UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-KSB

(Mark One)

|[X] | ANNUAL REPORT PURSUANT TO SECTION
      13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year
      endedJanuary 31, 2006
|--- | ------------------------------------------------------------------------------------------------------------------------------------------
|   

|[ ]                                                                  | TRANSITION REPORT UNDER SECTION 13 OR 15(d)
      OF THE SECURITIES EXCHANGE ACT OF 1934
|-------------------------------------------------------------------- | ----------------------------------------------------------------------------------------
|                                                                     | For the transition period from [ ] to [ ]                                               
|                                                                     | Commission file number000-4995                                                          
|                                                                     | TAO MINERALS LTD.                                                                       
|                                                                     | (Name of small business issuer in its charter)                                          
|                                                                     |                                                                                         
|                                                                     | Nevada                                                                                  
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)                                                    
|                                                                     |                                                                                         
|                                                                     | Officina 618,
      Empresarial Mall Ventura, Cra.32#1B                                 
|                                                                     | Sur 51, Medellin, Columbia                                                              
|                                                                     | (Address of principal executive offices)                                                
|                                                                     |                                                                                         
|Issuer's telephone number(305)
      726-0602                        |                                                                                         
|                                                                     |                                                                                         
|Securities registered pursuant to Section
      12(b) of the Act:    |                                                                                         
|                                                                     |                                                                                         
|                                                                     | Title of each class                                                                     
|                                                                     | Nil                                                                                     
|                                                                     |                                                                                         
|Securities registered pursuant to Section
      12(g) of the Act:    |                                                                                         
|                                                                     | Common Shares, par value $0.001                                                         
|                                                                     | (Title of class)                                                                        

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 is not 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.
[ ]

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

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

Yes [X] No [ ]

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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.

34,216,000 common shares @ $1.895(1)= $64,839,320

(1)Average of bid and ask closing prices on April 24, 2006.

(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 24, 2006

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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Our Current Business

We are in the mineral resource business. To date, we have not conducted any exploration on our mineral properties. We are currently in the process of our phase 1 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, lead, 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 24, 2006, 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.

We also engage directors and 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 exploration of our
property.

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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 $2,361 and working capital deficit of $1,758 as of our year ended January 31, 2006. We currently do not generate revenues from our operations. Our business plan calls for substantial
investment and cost in connection with the acquisition and exploration of our mineral properties currently under lease and option. Any direct acquisition of the claim under lease or option is subject to our ability to obtain the financing necessary
for us to fund and carry out exploration programs on the properties. The requirements are substantial. We do not currently have any arrangements for additional financing and we can provide no assurance to investors that we will be able to find such
financing if required. Obtaining additional financing would be subject to a number of factors, including market prices for minerals, investor acceptance of our properties, and investor sentiment. These factors may make the timing, amount, terms or
conditions of additional financing unavailable to us. The most likely source of future funds presently available to us is through the sale of equity capital and loans. Any sale of share capital will result in dilution to existing shareholders.

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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, 2006 is $54,493.
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.

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

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to exploit them, that we will do so on a profitable basis.

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

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

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

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

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

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

Our independent certified public accounting firm, in their Notes to the audited financial statements for the year ended January 31, 2006 states that there is a substantial doubt that we will be able to continue as a
going concern.

Our independent certified public accounting firm, De Leon & Company, state in their Notes to the audited financial statements for the year ended January 31, 2006, that we have experienced significant losses since
inception. Failure to arrange adequate financing on acceptable terms and to achieve profitability would have an adverse effect on our financial position, results of operations, cash flows and prospects, there is a substantial doubt that we will be
able to continue as a going concern.

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

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

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,

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existing laws and regulations that may entail greater or lesser costs and delays, depending on the nature of the activity to be permitted and how stringently the regulations are implemented by the permitting authority. We
are not presently aware of any specific material environmental constraint affecting our properties that would preclude the economic development or operation of any specific property.

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

Risks Associated with Our Common Stock

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

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

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

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

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interpretations of these rules, the NASD
believes that there is a high probability that speculative low priced securities
will not be suitable for at least some customers. The NASD requirements make it
more difficult for broker-dealers to recommend that their customers buy our
common stock, which may limit your ability to buy and sell our stock.

Other Risks

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

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

Trends, Risks and
Uncertainties

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

|Item
      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.

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

The Whale Mine
ClaimsAcquisition 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.

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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 or 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.

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 analysed 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 2006. 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.

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- 11 -

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 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 analysed 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

---

|                                 | - 12 - |            
|-------------------------------- | ------ | -----------
|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

Phase One of the recommended geological program will be funded from our cash on hand. 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 and Location

On February 1, 2006 we executed a letter agreement with Primecap Resources and Nueva California S.A.,

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- 13 -

concerning the acquisition of an interest in the Risaraldo La Golondrina D14-082 property located in Narino, Colombia.

