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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended January 31, 2011

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from [ ] to [ ]

Commission file number 000-52010

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

Nevada	20-1682702
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

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

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

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

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

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

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

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

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

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Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the last 90 days.
Yes[ ] No[ x ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-K (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes[ ] No[ ]

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]	Accelerated filer [ ]
Non-accelerated filer [ ]	Smaller reporting company [ x ]

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

The aggregate market value of Common Stock held by non-affiliates of the Registrant on July 31, 2010 was $75,786,702 based on a $0.255 average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock as of the latest practicable date.

342,605,877 as of June 22, 2011

DOCUMENTS INCORPORATED BY REFERENCE

 None.

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TABLE OF CONTENTS

Item 1.	Business	4
Item 1A.	Risk Factors	7
Item 1B.	Unresolved Staff Comments	11
Item 2.	Properties	11
Item 3.	Legal Proceedings	12
Item 4.	[Removed and Reserved]	18
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	18
Item 6.	Selected Financial Data	19
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 8.	Financial Statements and Supplementary Data	26
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	49
Item 9A.	Controls and Procedures	49
Item 9B.	Other Information	50
Item 10.	Directors, Executive Officers and Corporate Governance	50
Item 11.	Executive Compensation	54
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	56
Item 13.	Certain Relationships and Related Transactions, and Director Independence	57
Item 14.	Principal Accounting Fees and Services	58
Item 15.	Exhibits, Financial Statement Schedules	58

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PART I

Item 1.

Business

This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors”, that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

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

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

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

As used in this annual report, the terms we", "us", "our" and "our company" mean Tao Minerals Ltd. and our majority owned subsidiary, Minera Tao S.A., unless otherwise indicated.

Corporate Overview

The address of our principal executive office is Officina 301 Edeficio El Crusero, Carrera 48, 12 Sur – 148 Medellin Colombia. Our telephone numbers is 877-331-8777.

Corporate History

We were incorporated in the State of Nevada on September 23, 2004.

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

Under the terms of the amended option agreement, the purchase price of the option is $1.42 billion Colombian pesos or approximately US$825,000 dollars. We paid $80,000,000 pesos (approximately US$50,000) upon closing of the option agreement and are obligated to pay $40,000,000 pesos on the 15th of every month until $320,000,000 pesos has been paid. Thereafter 20% of production will be paid until $1.1 billion pesos have been received by Agrominas De Colombia. After the acquisition price is paid Agrominas De Colombia will continue to receive 20% of the mining production. Upon receipt of $1.42 billion pesos by Agrominas De Colombia the option will be exercised and 80% ownership in the property will be transferred to Minera Tao. To date, we have paid to Agrominas De Colombia $240,000,000 pesos (or US$150,000).

Effective September 21, 2009, we effected a 200 for 1 share consolidation of our authorized and issued and outstanding common stock. As a result, our authorized capital decreased from 552,000,000 shares of common stock with a par value of $0.001 to 2,760,000 shares of common stock with a par value of $0.001 and our issued and outstanding shares decreased from 547,370,946 shares of common stock to 2,736,854 shares of common stock.

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The consolidation became effective with the Over-the-Counter Bulletin Board at the opening for trading on September 23, 2009 under the new stock symbol “TAON”. Our CUSIP number is 87600P303.

Effective July 1, 2010, we entered into a consulting services agreement with Kerry Associates, Inc., wherein Kerry Associates has the agreed to provide certain consulting services to our company for a period of 30 days. Under the terms of the agreement we paid Kerry Associates, Inc. $25,000 and issued to Kerry Associates, Inc. 2,000,000 restricted shares of our stock

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

We are in the mineral resource business. This business generally consists of three stages: exploration, development and production. Mineral resource companies that are in the exploration stage have not yet found mineral resources in commercially exploitable quantities, and are engaged in exploring land in an effort to discover them. Mineral resource companies that have located a mineral resource in commercially exploitable quantities and are preparing to extract that resource are in the development stage, while those engaged in the extraction of a known mineral resource are in the production stage. Our company is in the exploration stage.

The address of our principal executive office is Officina 301 Edeficio El Crusero, Carrera 48, 12 Sur – 148 Medellin Colombia. Our telephone numbers is 877-331-8777.

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

Mineral resource exploration can consist of several stages. The earliest stage usually consists of the identification of a potential prospect through either the discovery of a mineralized showing on that property or as the result of a property being in proximity to another property on which exploitable resources have been identified, whether or not they are or have in the past been extracted.

After the identification of a property as a potential prospect, the next stage would usually be the acquisition of a right to explore the area for mineral resources. This can consist of the outright acquisition of the land or the acquisition of specific, but limited, rights to the land (e.g., a license, lease or concession). After acquisition, exploration would probably begin with a surface examination by a prospector or professional geologist with the aim of identifying areas of potential mineralization, followed by detailed geological sampling and mapping of this showing with possible geophysical and geochemical grid surveys to establish whether a known trend of mineralization continues through un-exposed portions of the property (i.e., underground), possibly trenching in these covered areas to allow sampling of the underlying rock. Exploration also commonly includes systematic regularly spaced drilling in order to determine the extent and grade of the mineralized system at depth and over a given area, as well as gaining underground access by ramping or shafting in order to obtain bulk samples that would allow one to determine the ability to recover various commodities from the rock. Exploration might culminate in a feasibility study to ascertain if the mining of the minerals would be economic. A feasibility study is a study that reaches a conclusion with respect to the economics of bringing a mineral resource to the production stage.

Our mineral resource properties consist of exploration claims located in Columbia (Risaldo La Golondrina D14-082 mineral property located in Narino, Colombia) ( El Colmillo mineral property located in Antioquia, Colombia). There is no assurance that a commercially viable mineral deposit exists on any of our properties, and further exploration is required before we can evaluate whether any exist and, if so, whether it would be economically and legally feasible to develop or exploit those resources. Even if we complete our current exploration program and we are successful in identifying a mineral deposit, we would be required to spend substantial funds on further drilling and engineering studies before we could know whether that mineral deposit will constitute a reserve (a reserve is a commercially viable mineral deposit). Please refer to the section entitled ‘Risk Factors’, of this annual report on Form 10-K, for additional information about the risks of mineral exploration.

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Our Current Business

We are an exploration stage company that has not yet generated or realized any revenues from our business operations. We have concentrated our recent exploration efforts on the La Golondrina Property in Columbia. In July, 2008 we acquired a mineral right in the El Colmillo property in Colombia. In October, 2009, our company decided to employ our efforts in exploration of the El Colmillo property for the next 12 months and will hold exploration of the Golondrina property until a determination of viability at El Colmillo can be determined. In December 2008, company personnel at the El Colmillo property were met by Colombian rebels who demanded a war tax to permit the development activities to continue. Our company immediately ceased any efforts at the mine and reported the situation to the Colombian government and to the issuer of the option. Our company invoked the force majeure section of the contract and we are waiting to see what developments will take place.

Research and Development

We do not currently have a formal research and development effort. We did not spend any funds on research and development during the last two fiscal years.

Purchase of Significant Equipment

We do not intend to purchase any significant equipment over the twelve months ending January 31, 2012.

Competition

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

Compliance with Government Regulation

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

Subsidiaries

We have a majority owned subsidiary Minera Tao S.A.

Employees

As of June 22, 2010, we had no employees other than our directors and officers.

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

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

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

Intellectual Property

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

REPORTS TO SECURITY HOLDERS

We are required to file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission and our filings are available to the public over the internet at the Securities and Exchange Commission’s website at http://www.sec.gov. The public may read and copy any materials filed by us with the Securities and Exchange Commission at the Securities and Exchange Commission’s Public Reference Room at 100 F Street N.E. Washington D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the Securities and Exchange Commission at 1-800-732-0330. The SEC also maintains an Internet site that contains reports, proxy and formation statements, and other information regarding issuers that file electronically with the SEC, at http://www.sec.gov.

Item 1A.

Risk Factors

Risks Associated With Our Business

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

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

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

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

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

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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 $18,295 and a working capital deficit of $1,522,276 as at our year ended January 31, 2011. We currently do not generate revenues from our operations. Our business plan calls for substantial investment and cost in connection with the acquisition and exploration of our mineral properties currently under lease and option. Any direct acquisition of the claim under lease or option is subject to our ability to obtain the financing necessary for us to fund and carry out exploration programs on the properties. The requirements are substantial. We do not currently have any arrangements for additional financing and we can provide no assurance to investors that we will be able to find such financing if required. Obtaining additional financing would be subject to a number of factors, including market prices for minerals, investor acceptance of our properties, and investor sentiment. These factors may make the timing, amount, terms or conditions of additional financing unavailable to us. The most likely source of future funds presently available to us is through the sale of equity capital and loans. Any sale of share capital will result in dilution to existing shareholders.

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

We have not earned any revenues as of the date of this 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, 2011 was $14,432,305. We have incurred losses for the year ended January 31, 2011 of $5,923,713. 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.

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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.

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.

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Our independent certified public accounting firm, in their Notes to the audited financial statements for the year ended January 31, 2011 states that there is a substantial doubt that we will be able to continue as a going concern.

Our independent certified public accounting firm state in their Notes to the audited financial statements for the year ended January 31, 2011, that we have experienced significant losses since inception. Failure to arrange adequate financing on acceptable terms and to achieve profitability would have an adverse effect on our financial position, results of operations, cash flows and prospects, there is a substantial doubt that we will be able to continue as a going concern.

We are subject to various government regulations and environmental concerns.

