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EX-31.1 - SECTION 302 CERTIFICATION - Tao Minerals Ltd.exhibit31-1.htm
EX-31.2 - SECTION 302 CERTIFICATION - Tao Minerals Ltd.exhibit31-2.htm
EX-32.2 - SECTION 906 CERTIFICATION - Tao Minerals Ltd.exhibit32-2.htm
EX-32.1 - SECTION 906 CERTIFICATION - Tao Minerals Ltd.exhibit32-1.htm

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

FORM 10-Q

(Mark One)

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

For the quarterly period ended July 31, 2009

or

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

For the transition period from _______________________________ to _______________________________

Commission File Number 000-51922

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

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

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

780-669-1456
(Registrant’s telephone number, including area code)

N/A
(Former name, former address and former fiscal year, if changed since last report)

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 past 90 days.
[X] YES    [   ] NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting
company. See the definitions 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   [   ] (Do not check if a smaller reporting company) 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    [X] NO

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the
Exchange Act after the distribution of securities under a plan confirmed by a court.

[   ] YES    [   ] NO

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any,
every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 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

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
2,736,849 common shares issued and outstanding as of November 6, 2009

1


PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

 

 

 

 

2



TAO MINERALS LTD. and Subsidiary
(An Exploration Stage Company)
Consolidated Balance Sheets
(Unaudited)

    July 31     January 31  
    2009     2009  
             
                                                                                                                         ASSETS            
Current            
 Cash $  2,798   $  7,868  
 Prepaids   43,120     46,611  
Total current assets   45,918     54,479  
             
Property and Equipment   19,370     16,820  
             
Mineral Properties            
 Mineral Rights   129,921     113,420  
Total Mineral Properties   129,921     113,420  
             
Total assets $  195,209   $  184,719  
             
                                                                         LIABILITIES AND STOCKHOLDERS’ DEFICIT            
Current            
             
 Accounts payable and accrued expenses $  369,159   $  241,057  
 Note Payable   516,000     500,000  
 Derivative liability   183,255     177,374  
 Stock issuance liability   92,100     92,100  
 Other accrued liabilities   170,237     154,546  
Total current liabilities   1,330,751     1,165,077  
Note payable long term   11,163     6,883  
Total liabilities   1,341,914     1,171,960  
             
STOCKHOLDERS’ DEFICIT            
Share Capital            
 Authorized:            
Preferred stock: $0.001 par value 1,000,000 shares authorized   -     -  
 None issued, allotted and outstanding:            
             
Common stock: $0.001 par value, 552,000,000 shares authorized            
 Issued, allotted and outstanding:393,672,.316 and 324,954,369 shares            
     common stock at July 31, 2009 and January 31, 2009   393,673     324,955  
Additional paid-in capital   6,790,755     6,791,473  
Accumulated other comprehensive loss   (32,280 )   (32,822 )
Deficit accumulated during exploration stage   (8,288,770 )   (8,060,831 )
Total TAO stockholders’ deficit   (1,136,622 )   (977,225 )
Noncontrolling interest   (10,083 )   (10,016 )
Total deficit   (1,146,705 )   (987,241 )
Total liabilities and deficit $  195,209   $  184,719  

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

3


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

    From Inception Date     For the Six Months  
    of September 23, 2004     Ended July 31  
    to Period Ended July                 
    31, 2009     2009     2008  
OPERATING EXPENSES                  
                   Exploration expenses $  122,650   $  -   $  -  
                   Professional fees   226,918     9,700     24,420  
                   Director fees   120,000     -     -  
                   Consulting fees   934,350     109,500     96,000  
                   Legal fees   276,490     2,107     87,854  
                   General and administrative   214,430     48,675     26,057  
                   Impairment charge   4,700,000           -  
                   
LOSS FROM OPERATIONS   6,594,838     169,982     234,331  
                   
                   Total Operating Expenses   (6,594,838 )   (169,982 )   (234,331 )
                   
OTHER INCOME (EXPENSE)                  
                   Derivative expense   (83,255 )   (5,881 )   (687,127 )
                   Loss on settlement of debt   (1,388,151 )   (34,000 )   (816,367 )
                   Interest expense   (54,705 )   (18,378 )   (9,701 )
                   Other loss, net   (1,071 )   222     -  
                   Foreign currency translation gain   1,531     -     -  
                   
