SHAMIKA 2 GOLD, INC. - FORM 10-Q

Attached files

file	filename
EX-32.1 - EXHIBIT 32.1 - SHAMIKA 2 GOLD, INC.	ex321.htm
EX-31.1 - EXHIBIT 31.1 - SHAMIKA 2 GOLD, INC.	ex311.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended March 31, 2011

o	TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD ________TO ________

Commission File Number: 333-126748

SHAMIKA 2 GOLD, INC.

(formerly known as Aultra Gold, Inc.)

(Exact name of small business issuer as specified in its charter)

Nevada	98-0448154
(State or other jurisdiction of incorporation or	(IRS Employer Identification No.)
organization)

1350 Broadway, 11th Floor

New York, New York 10018

(Address of principal executive offices)

(Registrant's telephone number, including area code (212) 216-8000)

Indicate by check mark whether the issuer (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. Yes þ No o

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 (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 o No o

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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o		Accelerated filer o
Non-accelerated filer o		Smaller Reporting Company þ

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

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: As of March 31, 2011, the Issuer had 50,800,006 shares of common stock, par value $0.00001 per share, issued and outstanding.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
		Page
ITEM 1.	Consolidated Financial Statements (unaudited)	3
	Consolidated Balance Sheets at March 31, 2011 and December 31, 2010 (unaudited)	F-2
	Consolidated Statements of Operations for the three months ended March 31, 2011 and the period from inception (January 13, 2010) through March 31, 2010 (unaudited)	F-3
	Consolidated Statements of Cash Flows for the three months ended March 31, 2011 and for the period from inception (January 13, 2010) through March 31, 2010	F-4
	Notes to Financial Statements (unaudited)	F-6-F-17

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	7

ITEM 4.	Controls and Procedures	7

PART II. OTHER INFORMATION

ITEM 1	Legal Proceedings	10

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	10

ITEM 3.	Defaults Upon Senior Securities	12

ITEM 4.	(Removed and Reserved)	12

ITEM 5.	Other Information	12

ITEM 6	Exhibits	12

	Signatures	10

PART I - FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS.

The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and Item 310(b) of Regulation S-B, and, therefore, do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders' equity in conformity with generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the three months ended March 31, 2011 are not necessarily indicative of the results that can be expected for the year ending December 31, 2011.

As used in this Quarterly Report on Form 10-Q (the “Quarterly Report”), the terms "we", "us", "our", the “Company” and mean Shamika 2 Gold. Inc., unless otherwise indicated. All dollar amounts in this Quarterly Report are in U.S. dollars unless otherwise stated.

Shamika 2 Gold, Inc.

An Exploration Stage Company

Consolidated Balance Sheets

	UNAUDITED
	March 31, 2011			December 31, 2010
A S S E T S
Current Assets
Deferred Financing Costs	$	27,534		$	7,995
Accounts Receivable – Related Party		94,132			-
Assets of Discontinued Operations		500,002			500,002

Total Assets	$	621,668		$	507,997
L I A B I L I T I E S A N D S T O C K H O L D E R S’ D E F I C I T

Current Liabilities
Accounts payable, notes payable and other accrued liabilities	$	215,354		$	200,551
Accounts payable related parties		-			9,613
Liabilities of Discontinued Operations		503,499			503,499
Convertible Notes – Net of Discount $179,087 and $53,526 respectively		152,509			24,974
Accrued Interest		3,632			276
Total liabilities		874,994			738,913
S TOCK H O L D E R S ’ D E F I C I T
Common stock, $0.00001 par value, 300,000,000 shares authorized: 50,800,006 and 50,333,336 shares issued and outstanding, respectively (note 6)	$	508		$	503
Additional Paid-in Capital		467,852			156,842
Accumulated deficit		(721,686	)		(388,261	)
Total stockholders’ deficit	$	(253,326	)	$	(230,916	)

Total liabilities and stockholders’ deficit	$	621,668		$	507,997

See notes to financial statements

F-2

Shamika 2 Gold, Inc.
An Exploration Stage Company
Consolidated Statement of Operations
For the Three Months Ended March 31, 2011 and the period from inception (January 13, 2010) through March 31, 2010

				UNAUDITED
				period from inception
	UNAUDITED			January 13, 2010
	3 mos ending			through
	March 31, 2011			March 31, 2010
R E V E N U E	$	-		$	-

Operational Expenses
Organizational costs		-			500
Legal and professional fees		34,877			16,550
Management fee – related party (note 5)		190,501			-
Exploration costs		-			-
Other operational expenses		9,477			16,965

Operating Loss		(234,855	)		(34,015	)

Other Expenses
Interest expense		72,570			-
Loss from continuing operations before income taxes		(307,425	)		(34,015	)

Provision for Income taxes		-			-

Net loss from continuing operations		(307,425	)		(34,015	)

Loss from discontinued operations (note 4)		(26,000	)		-

Net loss		(333,425	)		(34,015	)

Loss per share from continuing operations - basic and diluted	$	(0.00	)	$	(0.00	)
Loss per share from discontinued operations - basic and diluted	$	(0.00	)	$	-

Loss per share	$	(0.00	)	$	(0.00	)

Weighted Average Number of Shares Outstanding		50,684,837			50,000,000

See notes to financial statements.

F-3

Shamika 2 Gold, Inc.
An Exploration Stage Company
Consolidated Statement of Cash Flows
For the Three Months Ended March 31, 2011 and the period from inception (January 13, 2010) through March 31, 2010

				UNAUDITED
				period from inception
	UNAUDITED			January 13, 2010
	3 mos ending			through
	March 31, 2011			March 31, 2010
Operating activities
Net Loss	$	(333,425	)	$	(34,015	)

Adjustments to reconcile net loss to cash used by operating activities
Amortization of deferred financing costs		25,887
Amortization of debt discount		43,050
Loss from Discontinued Operations		26,000			-
Changes in:
Deferred financing costs		(27,926	)
Accrued interest		3,356
Accounts payable		14,803			34,015
Accounts (receivable) payable related party		248,255

Net cash used in operating activities of continuing operations		-			-

Net cash used in operating activities of discontinued operations		-
Total change in cash for period	$	-		$	-

Non-cash Financing Transactions
Common Stock Issued, proceeds received by related party		125,000			-
Notes Payable, proceeds received by related party		255,500
Net non-cash Financing Activities	$	380,500		$	-

See notes to financial statements

F-4

Shamika 2 Gold, Inc.

