 31, 2007 and 2006
|                                             

|2. | Significant Accounting Policies(continued)
|-- | ------------------------------------------
|   |                                           
|   | (d)                                       
|   |                                           
|   |                                           
|   |                                           
|   | (e)                                       
|   |                                           
|   |                                           
|   |                                           
|   | (f)                                       
|   |                                           
|   |                                           
|   |                                           
|   | (g)                                       
|   |                                           
|   |                                           
|   |                                           
|   | (h)                                       
|   |                                           
|   |                                           

| | i) | Business Segments                                                                            
| | -- | ---------------------------------------------------------------------------------------------
| |    |                                                                                              
| |    | The Company operates in one segment and therefore segment
      information is not presented.

---

F-9

|TAO MINERALS LTD                             
|---------------------------------------------
|(An Exploration Stage Company)               
|Notes to Financial Statements                
|For the years ended January 31, 2007 and 2006
|                                             

|2. | Significant Accounting Policies(continued)
|-- | ------------------------------------------
|   |                                           
|   | (j)                                       
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           

|3. | Acquisition of Mineral Rights                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | 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:

---

F-11

|TAO MINERALS LTD                             
|---------------------------------------------
|(An Exploration Stage Company)               
|Notes to Financial Statements                
|For the years ended January 31, 2007 and 2006
|                                             

|3. | Acquisition of Mineral Rights
(continued)
|-- | -----------------------------------------
|   |                                          
|   | 1.                                       
|   | 2.                                       
|   | 3.                                       
|   | 4.                                       
|   | 5.                                       
|   | 6.                                       
|   | 7.                                       
|   | 8.                                       
|   | 9.                                       
|   | 10.                                      

|   | 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. 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                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | As of January 31, 2007 the Company has not made the
      $32,000 cash payment nor issued the 300,000 shares of common stock due
      August 23, 2006. The Company is in negotiations with Primecap as to the
      amounts due them. Primecap has not made any demands on the Company as
      regarding these payments. 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.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|4. | Related Party                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | During the year ended January 31, 2006, the former
      president advanced the Company $3,000 (2005 - $Nil). The advance is
      unsecured, non-interest bearing and has no specific terms of
    repayment.                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Effective April 1, 2006 we entered into management
      agreements with two directors and officers of the company for $8,000 per
      month and $5,000 per month. During the six month period ended July 31,
      2006 the Company paid consulting fees of $52,000. On November 1, 2006 the
      contract dated April 1, 2006 for $5,000 per month was cancelled and a new
      contract for $5,000 per month for one year was executed with a new
      director and officer.                                

---

F-8

|TAO MINERALS LTD                             
|---------------------------------------------
|(An Exploration Stage Company)               
|Notes to Financial Statements                
|For the years ended January 31, 2007 and 2006
|                                             

|4. | Related Party(continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|5. | 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 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, 2007 the Company has received $620,000 for which common
      stock has not been issued to the subscriber. According to the subscription
      agreement this amount has been treated as an interest free loan under the
      item stock issuance liability.                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | 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 Company
      redistributed 5,000,000 shares to 4 directors and cancelled 12,600,000
      shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|6. | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | As of January 31, 2007, the Company had a net operating
      loss carryforward for income tax reporting purposes of approximately
      $454,129 that may be offset against future taxable income through 2027.
      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                                                                                                                                                                                   

2007
    
    
    2006Deferred tax assets:Net operating loss carryforwards
    $
    399,636
    
    $
    54,000Gross deferred tax assets
    
    136,000
    
    
    1,900Less: valuation allowance
    
    (136,000
    )
    
    (1,900
    )Net deferred tax asset
    $
    --
    
    $
    --


---

F-8

|TAO MINERALS LTD                             
|---------------------------------------------
|(An Exploration Stage Company)               
|Notes to Financial Statements                
|For the years ended January 31, 2007 and 2006
|                                             

|6. | Income Taxes (continued)
|-- | ------------------------

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

2007
    
    
    2006Tax expense (benefit) at U.S. statutory
      rate
    
    34.00%
    
    
    34.00%State taxes, net of federal benefit
    
    --
    
    
    --Change in valuation allowance
    
    (34.00
    )
    
    (34.00
    )0.00
      %
    
    
    0.00
      %


|7. | Subsequent Event                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | The Company is obligated to pay Primecap $280,000 and
      600,000 shares of common stock to complete the acquisition of the mineral
      rights agreement in Colombia. A payment for $32,000 was due by August 23,
      2006 and an additional $188,000 is due through August 23, 2009. The shares
      are due in two installments of 300,000 each on august 23, 2007 and August
      23, 2006, neither of which has been issued.