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

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

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

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

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

The Golondria Gold-Silver Project is located in the Municipality of Los Andes Sotomayor, Department of Narino, in the southwest part of the state of Colombia, South America.

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. 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, in the area of Golondrina.

There are no government records of historical mining activity in the area. To the best of our knowledge no national or international mining companies have explored the area during the Spanish colonial period. In the late
1900s both placer and lode mining have been carried out by the local population. Placer mining only involved panning of gravels from the local creeks. Lode mining simply consisted of finding a vein exposed in the local hillsides and tunneling with
pick and shovel along that vein. Vein material thought to contain gold was separated from host rock by hand-cobbing, and then the vein material was crushed by hand or by stamp mill. Gold was separated then by a mixture of panning, vibrating tables
and gravity separation to separate gold from gangue material. Larger operations 10 km to the southwest (e.g. San Juan Bosco, La Llanada) have also made use of cyanidation for gold separation.

The Golondrina property was acquired by Colombian mining company Barro Blanco S.A. Several other gold properties exist in the area. Latingold Inc. 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. Except for local small-scale mining no further work
has been done on those properties since that time except a site visit in August 2004 by Duncan Bain. During that visit several samples of possible ore-grade material were taken for analysis. These assays confirmed the presence of ore-grade gold
mineralization on the property. Primecap Resources Inc. acquired an

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- 14 -

option from the Cooperative of Small Miners of the Andes Comilan to earn a 100% interest in the Golondrina property in August 2004. No work has been carried out by PrimeCap since that time. We optioned the property from
PrimeCap in February 2006.

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.

Accessibility

The Golondrina Project is located in the watershed of Quebrada Honda, a tributary of the Rio Pacual in the Municipality of Los Andes Sotomayor, Department of Narinõ, in the southwest part of the state of Colombia,
South America. It is found in the Mining District of Pasto and is contained within mining concession No. D14-082, which covers a rectangular area of 96 hectares. It occurs on Colombian National Topographic map sheet 410, and metric co-ordinates
945000E/ 655000N.

The closest town to the mining property is Sotomayor, which lies 5 kilometres to the southeast. Sotomayor is approximately 40 kilometres NW of the city of Pasto (population 354,000). Golondrina lies at Latitude 1o N,
Longitude 78o W.

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. Pasto connects to the capital city of Bogota by road and scheduled air service.

Infrastructure

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. Electrical power
is available at Sotomayor, although it may be subject to interruption. Any electrical power required on the property could be supplied by diesel generation. Should the project reach an advanced stage then the road could be upgraded and an electrical
powerline could be extended from Sotomayor to the property. There is no rail link into the immediate area. Cell phone coverage is available in the area, although it is dependent on topography.

Budget

It is recommended that La Golondrina property should be explored using modern exploration methods to discover one or more gold mineralized zones that can be mined at a profit.

A Phase 1 program would consist of reconnaissance and detailed mapping of the property. Particular notice would be made for structures which might control mineralization and alteration. Prospecting for and sampling of
mineralization would also be conducted. Stream sediment sampling would be carried out over the whole drainage system within the property boundaries. This sampling would be used to look for continuity of mineralized veins or their alteration haloes
not exposed at surface. For the same purpose a soil survey would also be conducted, on a grid covering the entire property, with lines at 50 m spacing. Samples would be taken every 25 m along those lines. The positions of surface and underground
workings would be accurately plotted and these workings would be mapped. They would also be systematically sampled. Assaying of all stream sediment, surface rock and soil samples would be carried out for 30 elements by ICP-MS, and any samples
showing highly anomalous Au values would be re-assayed

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- 15 -

by Fire Assay. Trenching of appropriate
areas to expose bedrock for mapping and sampling would be carried out, based on
mapping and sampling results. Samples from underground workings would be assayed
by Fire Assay. Any underground samples with recognizable coarse gold would be
screened and the appropriate fractions assayed independently. The estimated cost
of this work is $52,450.

Dependent on favourable results from the
Phase 1 program, a Phase 2 diamond drill program would be initiated. Further
work would be dependent on the results of the Phase 1 and Phase 2
programs.