An Exploration Stage Company

Notes to Financial Statements

March 31, 2011

(unaudited)

1.	Nature of Operations

a)	Organization and Change of Business

Aultra Gold Inc. (" Aultra") was incorporated under the laws of the State of Nevada on January 26, 2005 and was primarily engaged in the acquisition and exploration of mining properties until April 2006. On April 26, 2006, there was a change in management and direction and Aultra engaged in the acquisition and licensing of online gaming technologies. In 2008 and 2009, Aultra changed strategy to focus on exploration and mining and had acquired interests in certain mining properties in Nevada, Oregon, and Montana.

On January 6, 2010, pursuant to a Stock Purchase Agreement, Dutch Gold Resources, Inc. (“Dutch Gold”) acquired 6.4 million shares of Aultra common stock which was a 67% controlling interest of Aultra for a purchase price of one million newly-issued shares of Dutch Gold’s common stock. On January 6, 2010, Aultra entered into an Asset Purchase Agreement (the “Agreement”) with Dutch Gold to be effective as of December 31, 2009 in which Aultra sold substantially all of its assets to Dutch Gold. As consideration for these assets, Dutch Gold issued 9,614,667 shares of its common stock, par value $0.001 per share, to the Aultra shareholders. In accordance with the transaction, Dutch Gold acquired substantially all of the assets related to Aultra’s gold and mineral business, including inventory, accounts receivable, certain supply and distribution and other vendor contracts, good will and other various assets and intangibles.

On January 13, 2010, Aultra entered into an Agreement and Plan of Share Exchange (the “Exchange”) with Shamika Gold Inc. ("SGI") and the shareholders of SGI pursuant to which Aultra acquired all of the outstanding shares of SGI. For accounting purposes, this is a reverse acquisition with SGI the accounting acquirer of Aultra. For legal purposes Aultra issued shares to the SGI shareholders followed by a merger and recapitalization of Aultra whereby SGI shares were cancelled and Aultra is the surviving entity.

SGI is a Canadian private corporation created by Articles of incorporation on January 13, 2010. SGI primary business activity consists of mining property acquisition, mineral exploration and development.

As a result of the transaction, 50 million shares were outstanding with 25.5 million (approximately 51%) held by the SGI shareholders, 23.5 million issued to settle liabilities and obligations of Aultra and approximately 1 million held by the former Aultra shareholders.

Upon consummation of the Exchange, the business plan of SGI was adopted and Aultra changed its name to Shamika 2 Gold, Inc. (the “Company”).

b)	Going Concern

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The Company’s financial statements are prepared using generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business.

F-5

Shamika 2 Gold, Inc.

An Exploration Stage Company

Notes to Financial Statements

March 31, 2011

(unaudited)

b)	Going Concern - continued

As shown in the accompanying financial statements, the Company has incurred a net loss of $333,425 for the three month period ended March 31, 2011. The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of acquisitions. Management has plans to seek additional capital through a private placement and public offering of its common stock. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

2.	Significant Accounting Policies

a)	Basis of Accounting

These consolidated financial statements are prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States of America and include our accounts and the accounts of our majority-owned controlled subsidiary. As the Company has not generated any revenues from is principal intended activity of mining operations, the Company is considered to be in the exploration stage. The Company currently operates in one reportable segment. Summarized below are those policies considered particularly significant to the Company.

b)	Use of Estimates

The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of any contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenues earned and expenses incurred during the period. Actual results could differ from those estimates.

c)	Financial Instruments and Financial Risk

The Company’s financial instruments consists of cash, prepaid expenses, accounts payable and accrued liabilities, the fair values of which approximate their carrying amounts due to the short-term nature of these instruments. The fair value of the Company’s debt instruments are calculated based upon the availability of debt instruments with similar terms, rates, privileges and credit quality.

F-6

Shamika 2 Gold, Inc.

An Exploration Stage Company

Notes to Financial Statements

March 31, 2011

(unaudited)

d)	Cash and Concentrations

Financial instruments, which could potentially subject the Company to credit risk, consist primarily of cash. Cash is managed for the Company by a related party, Shamika Resources Inc. The Company is at risk of loss to the extent that the related party does not uphold its obligations to the Company.

The Company’s operations are all related to the minerals and mining industry. A reduction in mineral prices, political unrest in the countries in which the Company operates or other disturbances in the minerals market could have an adverse effect on the Company’s operations.

e)	Environmental Costs

Environmental expenditures that relate to current operations are charged to operations 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 charged to operations. 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. Management has determined that recording a liability pertaining to environmental expenditures as of March 31, 2011 is not needed.

f)	Per Share Data

Basic loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the year. Diluted loss per share is computed by dividing net loss by the weighted average number of common shares outstanding plus common stock equivalents (if dilutive) related to warrants and convertible notes.

The Company has excluded all common equivalent shares outstanding for warrants and convertible notes from the calculation of diluted net loss per share because all such securities are anti-dilutive for the periods presented.

g)	Income Taxes

The Company accounts for income taxes under ASC 740, Income Taxes. Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carry-forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. ASC 740 also requires that uncertain tax positions are evaluated in a two-step process, whereby (1) it is determined whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the largest amount of tax benefit that is greater than fifty percent likely of being realized upon ultimate settlement with the related tax authority would be recognized.

F-7

Shamika 2 Gold, Inc.

An Exploration Stage Company

Notes to Financial Statements

March 31, 2011

(unaudited)

2.	Significant Accounting Policies (continued)

h)	Revenue Recognition

The Company plans to recognize revenue from the sale of product when an agreement of sale exists, product delivery has occurred, title has transferred to the customer and collection is reasonably assured. The price to be received is based upon terms of a sales contract. The Company has not generated revenue activity for the periods presented in the consolidated financial statements.

i)	Stock Based Compensation

The Company has adopted ASC 718, Stock Compensation, which requires the Company to measure the compensation cost of stock options and other stock-based awards to employees and directors at fair value at the grant date and recognize compensation expense over the requisite service period for awards expected to vest. The Company has not issued any stock based compensation awards in 2011.

The Company may periodically issue stock for payment of certain professional fees and these stock issuances are expensed based on the market value of the stock on the date granted. The Company expenses these professional fees at the time of stock issuance as the stock issuance date approximates the date the services are performed. No such issuances were made in 2011.

j)	Asset Retirement Obligation

The Company follows ASC 410-20, which addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated retirement costs. The standard applies to legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and normal use of the asset.

ASC 410-20 requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The fair value of the liability is added to the carrying amount of the associated asset and this additional carrying amount is depreciated over the life of the asset. The liability is accreted at the end of each period through charges to operating expense. If the obligation is settled for other than the carrying amount of the liability, the Company will recognize a gain or loss on settlement. The Company has no mining projects in production as of March 31, 2011, and the asset retirement obligations are usually created as part of the production process. Accordingly, at March 31, 2011, the Company had no asset retirement obligations.

