Stock Alert for TAO Minerals Ltd. ($TAON)

TAO Minerals Ltd. (OTCBB: $TAON)

TAO Minerals Ltd. (TAON) is a start-up, exploration-stage company in the mineral resource business. The Company’s mineral resource properties consist of exploration claims located in Nevada (Whale Mine property) and in Columbia (Risaldo La Golondrina D14-082 mineral property located in Narino, Colombia). The Company concentrated its exploration efforts on the La Golondrina Property in Columbia over its fiscal year ended January 31, 2009. In July 2008, the Company acquired a mineral right in the El Colmillo property in Colombia. In October 2008, the Company decided to employ its efforts in exploration of the El Colmillo property and will hold exploration of the Golondrina property until a determination of viability at El Colmillo can be determined. The Company had not generated or realized any revenues from its business operations as of January 31, 2008.

Share Statistics (10-May-10)			FY 2007	FY 2008	% Chg	Q4 2008	Q4 2009	% Chg
Symbol	TAON	Revenue, $Mn	0.0M	0.0M	0.0%	0.0M	0.0M	0.0%
Current price	$0.47	Gross marg.	n/a	n/a	n/a	n/a	n/a	n/a
52wk Range:	$0.72-0.054	Oper. margin	-n/m	-n/m	n/a	-n/m	-n/m	n/a
Avg Vol (3m):	10,856	Net margin	-n/m	-n/m	n/a	-n/m	-n/m	n/a
Market Cap.	1.29M
Dil. Shares Outst.	2.7M	EPS, $	n/a	n/a	n/a	n/a	n/a	n/a

Source: Reuters.com, SEC Filings.

Financial Summary

TAON is an exploration stage company that has not yet generated or realized any revenues from its business operations. It had concentrated its recent exploration efforts on the La Golondrina Property in Columbia over the fiscal year ending January 31, 2009. In July 2008, TAON acquired a mineral right in the El Colmillo property in Colombia. In October 2009, the Company decided to employ its 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. 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 majeure section of the contract and is waiting to see what developments will take place.

The consolidated financial statements report a net loss of $75,744 for the three-month period ended October 31, 2009, compared to a net loss of $224,054 for the three-month period ended October 31, 2008. Losses have decreased primarily as a result of a decrease in expenses due to the cessation of work on the El Colmillo property.

TAONs accumulated losses increased to $8,261,032 as of October 31, 2009. The consolidated financial statements report a net loss of $370,127 for the nine-month period ended October 31, 2009, compared to a net loss of $1,971,725 for the nine-month period ended October 31, 2008. Losses have decreased primarily resulting from a decrease in expenses due to the cessation of work on the El Colmillo property.

Revenues

TAON has not earned any revenues since its inception and it does not anticipate earning revenues in the near future.

As of October 31, 2009, TAON’s current total assets were $41,075, its total current liabilities were $1,329,645 and it had a working capital deficit of $1,288,570. The financial statements report a net loss of $370,127 for the nine-month period ended October 31, 2009, and a net loss of $8,261,032 for the period from September 23, 2004 (date of inception), to October 31, 2009.

TAON has suffered recurring losses from operations. The continuation of the Company is dependent upon the Company attaining and maintaining profitable operations and raising additional capital as needed. In this regard, TAON has raised additional capital through equity offerings and loan transactions.

TAON had cash in the amount of ($45) as of October 31, 2009, as compared to $7,868 as of October 31, 2008. It had a working capital deficit of $1,288,570 as of October 31, 2009, compared to working capital deficit of $1,255,335 as of October 31, 2008.

TAON’s principal sources of funds have been from sales of common stock and short-term loans.

Financial Strength (10-May-2010)	Company	Industry	Sector	S&P 500
Quick Ratio (MRQ)	0.03	2.33	0.56	0.83
Current Ratio (MRQ)	0.03	2.96	0.78	0.96
Long-Term Debt to Equity (MRQ)	–	29.79	22.34	121.92
Total Debt to Equity (MRQ)	–	37.64	22.34	185.31

Source: Reuters.com, SEC Filings.

Analyst Consensus

No chart available.

Source: www.ft.com

No consensus analysis data available.

Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=TAON.OB

Investment Highlights

TAON is pleased to provide an update of its operations and corporate activities. In the past six months, Tao has undergone a complete reorganization. This was done to provide more attractive financing options as the Company moves forward focused on development and production at its El Colmillo Gold project. Market conditions for financing have improved and specifically recent successes by companies such as Ventana Gold Corp. have improved the financing prospects for other mining companies in Colombia. TAON will be providing an update of its financing activities in the near future.

The International Finance Corp. (IFC), an investment branch of the World Bank, has identified Colombia as a primary target for mining investment because of the potential for substantial economic impact from the mining sector. The Colombian government has been recognized as one of the best pro-business reformers globally in recent years by the World Bank and with the country gaining economic stability, new legislation provides foreign investors with a high degree of legal protection and security.

TAON said it believes that the security situation at its El Colmillo gold project in Colombia has continually improved during the time frame under which the Company has been reorganized. As previously announced on April 6, 2009, TAON was working with federal and local authorities to improve security in the area and specifically the El Colmillo Gold Mine. Local mayors and townspeople who were employed at the mine site have exerted considerable political influence on the Colombian government to clean up the situation with the guerrillas in the area and are encouraged by the response from all authorities involved.

Significant progress has been made and subject to a third-party security assessment. TAON is poised to resume operations and move the project to the production stage. The project will provide local employment and plans are moving ahead to upgrade the roads to this remote area to allow federal security forces access to the mine site greatly improving response times should the Company experience any further security issues.

Source: www.yahoo.com

Technical Analysis

Source: http://stockcharts.com

TAON is trading above its 50day moving average. This is considered to be the sign of a bullish trend. There is added weight to this indication because the moving average is rising and suggests that there has been buying interest in this stock.

TAON’s recent volatility has been greater than normal. This is evidenced by the increased distance between the upper and lower Bollinger Bands. These bands measure volatility using standard deviation and a large width is due to high volatility. Additionally, TAON is trading above its upper Bollinger Band. Relative to recent price action, the stock is currently overextended and due for either a pause or retracement.

The MACD for TAON currently indicates a strong bullish signal for two reasons. First, the MACD is above the signal line, a 9-day moving average. Second, the MACD is above 0, which implies that the underlying moving averages are trending higher.

Comparative Analysis

Company Name	Ticker	Price per	Mrkt. Cap.	P/E		P/S
May-10-2010	symbol	Share, $	$ Mn	2009	2010	2009	2010
Bellhaven Copper & Gold Inc.	BHV	0.19	11.13M	n/a	n/a	n/a	n/a
Goldplat plc	GDP	9.69	10.82M	6.93	n/a	0.96	n/a
Greenstone Resources Ltd.	GRERF	0.0001	6.92K	n/a	n/a	0.00	n/a
Gold & Silver Median			7.31M	n/a	n/a	0.96	n/a
TAO Minerals Ltd.	TAON	0.47	1.29M	n/a	n/a	n/a	n/a

Source: Thomson Financial

Insider Trading Activity

NET SHARES PURCHASE ACTIVITY Inside Purchases – Last 6 Months
	Shares	Transaction
Purchases	n/a	n/a
Sales	n/a	n/a
Net Shares Purchased (Sold)	n/a	n/a
Total Insider Shares Held	n/a	n/a
% Net Shares Purchased (Sold)	n/a	n/a

Net Institutional Purchases — Prior Qtr to Latest Qtr
	Shares
Net Shares Purchased (Sold)	n/a
% Change in Institutional Shares Held	n/a

Source: Yahoo Finance

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