---

- 22 -

Item
8.           Changes In and
Disagreements With Accountants on Accounting and Financial Disclosure.

On September 1, 2006, we decided to engage new auditors as our
independent accountants to audit our financial statements. Our Board of
Directors approved the change of accountants to Infante & Company, an
independent registered firm of Certified Public Accountants.

During our most recent fiscal years, and any subsequent interim
periods preceding the change in accountants, there were no disagreements with De
Leon & Company P.A. on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope procedure. The report on the
financial statements prepared by De Leon & Company P.A., for the last fiscal
year did not contain an adverse opinion or a disclaimer of opinion, nor was it
qualified or modified as to uncertainty, audit scope or accounting principals,
except that De Leon & Company P.A. expressed in their report substantial
doubt about our ability to continue as a going concern. Our board of directors
approved the change of auditors.

We have engaged the firm of Infante & Company, as of
September 1, 2006. Infante & Company was not consulted on any matter
relating to accounting principles to a specific transaction, either completed or
proposed, or the type of audit opinion that might be rendered on our financial
statements.

Item
8A.         Disclosure Controls and
Procedures

As required by Rule 13a-15 under the Exchange Act, we have
carried out an evaluation of the effectiveness of the design and operation of
our company's disclosure controls and procedures as of the end of the period
covered by this annual report, being January 31, 2007. This evaluation was
carried out under the supervision and with the participation of our company's
management, including our company's president and chief financial officer. Based
upon that evaluation, our company's president and chief financial officer
concluded that our company's disclosure controls and procedures are effective as
at the end of the period covered by this report. There have been no changes that
occurred in the during the last fiscal quarter that has materially affected or
is reasonably likely to materially affect internal control over financial
reporting. Disclosure controls and procedures are controls and other procedures
that are designed to ensure that information required to be disclosed in our
company's reports filed or submitted under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the
Securities and Exchange Commission's rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed in our company's reports filed
under the Exchange Act is accumulated and communicated to management, including
our company's president and chief executive officer as appropriate, to allow
timely decisions regarding required disclosure.

PART III

Item
9.           Directors,
Executive Officers, Promoters and Control Persons; Compliance with Section 16(a)
of the Exchange Act.

Directors and Executive Officers, Promoters and Control
Persons

As at April 30, 2007, our directors and executive officers,
their ages, positions held, and duration of such, are as follows:

Name
      Position Held with our Company
      Age
      Date First Elected or AppointedJames Sikora
    President and Director
    49
    February 1, 2006Duncan Bain
    Director
    53
    March 5, 2006Walter (Terry)
      Plummer
    Director
    68
    March 14, 2006Julio De Leon
    Chief Financial Officer and Director
    56
    September 1, 2006


---

- 23 -

Business Experience

The following is a brief account of the education and business
experience of each director and executive officer during at least the past five
years, indicating each person's principal occupation during the period, and the
name and principal business of the organization by which he was employed.

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.

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.

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 serves as a consultant to Hard to Treat. 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

---

- 24 -

Association of Fraud Examiners.

Committees of the Board

Audit Committee

Our entire board of directors serve as our Audit Committee.

Nominating Committee

Our entire board of directors serve as our Nominating Committee
which oversees the process by which individuals may be nominated to our board of
directors.

The current size of our board of directors does not facilitate
the establishment of a separate committee. We hope to establish a separate
Nominating Committee consisting of independent directors, if the number of our
directors is expanded.

Compensation Committee

We do not have a compensation committee.

Family Relationships

There are no family relationships between any director or
executive officer.

Involvement in Certain Legal Proceedings

None of our directors, executive officers, promoters or control
persons have 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 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.