F-8

Shamika 2 Gold, Inc.

An Exploration Stage Company

Notes to Financial Statements

March 31, 2011

(unaudited)

k)	Mineral Properties, Mineral Claim Payments and Exploration Expenses

The Company expenses all costs related to the acquisition, maintenance and exploration of the unproven mineral properties to which it has secured exploration rights. If and when proven and probable reserves are determined for a property and a feasibility study is completed, then subsequent development costs of the property are capitalized. Once capitalized, such costs will be amortized using the units-of-production method over the estimated life of the probable reserves. To date, excluding the mineral properties in the Democratic Republic of Congo which were discontinued subsequent to year end (see note 4), the Company has not established the commercial feasibility of its exploration prospects, therefore all costs have been expensed. The costs related to acquisition, maintenance and exploration were not material for the years presented in the consolidated statement of operations.

The Company assesses the carrying costs for impairment under ASC 930 Extractive Activities – Mining (ASC 930) annually. An impairment is recognized when the sum of the expected undiscounted future cash flows is less than the carrying amount of the mineral property. Impairment losses, if any, are measured as the excess of the carrying amount of the mineral property over its estimated fair value. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.

l)	Convertible Instruments

The Company reviews the terms of convertible debt and equity instruments to determine whether there are conversion features or embedded derivative instruments including embedded conversion options that are required to be bifurcated and accounted for separately as a derivative financial instrument. In circumstances where the convertible instrument contains more than one embedded derivative instrument, including conversion options that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single compound instrument. Also, in connection with the sale of convertible debt and equity instruments, the Company may issue free standing warrants that may, depending on their terms, be accounted for as derivative instrument liabilities, rather than as equity. When convertible debt or equity instruments contain embedded derivative instruments that are to be bifurcated and accounted for separately, the total proceeds allocated to the convertible host instruments are first allocated to the fair value of all the bifurcated derivative instruments. The remaining proceeds, if any, are then allocated to the convertible instruments themselves, usually resulting in those instruments being recorded at a discount from their face amount. When the Company issues debt securities, which bear interest at rates that are lower than market rates, the Company recognizes a discount, which is offset against the carrying value of the debt. Such discount from the face value of the debt, together with the stated interest on the instrument, is amortized over the life of the instrument through periodic charges to income.

In addition, certain conversion features are recognized as beneficial conversion features to the extent the conversion price as defined in the convertible note is less than the closing stock price on the issuance of the convertible notes.

Fees incurred in the placement of the convertible notes are deferred and recognized over the life of the debt agreement as an adjustment to interest expense using the interest method.

F-9

Shamika 2 Gold, Inc.

An Exploration Stage Company

Notes to Financial Statements

March 31, 2011

(unaudited)

m)	Recent Accounting Pronouncements

Fair Value Measurements and Disclosures ASC 820, Improving Disclosures about Fair Value Measurements: In January 2010, the Financial Accounting Standards Board (FASB) issued accounting guidance intended to improve disclosures related to fair value measurements. This guidance requires significant transfers in and out of Level 1 and Level 2 fair value measurements to be disclosed separately along with the reasons for the transfers. Additionally, in the reconciliation for the fair value measurements using significant unobservable inputs (Level 3), information about purchases, sales, issuances and settlements must be presented separately (cannot net as one number). This guidance also provides clarification for existing disclosures on (i) level of disaggregation and (ii) inputs and valuation techniques. In addition, this guidance includes conforming amendments for employers’ disclosure of postretirement benefit plan assets. This guidance was effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances and settlements in the roll-forward of activity in Level 3 fair value measurements. Those disclosures are required for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The adoption of ASC 820 did not have a material impact on the Company’s consolidated results of operations or financial position.

3.	Business Acquisitions

Prior to the reverse acquisition discussed herein, Aultra Gold Inc. was an exploration and mining company with certain claims and permits and limited operational activity.

Pursuant to a Stock Purchase Agreement, on January 6, 2010 Dutch Gold Resources Inc. (Dutch Gold) acquired 6,442,500 shares of Aultra which comprised a 67% controlling interest in Aultra after giving effect to a 1 for 10 reverse stock split completed by Aultra just prior to the transaction. Dutch Gold issued one million shares of Dutch Gold’s common stock with a fair value at date of closing of $135,000 as consideration for the purchase.

On January 6, 2010, Dutch Gold also entered into an Asset Purchase Agreement with Aultra pursuant to which, Dutch Gold acquired all of Aultra’s assets which at the time consisted of mining property rights to several parcels in Montana, Nevada and Oregon. As consideration for these assets, Dutch Gold issued 9,614,667 shares of Dutch Gold common stock, par value $0.001 per share, to Aultra's shareholders at a total value of $1,297,980.

As a result of the January 6, 2010 transactions with Dutch Gold, Aultra was 67% owed by Dutch Gold, and was a publically traded company with no assets, approximately $900,000 in carry over liabilities and no means of generating any future revenues.

On March 26, 2010, Aultra Gold, Inc. entered into an Agreement and Plan of Share Exchange with SGI. Pursuant to the agreement Aultra Gold, Inc. acquired all of the outstanding SGI shares from the SGI shareholders in exchange for an aggregate of 25,500,000 newly issued shares of Aultra’s common stock, par value $0.00001 per share resulting in, SGI and its 99.9% owned subsidiary Shamika Gold Mining Sprl., a Congolese limited partnership became subsidiaries of Aultra. Aultra shares were issued to the SGI shareholders on a pro rata basis, on the basis of the shares held by such SGI shareholders at the time of the transaction. In addition, Aultra issued 23,547,067 shares of its common stock to various former Aultra Shareholders to satisfy certain liabilities at the time of the transaction in the amount of $301,000 and of this amount Dutch Gold receiving 4,950,000 shares. Upon completion of the transaction, there were 50,000,000 shares of Aultra outstanding including 952,933 shares retained by the former Aultra shareholders.

F-10

Shamika 2 Gold, Inc.

An Exploration Stage Company

Notes to Financial Statements

March 31, 2011

(unaudited)

3.	Business Acquisitions - continued

This transaction represents a reverse acquisition with SGI being the acquirer. The business purpose of this transaction was for SGI to be a publically traded company and have access to capital markets in the United States.

As Aultra had no operations subsequent to the Asset Purchase Agreement noted above, issuing shares that would result in SGI having a controlling interest allowed Aultra shareholders an exit strategy or way to get value.

As a result of the acquisition by SGI, Dutch Gold assumed the remaining Aultra liabilities of $616,154 which represents amounts owed to Ron Perttu at the time of the transaction.