TOTAL OTHER INCOME (EXPENSE)   (1,525,651 )   (58,037 )   (1,513,195 )
                   
Net loss for the Period   (8,120,489 )   (228,019 )   (1,747,526 )
                   
Less: net loss attributable to                  
noncontrolling interest   1,646     81     515  
                   
Net loss attributable to TAO common                  
shareholders’ $  (8,118,843 ) $  (227,938 ) $  (1,747,011 )
                   
LOSS PER SHARE – BASIC       $  0.00   $  0.00  
WEIGHTED AVERAGE NUMBER OF ISSUED SHARES                  
BASIC         368,772,032     67,979,387  

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

4


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

          For the Three Months  
          Ended July 31  
          2009     2008  
OPERATING EXPENSES                  
                   Exploration expenses       $  -   $  -  
                   Professional fees         9,700     24,030  
                   Director fees         -     -  
                   Consulting fees         52,500     48,000  
                   Legal fees               21,039  
                   General and administrative         26,527     24,361  
                   Impairment charge               -  
LOSS FROM OPERATIONS         88,727     117,430  
                   Total Operating Expenses         (88,727 )   (117,430 )
OTHER INCOME (EXPENSE)                  
                   Derivative expense         1,927     (673,355 )
                   Loss on settlement of debt               (816,367 )
                   Interest expense         (14,499 )   (9,244 )
                   Other loss, net         37     -  
                   Foreign currency translation gain         -     -  
TOTAL OTHER INCOME (EXPENSE)         (12,535 )   (1,498,966 )
Net loss for the Period         (101,262 )   (1,498,966 )
Less: net loss attributable to                
noncontrolling interest         14     515  
Net loss attributable to TAO common                  
shareholders’       $  (101,248 ) $  (1,615,881 )
                   
LOSS PER SHARE – BASIC       $  0.00   $  0.00  
WEIGHTED AVERAGE NUMBER OF ISSUED SHARES                  
BASIC         342,739,916     68,620,271  

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

5


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

    From Inception Date     For the Six     For the Six  
    of September 23,     Months Ended     Months Ended  
    2004 to Period Ended     July 31, 2009     July 31, 2008  
    July 31, 2009                
Cash Provided by (Used for) Operating Activities
Net (loss) for the period $  (8,118,663 ) $  (227,938 ) $  (1,747,524 )
Stock issued for services   682,386           79,750  
Loss on settlement of debt   1,388,151     34,000     816,367  
Impairment charges   4,700,000           -  
Minority interest in loss   (11,648 )   (67 )   515  
Changes in non-cash working capital items                  
                   Prepaids   (40,253 )   3,491     (5,433 )
                   Discount on Note payable   (118,117 )            
                   Deferred charges   -     -     (97,663 )
                   Accounts payable and accrued   538,191     148,073     72,897  
                   Derivative liability   183,255     5,881     787,127  
                   Cash used by operations   (796,698 )   (36,560 )   (93,964 )
Investing Activities                  
                   Acquisition of subsidiary   (114,189 )   -     -  
                   Purchase of fixed assets   (16,820 )   (2,550 )   -  
                   Purchase of mineral rights   (365,715 )   (16,501 )   (164,829 )
                                 Cash used by investing activities   (496,724 )   (19,051 )   (164,829 )
Financing Activities                  
                   Issuance of debt   1,270,000     50,000     350,000  
                   Issuance of common stock   55,310     -     -  
                   Cash provided by financing activities   1,325,310     50,000     350,000  
                   
Effect of exchange rate on cash   (33,160 )   541     (1,014 )
Cash Increase (Decrease) During the Period   2,805     (5,070 )   91,207  
Cash, Beginning of Period   -     7,868     1,563  
Cash and Equivalent, End of Period   2,798     2,798     91,756  

SUPPLEMENTAL CASH FLOWS INFORMATION

The Company did not pay cash for either interest or taxes for the six months ended July 31, 2009 and 2008.

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

6



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

1.

Organization and Summary of Significant Accounting Policies

   

Nature of Operations and Going Concern

   

Tao Minerals, Ltd. (an exploration stage company) (the “Company”) was incorporated under the laws of the State of Nevada on September 23, 2004. The Company is natural resource exploration company with an objective of acquiring, exploring and if warranted and feasible, developing natural resource properties.