ESTIMATED BUDGET, PHASE 1
PROGRAM

|ITEM |                               | #   | Cost/wk | #   | $US/day    | Total   | Comments         
|---- | ----------------------------- | --- | ------- | --- | ---------- | ------- | -----------------
|     |                               |     |         | Wks |            | $US     |                  
|1    | Senior
      Geologist        | 1   | $1400   | 6   | $200       | $8400   |                  
|2    | Junior
      Geologist        | 2   | $875    | 6   | $125       | $10500  |                  
|3    | Labourers                     | 6   | $140    | 6   | $7         | $5040   |                  
|4    | Stream sample
      Analysis  | 50  |         |     | $20/sample | $1000   | ICP+AuFA         
|5    | Soil sample
      analysis    | 50  |         |     | $20/sample | $1000   | ICP+AuFA         
|6    | Underground
      sample      | 200 |         |     | $20/sample | $4000   | ICP+AuFA         
|     | analysis                      |     |         |     |            |         |                  
|7    | Trenching/backhoe             | 1   | $1500   | 1   | $45/hr     | $1500   | RetroCAT100      
|8    | Food                          | 9   | $180    | 6   | $20        | $9720   |                  
|9    | Transportation                | 1   | $400    | 6   |            | $2400   | Campero
      4X4
|10   | Accommodation                 | 9   | $35     | 6   | $5         | $1890   |                  
|11   | Office
      Management-local | 1   | $1000   | 3   |            | $1000   |                  
|12   | Administration-Medellin       | 1   | $1000   | 12  | $4000/mo   | $6000   |                  
|     | TOTAL                         |     |         |     |            | $52,450 |                  

|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.

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, 2006
    $n/a
    $n/a


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- 16 -

National
      Association of Securities Dealers OTC Bulletin
      BoardQuarter
      Ended(1)
    High
    LowOctober 31, 2005
    $n/a
    $n/aJuly 31, 2005
    $n/a
    $n/a


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

On April 24, 2006, the closing price for
the common stock as reported by the quotation service operated by the OTC
Bulletin Board was $1.90.

As of April 24, 2006, there were 32
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.

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, 2006, we
did not issue any equity securities which were not registered under the
Securities Act of 1933. Subsequent to the year ended January 31, 2006 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

---

- 17 -

(the Securities Act) provided by Section
3(a)(9) of the Securities Act and/or by Regulation S promulgated
thereunder.

Equity Compensation Plan
InformationWe 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 a junior exploration stage company
that has not yet generated or realized any revenues from our business
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, 2006, we had working
capital deficit of $1,758, compared to working capital of $46,733 as at
January

---

- 18 -

31, 2005.

At January 31, 2006, our total current assets were $2,361 which consisted of cash compared to total current assets of $50,933 as at January 31, 2005.

At January 31, 2006, our total current liabilities were $4,119, compared to total current liabilities of $4,200 as at January 31, 2005.

For the year ended January 31, 2006, we posted losses of $48,916 compared to $5,577 as at January 31, 2005 and to $54,493 since incorporation. The principal components of the loss for the year ended January 31,
2006 were professional fees, exploration costs and expenses, and general and administrative.

Operating expenses for the year ended January 31, 2006 were $48,416 compared to $7,608 as at January 31, 2005.

At January 31, 2006, we had cash on hand of $2,361 compared to $50,933 as at January 31, 2005.

Cash Requirements

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

Going Concern

Due to our being an exploration stage company and not having generated revenues, in their Notes to our financial statements for the year ended January 31, 2006, 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, 2006 have incurred losses of $54,493 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

---

- 19 -

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 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

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- 20 -

known environmental remedial liabilities
as at March 31, 2006.

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 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 expect to adopt 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 plan to adopt 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.

---

- 21 -

|Item
      7. | Financial
      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 consolidated financial
statements are filed as part of this annual report:

Report of Independent
      Registered Public Accounting FirmBalance
      SheetsStatements of Changes in
      Stockholders' Equity (Deficiency)Statements of
      OperationsStatements of Cash
      FlowsNotes to the Consolidated
      Financial Statements


---

F-1

TAO MINERALS
LTD.(An Exploration Stage
Company)

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

January 31, 2006 and 2005

|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 andStockholders 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 audits. The cumulative statements of operations,
stockholders deficit, and cash flows for the period from September 23, 2004 (inception) to January 31, 2006 include amounts for the period from September 23, 2004 (inception) to January 31, 2005, which were audited by other auditors whose
report has been furnished to us, and our opinion, insofar as it relates to the amounts included for the period September 23, 2004 through January 31, 2005 is based solely on the report of other auditors.

We conducted our audits 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 audits provide a reasonable basis for our opinion.

In our opinion, based on our audits and the report of other auditors, 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 and for the period from September 23, 2004 (inception) to January 31, 2006 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.