We are subject to various government and environmental regulations. Permits from a variety of regulatory authorities are required for many aspects of exploration, mining operations and reclamation. We cannot predict the extent to which future legislation and regulation could cause additional expense, capital expenditures, restrictions, and delays in the development of our U.S. or Colombian properties, including those with respect to unpatented mining claims.

Our activities are not only subject to extensive federal, state and local regulations controlling the exploration and mining of mineral properties, but also the possible effects of such activities upon the environment. Future legislation and regulations could cause additional expense, capital expenditures, restrictions and delays in the development of our properties, the extent of which cannot be predicted. Also, as discussed above, permits from a variety of regulatory authorities are required for many aspects of mine operation and reclamation. In the context of environmental permitting, including the approval of reclamation plans, we must comply with known standards, existing laws and regulations that may entail greater or lesser costs and delays, depending on the nature of the activity to be permitted and how stringently the regulations are implemented by the permitting authority. We are not presently aware of any specific material environmental constraint affecting our properties that would preclude the economic development or operation of any specific property.

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

Risks Associated with Our Common Stock

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

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

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

Our stock is a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an

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

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

Other Risks

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

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

Trends, Risks and Uncertainties

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

Item 1B.

Unresolved Staff Comments

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

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Item 2.

Properties

Executive Offices

Our principal offices are located at Officina 301 Edeficio El Crusero, Carrera 48, 12 Sur – 148 Medellin Colombia. Our telephone number at our principal office is 011-574-311-0720. Our office is donated rent free by our President. We believe that our office space and facilities are sufficient to meet our present needs and do not anticipate any difficulty securing alternative or additional space, as needed, on terms acceptable to us.

Mineral Properties

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

Golondria Gold-Silver Project

Acquisition, Location and Access

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

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

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

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

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

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

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

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

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

ESTIMATED BUDGET, PHASE 1 PROGRAM

Chronological Schedule

Expense Schedule

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

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

History

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

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

Property Geology

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

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

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

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El Colmillo Gold Project

Acquisition, Location and Access

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

Under the terms of the amended option agreement, the purchase price of the option is $1.42 billion Colombian pesos or approximately US$825,000 dollars at an exchange rate of $1,600 pesos for one dollar. We paid $80,000,000 pesos (approximately US$50,000) upon closing of the option agreement and are obligated to pay $40,000,000 pesos on the 15th of every month until $320,000,000 pesos has been paid. Thereafter 20% of production will be paid until $1.1 billion pesos have been received by AC. After the acquisition price is paid AC will continue to receive 20% of the mining production. Upon receipt of $1.42 billion pesos by AC the option will be exercised and 80% ownership in the property will be transferred to MT.

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

ESTIMATED BUDGET, PHASE 1 PROGRAM

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

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

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

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

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

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

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Property Geology

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

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

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

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

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

Item 3.

Legal Proceedings

We know of no material, existing or pending legal proceedings against 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 stockholder, is an adverse party or has a material interest adverse to our interest.

Item 4.

[Removed and Reserved]

PART II

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Our Common stock is quoted on the OTC Bulletin Board under the Symbol "TAOL". We received approval on November 22, 2005 for trading under the symbol “TAOM”. On March 24, 2006 our symbol was changed to “TAOL” in connection with our forward stock split and on September 23, 2009 our symbol was changed to “TAON” in connection with a share consolidation.

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

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

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As of June 22, 2011, there were approximately 36 holders of record of our common stock. As of such date, 342,605,877 common shares were issued and outstanding.

Our common shares are issued in registered form. Transfer Online, Inc., 512 SE Salmon Street, Portland, OR, USA (Telephone: 503.227.2950) 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; Use of Proceeds from Registered Securities

Other than as disclosed below, we did not sell any equity securities which were not registered under the Securities Act during the year ended January 31, 2011 that were not otherwise disclosed on our quarterly reports on Form 10-Q or our current reports on Form 8-K filed during the year ended January 31, 2011.

Equity Compensation Plan Information

Except as disclosed below, we do not have a stock option plan in favor of any director, officer, consultant or employee of our company.

Purchase of Equity Securities by the Issuer and Affiliated Purchasers

We did not purchase any of our shares of common stock or other securities during our fourth quarter of our fiscal year ended January 31, 2011.

Item 6.

Selected Financial Data

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

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our audited financial statements and the related notes for the years ended January 31, 2011 and January 31, 2010 that appear elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this annual report, particularly in the section entitled "Risk Factors" beginning on page 7 of this annual report.

Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

Plan of Operations

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

Phase I of the program focuses on the existing mining works. The mine is currently idle and Phase I activities are designed to accomplish its reactivation to the extent of its existing full installed capacity. Actions to accomplish this

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will include developing the tunnels to increase the throughput volume of ore and, in concert with that, work to increase knowledge of the mine’s characterization in terms of its specific mineralogy to determine the best approach to the set-up of the upgraded gold recovery circuit.

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

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

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

In May 2010, we retained the Colombian legal firm of Gutierrez Marquez Asesores S.A. to represent our company in all aspects of applicable Colombian law pertaining to our operations in Colombia.

Purchase of Significant Equipment

We do not intend to purchase any significant equipment over the next twelve months.

Personnel Plan

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

Off-Balance Sheet Arrangements

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

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

Results of Operations for the Years Ended January 31, 2011 and 2010

The following summary of our results of operations should be read in conjunction with our audited financial statements for the years ended January 31, 2011 and 2010.

Our operating results for the years ended January 31, 2011 and 2010 are summarized as follows:

			Year Ended
			January 31
			2011			2010
	Revenue	$	Nil		$	Nil
	Total Operating Expenses	$	3,453,091		$	405,212
	Other Income (Expenses)	$	(2,470,622	)	$	(210,910	)

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			Year Ended
			January 31
			2011			2010
	Net Loss	$	(5,923,713	)	$	(616,040	)

Revenues

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

Operating Expenses

Our operating expenses for the year ended January 31, 2011 and January 31, 2010 are outlined in the table below:

			Year Ended
			January 31
			2011			2010
	Exploration expenses	$	25,524		$	Nil
	Professional fees	$	51,450		$	24,550
	Consulting fees	$	395,156		$	269,500
	Legal fees	$	32,707		$	12,548
	General and administrative	$	2,928,604		$	98,614
	Impairment charge	$	19,650		$	Nil

The increase in operating expenses for the year ended January 31, 2011, compared to the same period in fiscal 2010, was mainly due to an increase in stock based compensation.

Liquidity and Financial Condition

As of January 31, 2011, our total current assets were $26,990 and our total current liabilities were $1,579,266 and we had a working capital deficit of $1,552,276. Our financial statements report a net loss of $5,923,713 for the year ended January 31, 2011, and a net loss of $14,432,305 for the period from September 23, 2004 (date of inception) to January 31, 2011.

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

	Cash Flows		As at
			January 31,
			2011			2010
	Net Cash Used by Operating Activities	$	(500,012	)	$	(81,539	)
	Net Cash Used by Investing Activities	$	Nil		$	(19,051	)
	Net Cash Provided by Financing Activities	$	520,300		$	100,020
	Increase (Decrease) In Cash During The Period	$	10,430		$	(3	)

We had cash in the amount of $18,295 as of January 31, 2011 as compared to $7,865 as of January 31, 2010. We had a working capital deficit of $1,552,276 as of January 31, 2011 compared to working capital deficit of $1,454,580 as of January 31, 2010.

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Cash Requirements

We intend to conduct exploration activities on our properties during the next twelve months. We estimate our operating expenses and working capital requirements for the twelve month period to be as follows:

At present, our cash requirements for the next 12 months outweigh the funds available to maintain or develop our properties. Of the $600,000 that we require for the next 12 months, we had $18,295 in cash as of January 31, 2011, and a working capital deficit of $1,552,276. In order to improve our liquidity, we plan pursue additional equity financing from private investors or possibly a registered public offering. we do not currently have any definitive arrangements in place for the completion of any further private placement financings and there is no assurance that we will be successful in completing any further private placement financings. If we are unable to achieve the necessary additional financing, then we plan to reduce the amounts that we spend on our business activities and administrative expenses in order to be within the amount of capital resources that are available to us.

Research and Development

We do not intend to allocate any funds to research and development over the twelve months ending January 31, 2012.

Future Financings

We will require additional funds to implement our growth strategy in our new business. 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 can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis should it be required, or generate significant material revenues from operations, we will not be able to meet our other obligations as they become due and we will be forced to scale down or perhaps even cease our operations.

Contractual Obligations

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

Going Concern

We have suffered recurring losses from operations and are dependent on our ability to raise capital from stockholders or other sources to meet our obligations and repay our liabilities arising from normal business operations when they become due. In their report on our audited financial statements for the year ended January 31, 2011, our independent auditors included an explanatory paragraph regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosure describing the circumstances that lead to this disclosure by our independent auditors.

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Off-Balance Sheet Arrangements

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

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial statements.

Accounting Estimates

The preparation of financial statements in conformity with US generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Our company regularly evaluates estimates and assumptions related to valuation of long-lived assets, stock based compensation and deferred income tax asset valuation allowances. Our company bases our estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by our company may differ materially and adversely from our company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Cash Equivalents

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

Concentrations

Our company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. Our company maintains the majority of our cash balances with one financial institution, in the form of demand deposits. Our company’s assets and operations are concentrated in the country of Colombia, South America.

Mineral Interests

Mineral interests associated with other than owned properties are classified as tangible assets. The mineral rights will be amortized using the units-of-production method when production at each project commences.