   

As reflected in the accompanying financial statements, the Company is in the exploration stage and has a cumulative negative cash flows from operations of $755,673 since inception and losses of $227,761 for the six month period ended July 31, 2009. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

   

Management 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.

   

The financial statements for the six months ended July 31, 2009 and 2008, and for the period from September 23, 2004 (inception) to July 31, 2009, together with the balance sheet as of July 31, 2009 included herein have not been audited by the Company’s independent public accountants. In the opinion of management, all adjustments necessary to present fairly the financial position at July 31, 2009 and the results of operations and cash flows for the periods presented herein have been made.

   

The financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such regulations. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-KSB for the year ended January 31, 2009.

   

The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgment. Actual results may vary from these estimates. Prior periods have been adjusted to conform with the presentation of the financial statements ended July 31, 2009.


2.

Notes Payable

   

During the six months ended July 31, 2009 the company converted $34,000 of principal on its $500,000 note payable, recognizing a $34,000 loss on conversion. Also, the company increased its debt by $50,000.


3.

Common Stock

   

During the six months ended July 31, 2009 the company converted $34,000 of debt by issuing 68,717,947 shares of common stock.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

FORWARD-LOOKING STATEMENTS

This quarterly 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, 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 unaudited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly 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 quarterly report.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to "US$" refer to United States dollars and all references to "common stock" refer to the common shares in our capital stock.

As used in this quarterly report, the terms "we", "us", "our" and "our company" mean Tao Minerals Ltd., unless otherwise indicated.

General Overview and Business Development over the Last Three Years

We were incorporated in the State of Nevada on September 23, 2004 with authorized capital of 69,000,000 shares of common stock with a par value of $0.001 and 1,000,000 shares of preferred stock with a par value of $0.001.

On March 13, 2006, our board of directors approved an eight (8) for one (1) forward stock split of our authorized, issued and outstanding common stock. The forward stock split became effective with the Secretary of State of Nevada on March 24, 2006. As a result, our authorized capital increased from 69,000,000 shares of common stock with a par value of $0.001 and 1,000,000 Preferred “A” stock with a par value of $0.001 to 552,000,000 shares of common stock with a par value of $0.001 and 1,000,000 Preferred “A” stock with a par value of $0.001. Our issued and outstanding share capital increased from 7,739,500 shares of common stock to 51,816,000 shares of common stock. Effective March 24, 2006 our trading symbol on the OTC Bulletin Board was changed from “TAOM” to “TAOL” in connection with the forward stock split.

On April 4, 2008, we entered into a promissory note conversion agreement with Outboard Investments Ltd., pursuant to which we agreed to provide for certain conversion provisions related to that certain promissory note issued by our company. The promissory note originally evidenced an interest free loan received by our company from Epsom Investment Services N.V. in the amount of $620,000. On April 4, 2008, the promissory note was transferred to Outboard Investments Ltd. pursuant to that certain debt sale agreement. Pursuant to the conversion agreement, the promissory note is convertible into shares of our company’s common stock at a price equal to 30% of the lowest closing bid price of the shares of our company’s common stock during the five trading days immediately preceding the conversion date. In the event of a failure by our company to honor any conversion requests by Outboard, Outboard shall have the right to demand payment of all outstanding amounts under the promissory note which amounts shall be paid within 5 days.

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The promissory note conversion agreement also provides that Outboard may have the right to require our company to redeem the promissory note in cash at 110% of the outstanding principal amount, together with all accrued and unpaid interest in the event (A) our company challenges, disputes or denies the right of Outboard to effect the conversion of the promissory note or otherwise dishonors or rejects a conversion request, and (B) any third party asserts any claim which seeks to challenge, deny, enjoin, limit, modify or dispute the right of Outboard to effect any conversions under the promissory note.

Outboard shall not be obligated to effect conversions under the conversion agreement in the event such conversion will result in Outboard being deemed to be the beneficial owner of more than 4.99% .

On October 4, 2008, our company and Outboard Investments Ltd. jointly agreed to enter into a cancellation agreement in regards to the $1,000,000 financing.

