Filed by sedaredgar.com - Tao Minerals Ltd. - Exhibit 10.1






THIS CANCELLATION AGREEMENT is made this 4th day of October,
2008.

	 BETWEEN: 	
	 	TAO MINERALS, LTD., a
      Nevada corporation with a principal 
	 	executive office at Officina 624,
      Empresarial Mall Ventura, Cra.32#1B 
	 	Sur 51, Medellin, Columbia 
	 	 
	 	(hereinafter referred to as the
      "Company") 
	 	
	 AND: 	
	 	
	 	OUTBOARD INVESTMENTS,
      LTD., of BCM Cape Building 
	 	Leeward Highway Providenciales,
      Turks and Caicos, BWI 
	 	(hereinafter referred to as the
      "Investor") 


WHEREAS:

	A. 	
      The Investor and the Company entered into a Securities
      Purchase Agreement dated April 4, 2008 (the “Purchase Agreement”), wherein
      the Investor purchased from the Company a 10% convertible note in the
      aggregate principal amount of one million dollars ($1,000,000) (the
      “Note”);

	 	 
	B. 	
      The Company and the Investor wish to cancel the Note and
      the Purchase Agreement;



THEREFORE this agreement witnesses that in consideration
of the sum of $1.00 given by the Company to the Investor and other good and
valuable consideration given by each to the other, the receipt and sufficiency
of which is acknowledged by the respective parties, the parties hereto agree as
follows:

	1. 	
      The Purchase Agreement is hereby cancelled and of no
      further force and effect.

	 	 
	2. 	
      The Note is hereby cancelled and of no further force and
      effect, with the exception of the convertible note in the principal sum of
      $125,000 previously advanced dated April 4, 2008 (the “First Tranche
      Note”).

	 	 
	3. 	
      All obligations of the Investor and the Company under the
      Purchase Agreement and the Note are hereby terminated, with the exception
      of the First Tranche Note.

	 	 
	4. 	
      The parties agree to execute such further documents and
      assurances as may be required to effect the intent hereof.

	 	 
	5. 	
      This Agreement is personal in nature and shall enure to
      the benefit of and be binding upon the parties hereto and their respective
      executors, administrators, successors and permitted assigns.

	 	 
	6. 	
      Whenever the singular or masculine are used throughout
      this Agreement, the same shall be construed as being the plural or
      feminine or neuter where the context so requires, and vice
versa.

	 	 
	7. 	
      This Agreement shall be governed, construed and enforced
      according to the laws of the State of Nevada.







- 2 -

	8. 	
      The Investor and the Company may execute this Agreement
      in two or more counterparts and deliver same by facsimile, and any such
      counterparts and facsimiles shall be deemed to constitute one and the same
      instrument, to be an originally executed document, and to bear the date
      and be effective as of the date first above
written.



IN WITNESS WHEREOF the parties hereto have executed this
Agreement as of the date first above written.

	TAO MINERALS, LTD. 
	 	 
	 	 
	Per:	                                                                        
      
	 	Authorized Signatory 
	 	 
	 	 
	 	                                                                        
      
	 	OUTBOARD INVESTMENTS, LTD. 
	Per: 	
	 	Authorized Signatory