Long-Lived Assets

In accordance with ASC 360, Property Plant and Equipment, our company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end

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of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

Foreign Currency Translation

Our company’s functional and reporting currency is the United States dollar. Management has adopted ASC 740 Foreign Currency Translation Matters. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Average monthly rates are used to translate revenues and expenses. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. Our company has not, to the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

The financial statements of the subsidiary are translated to United States dollars in accordance with ASC 740 using period-end rates of exchange for assets and liabilities, and average rates of exchange for the year for revenues and expenses. Translation gains (losses) are recorded in accumulated other comprehensive income (loss) as a component of stockholders’ deficit. Foreign currency transaction gains and losses are included in current operations.

Environmental Costs

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

Loss per Share

Our company computes net earnings (loss) per share in accordance with ASC 260, Earnings Per Share, which requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net earnings (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. Our company has $375,800 of convertible debentures which can be converted to common stock. These shares have not been included in any weighted average computations since the effect would be anti-dilutive.

Income Taxes

Our company accounts for income taxes under the ASC 740, Income Taxes. Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Fair Value of Financial Instruments

Our financial instruments consist principally of cash, accounts payable, derivative liabilities, amounts due to related parties, stock issuance liabilities and convertible notes. Pursuant to ASC 820, Fair Value Measurements and Disclosures, and ASC 825, Financial Instruments the fair value of our cash equivalents is determined based on

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“Level 1” inputs, which consist of quoted prices in active markets for identical assets, the fair value of derivative liabilities, stock issuance liabilities and convertible notes are determined based on “Level 3” inputs, which consist of unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations.

Comprehensive Loss

ASC 220, Comprehensive Income establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. At January 31, 2011 and 2010, our company’s only component of comprehensive loss was foreign currency translation adjustments. Accordingly, the balance of accumulated other comprehensive income was charged to operations.

Stock-Based Compensation

In accordance with ASC 718, Compensation – Stock Based Compensation, our company accounts for share-based payments using the fair value method. Common shares issued to third parties for non-cash consideration are valued based on the fair market value of the services provided or the fair market value of the common stock on the measurement date, whichever is more readily determinable.

Business Segments

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

Mining Properties and Exploration Costs

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

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

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

Site Restoration and Post Closure Costs

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

Accounting Changes and Error Corrections

Our company follows ASC 250, Accounting Changes and Error Corrections. Changes in accounting principle are reported through retrospective application of the new accounting principle to all prior periods. Errors in the financial statements of a prior period discovered subsequent to their issuance shall be reported as a prior-period adjustment by restating the prior period.

Recent Accounting Pronouncements

See Note 2 to our consolidated financial statements included in this report for discussion of recent accounting pronouncements.

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Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

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

Item 8.

Financial Statements and Supplementary Data

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Report of Independent Registered Public Accounting Firm

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

     I have audited the accompanying consolidated balance sheets of TAO MINERALS, LTD, and Subsidiary (an Exploration Stage Company) as of January 31, 2011 and 2010 and the related consolidated statements of operations, stockholders’ deficit, and cash flows for each of the years in the two-year period ended January 31, 2011. TAO MINERALS,LTD’S management is responsible for these financial statements. My responsibility is to express an opinion on these financial statements based on my audit.

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

     In my opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of TAO MINERALS, LTD, and Subsidiary (an Exploration Stage Company) as of January 31, 2011, and 2010 and the results of its operations and its cash flows for each of the years in the two-year period ended January 31, 2011, in conformity with accounting principles generally accepted in the United States of America.

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

	/s/ Larry Wolfe
	Larry Wolfe
Miami, Florida	Certified Public Accountant
June 22, 2011

27

---

TAO MINERALS LTD. and Subsidiary

(An Exploration Stage Company)

Consolidated Balance Sheets

		January 31,			January 31,
		2011			2010
ASSETS
Current
Cash	$	18,295		$	7,865
Prepaids		8,695			36,120
Total current assets		26,990			43,985
Property and Equipment		-			19,370
Mineral Properties
Mineral Rights		132,500			129,921
Total Mineral Properties		132,500			129,921
Total assets	$	159,490		$	193,276
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current
Accounts payable and accrued expenses	$	102,558		$	150,385
Note payable		272,846			420,622
Derivative liability		683,057			233,008
Due to related parties		199,047			481,638
Stock issuance liability		93,140			92,100
Other accrued liabilities		228,618			120,812
Total current liabilities		1,579,266			1,498,565
Note payable long term		-			66,092
Total liabilities		1,579,266			1,564,657
STOCKHOLDERS’ DEFICIT
Share Capital
Authorized: Preferred stock: $0.001 par value 1,000,000 shares authorized None issued, allotted and outstanding		-			-
Common stock: $0.001 par value, 1,000,000,000 shares authorized 196,631,122 shares and 2,736,857 shares issued and outstanding at January 31, 2011 and January 31, 2010		196,632			2,738
Additional paid-in capital		13,033,514			7,345,090
Accumulated other comprehensive loss		(39,255	)		(32,255	)
Deficit accumulated during exploration stage		(14,599,401	)		(8,676,871	)
Total stockholders’ deficit		(1,408,510	)		(1,361,298	)
Non-controlling interest		(11,266	)		(10,083	)
Total deficit		(1,419,776	)		(1,371,381	)
Total liabilities and deficit	$	159,490		$	193,276

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

28

---

TAO MINERALS LTD. and Subsidiary

(An Exploration Stage Company)

Consolidated Statements of Operations

					For the Year
					Ended January 31,
		From Inception to			2011			2010
		January 31, 2011
		(Unaudited)
OPERATING EXPENSES
Exploration expenses	$	148,174		$	25,524		$	-
Professional fees		293,218			51,450			24,550
Director fees		120,000			-			-
Consulting fees		1,489,506			395,156			269,500
Legal fees		319,638			32,707			12,548
General and administrative		3,192,973			2,928,604			98,614
Impairment charge		4,719,650			19,650			-
LOSS FROM OPERATIONS		10,283,159			3,453,091			405,212
Total Operating Expenses		(10,283,159	)		(3,453,091	)		(405,212	)
OTHER INCOME (EXPENSE)
Derivative expense		(1,863,579	)		(1,730,571	)		(55,634	)
Loss on settlement of debt		(1,456,151	)		-			(102,000	)
Interest expense		(829,880	)		(740,051	)		(53,502	)
Other income (loss), net		(1,067	)		-			226
Foreign currency translation gain		1,531			-			-
TOTAL OTHER INCOME (EXPENSE)		(4,149,146	)		(2,470,622	)		(210,910	)
Net loss for the period		(14,432,305	)		(5,923,713	)		(616,122	)
Less: net loss attributable to noncontrolling interest		11,266			1,183			82
Net loss attributable to TAO common shareholders	$	(14,421,039	)	$	(5,922,530	)	$	(616,040	)
Other Comprehensive Loss
Foreign currency translation adjustment		(39,255	)		(7,000	)		567
Comprehensive Loss	$	(14,460,294	)	$	(5,929,530	)	$	(615,473	)
LOSS PER SHARE – BASIC				$	(0.10	)	$	(0.26	)
WEIGHTED AVERAGE NUMBER OF ISSUED SHARES: - BASIC					61,023,273			2,398,502

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

---

TAO MINERALS LTD. And Subsidiary

(An Exploration Stage Company)

Consolidated Statements of Cash Flows

		From Inception to			For the Year			For the Year
		January 31, 2011			Ended			Ended
		(Unaudited)			January 31, 2011			January 31, 2010
Cash Provided by (Used for) Operating
Activities
Net (loss) for the period	$	(14,429,475	)	$	(5,922,530	)	$	(616,040	)
Stock issued for services		3,286,386			2,604,000			102,000
Loss on settlement of debt		1,456,151			-			-
Impairment charges		4,719,650			19,650			-
Minority interest in loss		(12,831	)		(1,183	)		(67	)
Changes in non-cash working capital items:
Prepaids		(8,695	)		27,425			10,491
Discount on note payable		557,826			666,734			9,209
Accounts payable and accrued liabilities		1,403,274			657,912			357,234
Due to related parties		(282,591	)		(282,591	)		-
Derivative liability		1,963,579			1,730,571			55,634
Cash used by operations		(1,346,726	)		(500,012	)		(81,539	)
Investing Activities
Acquisition of subsidiary		(114,185	)		-			-
Purchase of fixed assets		(19,370	)		-			(2,550	)
Purchase of mineral rights		(379,941	)		-			(16,501	)
Cash used by investing activities		(513,496	)		-			(19,051	)
Financing Activities
Issuance of debt		1,865,320			520,300			100,020
Issuance of common stock		55,310			-			-
Cash provided by financing activities		1,920,630			520,300			100,020
Effect of Exchange Rate on Cash		(42,113	)		(9,858	)		567
Cash Increase (Decrease) During the Period		18,295			10,430			(3	)
Cash, Beginning of Period		-			7,865			7,868
Cash and Equivalents, End of Period	$	18,295		$	18,295		$	7,865

Supplemental Cash Flow Information;
The Company did not pay cash for either interest or taxes for the 12 months ended January 31, 2011 and 2010.