At the effective time of the acquisition, Aultra’s board of directors and officers was reconstituted by the resignation of: Rauno Perttu from his role as President, Secretary and director, Daniel Hollis from his role as Chief Financial Officer and director, and the appointment of Robert Vivian as President and Chief Executive Officer and Terence Orstlan as Secretary and Director. Therefore, subsequent to the acquisition, Dutch Gold no longer has a controlling interest in Aultra.

Subsequent to the transaction, Aultra changed its name to Shamika 2 Gold, Inc and adopted the business plan of the Company.

On January 13, 2010, Shamika Gold Mining SPRL, a subsidiary was contributed as initial capital to the Company. During 2010 the Company spent resources on permits to develop the Congo claims: the Lubutu project consists in 72 mining blocks controlled, covering 61 km2 located on lands in Lubutu, Pting the province of Maniema. This location is in the heart of the Kibara Metallogenic Belt approximately 300 kilometers northwest of Lake Kivu. The Poko project consists in an exploration permit located on lands in the Kilo-Moto Greenstone belt area in Congo’s Eastern region covering an area of 120 mining blocks and 101 km2

F-11

Shamika 2 Gold, Inc.

An Exploration Stage Company

Notes to Financial Statements

March 31, 2011

(unaudited)

4.	Discontinued Operations - continued

During fourth quarter 2010, the Company reallocated its resources to find other projects and to focus efforts on the Cambodia project (see note 6), ceased expenditures and further, the Company decided to abandon its efforts on the Congo properties. There was no activity on the Congo properties subsequent to year-end. On April 6, 2011 the Company assigned all rights and interests in the assets and liabilities of Shamika Gold Mining SPRL to a related company, Shamika Congo Kahele SPRL. The Company has no continuing involvement in Shamika Gold Mining SPRL. As a result of the decision to abandon the Congo projects prior to the issuance of financial statements, the Company has accounted for the subsidiary disposal as discontinued operations. The value of the identifiable assets and liabilities of Shamika Gold Mining SPRL was as follows as of March 31, 2011:

Assets
Mining rights and licences	$	500,002
Liabilities
Note payable		459,000
Accounts payable – related party		44,499
		503,499
Net liabilities of discontinued operations	$	3,497

The following table shows the results of operations of the disposal subsidiary for the three month period ended March 31, 2011:
Revenues	$	-

Permits & Licences		20,000
Other administrative costs		6,000
Net Loss	$	26,000

No tax benefits were recorded on results of discontinued operations as realization of such does not meet recognition criteria.

F-12

Shamika 2 Gold, Inc.

An Exploration Stage Company

Notes to Financial Statements

March 31, 2011

(unaudited)

5.	Discontinued Operations - continued

Management Fees to Related Party

The Company operates under a management agreement with a related party Shamika Resources, Inc, which is controlled by the Company's CEO, Robert Vivian. The Company has no employees or office expenses as such are provided by Shamika Resources Inc. through the management agreement. During 2011 the agreement was informal and $190,501 was paid to Shamika Resources, Inc. under the agreement. The Company does not maintain any cash or bank accounts but relies upon advances from and payables to Shamika Resources, Inc, under the management agreement, which holds any cash the company has raised as a result of debt or equity issuances and makes payments for services on the Company's behalf.

Related party payables are recorded at their cost, are non-interest bearing, unsecured and have no specific terms for repayment.

As at March 31, 2011, the Company is owed $94,132 by Shamika Resources Inc., a major shareholder and a company with directors in common.

6.	Share Capital

During 2010, the Company sold capital units (Units) using a subscription agreement. Each Unit consisted of 83,334 shares of common stock and 41,667 warrants. The warrants have a three year expiration. The warrants also are subject to a mandatory exercise provision which will require the holder of the warrants to exercise the warrants when the average closing price of the Company’s Common Stock has been equal to or greater than $0.75 for ten consecutive trading days.

As a result of a subscription agreement that was executed with Dutch Gold on November 16, 2010, the Company received $100,000 in payments from Dutch Gold for 4 units. The Company issued 333,336 Common Stock of the Company, par value $0.00001 per share and166,668 warrants with a $0.50 exercise strike price.

On January 13, 2011, as a result of a subscription agreement that was executed with Dutch Gold on November 16, 2010, the Company received $50,000 in payments from Dutch Gold for 2 Units resulting in the issuance of 166,668 Common Stock of the Company, par value $0.00001 per share and 83,336 Warrants of the Company’s Common Stock with a $0.50 exercise strike price.

On January 19, 2011, as a result of a subscription agreement that was executed with El Oro on Ltd. November 16, 2010, the Company received $75,000 in payments from El Oro Ltd. for 3 Units resulting in the issuance of 250,002 Common Stock of the Company, par value $0.00001 per share and 125,004 Warrants of the Company’s Common Stock at the exercise price of $0.30 per share.

F-13

Shamika 2 Gold, Inc.

An Exploration Stage Company

Notes to Financial Statements

March 31, 2011

(unaudited)

6.	Share Capital - continued

On February 25, 2011 the Company entered into a Securities Exchange Agreement with MIG International Mining Group, a company organized under the laws of the Republic of Mauritius (“Cambodia Project”). The Company will acquire 85% of the outstanding equity of MIG International Mining Group in exchange for an aggregate 57,000,000 newly issued common shares of the Company, par value $0.00001 per share (the “Exchange Shares”) and five hundred thousand (500,000) shares of the Company’s Series B Performing Preferred Stock, par value $0.00001 per share (the “Performing Preferred Shares”), which entitles the holder, to receive a dividend equal to forty-five percent (45%) of the net operating profit, after taxes. This Cambodia project consists of an area of approximately 140 sq miles in the Samplout/Samlaut area of Western Cambodia. The land is adjacent to Cambodia’s Pailin district, which is a producer of rubies. Following the initial closing, the holders of the newly issued shares will beneficially own approximately 51% of the outstanding shares of the Company’s Common Stock and 100% of the total outstanding shares of Performing Preferred Shares. The Performing Preferred Shares and the Exchange Shares shall be held in escrow until MIG Mauritius has received all required production licenses in Cambodia to mine approximately 240 square kilometers for gold and ruby mineralization in mining exploration rights located in Samlaut, Cambodia, (the “Mining Rights”) and has commenced commercial production for a period of at least two months (the “Release Conditions”). Following satisfactory proof of the Release Conditions, the Exchange Shares shall be released to the MIG Mauritius holders. If the Release Condition have not been satisfied within six (6) months from the Closing, Shamika shall have the right to terminate the Agreement.