De Leon & Company, P.A.Pembroke Pines, FloridaApril 14, 2006

---

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of:Tao Minerals, Ltd. (an exploration stage company)

We have audited the accompanying balance sheet of Tao Minerals, Ltd. (an exploration stage company) as of January 31, 2005 and the related statements of operations, changes in stockholders equity and cash flows for
the period from September 23, 2004 (inception) to January 31, 2005.  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.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, 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, 2005 and the results of its
operations and its cash flows for the for the period from September 23, 2004 (inception) to January 31, 2005 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 is in the development stage with no
operations and has a negative cash flow from operations of $1,377 for the period September 23, 2004 (inception) to January 31, 2005. These factors raise substantial doubt about its ability to continue as a going concern. Managements plans
concerning this matter are also described in Note 1. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

WEBB & COMPANY, P.A.Boynton Beach, FloridaMarch 8, 2005

---

F-3

|TAO MINERALS
      LTD.                                                                |               |   |         
|-------------------------------------------------------------------------------------- | ------------- | - | --------
|(An
      Exploration Stage Company)                                                   |               |   |         
|Balance
      Sheets                                                                   |               |   |         
|January 31, 2006 and
      2005                                                        |               |   |         
|(Expressed in
      U.S. Dollars)                                                      |               |   |         
|                                                                                       | 2006          |   | 2005    
|ASSETS                                                                                 |               |   |         
|Current                                                                                |               |   |         
|Cash                                                                                   | $
      2,361 | $ | 50,933  
|Total current
      assets                                                             | 2,361         |   | 50,933  
|Mineral
      Properties                                                               |               |   |         
|Mineral Rights, net                                                                    | 3,000         |   | 3,000   
|Total Mineral
      Properties                                                         | 3,000         |   | 3,000   
|Total assets                                                                           | $
      5,361 | $ | 53,933  
|LIABILITIES                                                                            |               |   |         
|Current                                                                                |               |   |         
|Accounts payable and
      accrued expenses                                            | $ 1,119       | $ | 4,200   
|Due to a related
      party                                                           | 3,000         |   | -       
|Total current
      liabilities                                                        | 4,119         |   | 4,200   
|Total Liabilities                                                                      | $4,119        | $ | 4,200   
|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, 69,000,000 shares
      authorized                      |               |   |         
|Issued, allotted and
      outstanding:                                                |               |   |         
|61,916,000 shares of common
      stock                                                | 61,916        |   | 61,916  
|Subscription
      receivable                                                          | -             |   | (425)   
|Additional
      paid-in capital                                                       | 47,995        |   | 47,995  
|Deficit accumulated
      during exploration stage                                     | (108,669)     |   | (59,753)
|Total stockholders equity                                                             | 1,242         |   | 49,733  
|Total liabilities and stockholders
      equity                                       | $
      5,361 | $ | 53,933  
|The
      accompanying notes are an integral part of these financial
      statements. |               |   |         

---

F-4

|TAO MINERALS LTD.                                                        |              |                |         |              |            |             |             |              
|------------------------------------------------------------------------ | ------------ | -------------- | ------- | ------------ | ---------- | ----------- | ----------- | -------------
|(An Exploration Stage
      Company)                                     |              |                |         |              |            |             |             |              
|Statement of Changes in Stockholders'
      Deficiency                   |              |                |         |              |            |             |             |              
|For the periods September 23, 2004
      (Inception) to January 31, 2006 |              |                |         |              |            |             | Page 1 of 2
|(Expressed in U.S. Dollars)                                              |              |                |         |              |            |             |             |              
|                                                                         |              |                |         |              |            |             | Deficit     | Total        
|                                                                         |              |                |         | Additional   |            |             | Accumulated | Stock-       
|                                                                         |              |                |         |              |            |             | During      |              
|                                                                         | 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 period from September 23,
      2004 to               |              |                |         |              |            |             | (5,577)     | (5,577)      
|January 31,
      2005                                                   |              |                |         |              |            |             |             |              

|Balance, January 31,
      2005 | 61,916,000 | $ | 61,916 | $ | 47,995 $ | (425) | $ | (59,753) | $ | 49,733
|------------------------------- | ---------- | - | ------ | - | -------- | ----- | - | -------- | - | ------

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

---

F-5

|TAO MINERALS
      LTD.                                                  |              |        |         |              |            |             |          |              |         
|------------------------------------------------------------------------ | ------------ | ------ | ------- | ------------ | ---------- | ----------- | -------- | ------------ | --------
|(An
      Exploration Stage Company)                                     |              |        |         |              |            |             |          |              |         
|Statement of Changes in
      Stockholders' Deficiency                   |              |        |         |              |            |             |          |              |         
|For the periods September
      23, 2004 (Inception) to January 31, 2006 |              |        |         |              |            |             |          | Page 2 of 2 
|(Expressed in U.S. Dollars)                                              |              |        |         |              |            |             |          |              |         
|                                                                         |              |        |         |              |            |             |          | Deficit      | Total   
|                                                                         |              |        |         |              | Additional |             |          | Accumulated  | Stock-  
|                                                                         |              |        |         |              |            |             |          | During       |         
|                                                                         | 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
|------------------------------- | ---------- | - | ------ | - | -------- | --- | --------- | - | -----