Code of Ethics

Our board of directors have not yet established a Code of
Ethics and Business Conduct.

Audit Committee Financial Expert

Our board of directors has determined that it has one member of
its audit committee, Gordon Samson, qualifies as an audit committee financial
expert as defined in Item 401(e) of Regulation S-B, however, Mr. Samson is not
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. In
addition, we

---

- 25 -

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 revenues to date.

Section 16(a) Beneficial Ownership Compliance

Section 16(a) of the Securities Exchange Act requires our
executive officers and directors, and persons who own more than 10% of our
common stock, to file reports regarding ownership of, and transactions in, our
securities with the Securities and Exchange Commission and to provide us with
copies of those filings. Based solely on our review of the copies of such forms
received by us, or written representations from certain reporting persons, we
believe that during fiscal year ended January 31, 2007, all filing requirements
applicable to its officers, directors and greater than ten percent beneficial
owners were complied with.

Item
10.         Executive Compensation.

The following table provides certain summary information
concerning the compensation earned by our President and each of our three other
most highly compensated executive officers whose aggregate salary and bonus for
the fiscal year ended January 31, 2007 was in excess of $100,000 (the Named
Executive Officers).

Name and Principal
      Position
      Fiscal
      Year Ended
      Salary
      Bonus
      Stock Awards
      OptionsAward
      Nonequity incentive Plan
      **Compensa** tion
      Nonqualified Deferred
      Compensation earnings
      All Other Compensation
      TotalJames Sikora(1)President
    2007 2006
      $80,000 
        $Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
    Nil Nil
    Nil Nil
    Nil Nil
      $80,000 
        $NilGordon Samson(2)Chief
      Financial Officer
    2007 2006
      $25,000 
        $Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
    Nil Nil
    Nil Nil
    Nil Nil
      $25,000 
        $NilJulio De Leon Chief Financial
      Officer(5)
    2007 2006
      $25,000 
        $Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
    Nil Nil
    Nil Nil
    Nil Nil
      $25,000 
        $NilDon Axent(3)former
      President, CEO
    2007 2006
      $Nil 
        $Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
    Nil Nil
    Nil Nil
    Nil Nil
      Nil 
        NilJames Plexman(4)former CFO
      and Treasurer
    2007 2006
      $Nil 
        $Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
    Nil Nil
    Nil Nil
    Nil Nil
      Nil 
        Nil


|(1) | Mr. Sikora was appointed President on March 5,
    2006.                                                                                                          
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                   
|(2) | Mr. Samson was appointed Chief Financial Officer on March
      24, 2006. On September 1, 2006 Mr. Samson resigned as CFO and Director on
      September 1, 2006.
|    |                                                                                                                                                                   
|(3) | Mr. Axent resigned as an officer and director on March 5,
      2006.                                                                                             
|    |                                                                                                                                                                   
|(4) | Mr. Plexman resigned as an officer and director on
      February 1, 2006.                                                                                        
|    |                                                                                                                                                                   
|(5) | Mr. De Leon became Chief Financial Officer and a member
      of the board on September 1, 2006.                                                                  

Stock Options and Stock Appreciation Rights

From the date of inception and up to January 31, 2007, we did
not grant any stock options or stock appreciation rights to any of our directors
or officers and there were no stock options or stock appreciation rights
outstanding on January 31, 2007.

Compensation of Directors

We reimburse our directors for expenses incurred in connection
with attending board meetings. We have not paid any director's fees or other
cash compensation for services rendered as a director since our inception to
January 31, 2007.

We have no formal plan for compensating our directors for their
service in their capacity as directors, although such directors are expected in
the future to receive stock options to purchase common shares as awarded by our
board of directors or (as to future stock options) a compensation committee
which may be established. Directors are entitled

---

- 26 -

to reimbursement for reasonable travel and other out-of-pocket
expenses incurred in connection with attendance at meetings of our board of
directors. Our board of directors may award special remuneration to any director
undertaking any special services on our behalf other than services ordinarily
required of a director. No director received and/or accrued any compensation for
their services as a director, including committee participation and/or special
assignments.