In addition, Shamika agreed to provide the project financing in the amount of $2.5 million to $5 million. Such project financing is required for the realization of the exploration and exploitation projects related to: the 254km2 property in Samlaut District, Battambang and Pailin provinces, in the Kingdom of Cambodia; the 94km2 property in Kompovpur Village, Samlaut District, in Battambang province, Kingdom of Cambodia; and other projects, subject to board approval. The project financing will be dependent upond the Company ability to successfully raise the funds from investors and will not be invested in the Cambodia Project until production and exploitation licenses have been approved by the regulatory authorities.

The acquisition of the Cambodia Project will not be considered completed or accounted for as a business combination in the financial statements until all contractual provisions are satisfied and the Company has effective control of the Cambodia Project. Such control is anticipated to occur upon the contribution of significant project financing funds once production licenses are approved and the termination provisions are no longer applicable to the Company.

F-14

Shamika 2 Gold, Inc.

An Exploration Stage Company

Notes to Financial Statements

March 31, 2011

(unaudited)

7.	Convertible Note

The Company had convertible promissory notes outstanding at March 31, 2011 and December 31, 2010 as follows:

	Notes Outstanding as of
Convertible Notes - Net of Debt Discount	March 31, 2011		December 31, 2010

Asher Enterprises #1		43,646		24,974
Asher Enterprises #2		25,331
Asher Enterprises #3		18,529
War Chest		65,495
Coventry		1,913

		154,914		24,974

The Asher Enterprises #1 note bears interest at the rate of 8% per annum and matures September 16, 2011. The Company has the option to repay the note at a premium or to pay all outstanding principal and interest at maturity. If not repaid prior to or upon maturity, the note will automatically convert into common shares. Under the convertibility terms of the convertible promissory note, the principal, plus accrued interest can be converted at any time or upon maturity, at the option of the holder, either in whole, or in part, into fully paid common shares of the Company. The note contains a beneficial conversion feature which allows the holder of the note to convert the note into common shares of the Company at a price less than fair market value at date of conversion. The Company initially computed and recorded a $56,845 value for the beneficial conversion feature pertaining to the convertible note. This amount is recorded as a discount to the principal amount of the note and is amortized to interest expense utilizing the straight-line method over the term of the related note as the results are not materially different from those which would result from the interest method. As of March 31, 2011 and December 31, 2010, $34,854 and $53,526 respectively in unamortized discount remained associated with the beneficial conversion feature. During the 1st quarter of 2011, the Company recognized interest expense on the agreement of $23,220 which was comprised o $1,548 in contractual interest, $18,672 in amortization of the debt discount and $3,000 in amortization of the deferred financing costs.

On January 3, 2011, the Company issued a Secured Convertible Note in the amount of $50,000 to Asher Enterprises Inc. due September 3, 2011 and bearing interest at the rate of 8% per annum. The note is convertible into common shares of the Company at any time from January 3, 2011 and ending on the complete satisfaction of the Note. The conversion price shall equal the Variable Conversion Price defined as 58% multiplied by the Market Price defined as the average of the lowest 3 Trading Prices on the OTCBB during the 10 day trading period ending one day prior to the date of Conversion Notice. In the event of default, the Note is immediately payable. The minimum amount due in default is 150% x (outstanding principal + unpaid interest). As of March 31, 2011, $24,669 in unamortized discount remained associated with the beneficial conversion feature. During the 1st quarter of 2011, the Company recognized interest expense on the agreement of $13,324 which was comprised of $953 in contractual interest, $11,538 in amortization of the debt discount and $833 in amortization of the deferred financing costs.

F-15

Shamika 2 Gold, Inc.

An Exploration Stage Company

Notes to Financial Statements

March 31, 2011

(unaudited)

7.	Convertible Note - continued

On March 2, 2011 the Company issued a Secured Convertible Note in the amount of $102,500 to War Chest Capital Multi-Strategy Fund LLC., due September 2, 2011 and bearing interest at the rate of 9.875% per annum. The note is convertible into common shares of the Company at any time during the period beginning on the date of the Note and ending on the complete satisfaction of the Note. The lender has the option to convert the outstanding principal and interest of this Note into fully-paid and non-assessable shares of the Company’s Common Stock at a 30% discount to the Fair Market Value but not to exceed $0.75 per share. In the event of default, the Note is immediately payable. In the event of default, additional interest will accrue at the rate equal to the lesser of (i) 15% per annum in addition to the Interest Rate or (ii) the highest rate permitted by law, per annum until all outstanding principal, interest and fees are repaid in full. ). As of March 31, 2011, $37,005 in unamortized discount remained associated with the beneficial conversion feature. During the 1st quarter of 2011, the Company recognized interest expense on the agreement of $8,145 which was comprised of $804 in contractual interest, $6,924 in amortization of the debt discount and $417 in amortization of the deferred financing costs.

On March 3, 2011 the Company issued a Secured Convertible Note in the amount of $53,000 to Asher Enterprises Inc. due December 3, 2011 and bearing interest at the rate of 8% per annum. The note is convertible into common shares of the Company at any time from March 3, 2011 and ending on the complete satisfaction of the Note. The conversion price shall equal the Variable Conversion Price defined as 58% multiplied by the Market Price defined as the average of the lowest 3 Trading Prices on the OTCBB during the 10 day trading period ending one day prior to the date of Conversion Notice. In the event of default, the Note is immediately payable. The minimum amount due in default is 150% x (outstanding principal + unpaid interest). As of March 31, 2011, $34,471 in unamortized discount remained associated with the beneficial conversion feature. During the 1st quarter of 2011, the Company recognized interest expense on the agreement of $4,546 which was comprised of $360 in contractual interest, $3,908 in amortization of the debt discount and $278 in amortization of the deferred financing costs.

On March 17, 2011 the Company executed a Convertible Note in the amount of $50,000 in favor of Coventry Enterprises LLC. Pursuant to the terms of the Note, the Company is required to issue the Holder 50,000 common shares, par value $0.00001 per share. The Conversion Price per share of Common Stock shall be the lower of $.30 or thirty five percent (35%) of the average of the three lowest prices, as defined, of the Company’s Common Stock for the fifteen trading days preceding a Conversion Date. ). As of March 31, 2011, $48,087 in unamortized discount remained associated with the beneficial conversion feature. During the 1st quarter of 2011, the Company recognized interest expense on the agreement of $2,121 which was comprised of amortization of the debt discount and $208 in amortization of the deferred financing costs.