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

---

TAO MINERALS LTD. and Subsidiary

(An Exploration Stage Company)

Consolidated Statement of Changes in Stockholders' Deficit

For the period September 23, 2004 (Inception) to January 31, 2011

														Accumulated
								Additional						Deficit During			Total
		Common stock						paid-in			Subscription			Exploration			Stockholders'
		Shares			Amount			capital			Receivable			Stage			(Deficit)
Common stock issued to founders for cash ($0.20 per share)		270,400		$	270		$	53,810		$			$	(47,320	)	$	6,760
Common stock issued for cash ($1.43 per share)		39,180			39			55,792			(425	)		(6,856	)		48,550
- net loss for the year		-			-			-			-			(5,577	)		(5,577	)
Balance, January 31, 2005		309,580		$	309		$	109,602		$	(425	)	$	(59,753	)	$	49,733
																	-
Subscription receivable cancelled		-			-			-			425			-			425
- net loss for the year		-			-			-			-			(48,916	)		(48,916	)
Balance, January 31, 2006		309,580		$	309		$	109,602		$	-		$	(108,669	)	$	1,242
Common stock issued for mineral rights on April 20, 2006 at
$.348		12,500			13			4,349,987			-			-			4,350,000
Common stock cancelled April 24, 2006		(63,000	)		(63	)		63			-			-			-
Net loss for the period														(4,749,636	)		(4,749,636	)
Balance, January 31, 2007		259,080		$	259		$	4,459,652		$	-		$	(4,858,305	)	$	(398,394	)
Balance, January 31, 2007
Common stock issued for services to officers, directors and consultants on September 25, 2007 at $24		17,500			18			419,982			-			-			420,000
Common stock issued for legal fees on September 25, 2007 at $24		2,500			3			59,997			-			-			60,000
Common stock issued for legal services on January 15, 2008 at $19		5,455			5			103,631			-			-			103,636
Common stock issued for services on January 15, 2008 At $19		1,000			1			18,999			-			-			19,000
Net loss for the period		--			-			-			-			(833,424	)		(833,424	)
Balance, January 31, 2008		285,535		$	286		$	5,062,261 $			-		$	(5,691,729	)	$	(629,182	)

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

31

---

TAO MINERALS LTD. and Subsidiary

(An Exploration Stage Company)

Consolidated Statement of Changes in Stockholders' Deficit

For the period September 23, 2004 (Inception) to January 31, 2011

														Accumulated
								Additional			Accumulated			Deficit During			Total
		Common Stock						Paid in			Comprehensive			Exploration			Stockholder’s
		Shares			Amount			Capital			Adjustment			Stage			(Deficit)
Balance, January 31, 2008		285,535			286			5,062,261			-			(5,691,729	)		(629,182	)
Common stock issued for legal services April 21, 2008 @ $11		7,250			7			79,743			-			-			79,750
Common stock issued for conversion of debt April 24, 2008 @ $9.60		12,500			13			119,987			-			-			120,000
Common stock issued for conversion of debt May 9, 2008 @ $10		16,667			17			166,650			-			-			166,667
Common stock issued for conversion of debt May 20, 2008 @ $8		20,834			21			166,646			-			-			166,667
Common stock issued for conversion of debt May2 9, 2008 @ $6		19,444			19			116,648			-			-			116,667
Common stock issued for conversion of debt June 9, 2008 @ $6		19,444			19			116,648			-						116,667
Common stock issued for conversion of debt June 12, 2008 @4		20,834			21			83,312			-			-			83,333
Common stock issued for conversion of debt June 13, 2008 @ $1.40		20,833			21			29,146			-			-			29,167
Common stock issued for conversion of debt June 25, 2008 @ $3.20		19,444			19			62,203			-			-			62,222
Common stock issued for conversion of debt July 2, 2008 @ $3		20,000			20			59,980			-						60,000
														-
Common stock issued for conversion of debt July 8, 2008 @ $2.80		21,795			22			61,004			-			-			61,026
Common stock issued for conversion of debt July 14, 2008 @ $2.40		22,222			22			53,311			-			-			53,333
Common stock issued for conversion of debt July 16, 2008 @ $2.20		21,795			22			47,927			-			-			47,949
Common stock issued for conversion of debt July 18, 2008 @ $2.20		25,000			25			54,975			-			-			55,000
Common stock issued for conversion of debt July 24, 2008 @ $2.20		24,244			24			53,313			-			-			53,337
Common stock issued for conversion of debt August 1, 2008 @ $2		26,316			26			52,606			-			-			52,632
Common stock issued for conversion of debt August 14, 2008 @ $2		27,778			28			55,528						-			55,556
Common stock issued for conversion of debt September 3, 2008 @ $1.20		30,000			30			35,970			-			-			36,000

The accompanying notes are an integral part of these financial statements

---

TAO MINERALS LTD. and Subsidiary

(An Exploration Stage Company)

Consolidated Statement of Changes in Stockholders' Deficit

For the period September 23, 2004 (Inception) to January 31, 2011

														Accumulated
								Additional			Accumulated			Deficit During			Total
		Common Stock						Paid in			Comprehensive			Exploration			Stockholder’s
		Shares			Amount			Capital			Adjustment			Stage			(Deficit)
Common stock issued for conversion of debt September 30, 2008 @ $1.10		33,333			33			36,634			-			-			36,667
Common stock issued for conversion of debt September 9, 2008 @ $1.40		30,000			30			41,970			-			-			42,000
Common stock issued for conversion of debt October 2, 2008 @ $1.20		33,333			33			39,967			-			-			40,000
Common stock issued for conversion of debt October 6, 2008 @ $1		36,667			37			36,630			-			-			36,667
Common stock issued for conversion of debt October 7, 2008 @ $1		40,000			40			39,960			-			-			40,000
Common stock issued for conversion of debt October 9, 2008 @ $1		43,333			43			43,280			-			-			43,323
Common stock issued for conversion of debt October 13, 2008 @ $.70		42,857			43			29,957			-			-			30,000
Common stock issued for conversion of debt October 15, 2008 @ $.70		42,857			43			29,957			-			-			30,000
Common stock issued for conversion of debt October 16, 2008 @ $.70		47,619			48			33,285			-			-			33,333
Common stock issued for conversion of debt October 17, 2008 @ $.70		47,619			48			33,285			-			-			33,333
Common stock issued for conversion of debt October 20, 2008 @ $.70		52,381			52			36,615			-			-			36,667
Common stock issued for conversion of debt October 23, 2008 @ $.70		52,381			52			36,615			-			-			36,667
Common stock issued for conversion of debt October 29, 2008 @ $.50		60,000			60			29,940			-			-			30,000
Common stock issued for conversion of debt October 30, 2008 @ $.50		61,644			62			30,521			-			-			30,583
Common stock issued for conversion of debt November 4, 2008 @ $.50		68,493			68			34,179			-			-			34,247
Common stock issued for conversion of debt November 10, 2008 @ $.48		68,493			68			32,809			-			-			32,877
Common stock issued for conversion of debt November 17, 2008 @ $.48		68,493			68			32,809			-			-			32,877
Common stock issued for conversion of debt November 25, 2008 @ $.30		66,667			67			19,933			-			-			20,000
Common stock issued for conversion of debt December 10, 2008 @ $.28		66,667			67			18,600			-			-			18,667
Acquisition of Subsidiary		-			-			-			-			(115,750	)		(115,750	)
Loss for the period		-			-			-			-			(2,253,352	)		(2,253,352	)
Foreign currency adjustment		-			-			-			(32,822	)		-			(32,822	)
Balance, January 31, 2009		1,624,772			1,624			7,114,804		$	(32,822	)	$	(8,060,831	)	$	(977,225	)

The accompanying notes are an integral part of these financial statements

---

TAO MINERALS LTD. and Subsidiary

(An Exploration Stage Company)

Consolidated Statement of Changes in Stockholders' Deficit

For the period September 23, 2004 (Inception) to January 31, 2011

														Accumulated
								Additional			Accumulated			Deficit During			Total
		Common Stock						Paid in			Comprehensive			Exploration			Stockholder’s
		Shares			Amount			Capital			Adjustment			Stage			(Deficit)
Balance, January 31, 2009		1,624,772			1,624			7,114,804		$	(32,822	)	$	(8,060,831	)	$	(977,225	)
Common stock issued for conversion of debt March 13, 2009 @.26		76,923			77			19,923			-			-			20,000
Common stock issued for conversion of debt April 6, 2009 @.18		83,333			83			14,917			-			-			15,000
Common stock issued for conversion of debt April 15, 2009 @.18		83,333			83			14,917			-			-			15,000
Common stock issued for conversion of debt April 22, 2009 @.18		100,000			100			17,900			-			-			18,000
Common stock issued for conversion of debt May 8, 2009 @.18		100,000			100			17,900			-			-			18,000
Common stock issued for conversion of debt May 12, 2009 @.18		100,000			100			17,900			-			-			18,000
Common stock issued for conversion of debt May 13, 2009 @.18		100,000			100			17,900			-			-			18,000
Common stock issued for conversion of debt May 14, 2009 @.20		100,000			100			19,900			-			-			20,000
Common stock issued for conversion of debt May 15, 2009 @.24		100,000			100			23,900			-			-			24,000
Common stock issued for conversion of debt May 19, 2009 @.18		100,000			100			17,900			-			-			18,000
Common stock issued for conversion of debt May 20, 2009 @.20		100,000			100			19,900			-			-			20,000
Common Stock issued for note payable January 31, 2010 @$.40		68,496			71			27,329			-			-			27,400
Foreign currency adjustment		-			-			-			567			-			567
Loss for the period		-			-			-			-			(616,040	)		(616,040	)
Balance, January 31, 2010		2,736,857			2,738		$	7,345,090		$	(32,255	)	$	(8,676,871	)	$	(1,361,298	)

The accompanying notes are an integral part of these financial statements

---

TAO MINERALS LTD. and Subsidiary

(An Exploration Stage Company)