Employment Contracts and Termination of Employment and
Change in Control Arrangements

On April 1, 2006, we entered into consulting agreement with
James Sikora. The agreement is for a period of one year and will automatically
renew for an additional one year period unless notice is given otherwise.
Pursuant to the terms of the agreement, we will pay Mr. Sikora fees of $8,000
per month.

On April 1, 2006, we entered into consulting agreement with
Gordon Samson. The agreement is for a period of one year and will automatically
renew for an additional one year period unless notice is given otherwise.
Pursuant to the terms of the agreement, we will pay Mr. Samson fees of $5,000
per month.

On September 1, 2006, we entered into consulting agreement with
Julio De Leon. The agreement is for a period of one year and will automatically
renew for an additional one year period unless notice is given otherwise.
Pursuant to the terms of the agreement, we will pay MrDe Leon fees of $5,000 per
month.

Item
11.         Security Ownership of
Certain Beneficial Owners and Management.

As of April 30, 2007, there were 51,816,000 shares of our
common stock outstanding. The following table sets forth certain information
known to us with respect to the beneficial ownership of our common stock as of
that date by (i) each of our directors, (ii) each of our executive officers, and
(iii) all of our directors and executive officers as a group. Except as set
forth in the table below, there is no person known to us who beneficially owns
more than 5% of our common stock. The number of shares beneficially owned is
determined under rules of the SEC and the information is not necessarily
indicative of beneficial ownership for any other purpose. Under such rules,
beneficial ownership includes any shares as to which the individual has the sole
or shared voting power or investment power and any shares which the individual
has the right to acquire within 60 days of April 30, 2007 through the exercise
of any stock option or other right. Unless otherwise noted, we believe that each
person has sole investment and voting power (or shares such powers with his or
her spouse) with respect to the shares set forth in the following table:

Name and Address of Beneficial Owner
      Directors and Executive Officers
      Amount and Nature of Beneficial Ownership
      Percent of
      Class(1)James Sikora Officina 618, Empresarial Mall Ventura
      Cra. 32 #1B Sur 51 Medellin, Colombia
    4,500,000(2)
    8.68%Duncan Bain 49 Midale Crescent London, ON, Canada
      M5X 3C2
    500,000
    *Walter (Terry) Plummer 1804 Lindell Avenue Lindell
      Beach, BC, Canada, V2R 4W7
    500,000
    *Julio De Leon 510 NW 159thLane Pembroke
      Pines, Fl. 33028
    750,000
    1.445% stockholdersDon Axent RR 13 STN P Thunder Bay, Ontario, Canada
    17,600,000 common
    33.97Directors and Officers as a group (4
      persons)
    6,250,000
    12.03%


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- 27 -

|* less than 1%
|--------------
|              
|(1)           
|              
|(2)           

Changes in Control

We are unaware of any contract or other arrangement the
operation of which may at a subsequent date result in a change of control of our
company.

Item
12.         Certain Relationships
and Related Transactions.

Except as otherwise indicated below, we have not been a party
to any transaction, proposed transaction, or series of transactions in which the
amount involved exceeds $60,000, and in which, to our knowledge, any of our
directors, officers, five percent beneficial security holder, or any member of
the immediate family of the foregoing persons has had or will have a direct or
indirect material interest.