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

---

F-6

|TAO MINERALS
      LTD.                                                          |                            |                          |                        |                     |   |               
|-------------------------------------------------------------------------------- | -------------------------- | ------------------------ | ---------------------- | ------------------- | - | --------------
|(An
      Exploration Stage Company)                                             |                            |                          |                        |                     |   |               
|Statements of
      Operations                                                   |                            |                          |                        |                     |   |               
|(Expressed in U.S. Dollars)                                                      |                            |                          |                        |                     |   |               
|                                                                                 | From Inception
      Date  |                          |                        |                     |  
|                                                                                 |                            | of  September 23,        |                        |                     |   | For the period
|                                                                                 | 2004 to
      Period Ended | For the Year
      ended | September 23, 2004    
|                                                                                 |                            | January 31,              | January 31,
      2006 | to January 31, 2005
|                                                                                 |                            | 2006                     |                        |                     |   |               
|OPERATING
      EXPENSES                                                         |                            |                          |                        |                     |   |               
|Exploration
      expenses                                                       | $                          | 30,550                   | $                      | 27,250              | $ | 3,300         
|Professional
      fees                                                          |                            | 16,339                   |                        | 12,139              |   | 4,200         
|Consulting
      fees                                                            |                            | 3,000                    |                        | 3,000               |   | -             
|Transfer agent and filing
      fees                                             |                            | 4,494                    |                        | 4,494               |   | -             
|General and
      administrative                                                 |                            | 1,641                    |                        | 1,533               |   | 108           
|Total Operating
      Expenses                                                   |                            | 56,024                   |                        | 48,416              |   | 7,608         
|LOSS FROM
      OPERATIONS                                                       |                            | (56,024)                 |                        | (48,416)            |   | (7,608)       
|OTHER
      EXPENSE                                                              |                            |                          |                        |                     |   |               
|Foreign currency
      translation gain (loss)                                   |                            | 1,531                    |                        | (500)               |   | 2,031         
|Provision for income
      taxes                                                 |                            | -                        |                        | -                   |   | -             
|Net (loss) for the
      Period                                                  | $                          | (54,493)                 | $                      | (48,916)            | $ | (5,577)       
|                                                                                 |                            |                          |                        |                    
|**LOSS PER SHARE  BASIC AND FULLY DILUTED**                                     |                            |                          | $                      | **(0.00)**          | $ | (0.00)        
|WEIGHTED AVERAGE NUMBER OF ISSUED
      SHARES   BASIC and FULLY
      DILUTED   |                            |                          |                        |                    
|                                                                                 | 61,916,000                 |                          | 58,299,384            
|The accompanying notes are an integral part of these
      financial statements. |                            |                          |                       

---

F-7

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

|                                                | From Inception
      Date    of September 23,  2004 to Period Ended   
      January 31,
      2006 |          | For the
      Year  ended  January  31,2006 |          | For the period  September 23, 
      2004 to
      January  31, 2005
|----------------------------------------------- | --------------------------------------------------------------------------------------------------- | -------- | ------------------------------------------- | -------- | --------------------------------------------------------------------
|
|
|
|Cash Provided
      by (Used for) Operating     |                                                                                                     |          |                                             |          |                                                                     
|Activities                                      |                                                                                                     |          |                                             |          |                                                                     
|Net (loss) for the
      period                 | $                                                                                                   | (54,493) | $                                           | (48,916) | $                                                                   
|Changes in non-cash
      working capital items |                                                                                                     |          |                                             |          |                                                                     
|Accounts payable and
      accrued              |                                                                                                     | 1,119    |                                             | (3,081)  |                                                                     
|Increase in due from a related
      party      |                                                                                                     | 3,000    |                                             | 3,000    |                                                                     
|Subscription receivable                         |                                                                                                     | 425      |                                             | 425      |                                                                     
|Cash used by operations                         |                                                                                                     | (49,949) |                                             | (48,572) |                                                                     
|Investing
      Activities                      |                                                                                                     |          |                                             |          |                                                                     
|Purchase of mineral
      rights                |                                                                                                     | (3,000)  |                                             | -        |                                                                     
|Cash used by investing
      activities         |                                                                                                     | (3,000)  |                                             | -        |                                                                     
|Financing
      Activities                      |                                                                                                     |          |                                             |          |                                                                     
|Issuance of common stock                        |                                                                                                     | 55,310   |                                             | -        |                                                                     
|Cash provided by financing
      activities     |                                                                                                     | 55,310   |                                             | -        |                                                                     
|Cash Increase
      During the Period           |                                                                                                     | 2,361    |                                             | (48,572) |                                                                     
|Cash,
      Beginning of Period                 |                                                                                                     | -        |                                             | 50,933   |                                                                     
|Cash and Equivalent, End
      of Period        |                                                                                                     | 2,361    |                                             | 2,361    |                                                                     
|SUPPLEMENTAL CASH FLOW INFORMATION              |                                                                                                     |          |                                             |         
|Cash and Equivalents
      consist of:          |                                                                                                     |          |                                             |          |                                                                     
|Cash                                            | $                                                                                                   | 2,361    | $                                           | 2,361    | $                                                                   