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

Under the terms of the amended option agreement, the purchase price of the option is $1.42 billion Colombian pesos or approximately US$825,000 dollars. We paid $80,000,000 pesos (approximately US$50,000) upon closing of the option agreement and are obligated to pay $40,000,000 pesos on the 15th of every month until $320,000,000 pesos has been paid. Thereafter 20% of production will be paid until $1.1 billion pesos have been received by Agrominas De Colombia. After the acquisition price is paid Agrominas De Colombia will continue to receive 20% of the mining production. Upon receipt of $1.42 billion pesos by Agrominas De Colombia the option will be exercised and 80% ownership in the property will be transferred to Minera Tao. To date, we have paid to Agrominas De Colombia $240,000,000 pesos (or US$120,000).

From inception on September 23, 2004 to present, we have engaged in no significant operations other than organizational activities, acquiring and staking our properties, preparing the registrations of our securities and planning Phase 1 of the exploration work on our Whale Mine Claims and acquiring our Golondria Gold-Silver Project and El Comillo mining property.

On April 23, 2008 we entered into a securities purchase agreement for the sale of $1,000,000 convertible note at 10% with a maturity of 2 years. We received $125,000 upon the closing and issued a note for the amount. Our company is obligated to file a registration statement within 45 days of the closing. Upon the registration statement becoming effective, our company will receive the balance of the $875,000. The note carries a conversion feature that calls for 50% of the average volume weighted price of the shares for the five trading days prior to conversion. Conversion is at the option of the holder. Subsequent to the $125,000 funding our company and the purchaser agreed to terminate the agreement and let the $125,000 note stand on its own.

On June 11, 2008 we issued a $500,000, 8% convertible debenture to Tuxedo Holdings which was payable by July 31, 2008. All or any portion of the amounts due under the convertible debenture may be converted at any time, at the option of the holder, into common shares of our company at a conversion price of seventy five percent (50%) of the average of the three lowest closing bid prices of our common stock for the five trading days immediately prior to the date that we receive notice of conversion of the convertible debenture.

On October 16, 2008, we entered into an agreement to issued a $500,000 8% convertible debenture to Galleon Investments Ltd. All or any portion of the amounts due under the convertible debenture, which matures 90 days from the advancement date, may be converted at any time, at the option of the holder, into common shares of our company at a conversion price of seventy five percent (75%) of the average of the three lowest closing bid prices of our common stock for the five trading days immediately prior to the date that we receive notice of conversion of the convertible debenture. The Note was to be funded by December 31, 2008, however the note was not funded by that date.

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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 0115-314-2330.

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

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

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

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

On July 13, 2009, Julio De Leon resigned as a director and chief financial officer of our company and Julio C. Calle was appointed chief financial officer of our company.

Our Current Business

We are an exploration stage company that has not yet generated or realized any revenues from our business operations. We had concentrated our recent exploration efforts on the La Golondrina Property in Columbia over our fiscal year ending January 31, 2009. In July, 2008 we acquired a mineral right in the El Colmillo property in Colombia. In October, 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

10


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 is waiting to see what developments will take place.

Results of Operations

Three Months Ended July 31, 2009 and 2008

The following summary of our results of operations should be read in conjunction with our consolidated financial statements for the quarter ended July 31, 2009 which are included herein.

Our operating results for the three months ended July 31, 2009, for the three months ended July 31, 2008 and the changes between those periods for the respective items are summarized as follows:







Three Months Ended
July 31,
2009


Three Months Ended
July 31,
2008
Change Between
Three Month Period
Ended
July 31, 2009
and July 31, 2008
Revenue $                                     Nil $                                     Nil $                                     Nil
Professional fees $                                 9,700 $                               24,030 $                              (14,030)
Consulting fees $                               52,500 $                               48,000 $                                  4,500
Legal fees $                                     Nil $                               21,039 $                               (21,039)
General and administrative $                               26,527 $                               24,361 $                                  2,166
Derivative expense $                                 1,927 $                            (673,355) $                              675,282
Loss on settlement of debt $                                     Nil $                            (816,367) $                              816,367
Interest expense $                              (14,499) $                                (9,244) $                                  5,255
Other loss $                                      37 $                                     Nil $                                       37
Net Income (Loss) $                            (101,262) $                          (1,498,966) $                           1,397,704

Our consolidated financial statements report a net loss of $101,262 for the three month period ended July 31, 2009 compared to a net loss of $1,498,966 for the three month period ended July 31, 2008. Our losses have decreased primarily resulting from a decrease in professional and legal fees and derivative expense and losses on settlement of debt.