Consolidated Statement of Changes in Stockholders' Deficit

For the period September 23, 2004 (Inception) to January 31, 2011

														Accumulated
								Additional			Accumulated			Deficit During			Total
		Common Stock						Paid in			Comprehensive			Exploration			Stockholder’s
		Shares			Amount			Capital			Adjustment			Stage			(Deficit)
Balance, January 31, 2010		2,736,857			2,738		$	7,345,090		$	(32,255	)	$	(8,676,871	)	$	(1,361,298	)
Common stock issued to settle debt February 25, 2010 @ $.08		5,418,750			5,419			428,081			-			-			433,500
Common stock issued for conversion of debt June 15, 2010 @ $.04		7,115,133			7,115			157,112			-			-			164,227
Common stock issued for services June 5, 2010 @ $.16		16,000,000			16,000			2,544,000			-			-			2,560,000
Common stock issued for conversion of debt August 5, 2010 @ $.011		2,000,000			2,000			20,000			-			-			22,000
Common stock issued for conversion of debt August 16, 2010 @ $.011		4,931,818			4,932			49,318			-			-			54,250
Common stock issued for services August 19, 2010 @ $.22		2,000,000			2,000			42,000			-			-			44,000
Common stock issued for conversion of debt August 24, 2010 @ $.011		6,000,000			6,000			57,000			-			-			63,000
Common stock issued for conversion of debt September 9, 2010 @ $.006		6,999,999			7,000			35,000			-			-			42,000
Common stock issued for conversion of debt September 22, 2010 @ $.0035		8,285,714			8,286			26,714			-			-			35,000
Common stock issued for conversion of debt October 12, 2010 @ $.0035		8,285,714			8,286			20,714			-			-			29,000
Common stock issued for conversion of debt October 20, 2010 @ $.0035		7,142,857			7,143			17,857			-			-			25,000
Common stock issued for conversion of debt October 27, 2010 @ $.0035		4,285,714			4,286			10,714			-			-			15,000
Common stock issued for conversion of debt November 3, 2010 @ $.0035		5,714,285			5,714			14,286			-			-			20,000
Common stock issued for conversion of debt November 8, 2010 @ $.0035		5,714,285			5,714			14,286			-			-			20,000
Common stock issued for conversion of debt November 9, 2010 @ $.0035		7,142,857			7,143			17,857			-			-			25,000
Common stock issued for note payable November 11,2010 @ $.0035		12,857,142			12,857			32,143			-			-			45,000
Common stock issued for conversion of debt November 12, 2010 @ $.0035		8,571,428			8,571			21,429			-			-			30,000
Common stock issued for conversion of debt November 15, 2010 @$.0035		8,571,428			8,571			21,429			-			-			30,000
Common stock issued for conversion of debt November 18, 2010 @ $.0035		10,000,000			10,000			25,000			-			-			35,000
Common Stock issued for note payable December 8, 2010 @ $.0035		14,000,000			14,000			35,000			-			-			49,000

The accompanying notes are an integral part of these financial statements

---

TAO MINERALS LTD. and Subsidiary

(An Exploration Stage Company)

Consolidated Statement of Changes in Stockholders' Deficit

For the period September 23, 2004 (Inception) to January 31, 2011

														Accumulated
								Additional			Accumulated			Deficit During			Total
		Common Stock						Paid in			Comprehensive			Exploration			Stockholder’s
		Shares			Amount			Capital			Adjustment			Stage			(Deficit)
Common Stock issued for conversion of debt and interest December 16, 2010
@ $.0035		22,857,142			22,857			57,143			-			-			80,000
Common Stock issued for note payable December 29, 2010 @ $.0035		9,285,714			9,286			23,214			-			-			32,500
Common Stock issued for note payable and interest January 5, 2011 @ $.0034		5,000,000			5,000			12,500			-			-			17,500
Conversion of interest on January 28, 2011 @ $.0035		5,714,285			5,714			14,286			-			-			20,000
Derivative liabilities relating to debt converted to shares		-			-			1,991,341			-			-			1,991,341
Foreign currency adjustment		-			-			-			(7,000	)		-			(7,000	)
Loss for the period		-			-			-			-			(5,922,530	)		(5,922,530	)
Balance, January 31, 2011		196,631,122			196,632		$	13,033,514		$	(39,255	)	$	(14,599,401	)	$	(1,408,510	)

The accompanying notes are an integral part of these financial statements

---

TAO MINERALS LTD. and Subsidiary

(An Exploration Stage Company)

Notes to the Consolidated Financial Statement

1.	Organization
	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 U.S. 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. (the “Company”) is a natural resource exploration company with an objective of acquiring, exploring and if warranted and feasible, developing natural resource properties. The Company was incorporated under the laws of the State of Nevada on September 23, 2004, and has been in the exploration stage since inception.
	As reflected in the accompanying financial statements, the Company is in the exploration stage and has cumulative negative cash flows from operations of $1,346,726 since inception and losses of $5,922,530 for the year ended January 31, 2011. This raises substantial doubt about its ability to continue as a going concern. These consolidated financial statements have been prepared on the assumption that the Company is a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. 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. Management plans to raise equity financings over the next twelve months to finance operations. There is no guarantee that the Company will be able to complete any of these objectives.
2.	Significant Accounting Policies
	Basis of Presentation
	These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. These consolidated financial statements include the accounts of TAO Minerals, LTD (“Parent” or “TAO”) and its 99% owned subsidiary, Minera TAO, SA “Minera”. Collectively, the consolidated entities are referred to herein as the “Company”. All significant inter-company transactions have been eliminated. The Company’s fiscal year end is January 31.
	Accounting Estimates
	The preparation of financial statements in conformity with US generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to valuation of long-lived assets, stock based compensation and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

37

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TAO MINERALS LTD. and Subsidiary

(An Exploration Stage Company)

Notes to the Consolidated Financial Statement

Cash Equivalents

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

Concentrations

The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. The Company maintains the majority of its cash balances with one financial institution, in the form of demand deposits. The company’s assets and operations are concentrated in the country of Colombia, South America.

Mineral Interests

Mineral interests associated with other than owned properties are classified as tangible assets. As of January 31, 2011, the Company had capitalized $132,500 related to the mineral rights. The mineral rights will be amortized using the units-of-production method when production at each project commences.

Long-Lived Assets

In accordance with ASC 360, Property Plant and Equipment, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value. At January 31, 2011, the Company recognized an impairment loss of $19,650 relating to capital assets whose carrying value was no longer recoverable and exceeded fair value.

Foreign Currency Translation

The Company’s functional and reporting currency is the United States dollar. Management has adopted ASC 740 Foreign Currency Translation Matters. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Average monthly rates are used to translate revenues and expenses. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. The Company has not, to the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

The financial statements of the subsidiary are translated to United States dollars in accordance with ASC 740 using period-end rates of exchange for assets and liabilities, and average rates of exchange for the year for revenues and expenses. Translation gains (losses) are recorded in accumulated other comprehensive income (loss) as a component of stockholders’ deficit. Foreign currency transaction gains and losses are included in current operations.

38

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TAO MINERALS LTD. and Subsidiary

(An Exploration Stage Company)

Notes to the Consolidated Financial Statement

Environmental Costs

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

Loss per Share

The Company computes net earnings (loss) per share in accordance with ASC 260, Earnings Per Share, which requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net earnings (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. The Company has $375,800 of convertible debentures which can be converted to common stock. These shares have not been included in any weighted average computations since the effect would be anti-dilutive.

Income Taxes

The Company accounts for income taxes under the ASC 740, Income Taxes. Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Fair Value of Financial Instruments

Our financial instruments consist principally of cash, accounts payable, derivative liabilities, amounts due to related parties, stock issuance liabilities and convertible notes. Pursuant to ASC 820, Fair Value Measurements and Disclosures, and ASC 825, Financial Instruments, the fair value of our cash equivalents is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets, the fair value of derivative liabilities, stock issuance liabilities and convertible notes are determined based on “Level 3” inputs, which consist of unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations.

Comprehensive Loss

ASC 220, Comprehensive Income establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. At January 31, 2011 and 2010, the Company’s only component of comprehensive loss was foreign currency translation adjustments. Accordingly, the balance of accumulated other comprehensive loss was charged to operations.

39

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TAO MINERALS LTD. and Subsidiary

(An Exploration Stage Company)

Notes to the Consolidated Financial Statement

Stock-Based Compensation

In accordance with ASC 718, Compensation – Stock Based Compensation, the Company accounts for share-based payments using the fair value method. Common shares issued to third parties for non-cash consideration are valued based on the fair market value of the services provided or the fair market value of the common stock on the measurement date, whichever is more readily determinable.

Business Segments

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

Mining Properties and Exploration Costs

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

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

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

Site Restoration and Post Closure Costs

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

Accounting Changes and Error Corrections

The Company follows ASC 250, Accounting Changes and Error Corrections. Changes in accounting principle are reported through retrospective application of the new accounting principle to all prior periods. Errors in the financial statements of a prior period discovered subsequent to their issuance shall be reported as a prior-period adjustment by restating the prior period.

Reclassifications

Certain reclassifications have been made to the prior period’s financial statements to conform to the current year’s presentation, including the reclassification of amounts due to related parties that were included in accounts payable at the year ended January 31, 2010.

Recent Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

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TAO MINERALS LTD. and Subsidiary

(An Exploration Stage Company)

Notes to the Consolidated Financial Statement

3.	Acquisition of Mineral Rights

Golondrina Property

On October 22, 2004, the Company acquired the mining rights to two claims collectively known as the Whale Mine property for a purchase price of $3,000. The Company received rights to all minerals contained in the Whale Mine property. During the year ended January 31, 2008 the Company abandoned the property and wrote off the capitalized amount of $3,000.