---

F-8

TAO MINERALS LTD(An Exploration Stage CompanyNotes to Financial StatementsFor the
year ended January 31, 2006 and the period ended January 31,
2005(Expressed in U.S.
dollars)

|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 negative cash flow from operations of $48,572 for the year ended
      January 31, 2006. 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)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  

---

F-9

TAO MINERALS LTD(An Exploration Stage Company)Notes to Financial StatementsFor the
year ended January 31, 2006 and the period ended January 31,
2005(Expressed in U.S.
dollars)

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

---

F-10

TAO MINERALS LTD(An Exploration Stage Company)Notes to Financial StatementsFor the
year ended January 31, 2006 and the period ended January 31,
2005(Expressed in U.S.
dollars)

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

---

F-11

TAO MINERALS LTD(An Exploration Stage Company)Notes to Financial StatementsFor the
year ended January 31, 2006 and the period ended January 31,
2005(Expressed in U.S.
dollars)

|4. | Related Party                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | During the year ended January 31,
      2006, the president advanced the Company $3,000 (2005 - $Nil). The advance
      is unsecured, non-interest bearing and has no specific terms of
      repayment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  
|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
      69,000,000 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 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.
|  
|6. | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  
|   | As of January 31, 2006, the
      Company had a net operating loss carryforward for income tax reporting
      purposes of approximately $54,493 that may be offset against future
      taxable income through 2026. 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                                                                                                                                                                                                                                                        
|  

2006
    
    2005Deferred tax
      assets:Net operating
      loss carryforwards
    $
    54,493
    $
    5,577Gross deferred tax
      assets
    
    18,527
    
    1,925Less: valuation
      allowance
    
    (18,527)
    
    (1,925)Net deferred tax
      asset
    $
    --
    $
    --


---

F-12

TAO MINERALS LTD(An Exploration Stage Company)Notes to Financial StatementsFor the
year ended January 31, 2006 and the period ended January 31,
2005(Expressed in U.S.
dollars)

|6. | Income Taxes(continued)                                                                                                    
|-- | ---------------------------------------------------------------------------------------------------------------------------
|  
|   | A reconciliation of the differences between the
      effective income tax rate and the statutory federal tax rate follows:
|  

2006
    2005Tax 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 Events
|-- | -----------------
|  

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

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

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

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 and on April 13, 2006 we paid the $US 150,000 in accordance with the
Definitive Agreement.

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

| | 1.  | US$30,000.00 upon execution of
      the HOA, which amount has been paid;                      
| | --- | -----------------------------------------------------------------------------------------------
| | 2.  | US$20,000.00 on or before August
      23, 2005, which amount has been paid;                   
| | 3.  | US$32,000.00 on or before August
      23, 2006;                                               
| | 4.  | US$40,000.00 on or before August
      23, 32007;                                              
| | 5.  | US$48,000.00 on or before August
      23, 2008; and                                           
| | 6.  | US$160,000.00 on or before August
      23, 2009.                                              
| | 7.  | 200,000 shares of the Assignor,
      as of August 23, 2004, which issuance has been completed;
| | 8.  | 200,000 shares of the Assignor,
      as of August 23, 2005, which issuance has been completed;
| | 9.  | 300,000 shares of the Assignor,
      as of August 23, 2006;                                   
| | 10. | 300,000 shares of the Assignor,
      as of August 23, 2007                                    
| |    

On April 21, 2006 12,600,000 common shares
were cancelled.

---

- 22 -

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

On April 4, 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 De Leon & 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 Webb & 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 Webb & 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 Webb & 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 De Leon &
Company, as of April 4, 2006. De Leon & 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, 2006.
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 in our company's internal controls or in other
factors, which could significantly affect internal controls subsequent to the
date we carried out our evaluation.