8.	Commitments

On December 20, 2010, the Company entered into the Montclerg Property- Property Sale Agreement (the “Agreement”) with Lam Chan Tho (“Tho”). Pursuant to the Agreement, the Company will acquire all of the interests in certain mineral claims owned by Tho in consideration for five million shares of shares of the Company’s Common Stock, and payment of a royalty of two and one half percent of the net smelter returns, as further described in the Agreement. This Agreement has not yet been finalized but is committed to close in 2011.

F-16

Shamika 2 Gold, Inc.

An Exploration Stage Company

Notes to Financial Statements

March 31, 2011

(unaudited)

9.	Subsequent events

On April 14, 2011, the Company's Board of Directors authorized the issuance of an aggregate of 4,800,000 shares of Common Stock to its founders. The market price on April 14, 2011 was $0.26 per share, resulting in a value of this share grant $1,248,000.

On April 19, 2011, the Company sold two capital units (Units) using a subscription agreement. Each Unit consisted of 83,334 shares of common stock and 41,667 warrants. The warrants have a three year expiration. The warrants also are subject to a mandatory exercise provision which will require the holder of the warrants to exercise the warrants when the average closing price of the Company’s Common Stock has been equal to or greater than $0.75 for ten consecutive trading days.

On April 27, 2011 the Company issued a Secured Convertible Note in the amount of $50,000 to Asher Enterprises Inc. due January 30, 2012 and bearing interest at the rate of 8% per annum. The note is convertible into common shares of the Company at any time from April 30, 2011 and ending on the complete satisfaction of the Note. The conversion price shall equal the Variable Conversion Price defined as 58% multiplied by the Market Price defined as the average of the lowest 3 Trading Prices on the OTCBB during the 10 day trading period ending one day prior to the date of Conversion Notice. In the event of default, the Note is immediately payable. The minimum amount due in default is 150% x (outstanding principal + unpaid interest).

F-17

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our Financial Statements and Notes thereto included herein beginning on page F-1.

Certain statements in this Report constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. We intend that such forward-looking statements be subject to the safe harbors created thereby.

References in this Quarterly Report on Form 10-Q (the “Quarterly Report”) to “we”, “us,” “our,” “the Company,” “Shamika” mean Shamika 2 Gold, Inc. and our subsidiaries, unless the context otherwise requires.

Item 1.

Description of Shamika 2 Gold, Inc Business

Shamika 2 Gold, Inc. was a private Company formed in Montreal, Canada on January 13, 2010. The Company is engaged in the business of acquiring and exploring mining properties principally located in Cambodia and Quebec, Canada.

On March 26, 2010, Aultra Gold, Inc. entered into an Agreement and Plan of Share Exchange (the “Exchange Agreement”) with Shamika Gold, Inc., a Canadian corporation (“Shamika”), and the stockholders of Shamika (the “Shamika Stockholders”) whereby Aultra Gold, Inc. acquired all of the issued and outstanding capital stock of Shamika in exchange (the “Exchange”) for 25,500,000 newly issued shares of Common Stock par value $0.00001 per share (the “Common Exchange Shares”). As a result of the Exchange, Shamika became a wholly-owned subsidiary of the Company. The Company shares were issued to the Shamika Holders on a pro rata basis, on the basis of the shares held by such Shamika Holders at the time of the Exchange. Shamika Resources Inc., a Canadian private company became the controlling shareholder (51%) of the Company.

General Overview of Business

Shamika 2 Gold, Inc. is engaged in the business of acquiring and exploring mining properties principally located in Cambodia and Quebec, Canada, with the objective of identifying gold and mineralized deposits economically worthy of continued production and/or subsequent development, mining or sale.

Results of Operations

During the three-month period ended March 31, 2011, the Company incurred operating expenses of $234,855 and interest expenses of $72,570 as compared to operating expenses of $34,015 for the period ended March 31, 2010. On April 6, 2011 the Company assigned all rights and interests in the assets and liabilities of Shamika Gold Mining SPRL to a related company, Shamika Congo Kahele SPRL. The Company has no continuing involvement in Shamika Gold Mining SPRL. As a result of the decision to abandon the Congo projects prior to the issuance of financial statements, the Company has accounted for the subsidiary disposal as discontinued operations as of March 31, 2011. As a result of this decision, the Company incurred losses from discontinued operations of $26,000 during the three-month period ended March 31, 2011.

Employees

As of March 31, 2011, the Company had no full time employees. The Company anticipates that it will be conducting most of its business through agreements with consultants and third parties.

Description of S2G’s Properties

Description of Samplout, Cambodia

The Samplout project comprises a project of approximately 140 sq miles in the Samplout/Samlaut area of Western Cambodia. The land is adjacent to Cambodia’s well known Pailin district, which is a proven producer of rubies. A Survey Report by Terra Insight Services suggests that the property has potential for 9,000 kilograms of rubies and 1.5 million ounces of gold. Shamika’s business plan envisages the initiation of gold and ruby alluvial production in the second half of 2011, the completion of a 43-101 Report and a program of further exploration in accordance with the recommendations.

A NI 43-101, Independent Third-Party Evaluation, will be prepared in 2011. The reader is warned that a NI 43-101 study is a Canadian report, and is not compliant with U.S. SEC regulations. The report and earlier reports not compliant with current SEC regulations used terms such as “ore”, "measured," "indicated," and "inferred" "resources," which current SEC regulations strictly forbid. An effort has been made to remove such words from this document.

Description of Montclerg

This project is situated on lands close to the town of St-Augustin de Woburn in an area known as the Eastern Townships, which is approximately 200 kilometres east of Montreal. The property consists of 23 mineral claims having an area of 17.5 square kilometres. Preliminary surveys have found traces of gold on the property and it is recommended that we undertake additional investigation to localize and determine the extent of the source. Our business plan calls for the completion of a 43-101 report and a program of further exploration based on the recommendations.

Mineralization:

Samplout Project

The project comprises an area of approximately 140 sq miles in the Samplout/Samlaut area of Western Cambodia. The land is adjacent to Cambodia’s well known Pailin district, which is a proven producer of rubies. A Survey Report by Terra Insight Services suggests that the property has potential for 9,000 kilograms of rubies and 1.5 million ounces of gold. Terra Insights Services states that in close proximity to the north and west of the license area, there are known deposits of sapphires and rubies in the province of Trat (Thailand) and Battambang (Cambodia). The most known of such deposit is Pailin: it is the main source of sapphires in Cambodia. The field is characterized by alluvial and eluvial placers that were formed during the destruction of basaltic lavas. The geologic framework is the result of a long and repeated history of sedimentation, volcanism, igneous intrusion, metamorphism, and mountain building. These processes formed ancient and recent mountain chains, folded rocks, and broad sedimentary basins throughout the region. Nonfuel mineral deposits are associated with specific geologic rock types and tectonic settings, and therefore the extensive geologic history of Asia and Pacific region has been conducive to the formation of many kinds of large and abundant mineral deposits. The geologic setting in the Asia and Pacific regions is consistent with the discovery of a number of new, important mineral belts, which may contain potential for the occurrence of undiscovered deposits. In addition, the presence of known mineral deposits suggests that well-known belts also may be areas of new discoveries.