Item
13.         Exhibits

Exhibits required by Item 601 of Regulation S-B

|Exhibit Number | Description                                                                                                                                                                                                                    
|-------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |                                                                                                                                                                                                                                
|(3)            | (i) Articles of Incorporation; and (ii) Bylaws                                                                                                                                                                                 
|               |                                                                                                                                                                                                                                
|3.1            | Articles of Incorporation (incorporated by reference from
      our Form SB-2 Registration Statement, filed on March 24, 2005).                                                                                                
|               |                                                                                                                                                                                                                                
|3.2            | Bylaws (incorporated by reference from our Form SB-2
      Registration Statement, filed on March 24, 2005).                                                                                                                   
|               |                                                                                                                                                                                                                                
|3.3            | Certificate of Change (incorporated by reference from our
      Current Report on Form 8-K, filed on March 24, 2006).                                                                                                          
|               |                                                                                                                                                                                                                                
|(10)           | Material Contracts                                                                                                                                                                                                             
|               |                                                                                                                                                                                                                                
|10.1           | Purchase and Sale Agreement dated October 22, 2004
      (incorporated by reference from our Amendment No. 1 on Form SB-2/A
      Registration Statement, filed on April 28, 2005).                                            
|               |                                                                                                                                                                                                                                
|10.2           | Letter Agreement dated February 1, 2006 between our
      company and Nueva California S.A. and Primecap Resources Inc.
      (incorporated by reference from our Current Report on Form 8-K, filed on
      February 6, 2006).
|               |                                                                                                                                                                                                                                
|10.3           | Assignment Agreement dated February 28, 2006 between our
      company and Primecap Resources Inc. (incorporated by reference from our
      Current Report on Form 8-K, filed on March 10, 2006).                             
|               |                                                                                                                                                                                                                                
|10.4           | Amending Agreement dated March 15, 2006 between our
      company and Primecap Resources Inc. (incorporated by reference from our
      Current Report on Form 8-K, filed on March 20, 2006).                                  

---

- 28 -

|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)
|      |                                                                                                                                                                                        
|(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 Gordon Samson.                                                                                                   
|      |                                                                                                                                                                                        
|(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 Gordon Samson.                                                                                                   

*Filed herewith

Item 14. Principal Accountant Fees and Services

The following table sets forth the fees billed to the Company
for professional services rendered by the Company's principal accountant, for
the year ended January 31, 2006 and January 31, 2007:

|Services           | 2007  | 2006 
|------------------ | ----- | -----
|Audit fees         | 8,900 | 9,187
|Audit related fees | -     | -    
|Tax fees           |       |      
|All other fees     | -     | -    
|                   |       |      
|Total fees         | 8,900 | 9,187

Audit Fees. Consist of fees billed for professional
services rendered for the audits of our financial statements, reviews of our
interim consolidated financial statements included in quarterly reports,
services performed in connection with filings with the Securities & Exchange
Commission and related comfort letters and other services that are normally
provided by De Leon & Company, P.A. for 2006 and by Infante & Company
for 2007 in connection with statutory and regulatory filings or engagements.

Tax Fees. Consist of fees billed for professional
services for tax compliance, tax advice and tax planning. These services include
assistance regarding federal, state and local tax compliance and consultation in
connection with various transactions and acquisitions.

We do not use De Leon & Company or Infante & Company
for financial information system design and implementation. These services,
which include designing or implementing a system that aggregates source data
underlying the financial statements or generates information that is significant
to our financial statements, are provided internally or by other service
providers. We do not engage De Leon & Company or Infante & Company, to
provide compliance outsourcing services.

Effective May 6, 2003, the Securities and Exchange Commission
adopted rules that require that before De Leon & Company or Infante &
Company is engaged by us to render any auditing or permitted non-audit related
service, the engagement be:

- approved by our audit committee (which consists of our entire board of
  directors); or

---

- 29 -

- entered into pursuant to pre-approval policies and procedures established
  by the board of directors, provided the policies and procedures are detailed
  as to the particular service, the board of directors is informed of each
  service, and such policies and procedures do not include delegation of the
  board of directors' responsibilities to management.

The 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.

The board of directors has considered the nature and amount of
  fees billed by De Leon & Company and believes that the provision of services
  for activities unrelated to the audit is compatible with maintaining De Leon
  & Companys independence.

---

- 30 -

SIGNATURES

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



TAO MINERALS INC.

By: /s/ James
SikoraJames
Sikora President and Director Principal Executive Officer 
Date: August
8, 2007

By: /s/ Julio De
Leon Julio De
Leon Chief Financial Officer and Director Principal Financial Officer

Date: August
8, 2007

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

By: /s/ James
Sikora
  James
Sikora President and Director Principal Executive Officer 
Date: August
8, 2007

By: /s/ Julio De
LeonJulio De
Leon Chief Financial Officer and Director 
Date: August
8, 2007

By: /s/ Duncan
Bain
  Duncan
Bain Director 
Date: August
8, 2007

By: /s/ Walter
(Terry) PlummerWalter
(Terry) Plummer Director 
Date: August
8, 2007



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