Six Months Ended July 31, 2009 and 2008

The following summary of our results of operations should be read in conjunction with our consolidated financial statements for the quarter ended July 31, 2009 which are included herein.

Our operating results for the six months ended July 31, 2009, for the six months ended July 31, 2008 and the changes between those periods for the respective items are summarized as follows:





Six months Ended
July 31,
2009

Six months Ended
July 31,
2008
Change Between
Six Month Period Ended
July 31, 2009
and July 31, 2008
Revenue $                               Nil $                               Nil $                               Nil

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Six months Ended
July 31,
2009

Six months Ended
July 31,
2008
Change Between
Six Month Period Ended
July 31, 2009
and July 31, 2008
Professional fees $                                 9,700 $                               24,030 $                             (14,330)
Consulting fees $                             109,500 $                               96,000 $                               13,500
Legal fees $                                 2,107 $                               87,854 $                             (85,747)
General and administrative $                               48,675 $                               26,057 $                               22,618
Net Income (Loss) $                           (228,019) $                         (1,747,526) $                          1,517,507

Our accumulated losses increased to $(8,120,489) as of July 31, 2009. Our consolidated financial statements report a net loss of $228,019 for the six month period ended July 31, 2009 compared to a net loss of $1,747,526 for the six month period ended July 31, 2008. Our losses have decreased primarily resulting from a decrease in professional and legal fees and derivative expense and losses on settlement of debt.

Revenues

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

Liquidity and Financial Condition

As of July 31, 2009, our total assets were $195,209 and our total liabilities were $1,341,914 and we had a working capital deficit of $1,284,833. Our financial statements report a net loss of $228,019 for the quarter ended July 31, 2009, and a net loss of $8,120,489 for the period from September 23, 2004 (date of inception) to July 31, 2009.

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

  Cash Flows         As at  
      July 31,        
      2009     2008  
               
  Net Cash (Used) Provided by Operating Activities $  (36,560 ) $  (93,964 )
  Net Cash Used In Investing Activities $  (19,051 ) $  (164,829 )
  Net Cash Provided by Financing Activities $  50,000   $  350,000  
  Cash Increase (Decrease) In Cash During The Period $  (5,070 ) $  91,207  

We had cash in the amount of $2,798 as of July 31, 2009 as compared to $91,756 as of July 31, 2008. We had a working capital deficit of $1,284,833 as of July 31, 2009 compared to working capital deficit of $1,656,046 as of July 31, 2008.

Our principal sources of funds have been from sales of our common stock and short term loans.

Contractual Obligations

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

Going Concern

We have not yet achieved profitable operations and are dependent on our ability to raise capital from stockholders or other sources to meet our obligations and repay our liabilities arising from normal business operations when they become due, in their report on our audited financial statements for the year ended January 31, 2009, our independent

12


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.

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

Our consolidated financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management's application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our consolidated financial statements is critical to an understanding of our financials.

Cash Equivalents

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

Concentration of Credit Risk

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 its cash balances with one financial institution, in the form of demand deposits.

Mineral Interest

Pursuant to SFAS No. 141 and SFAS No. 142, as amended by EITF 04-02, mineral interest associated with other than owned properties are classified as tangible assets. As of July 31, 2009, our company had capitalized $129,921 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

Our company accounts for long-lived assets under the Statements of Financial Accounting Standards Nos. 142 and 144 “Accounting for Goodwill and Other Intangible Assets” and “Accounting for Impairment or Disposal of Long-Lived Assets” (“SFAS No. 142 and 144”). In accordance with SFAS No. 142 and 144, long-lived assets, goodwill and certain identifiable intangible assets held and used by our company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. For purposes of evaluating the recoverability of long-lived assets, goodwill and intangible assets, the recoverability test is performed under the methods identified in SFAS 144 and Emerging Issues Task Force 04-03.

Foreign Currency Translation

The accounts of our company are translated in accordance with Statement of Financial Accounting Standard No. 52, which requires that foreign currency assets and liabilities be translated using the exchange rates in effect at the balance sheet date. Results of operations are translated using the average rates prevailing throughout the period. The effects of unrealized exchange rate fluctuations on translating foreign currency assets and liabilities into U.S. dollars are accumulated as the accumulated other comprehensive adjustment in shareholders’ equity.