Montclerg Property

Preliminary surveys have found traces of gold on the property and it is recommended that we undertake additional investigation to localise and determine the extent of the source. Property brooks Arnold Morin is located about 200 km east of Montreal and 35 km south of Lake Township Megantic in Woburn, about 15 km south of the village of St-Augustin de Woburn (maps 1: 50 000 sheets 21 th / 21 th and 2 / 7). Canada border - the U.S. is located near the eastern boundaries of the property. The property covers a total area of approximately 1750 hectares divided into a block of 41 contiguous lots. Property is situated in the southern Quebec Appalachians, either in the region of the Megantic. Property sector includes, among other things, the massive Lake Chains and granite Devinien Lake to spiders. The formation of the Arnold River, part of the Chain Lakes massif, is regarded as a scale of Grenville. The rock formation is stuck in a thrust fault against the mixing unit Cambro-Ordovician. It consists of a mixture of meta-crystalline gray sandstone, more or less dark grained ranging from fine to medium. We also find granitic gneisses and quartzo-feldspathic granulites (Cheve, 1978). The thickness of this formation may reach several kilometers in the southern part of Quebec.1

An inspection of the Morin placer occurred on November 3 and 4, 2010. Two pannings were done in favorable places for gold deposition. Two gold nuggets were found in the second panning. The SM analysis suggests that the gold is coming from a regolith. This hypothesis is possible since the river valley is perpendicular to the main glacial flow in a similar way as Gilbert River and Mining brook, where gold-bearing placers are known. The valley is of SW-NE orientation. It is this orientation (perpendicular to the main glacial flow) that preserved the pre-Johnville sediments at Mining brook and at Gilbert River.

_______________________

1 Prospect Report, Projet Ruisseau-Morin, par Bertrand Brassard, Géologue, M. Sc., January 1994

Liquidity and Capital Resources

At March 31, 2011, our cash was $0. Since our inception on January 13, 2010, to the end of the period ended March 31, 2011, we have incurred losses of $721,686. We attribute our net loss to having no revenues to offset our operating expenses.

We have no cash flow from operations and do not have cash to meet our current liabilities nor our operational requirements for the next 12 months. In addition we will also be required to raise additional working capital to fund the exploration and development plans as discussed above.

We have no assurance that future financings will be available to us on acceptable terms. If financing is not available to us on acceptable terms, we may be unable to continue our operations. Should our costs and expenses prove to be greater than we currently anticipate, or should we change our current Plan of Mining Operations in a manner that will increase or accelerate our anticipated costs and expenses, such as through the acquisition of new properties, the depletion of our working capital would be accelerated. To the extent that it becomes necessary to raise additional cash in the future as our current cash and working capital resources are depleted, we will seek to raise it through the public or private sale of debt or equity securities, the procurement of advances on contracts or funding from joint-venture or strategic partners, debt financing or term loans, or a combination of the foregoing. We also may seek to satisfy indebtedness without any cash outlay through the private issuance of debt or equity securities.

We have no assurance that future financings will be available to us on acceptable terms. If financing is not available to us on acceptable terms, we may be unable to continue our operations.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is not exposed to market risk related to interest rates or foreign currencies.

ITEM 4.

CONTROLS AND PROCEDURES.

(a)	Evaluation of Disclosure Controls and Procedures

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. This rule defines internal control over financial reporting as a process designed by, or under the supervision of Company management to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP.

Based on this evaluation, our chief executive officer and principal accounting officer concluded that, as of the end of the fiscal period ending March 31, 2011 our disclosure controls and procedures were not effective to ensure that the information required to be disclosed in reports we submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms, and that such information was accumulated and communicated to our chief executive officer and principal accounting officer in a manner that allowed for timely decisions regarding required disclosure.

Management does not expect that our Disclosure Controls and internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management or board override of the control.

The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the company's CEO and CFO and effected by the company's board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that: pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

As of March 31, 2011, management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") and SEC guidance on conducting such assessments. Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.

Identified Weaknesses

The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board was the lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures.

·We lack sufficient trained personnel with experience in accounting and financial reporting functions due to the size of our Company and our lack of financial resources to pay such personnel; and

·We do not have a sufficient number of employees to adequately segregate accounting duties to provide for sufficient internal controls.

Management also believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

The Company does not have an adequate segregation of duties due to a limited number of employees among whom duties can be allocated. In particular there is not a segregation of access to cash and the ability to authorize and record transactions.

Management's Remediation Initiatives

In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated a plan to appoint one or more outside directors to our board of directors who shall be appointed to an audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management.

Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on our Board. While we are actively seeking outside members, including candidates with accounting experience, we cannot provide any assurance that we will be successful. Given the size of our company, lack of revenues and current lack of financing to continue with our business, it is unlikely that anyone will agree to join our Board until general economic conditions and our own business prospects improve significantly.

Changes in Internal Control Over Financial Reporting.

During the fiscal quarter ended March 31, 2011, there were no changes in our internal controls over financial reporting that we believe could materially affect, or is reasonably likely to materially affect, our internal controls over financial reporting.

This Quarterly Report does not include an attestation report of the Company’s registered accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the company’s registered public accounting firm pursuant to temporary rules of the SEC.

PART II - OTHER INFORMATION

ITEM 1.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During 2010 Fiscal Year

On January 6, 2010, Aultra USA entered into an Asset Purchase Agreement with Dutch Gold, Inc. Pursuant to the Agreement, Dutch Gold acquired all of Aultra USA's assets. As consideration for these assets, the Dutch Gold issued 9,614,667 shares of its common stock, par value $0.001 per share, to the Aultra USA shareholders. In accordance with the transaction, Dutch Gold acquired substantially all of the assets related to Aultra USA's gold and mineral business, including inventory, accounts receivable, certain supply and distribution and other vendor contracts, good will and other various assets and intangibles. The parties made customary representations, warranties and indemnities that are typical and consistent for a transaction of this size and scope.