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

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

Payment of US $150,000, (paid on April 13, 2006) and the issuance of 2,500,000 common shares in the capital stock of the Company, subject to applicable trading restrictions, to Nueva California. In addition, the Company will assume Primecap’s financial obligations under the HOA. The obligations under the HOA are:

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

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

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

On May 9, 2008 we entered into a second amending agreement which clarifies the first amending agreement as follows:

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TAO MINERALS LTD. and Subsidiary

(An Exploration Stage Company)

Notes to the Consolidated Financial Statement

Items 1 through 6 of the HOA agreement are deleted. The total amounts payable to Primecap remains as amended in the first amendment. The second $100,000 payment is now due on or before August 1, 2008 and is included in accrued liabilties. As of January 31, 2009 the Company has not issued the 300,000 shares of common stock due August 23, 2006 and the 300,000 shares of common stock due August 23, 2007. The Company has accrued $51,000 as a liability for the issuance of 300,000 shares of common stock on August 23, 2006 at $0.17 the closing price of the stock as of such date and $41,100 for the issuance liability of 300,000 shares of common stock at August 23, 2007 at $0.137 the closing price of the stock at such date. The Company has no further obligations under the HOA agreement other than those stated here.

During the year ended January 31, 2009 the Company wrote off the $350,000 capitalized cost of the Golondrina property. The Company has not been fiscally able to obtain an appraisal or other means of valuing the market value of such property.

El Colmillo Property

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

	1.	Payment of $80,000,000 Colombian pesos (“COP”) (approximately $50,000 US)
	2.	Payment of $40,000,000 COP (approximately $25,000 US) on the 15th of every month until the initial and monthly payments reach $320,000,000 COP (approximately $200,000 US)
	3.	A royalty of 40% of net production until $1,100,000,000 COP (approximately $687,500 US) has been paid.
		When 80% of item 3 has been reached ADC will pass legal title of the concession to Minera and will receive a 20% net royalty as long as the concession is maintained.
	4.	Minera has paid $240,000,000 COP (approximately $150,000 US) through December 2008 of the $320,000,000 COP (approximately $200,000 US). During the month of December 2008 Minera personnel were met at the site by Colombian rebels that demanded a war tax. The Company immediately stopped its development efforts and reported the activity to the authorities. A force majeure clause in the contract allows Minera to cease operations until the cause that activates this clause is resolved.

The Company is still assessing the security risk on this property and operations are still suspended.

Mutata Property

On October 12, 2010, the Company entered into a letter of intent to acquire the Mutata property, a prospective gold and platinum project in Colombia. The prospective acquisition consists of one concession that is located approximately 200 kilometers north of Medellin in the northwest region of the Antioquia Department known as Uraba. Collectively the concession covers an area of over 4,900 hectares.

The letter of intent provides the Company the right to examine the property for a period of one year and does not specify any acquisition terms or conditions. Should the Company decide to acquire the property the Company will negotiate and enter into a formal acquisition agreement. During the one year period of assessment the Company is responsible for all ongoing costs. At January 31, 2011, the Company was currently completing the due diligence related to this property.

42

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TAO MINERALS LTD. and Subsidiary

(An Exploration Stage Company)

Notes to the Consolidated Financial Statement

4.	Property Plant and Equipment
	During the year ended January 31, 2011, the Company recorded an impairment charge of $19,650 relating to long-lived assets for which the carrying value was no longer recoverable.
5.	Related Party Transactions
	a)	The Golondrina property was acquired from a Company controlled by James Sikora our current president. At the time of the acquisition Mr. Sikora was not related to the Company.
	b)	Management fees incurred for the year ended January 31, 2011 totaled $320,000 to the President of the Company.
	c)	Management fees incurred for the year ended January 31, 2011 totaled $67,500 to a company that the president has an ownership interest.
6.	Notes Payable

			January 31,			January 31,
			2011			2010
			$			$
	a)   Convertible notes - interest rate 10% per annum; due April 2010		–			125,000
	b)   Convertible notes - interest rate 8% per annum; due on demand.		–			370,602
	c)   Convertible notes - interest rate 10% per annum; due December 2, 2014		–			50,000
	d)   Demand loans - unsecured, non-interest bearing		50,020			50,020
	e)   Convertible notes - interest rate 12% per annum; due May 28, 2011		125,800			–
	f)   Convertible notes - interest rate 12% per annum; due February 15, 2011		250,000			–
	Less: Discount on convertible notes		(152,974	)		(108,908	)
	Convertible Notes		272,846			486,714
	Less: Current Portion		(272,846	)		(420,622	)
	Long Term Portion		–			66,092

	a)	On April 23, 2008, we entered into a securities purchase agreement for the sale of a $1,000,000 convertible note at 10% with a maturity of 2 years. We received $125,000 upon the closing and issued a note for the amount. Subsequent to the $125,000 funding the Company and the purchaser agreed to terminate the agreement and let the $125,000 note stand on its own.
		The note is convertible into common shares at 50% of the average volume weighted price of the shares for the five trading days prior to conversion. Conversion is at the option of the holder. Due to this provision, the embedded conversion option qualifies for derivative accounting under ASC 815-15 (See Note 10 below). This fair value of the derivative liability at issuance resulted a discount to the note payable. The carrying value of the convertible note was accreted over the term of the convertible note up to their value of $125,000.
		During the year ended January 31, 2011, the note and $41,250 of accrued interest was converted into 34,312,767 shares of the Company’s common stock.
	b)	In June 2008 the Company entered into a short term note in the amount of $500,000 due July 31, 2008 bearing interest at 8%. The note is convertible into common shares at 50% of the lowest closing bid price

43

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TAO MINERALS LTD. and Subsidiary

(An Exploration Stage Company)

Notes to the Consolidated Financial Statement

		of the Company’s common stock for the trailing 30 days. Due to this provision, the embedded conversion option qualifies for derivative accounting under ASC 815-15 (See Note 10 below). This fair value of the derivative liability at issuance resulted in a full discount to the note payable. The carrying value of the convertible note was accreted over the term of the convertible note up to their value of $500,000.
		The Company was not able to repay the note and it was converted to a demand note. During the fiscal year end January 31, 2010, $102,000 of the note was converted into 1,043,590 shares of common stock resulting in the conversion loss of $102,000. On May 20, 2010, the Directors approved settlement agreements with two of its lenders.
		During the year ended January 31, 2011, the note and $14,000 of accrued interest was converted into 83,619,044 shares of the Company’s common stock.
	c)	On December 2, 2009, the Company entered into a convertible loan agreement for $50,000, due in 60 months, bearing 10% interest. The note is convertible into common shares at the lesser of $0.06 per share or 60% of the closing bid price for the 10 trading days preceding the conversion. Due to this provision, the embedded conversion option qualifies for derivative accounting under ASC 815-15 (See Note 10 below). This fair value of the derivative liability at issuance resulted in a full discount to the note payable. The carrying value of the convertible note was accreted over the term of the convertible note up to their value of $50,000.
		On June 7, 2010, the Company issued 2,000,000 shares pursuant to the conversion of a loan agreement in the amount of $50,000 plus accrued interest.
	d)	During the fiscal year ended January 31, 2010, the Company borrowed $50,020 of which $25,020 is owed to its President. The loans are unsecured, due on demand and bear no interest.
	e)	During the year ended January 31, 2011, the Company entered into two 12% convertible debentures totaling $275,800 of which $125,800 is due in one year and $150,000 is due in 90 days. The terms of the debenture indicate both the holder and the Company is entitled, at its option, to convert at any time and from time to time, all or any part of the principal amount, plus accrued interest into common shares at a price per share equal to 50% of the lowest trading price of the common stock for the 30 days immediately prior to the notice of conversion. Due to this provision, the embedded conversion options qualify for derivative accounting under ASC 815-15 (See Note 10 below). This fair value of the derivative liabilities at issuance resulted in a full discount to the note payable. The carrying value of the convertible note was accreted over the term of the convertible note up to their values of $125,800 and $150,000 respectively.
		During the year ended January 31, 2011, the $150,000 note and $9,000 of accrued interest was converted into 45,428,571 shares of the Company’s common stock.
	f)	On August 15, 2010, the Company entered into a 12% convertible debenture due February 15, 2011 in the amount of $250,000. The Holder is entitled, at its option, to convert at any time and from time to time, all or any part of the principal amount of this debenture, plus accrued interest, into common shares, at a price per share equal to the lowest 50% of the average of the 3 (three) lowest closing bid prices of the common stock for the 30 trading days immediately prior to the date that the Company receives notice of the conversion or 50% of the lowest trading price for the 20 trading days prior to closing of this agreement. Likewise the Company is entitled, at its option, at any time and from time to time, to convert all or any part of the principal amount of the debenture, plus accrued interest, into shares of the Company’s common stock at a price equal to 50% of the lowest traded price of the common stock for the prior 20 trading days that the Company issues such a notice of conversion. Due to this provision, the embedded conversion option qualifies for derivative accounting under ASC 815-15 (See Note 10 below). This fair value of the derivative liability at issuance resulted in a full discount to the note payable. The carrying value of the convertible note was accreted over the term of the convertible note up to their value of $250,000.