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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

Basic and diluted net loss per common share is computed based upon the weighted average common shares outstanding as defined by Financial Accounting Standards No. 128, “Earnings Per Share.” As of July 31, 2009 and 2008, there were no dilutive securities outstanding. Our company has a $625,000 convertible debentures which can be converted to common stock. These shares have not been included in any weighted average computations since the effect would be anti-dilutive.

Income Taxes

Our company accounts for income taxes under the Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes” (“Statement 109”). Under Statement 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under Statement 109, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Business Segments

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 Accounting Changes and Error Corrections in accordance with Statement of Financial Accounting Standards # 154 which replaced APB 20 and Statement of Financial Accounting Standards #3. Changes

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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.

Recently Issued Accounting Standards

Statement of Financial Accounting Standards (“SFAS”) No. 151, “Inventory Costs – an amendment of ARB No. 43, Chapter 4” SFAS No. 152, “Accounting for Real Estate Time-Sharing Transactions - an amendment of FASB Statements No. 66 and 67,” SFAS No. 153, “Exchanges of Non-monetary Assets – an amendment of APB Opinion No. 29,” and SFAS No. 123 (revised 2004), “Share-Based Payment,” were recently issued. SFAS No. 151, 152, 153 and 123 (revised 2004) have no current applicability to our company and have no effect on the financial statements.

Item 3.   Quantitative Disclosures About Market Risks

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

Item 4T. Controls and Procedures.

Management’s Report on Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president (who is acting as our principal executive officer) and our chief financial officer (who is acting as our principal financial officer and principle accounting officer) to allow for timely decisions regarding required disclosure.

As of July 31, 2009, the end of our quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president (who is acting as our principal executive officer) and our chief financial officer (who is acting as our principal financial officer and principle accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president (who is acting as our principal executive officer) and our chief financial officer (who is acting as our principal financial officer and principle accounting officer) (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 quarterly report.

Changes in Internal Control over Financial Reporting

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

PART II - OTHER INFORMATION

Item 1.   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 shareholder, is an adverse party or has a material interest adverse to our interest.

Item 1A. Risk Factors

Much of the information included in this quarterly report includes or is based upon estimates, projections or other "forward looking statements". Such forward looking statements include any projections or estimates made by us and

15


our management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.

Such estimates, projections or other "forward looking statements" involve various risks and uncertainties as outlined below. We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other "forward looking statements".

Our common shares are considered speculative during the development of our new business operations. Prospective investors should consider carefully the risk factors set out below.

Risks Associated With Our Business

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

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

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

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

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

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

We have a limited operating history and must be considered in the exploration stage. Our company's operations will be subject to all the risks inherent in the establishment of an exploration stage enterprise and the uncertainties arising from the absence of a significant operating history. Potential investors should be aware of the difficulties normally encountered by mineral exploration companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the mineral properties that we plan to undertake. These potential problems include, but are not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates. The expenditures to be made by us in the exploration of the mineral claims may not result in the discovery of mineral deposits. Problems such as unusual or unexpected formations of rock or land and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts. If the results of our exploration do not reveal viable commercial mineralization, we may decide to abandon our claims and

16


acquire new claims for new exploration or cease operations. The acquisition of additional claims will be dependent upon us possessing capital resources at the time in order to purchase such claims. If no funding is available, we may be forced to abandon our operations. No assurance can be given that we may be able to operate on a profitable basis.

If we do not obtain additional financing, our business will fail and our investors could lose their investment.

We had cash in the amount of $2,798 and a working capital deficit of $1,284,833 as at our quarter ended July 31, 2009. We currently do not generate revenues from our operations. Our business plan calls for substantial investment and cost in connection with the acquisition and exploration of our mineral properties currently under lease and option. Any direct acquisition of the claim under lease or option is subject to our ability to obtain the financing 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 quarterly 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 quarter ended July 31, 2009 was $8,120,489. We have incurred losses for the quarter ended July 31, 2009 of $228,019. We recognize that if we are unable to generate significant revenues from our activities, we will not be able to earn profits or continue operations. Based upon current plans, we also expect to incur significant operating losses in the future. We cannot guarantee that we will be successful in raising capital to fund these operating losses or generate revenues in the future. We can provide investors with no assurance that we will generate any operating revenues or ever achieve profitable operations. If we are unsuccessful in addressing these risks, our business will most likely fail and our investors could lose their investment.