On March 26, 2010, Aultra USA entered into an Agreement and Plan of Share Exchange with Shamika Gold Inc., a Canada Corporation (“Shamika”), and certain shareholders of Shamika (the “Shamika Holders”). Pursuant to the Agreement, Aultra acquired all of the outstanding shares from the Shamika Holders in exchange for an aggregate of 25,500,000 shares of Aultra’s Common Stock (the “Exchange”) As a result of the Exchange, Shamika became a wholly-owned subsidiary of the Registrant and the Registrant adopted the business plan of Shamika Gold, Inc.

On December 14, 2010, the Company entered into an Agreement with Asher Enterprises, Inc. (“Securities Agreement”) whereby the Registrant issued an 8% convertible promissory note in an aggregate amount of $78,500.00 convertible into shares of the Company’s Common Stock. The agreement contains customary representations, warranties and covenants of the Company and investors for like transactions.

On December 17, 2010, the Company entered into an Agreement and Plan of Securities Exchange (the “Agreement”) with the representatives of a company to be organized under the laws of the Republic of Mauritius (“Newco”), The Millennium Mining Trust, a New York trust comprised of certain intended shareholders of and contributors to Newco (the “Newco Common Holders”), and The Millennium International Group, PLC, a public limited company organized under the laws of the Kingdom of Cambodia (“Millennium”, and collectively with the Newco Common Holders, the “Newco Holders”). Pursuant to the Agreement, the Company acquired 85% of the outstanding equity of Newco (i) in exchange for 32,000,000 newly issued shares of its restricted common stock, par value $0.00001 per share (“Shamika Exchange Shares”) to be issued to the Newco Holders; and (ii) Newco Shares from Millennium, solely in exchange for an aggregate for 25,000,000 Shamika Exchange Shares and 500,000 shares of Shamika’s Series B Performing Preferred Stock, par value $0.00001 per share (the “Performing Preferred Shares”), which entitles Millennium, among other things, to receive a dividend equal to forty-five percent (45%) of the net operating profit, after taxes of Millennium’s mining project operations in Samlaut, Cambodia (the “Performing Preferred Shares”, collectively with the Exchange Shares, the “Exchange Shares”). As a result of the Exchange, Newco will became a wholly-owned subsidiary of the Company. The Company shares were issued to the Newco Holders on a pro rata basis, on the basis of the shares held by such Newco Holders at the time of the Exchange.

During 2011 Fiscal Year

On January 13, 2011, as a result of a subscription agreement that was executed with Dutch Gold on November 16, 2010, the Company received $50,000 in payments from Dutch Gold for 2 Units resulting in the issuance of 166,672 Common Stock of the Company, par value $0.00001 per share and 83,336 Warrants of the Company’s Common Stock with a $0.50 exercise strike price.

On January 19, 2011, as a result of a subscription agreement that was executed with El Oro on Ltd. November 16, 2010, the Company received $75,000 in payments from El Oro Ltd. for 3 Units resulting in the issuance of 250,008 Common Stock of the Company, par value $0.00001 per share and 125,004 Warrants of the Company’s Common Stock at the exercise price of $0.30 per share.

On February 25, 2011 the Company entered into a Securities Exchange Agreement with MIG International Mining Group, a company organized under the laws of the Republic of Mauritius (“Cambodia Project”). The Company acquired 85% of the outstanding equity of MIG International Mining Group in exchange for an aggregate 57,000,000 newly issued common shares of the Company, par value $0.00001 per share and five hundred thousand (500,000) shares of the Company’s Series B Performing Preferred Stock, par value $0.00001 per share (the “Performing Preferred Shares”), which entitles the holder, to receive a dividend equal to forty-five percent (45%) of the net operating profit, after taxes. This Cambodia project consists of an area of approximately 140 sq miles in the Samplout/Samlaut area of Western Cambodia. The land is adjacent to Cambodia’s Pailin district, which is a producer of rubies. Following the closing, the holders of the newly issued shares will beneficially own approximately 51% of the outstanding shares of the Company’s Common Stock and 100% of the total outstanding shares of Performing Preferred Shares. The Performing Preferred Shares and the Exchange Shares shall be held in escrow until MIG Mauritius has received all required production licenses in Cambodia to mine approximately 240 square kilometers for gold and ruby mineralization in mining exploration rights located in Samlaut, Cambodia, (the “Mining Rights”) and has commenced commercial production for a period of at least two months (the “Release Conditions”). Following satisfactory proof of the Release Conditions, the Exchange Shares shall be released to the MIG Mauritius holders. If the Release Condition have not been satisfied within six (6) months from the Closing, Shamika shall have the right to terminate the Agreement. In addition, Shamika agreed to provide the project financing, required for the realization of the exploration and exploitation projects related to: the 254km2 property in Samlaut District, Battambang and Pailin provinces, in the Kingdom of Cambodia; the 94km2 property in Kompovpur Village, Samlaut District, in Battambang province, Kingdom of Cambodia; and other projects contributed to the Registrant, subject to board approval.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.

(REMOVED AND RESERVED)

ITEM 5.

OTHER INFORMATION.

On January 13, 2010, Shamika Gold Mining SPRL, a subsidiary, was contributed as initial capital to the Company. During 2010, the Company spent resources on permits to develop the Congo claims: the Lubutu project consists in 72 mining blocks controlled, covering 61 km2 located on lands in Lubutu, Pting the province of Maniema. This location is in the heart of the Kibara Metallogenic Belt approximately 300 kilometers northwest of Lake Kivu. The Poko project consists in an exploration permit located on lands in the Kilo-Moto Greenstone belt area in Congo’s Eastern region covering an area of 120 mining blocks and 101 km2. During the fourth quarter the Company reallocated its resources to find other projects and to focus efforts on the Cambodia project (see note 10), ceased expenditures and further, the Company decided to abandon its efforts on the Congo properties. There was no activity on the Congo properties subsequent to year-end. On April 6, 2011 the Company assigned all rights and interests in the assets and liabilities of Shamika Gold Mining SPRL to a related company, Shamika Congo Kahele SPRL. The Company has no continuing involvement in Shamika Gold Mining SPRL. As a result of the decision to abandon the Congo projects prior to the issuance of financial statements, the Company has accounted for the subsidiary disposal as discontinued operations as of March 31, 2011.

ITEM 6.

EXHIBITS.

Exhibit Number			Description of Exhibits
31.1			Certification of Chief Executive Officer and Chief Financial Officer as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *

32.1			Certification of Chief Executive Officer and Chief Financial Officer as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Date: May 17, 2011		/s/ Robert Vivian
		Name: Robert Vivian
		Title: President and Chief Executive Officer and Interim Financial Officer
		(Principal Executive and Accounting Officer)

SHAMIKA 2 GOLD, INC. - FORM 10-Q - May 17, 2011

Attached files

SHAMIKA 2 GOLD, INC. Reports