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

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 24, 2006, 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  Appointed
|------------ | ------------------------------------ | --- | ---------------------------------------
|
|
|James Sikora | President and Director               | 48  | February 1, 2006                       
|Duncan Bain  | Director                             | 51  | March 5, 2006                          

---

- 23 -

|Name                         | Position Held
      with our Company | Age | Date First 
      Elected or  Appointed
|---------------------------- | ------------------------------------ | --- | ---------------------------------------
|
|
|Walter (Terry)
      Plummer | Director                             | 67  | March 14, 2006                         
|Gordon Samson                | Chief Financial Officer and Director | 47  | March 24, 2006                         

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 graduated from University of
Western Ontario in 1977 with a B.Sc. Geology. He has practiced as an Exploration
and Mine Geologist for 30 years, both in Canada and overseas, including
Colombia, Peru, Mexico, United States, China, New Guinea, Portugal and Saudi
Arabia. His expertise includes a variety of mineral deposit types which include
epithermal and lode gold, VMS copper-zinc, magmatic copper-nickel-PGE, SEDEX
lead-zinc-silver base metals, uranium and diamonds. He formed his own consulting
firm, Duncan Bain Consulting Ltd., in 1986, and has designed, budgeted, and
supervised exploration programs which include airborne and ground-based
geophysics, mapping, geochemical sampling and both surface and underground
drilling programs. He holds a Professional Geoscientist (P.Geo.) designation,
has written numerous engineering reports including those required by National
Instrument 43-101 and meets the requirements of a Qualified Person. He is a
Fellow of the Geological Association of Canada and is a member of the
Prospectors and Developers Association of Canada. Mr. Bain is also a Director of
St. Elias Mines Ltd., a Canadian publicly traded junior resource company based
in Canada. He is currently in the process of completing a Ph.D. Geology program
while continuing to complete a variety of consulting contracts.

Walter (Terry) Plummer,
Director

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

---

- 24 -

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.

Gordon Samson, Chief Financial
Officer and Director

Mr. Samson was appointed as a director and
chief financial officer on March 24, 2006.

Mr. Samson is an accredited accountant
with approximately 20 years of experience in the financial arena including
positions with Canada Customs and Revenue Agency (formerly Revenue Canada); a
major Canadian institution as a senior banker; a regional, full service
brokerage house; chief financial officer and chief executive officer positions
in both the United States and Canada serving as a director of a number of public
corporations as well as being a member of various audit committees. Mr. Samson
has further served as a consultant, performing due diligence for acquisitions
and other corporate transactions for various reporting companies. Mr. Samsons
background spans both resource and technology firms.

Committees of the
BoardAudit
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
CommitteeWe 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
| |   
| |   

---

- 25 -

| | 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 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, 2006,
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, 2006 was in excess of
$100,000 (the Named Executive Officers).

|Name and
      Principal  Position                | Fiscal 
      Year  Ended |                                              |                                                        |                           | Long Term
      Compensation | All Other  Compen- 
      sation
|------------------------------------------------- | ------------------------- | -------------------------------------------- | ------------------------------------------------------ | ------------------------- | ---------------------------- | --------------------------------
|                                                  |                           | Pay- 
      outs      LTIP  Pay- 
      outs
|Annual Compensation                               | Awards(1)                
|Salary                                            | Bonus                     | Other 
      Annual  Compen-  sation(2)      | Securities 
      Underlying  Options/  SAR's  Granted | Restricted  Stock  Awards
|
|
|
|
|James Sikora(1)  President                        | 2006 
      2005          | $Nil 
      $Nil                             | Nil 
      Nil                                         | Nil 
      Nil            | Nil 
      Nil               | Nil 
      Nil                  
|
|Gordon Samson(2)  Chief Financial Officer         | 2006 
      2005          | $Nil 
      $Nil                             | Nil 
      Nil                                         | Nil 
      Nil            | Nil 
      Nil               | Nil 
      Nil                  
|
|Don Axent(3)  former President, CEO               | 2006 
      2005          | $Nil 
      $Nil                             | Nil 
      Nil                                         | Nil 
      Nil            | Nil 
      Nil               | Nil 
      Nil                  
|
|James Plexman(4)  former CFO and 
      Treasurer | 2006 
      2005          | $Nil 
      $Nil                             | Nil 
      Nil                                         | Nil 
      Nil            | Nil 
      Nil               | Nil 
      Nil                  
|
|
|Donald Fife 
      former Secretary               | 2006 
      2005          | $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.
|   

---

- 26 -

|(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.
|   

Stock Options and Stock Appreciation
Rights

From the date of inception and up to
January 31, 2006, 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, 2006.