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TAO MINERALS LTD. and Subsidiary

(An Exploration Stage Company)

Notes to the Consolidated Financial Statement

7.	Common Stock
	a)	On February 25, 2010 the Directors approved the issuance of 4,237,500 shares of common stock to James Sikora and 1,181,250 shares of common stock to Minera Primecap Resources S.A. in settlement of accounts payable in the amounts of $339,000 and $94,500 respectively. The per share price was $0.08.
	b)	On January 29, 2010, the Company increased its authorized common shares to 1 billion.
	c)	On June 15, 2010, a note holder converted a note in the amount of $50,000 for 2,000,000 shares of common stock.
	d)	On May 6, 2010, the Directors agreed to issue 6,000,000 shares of common stock in settlement of services and entered into four Consulting Agreements to provide various financial and management services for the period April 16, 2010 through October 16, 2010. Compensation for the four agreements amounted to 10,000,000 shares of restricted common stock.
	e)	During the period ended January 31, 2011, lenders converted $853,477 of convertible notes, interest and derivative payable for 170,475,515 shares of common stock.
	f)	On July 1, 2010, the Company entered into a Business Consultant Agreement to receive advice on growth strategies including mergers, acquisitions and fundings. The term of the agreement is for 30 days but may be extended upon agreement of both parties. The Company paid $25,000 and on August 19, 2010, issued 2,000,000 shares of common stock with a fair value of $44,000 to the Consultant.
	g)	During fiscal year end January 31, 2010, the Company converted debt into 1,043,590 shares of common stock.
8.	Commitments
	a)	During May 2010, the Directors consented to a subscription of 999,000 shares of common stock at $0.10 per share ($99,900) to three individuals in a private placement. As of January 31, 2011, the private placement had not been completed.
	b)	On May 15, 2010, the Company signed an investor relations agreement to provide marketing, promotional and investor relations services through November 1, 2010. The cost of these services will be the issuance of 100,000 shares of common stock and a monthly fee of $3,000. The monthly fee is being paid but the stock has not been issued as of January 31, 2011. The Company has accrued the fair value of the shares of $1,040 as a stock issuance liability.
9.	Fair Value Measurements
	ASC 825 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.
	Fair Value Hierarchy
	ASC 825 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 825 establishes three levels of inputs that may be used to measure fair value.

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TAO MINERALS LTD. and Subsidiary

(An Exploration Stage Company)

Notes to the Consolidated Financial Statement

Level 1 applies to assets and liabilities for which there are quoted prices in active markets for identical assets or liabilities. Valuations are based on quoted prices that are readily and regularly available in an active market and do not entail a significant degree of judgment.

Level 2 applies to assets and liabilities for which there are other than Level 1 observable inputs such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets), or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 2 instruments require more management judgment and subjectivity as compared to Level 1 instruments. For instance: determining which instruments are most similar to the instrument being priced requires management to identify a sample of similar securities based on the coupon rates, maturity, issuer, credit rating and instrument type, and subjectively select an individual security or multiple securities that are deemed most similar to the security being priced; and determining whether a market is considered active requires management judgment.

Level 3 applies to assets and liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The determination of fair value for Level 3 instruments requires the most management judgment and subjectivity.

Pursuant to ASC 825, the fair value of the cash equivalent is determined based on “Level 1” inputs, which consists of quoted prices in active markets for identical assets. Convertible notes payable and derivative are valued based on “Level 3” inputs, consisting of unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The Company believes that the recorded values of all of the other financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations.

Assets and liabilities measured at fair value on a recurring basis were presented on the Company’s balance sheet as at January 31, 2011 as follows:

			Fair Value Measurements Using
			Quoted prices in
			active markets			Significant other			Significant
			for identical			observable			Unobservable			Balance,
			instruments			Inputs			inputs			January 31,
			(Level 1)			(Level 2)			(Level 3)			2011
			$			$			$			$
	Cash and cash equivalents		18,295			–			–			18,295
	Convertible notes payable		–						(272,846	)		(272,846	)
	Derivative liabilities		–			–			(683,057	)		(683,057	)
			18,295			–			(955,903	)		(937,608	)

	The fair values of other financial instruments, which include accounts payable, and accrued liabilities approximate their carrying values due to the relatively short-term maturity of these instruments.
10.	Derivative Liability
	ASC 815-15 lays out a procedure to determine if an equity-linked financial instrument (or embedded feature) is indexed to its own common stock.
	Convertible Debt - The embedded conversion option in the Company’s convertible notes described in Note 6 contain a conversion feature that qualifies for embedded derivative classificiation. The fair value of these

46

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TAO MINERALS LTD. and Subsidiary

(An Exploration Stage Company)

Notes to the Consolidated Financial Statement

liabilities will be re-measured at the end of every reporting period and the change in fair value will be reported in our consolidated statement of operations as a gain or loss on derivative financial instruments.

The following table summarizes the change in derivative liabilities for the year ended January 31, 2011:

	Derivative Liabilities at January 31, 2010	$	233,008
	Addition of new derivative liabilities		710,819
	Conversion of derivatives		(1,991,341	)
	Change in fair value of embedded conversion option		1,730,571
	Derivative Liabilities at January 31, 2011	$	683,057

	The Company used the Black-Scholes option pricing model to value the embedded conversion feature using the following assumptions: number of options as set forth in the convertible notes agreements; no expected dividend yield; expected volatility ranging from 153% - 503%; risk-free interest rates ranging from 0.13% - 0.53% and expected terms based on the contractual term.
11.	Income Taxes
	As of January 31, 2011, the Company had a net operating loss carryforward for income tax reporting purposes of approximately $10,048,000 that may be offset against future taxable income through 2030. 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

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

	The net change in the valuation allowance for fiscal year end 2011 is $533,000 (2010 - $200,000).
12.	Subsequent Events
	Subsequent events were evaluated through June 13, 2011.
	a)	On November 10, 2010, the Company entered into a $250,000 convertible note agreement. The note bears interest at 12% per year and is due on May 15, 2011. The note is convertible at the holder’s option into shares of the Company’s common stock, at a price per share equal to the lower of 50% of the lowest closing bid price of the Common Stock for the 30 trading days immediately prior to the date that the Company receives notice of conversion or $0.0035. The note is convertible at the Company’s option into

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TAO MINERALS LTD. and Subsidiary

(An Exploration Stage Company)

Notes to the Consolidated Financial Statement

		the Company’s common shares at a price per share equal to 50% of the lowest traded price of the Common Stock for the 20 trading days prior to the date of such notice of conversion. At January 31, 2011, the Company had not yet received any proceeds relating to this loan. Subsequent to the period end the Company received $250,000 and issued the note. Subsequent to January 31, 2011, the Company also converted $65,000 of notes payable into 50,000,000 shares of the Company’s common stock.
	b)	On December 1, 2010, the Company entered into a $250,000 convertible note agreement. The note bears interest at 12% per year and is due on June 1, 2011. The note is convertible at the holder’s option into shares of the Company’s common stock, at a price per share equal to the lower of 50% of the lowest closing bid price of the Common Stock for the 30 trading days immediately prior to the date that the Company receives notice of conversion or 50% of the lowest traded price for the 20 trading days prior to the closing of this agreement. The note is convertible at the Company’s option into the Company’s common shares at a price per share equal to 50% of the lowest traded price of the Common Stock for the 20 trading days prior to the date of such notice of conversion. At January 31, 2011, the Company had not yet received any proceeds relating to this loan. Subsequent to the period end the Company received $250,000 and issued the note.
	c)	Subsequent to January 31, 2011, the holder of the convertible debenture described in Note 6(e) converted $43,870 of the outstanding debt into 21,935,000 shares of the Company’s common stock.
	d)	Subsequent to January 31, 2011, the Company issued 83,149,328 shares of common stock to settle $265,000 of principal and interest outstanding relating to the convertible note described in note 6(f).
	e)	On March 4, 2011, the Company issued 3,428,571 shares of common stock for $12,000 consulting fees included in accounts payable at January 31, 2011.
	f)	On April 27, 2011, the Company issued 10,000,000 shares of common stock for $20,000 of debt included in accounts payable at January 31, 2011.
	g)	On May 17, 2011, the Company issued 7,461,874 shares of common stock for $13,058 of debt included in accounts payable at January 31, 2011.
	h)	On May 24, 2011, the Company issued 10,000,000 shares of common stock for $10,000 of debt included in accounts payable at January 31, 2011.

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Item 9.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

There were no disagreements with our accountants related to accounting principles or practices, financial statement disclosure, internal controls or auditing scope or procedure during the two fiscal years and subsequent interim periods.

Item 9A.

Controls and Procedures

Management’s Report on Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president (our principal executive officer and our principal financial officer and principle accounting officer) to allow for timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As of January 31, 2011, the end of our fiscal year covered by this report, we carried out an evaluation, under the supervision and with the participation of our president (our principal executive officer and our principal financial officer and principle accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president (our principal executive officer and our principal financial officer and principle accounting officer) concluded that our disclosure controls and procedures were effective as of the end of the period covered by this annual report.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of control procedures. The objectives of internal control include providing management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management’s authorization and recorded properly to permit the preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States. Our management assessed the effectiveness of our internal control over financial reporting as of January 31, 2011. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework. Our management has concluded that, as of January 31, 2011, our internal control over financial reporting is. Our management reviewed the results of their assessment with our Board of Directors.

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

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Inherent limitations on effectiveness of controls

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

Changes in Internal Control over Financial Reporting

There have been no changes in our internal controls over financial reporting that occurred during the three month period ended January 31, 2011 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

Item 9B.

Other Information

None.

PART III

Item 10.

Directors, Executive Officers and Corporate Governance

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

Business Experience

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

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James Sikora, President, Chief Financial Officer and Director

Mr. Sikora was appointed a director on February 1, 2006, was appointed our president on March 5, 2006 and was appointed chief financial officer on August 13, 2010.

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

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

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

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

Duncan Bain, Director

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

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

Walter (Terry) Plummer, Director

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

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

Family Relationships

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

Involvement in Certain Legal Proceedings

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

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1. A petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;

2. Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);

3. Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:

	i.	Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity
	ii.	Engaging in any type of business practice; or
	iii.	Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;

4. Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity;

5. Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;

6. Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;

7. Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:

	i.	Any Federal or State securities or commodities law or regulation; or
	ii.	Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or
	iii.	Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

8. Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

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

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

Based solely on the reports received by the Company and on written representations from certain reporting persons, we believe that the directors, executive officers and persons who beneficially own more than 10% of the Company’s common stock during the fiscal year ended January 31, 2011 have been in compliance with Section 16(a).