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

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

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

Certain projects in which we have interests are located in Colombia. Mineral exploration activities in Colombia may be affected in varying degrees by political instabilities and government regulations relating to the mining industry. Any changes in regulations or shifts in political conditions are beyond our control and may adversely affect our business. Operations may be affected in varying degrees by government regulations with respect to restrictions on production, price controls, export controls, income taxes, expropriations of property, environmental legislation and mine safety. The status of Colombia as a developing country may make it more difficult for us to obtain any required financing for our projects. The effect of all these factors cannot be accurately predicted. Notwithstanding the progress achieved in restructuring Colombia political institutions and revitalizing its economy,

17


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.

Our independent certified public accounting firm, in their Notes to the audited financial statements for the year ended January 31, 2009 states that there is a substantial doubt that we will be able to continue as a going concern.

Our independent certified public accounting firm state in their Notes to the audited financial statements for the year ended January 31, 2009, that we have experienced significant losses since inception. Failure to arrange adequate financing on acceptable terms and to achieve profitability would have an adverse effect on our financial position, results of operations, cash flows and prospects, there is a substantial doubt that we will be able to continue as a going concern.

We are subject to various government regulations and environmental concerns.

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

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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 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.

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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 2.   Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.   Defaults Upon Senior Securities.

None.

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

None.

Item 5.   Other Information

On July 13, 2009, Julio De Leon resigned as a director and chief financial officer of our company and Julio C. Calle was appointed chief financial officer of our company.

Item 6.   Exhibits.

Exhibits required by Item 601 of Regulation S-K

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Exhibit Number Description
   
(3)

(i) Articles of Incorporation; and (ii) Bylaws

 

 

3.1

Articles of Incorporation (incorporated by reference from our Form SB-2 Registration Statement, filed on March 24, 2005).

 

 

3.2

Bylaws (incorporated by reference from our Form SB-2 Registration Statement, filed on March 24, 2005).

 

 

3.3

Certificate of Change (incorporated by reference from our Current Report on Form 8-K, filed on March 24, 2006).

 

 

(10)

Material Contracts

 

 

10.1

Purchase and Sale Agreement dated October 22, 2004 (incorporated by reference from our Amendment No. 1 on Form SB-2/A Registration Statement, filed on April 28, 2005).

 

 

10.2

Letter Agreement dated February 1, 2006 between our company and Nueva California S.A. and Primecap Resources Inc. (incorporated by reference from our Current Report on Form 8-K, filed on February 6, 2006).

 

 

10.3

Assignment Agreement dated February 28, 2006 between our company and Primecap Resources Inc. (incorporated by reference from our Current Report on Form 8-K, filed on March 10, 2006).

 

 

10.4

Amending Agreement dated March 15, 2006 between our company and Primecap Resources Inc. (incorporated by reference from our Current Report on Form 8-K, filed on March 20, 2006).

 

 

10.5

Consulting Agreement dated April 1, 2006 between our company and James Sikora (incorporated by reference from our Current Report on Form 8-K, filed on April 20, 2006)

 

 

10.6

Consulting Agreement dated April 1, 2006 between our company and Gordon Samson (incorporated by reference from our Current Report on Form 8-K, filed on April 20, 2006)

 

 

10.7

Amending Agreement Dated June 30, 2006 between our company and Primecap Resources Inc. (incorporated by reference from our Current Report on Form 8-K, filed on July 14, 2006).

 

 

10.8

Consulting Agreement dated September 1, 2006 between our company and Julio De Leon

 

 

(31)

302 Certification

 

 

31.1*

Section 302 Certification under Sarbanes-Oxley Act of 2002 of James Sikora.

 

 

31.2*

Section 302 Certification under Sarbanes-Oxley Act of 2002 of Julio C. Calle.

 

 

(32)

906 Certification

 

 

32.1*

Section 906 Certification under Sarbanes-Oxley Act of 2002 of James Sikora.

 

 

32.2*

Section 906 Certification under Sarbanes-Oxley Act of 2002 of Julio C. Calle.

* Filed herewith

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

  TAO MINERALS LTD.
   
   
   
   
  /s/ James Sikora
  James Sikora
  President, Chief Executive Officer and Director
  (Principal Executive Officer)
  Date: November 12, 2009
   
   
   
   
  /s/ Julio C. Calle
  Julio C. Calle
  Chief Financial Officer
  (Principal Financial Officer and Principal Accounting Officer)
  Date: November 12, 2009

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