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, 2006.

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 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.

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

As of April 24, 2006, 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 24, 2006 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:

---

- 27 -

|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                                    | *                  
|
|
|Gordon
      Samson  2943 Woodcrest Place  Surrey, BC V4P 2K8                                            | 1,500,000                                  | 2.89               
|
|
|Directors and
      Officers as a group  (4 persons)                                                     | 7,000,000                                  | 13.49%             
|

* less than 1%

|(1) | Based on 51,816,000 shares of
      common stock issued and outstanding as of April 24, 2006. Except as
      otherwise indicated, we believe that the beneficial owners of the common
      stock listed above, based on information furnished by such owners, have
      sole investment and voting power with respect to such shares, subject to
      community property laws where applicable.                                                                                                                                                                                 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    | Beneficial ownership is
      determined in accordance with the rules of the Securities and Exchange
      Commission and generally includes voting or investment power with respect
      to securities. Shares of common stock subject to options or warrants
      currently exercisable or exercisable within 60 days are deemed outstanding
      for the purposes of computing the percentage ownership of the person
      holding such options or warrants, but are not deemed outstanding for the
      purposes of computing the percentage ownership of any other person.
|   
|(2) | 2,500,000 of these shares are
      registered in the name of Nueva California SA. James Sikora has
      dispositive and voting power over these shares.                                                                                                                                                                                                                                                                                                                                                                                                                           
|   

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.

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
      12. | Certain
      Relationships and Related Transactions.
|-------------- | -----------------------------------------------------

|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).
|--- | -------------------------------------------------------------------------------------------------------------------------------------
|   

---

- 28 -

|3.2 | Bylaws (incorporated by reference
      from our Form SB-2 Registration Statement, filed on March 24,
      2005).         
|--- | ---------------------------------------------------------------------------------------------------------------------------
|   
|3.3 | Certificate of Change
      (incorporated by reference from our Current Report on Form 8-K, filed on
      March 24, 2006).
|   

|(10) | Material
      Contracts
|---- | ------------------------

|10.1 | Purchase and Sale Agreement dated
      October 22, 2004 (incorporated by reference from our Amendment No. 1 on
      Form SB-2/A Registration Statement, filed on April 28, 2005).                                            
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|10.2 | Letter Agreement dated February
      1, 2006 between our company and Nueva California S.A. and Primecap
      Resources Inc. (incorporated by reference from our Current Report on Form
      8-K, filed on February 6, 2006).
|    
|10.3 | Assignment Agreement dated
      February 28, 2006 between our company and Primecap Resources Inc.
      (incorporated by reference from our Current Report on Form 8-K, filed on
      March 10, 2006).                       
|    
|10.4 | Amending Agreement dated March
      15, 2006 between our company and Primecap Resources Inc. (incorporated by
      reference from our Current Report on Form 8-K, filed on March 20,
      2006).                            
|    
|10.5 | Consulting Agreement dated April
      1, 2006 between our company and James Sikora (incorporated by reference
      from our Current Report on Form 8-K, filed on April 20, 2006)                                             
|    
|10.6 | Consulting Agreement dated April
      1, 2006 between our company and Gordon Samson (incorporated by reference
      from our Current Report on Form 8-K, filed on April 20, 2006)                                            
|    

|(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,
2005:

|Services                 | 2006  | 2005 
|------------------------ | ----- | -----
|Audit fees               | 9,187 | 4,754
|Audit related
      fees | -     | 1,750
|Tax fees                 | -     | -    
|All other
      fees     | -     | -    
|Total fees               | 9,187 | 6,534

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

---

- 29 -

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 Webb & Company, P.A. for 2005 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
Webb & Company, P.A. 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 Webb & Company, P.A to provide compliance outsourcing
services.

Effective May 6, 2003, the Securities and
Exchange Commission adopted rules that require that before De Leon & Company
or Webb & Company, P.A. 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                                                                                                                                                                                                                                                                                                 
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|· | 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.

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 SikoraPresident and DirectorPrincipal
Executive OfficerDate: April 28,
2006.By: /s/ Gordon
SamsonGordon SamsonChief Financial Officer and DirectorPrincipal Financial OfficerDate: April 28, 2006.

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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 SikoraJames SikoraPresident and DirectorPrincipal Executive OfficerDate: April 28, 2006.By: /s/ Gordon SamsonGordon SamsonChief Financial Officer and DirectorDate: April 28, 2006.By: /s/ Duncan BainDuncan BainDirectorDate: April 28, 2006.By: /s/ W. T. PlummerWalter (Terry) PlummerDirectorDate: April 28, 2006.

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