Code of Ethics

Effective May 11, 2009, our company's board of directors adopted a Code of Business Conduct and Ethics that applies to, among other persons, members of our board of directors, our company's officers including our president, chief executive officer and chief financial officer, employees, consultants and advisors. As adopted, our Code of Business Conduct and Ethics sets forth written standards that are designed to deter wrongdoing and to promote:

	1.	honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
	2.	full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with, or submit to, the Securities and Exchange Commission and in other public communications made by us;
	3.	compliance with applicable governmental laws, rules and regulations;
	4.	the prompt internal reporting of violations of the Code of Business Conduct and Ethics to an appropriate person or persons identified in the Code of Business Conduct and Ethics; and
	5.	accountability for adherence to the Code of Business Conduct and Ethics.

Our Code of Business Conduct and Ethics requires, among other things, that all of our company's Senior Officers commit to timely, accurate and consistent disclosure of information; that they maintain confidential information; and that they act with honesty and integrity.

In addition, our Code of Business Conduct and Ethics emphasizes that all employees, and particularly Senior Officers, have a responsibility for maintaining financial integrity within our company, consistent with generally accepted accounting principles, and federal and state securities laws. Any Senior Officer who becomes aware of any incidents involving financial or accounting manipulation or other irregularities, whether by witnessing the incident or being told of it, must report it to our company. Any failure to report such inappropriate or irregular conduct of others is to be treated as a severe disciplinary matter. It is against our company policy to retaliate against any individual who reports in good faith the violation or potential violation of our company's Code of Business Conduct and Ethics by another.

Our Code of Business Conduct and Ethics is being filed with the Securities and Exchange Commission as Exhibit 14.1 to our annual report for the year ended January 31, 2009. We will provide a copy of the Code of Business Conduct and Ethics to any person without charge, upon request. Requests can be sent to: Tao Minerals Ltd., Officina 301 Edeficio El Crusero, Carrera 48, 12 Sur – 148 Medellin, Colombia.

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Committees of the Board

All proceedings of our board of directors were conducted by resolutions consented to in writing by all the directors and filed with the minutes of the proceedings of the directors. Such resolutions consented to in writing by the directors entitled to vote on that resolution at a meeting of the directors are, according to the corporate laws of the state of Nevada and the bylaws of our company, as valid and effective as if they had been passed at a meeting of the directors duly called and held.

Our company currently does not have nominating, compensation or audit committees or committees performing similar functions nor does our company have a written nominating, compensation or audit committee charter. Our board of directors does not believe that it is necessary to have such committees because it believes that the functions of such committees can be adequately performed by our directors.

Our company does not have any defined policy or procedure requirements for shareholders to submit recommendations or nominations for directors. The directors believe that, given the early stage of our development, a specific nominating policy would be premature and of little assistance until our business operations develop to a more advanced level. Our company does not currently have any specific or minimum criteria for the election of nominees to the board of directors and we do not have any specific process or procedure for evaluating such nominees. Our directors assess all candidates, whether submitted by management or shareholders, and make recommendations for election or appointment.

A shareholder who wishes to communicate with our board of directors may do so by directing a written request addressed to our President, at the address appearing on the first page of this annual report.

Audit Committee and Audit Committee Financial Expert

Our board of directors has determined that none of our directors qualifies as an "audit committee financial expert" as defined in Item 407(d)(5)(ii) of Regulation S-K, and is "independent" as the term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange Act of 1934, as amended.

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

Item 11.

Executive Compensation

The particulars of the compensation paid to the following persons:

• our principal executive officer;

• each of our two most highly compensated executive officers who were serving as executive officers at the end of the years ended January 31, 2011 and 2010; and

• up to two additional individuals for whom disclosure would have been provided under (b) but for the fact that the individual was not serving as our executive officer at the end of the years ended January 31, 2011 and 2010,

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

(1)	Mr. Sikora was appointed president on March 5, 2006 and as chief financial officer on August 13, 2010.
(2)	Mr. Calle was appointed chief financial officer on July 13, 2009 and resigned on August 13, 2010.
(3)	Mr. De Leon was appointed chief financial officer on September 1, 2006 and resigned on July 13, 2009.

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

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

Stock Option Plan

Currently, we do not have a stock option plan in favor of any director, officer, consultant or employee of our company.

Stock Options/SAR Grants

During our fiscal year ended January 31, 2011 there were no options granted to our named officers or directors.

Outstanding Equity Awards at Fiscal Year End

No equity awards were outstanding as of the year ended January 31, 2011.

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Option Exercises

During our Fiscal year ended January 31, 2011 there were no options exercised by our named officers.

Compensation of Directors

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

We have determined that none of our directors are independent directors, as that term is used in Item 7(d)(3)(iv)(B) of Schedule 14A under the Securities Exchange Act of 1934, as amended, and as defined by Rule 4200(a)(15) of the NASDAQ Marketplace Rules.

Pension, Retirement or Similar Benefit Plans

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

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

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

Family Relationships

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

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth, as of June 22, 2011, certain information with respect to the beneficial ownership of our common shares by each shareholder known by us to be the beneficial owner of more than 5% of our common shares, as well as by each of our current directors and executive officers as a group. Each person has sole voting and investment power with respect to the shares of common stock, except as otherwise indicated. Beneficial ownership consists of a direct interest in the shares of common stock, except as otherwise indicated.

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(1) Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding on June 22, 2011. As of June 22, 2011, there were 342,605,877 shares of our company’s common stock issued and outstanding.

(2) Includes 1,181,250 shares of common stock held in the name of Minera Primecap Resources S.A. for which James Sikora holds dispositive control.

Changes in Control

We are unaware of any contract or other arrangement or provisions of our Articles or Bylaws the operation of which may at a subsequent date result in a change of control of our company. There are not any provisions in our Articles or Bylaws, the operation of which would delay, defer, or prevent a change in control of our company.

Item 13.

Certain Relationships and Related Transactions, and Director Independence

Except as disclosed herein, no director, executive officer, shareholder holding at least 5% of shares of our common stock, or any family member thereof, had any material interest, direct or indirect, in any transaction, or proposed transaction since the year ended January 31, 2011, in which the amount involved in the transaction exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at the year end for the last three completed fiscal years.

Director Independence

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

We do not have a standing audit, compensation or nominating committee, but our entire board of directors acts in such capacities. We believe that our members of our board of directors are capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. The board of directors of our company does not believe that it is necessary to have an audit committee because we believe that the functions of an audit committee can be adequately performed by the board of directors. In addition, we believe that

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retaining an independent director who would qualify as an “audit committee financial expert” would be overly costly and burdensome and is not warranted in our circumstances given the early stages of our development.

Item 14.

Principal Accounting Fees and Services

The aggregate fees billed for the most recently completed fiscal year ended January 31, 2011 and for the fiscal year ended January 31, 2010 for professional services rendered by the principal accountant for the audit of our annual financial statements and review of the financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:

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

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

PART IV

Item 15.

Exhibits, Financial Statement Schedules

(a)	Financial Statements
	(1)	Financial statements for our company are listed in the index under Item 8 of this document
	(2)	All financial statement schedules are omitted because they are not applicable, not material or the required information is shown in the financial statements or notes thereto.
(b)	Exhibits

Exhibit	Description
Number
(3)	(i) Articles of Incorporation; and (ii) Bylaws
3.1	Articles of Incorporation (incorporated by reference from our Form SB-2 Registration Statement, filed on March 24, 2005).
3.2	Bylaws (incorporated by reference from our Form SB-2 Registration Statement, filed on March 24, 2005).

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Exhibit	Description
Number
3.3	Certificate of Change (incorporated by reference from our Current Report on Form 8-K, filed on March 24, 2006).
3.4	Certificate of Change (incorporated by reference from our Current Report on Form 8-K, filed on November 12, 2009).
(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	Amending Agreement Dated June 30, 2006 between our company and Primecap Resources Inc. (incorporated by reference from our Current Report on Form 8-K, filed on July 14, 2006).
10.7	Convertible Loan Agreement dated December 1, 2009 between our company and John C. Lama (incorporated by reference from our Current Report on Form 8-K, filed on December 11, 2009).
10.8	Consulting Services Agreement between our company and Kerry Services Inc. (incorporated by reference from our Current Report on Form 8-K, filed on August 12, 2010)
(31)	302 Certification
31.1*	Section 302 Certification under Sarbanes-Oxley Act of 2002.
(32)	906 Certification
32.1*	Section 906 Certification under Sarbanes-Oxley Act of 2002.

*	Filed herewith.

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SIGNATURES

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

	TAO MINERALS LTD.
	(Registrant)
Dated: June 27, 2011	/s/ James Sikora
	James Sikora
	President, Chief Executive Officer, Chief
	Financial Officer and Director
	(Principal Executive Officer, Principal Financial
	Officer and Principal Accounting Officer)

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.

Dated: June 27, 2011	/s/ James Sikora
	James Sikora
	President, Chief Executive Officer, Chief
	Financial Officer and Director
	(Principal Executive Officer, Principal Financial
	Officer and Principal Accounting Officer)
Dated: June 27, 2011	/s/ Duncan Bain
	Duncan Bain
	Director
Dated: June 27, 2011	/s/ Walter (Terry) Plummer
	Walter (Terry) Plummer
	Director

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