UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549


FORM
10-Q





(Mark
One)


T
            QUARTERLY
      REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For the
quarterly period ended March 31, 2007





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





For the
transition period from _ _ _ _ _ _ _ _ _ _  to _ _ _ _ _ _ _ _ _
_





Commission
file number 0-27355





CIGMA
METALS CORPORATION


(Exact
name of registrant as specified in its charter)





Florida
            98-0203244(State
      or other jurisdiction of incorporation or organization)
            (IRS
      Employer Identification No.)





18, 80 Furmanova Str,
Almaty, Republic of Kazakhstan


(Address
of principal executive offices)





+7 327 2611
026


(Registrant’s
telephone number, including area code)





(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.


YES T 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 T NO £





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 £ Accelerated
filer £
Non-accelerated filer £ (do not check
if a smaller reporting company) Smaller
reporting company T





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).


YES £ NO T





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





Indicate
by check mark, whether the registrant filed all documents and reports required
to be filed by Section 12, 13 or 15 (d) of the Securities Exchange Act of 1934
subsequent to the distribution of securities under a plan confirmed by
court.


YES £ NO £








APPLICABLE
ONLY TO CORPORATE ISSUERS





Indicate
the number of shares outstanding of each of the issuer’s classes of common
equity, as of the latest practicable date: 53,500,000 shares of Common Stock
were outstanding as of February 17, 2010.










CIGMA METALS CORPORATION





This
quarterly report contains statements that plan for or anticipate the future and
are not historical facts. In this Report these forward looking statements are
generally identified by words such as “anticipate,” “plan,” “believe,” “expect,”
“estimate,” and the like. Because forward looking statements involve future
risks and uncertainties, these are factors that could cause actual results to
differ materially from the estimated results. These risks and uncertainties are
detailed in Part 1 – Financial Information - Item 1. “Financial Statements” and
Item 2. “Management’s Discussion and Analysis of Financial Condition and Results
of Operations.”





The
Private Securities Litigation Reform Act of 1995, which provides a “safe harbor”
for such statements, may not apply to this Report.








PART
      1 – FINANCIAL INFORMATIONItem
      1.
            Financial
      StatementsInterim Consolidated Balance Sheets March 31, 2007 (unaudited)
      and December 31, 2006
            
            3Interim Consolidated Statements of Operations (unaudited) Three
      months ended March 31, 2007 and 2006; and for the period from January 13,
      1989 (Inception) to March 31, 2007
            
            4Interim Consolidated Statements of Cash Flows (unaudited) Three
      months ended March 31, 2007 and 2006 and for the period from January 13,
      1989 (Inception) to March 31, 2007
            
            5Notes to Interim Consolidated Financial Statements
      (unaudited)
            
            6Item
      2.
            Management’s Discussion and Analysis of Financial Condition and
      Results of Operations
            
            14Item
      3.
            Quantitative and Qualitative Disclosures About Market
      Risk
            
            20Item
      4T.
            Controls and Procedures
            
            20PART
      II – OTHER INFORMATIONItem
      1.
            Legal Proceedings
            
            22Item
      1A.
            Risk Factors
            
            22Item
      2.
            Unregistered Sales of Equity Securities and Use of
      Proceeds
            
            22Item
      3.
            Defaults Upon Senior Securities
            
            22Item
      4.
            Submission of Matters to a Vote of Security
      Holders
            
            23Item
      5.
            Other Information
            
            23Item
      6.
            Exhibits
            
            23SIGNATURES
            
            24


2
 Table of Contents


Item 1.
Financial Statements








CIGMA METALS CORPORATION(An
      exploration stage enterprise)Consolidated
      Balance SheetsMarch
      31, 2007 and December 31, 2006(Expressed in U.S. Dollars)March 31
            
            
            December 312007
            
            
            2006(Unaudited)ASSETSCurrentCash
            
            $
            2,865,172
            
            
            $
            3,082,432Available-for-sale
      securities
            
            
            132,904
            
            
            
            166,309Prepaid expenses and other
      assets
            
            
            177,547
            
            
            
            -3,175,623
            
            
            
            3,248,741Equipment,
      net
            
            
            65,936
            
            
            
            -Mineral properties
            
            
            1,258,724
            
            
            
            -Total assets
            
            $
            4,500,283
            
            
            $
            3,248,741LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      liabilitiesAccounts payable and accrued
      expenses
            
            $
            40,796
            
            
            $
            54,915Total
      current liabilities
            
            
            40,796
            
            
            
            54,915Long-term debt
            
            
            1,162,050
            
            
            
            -Total liabilities
            
            
            1,202,846
            
            
            
            54,915Non-controlling
      interest
            
            
            264,963
            
            
            
            -Stockholders'
      EquityCommon
      stockAuthorized100,000,000
      common shares, par value $0.0001Issued
      and outstanding:39,700,000
      (2006 - 39,500,000) common shares
            
            
            3,970
            
            
            
            3,950Additional
      paid in capital
            
            
            6,851,474
            
            
            
            6,714,494Accumulated
      deficit during the exploration stage
            
            
            (3,784,276
            )
            
            
            (3,509,130
            )Accumulated other comprehensive income
      (loss)
            
            
            (38,694
            )
            
            
            (15,488
            )Stockholders' equity
            
            
            3,032,474
            
            
            
            3,193,826Total liabilities and stockholders'
      equity
            
            $
            4,500,283
            
            
            $
            3,248,741





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


3
 Table of Contents




CIGMA
      METALS CORPORATION(An
      exploration stage enterprise)Consolidated
      Statements of Operations(Expressed
      in U.S. Dollars)
            
            Cumulative(Unaudited)
            
            January 13
            
            
            Three months
            
            
            Three months1989 (inception)
            
            
            Ended
            
            
            EndedMarch 31
            
            
            March 31
            
            
            March 312007
            
            
            2007
            
            
            2006ExpensesAdministrative
      and general
            
            $
            294,409
            
            
            $
            11,018
            
            
            $
            18,554Exploration
      costs-
      HaldeyGold Project - partnership
            
            
            796,261
            
            
            
            -
            
            
            
            --
      HaldeyGold Project - other
            
            
            185,126
            
            
            
            -
            
            
            
            24,000-
      Tugojakovsk Project
            
            
            453,821
            
            
            
            -
            
            
            
            100,000-
      Kazakhstan
            
            
            174,708
            
            
            
            174,708
            
            
            
            -Interest,
      bank charges and foreign currency exchange losses
            
            
            15,521
            
            
            
            1,633
            
            
            
            1,113Professional
      fees
            
            
            518,015
            
            
            
            59,898
            
            
            
            40,062Property
      investigation costs
            
            
            119,717
            
            
            
            -
            
            
            
            17,717Management and consulting
    fees
            
            
            1,080,716
            
            
            
            72,391
            
            
            
            42,349Loss before other items
            
            
            3,638,294
            
            
            
            319,648
            
            
            
            243,795Other
      income (loss)Writedown
      of available-for-sale securities
            
            
            (148,180
            )
            
            
            -
            
            
            
            -Writedown
      of investment in partnership interest
            
            
            (190,601
            )
            
            
            -
            
            
            
            (6,000
            )Interest income
            
            
            181,730
            
            
            
            33,432
            
            
            
            1,242Total other income (loss)
            
            
            (157,051
            )
            
            
            33,432
            
            
            
            (4,758
            )Net
      loss before non-controlling interest
            
            
            (3,795,345
            )
            
            
            (286,216
            )
            
            
            (248,553
            )Non-controlling interest
            
            
            11,069
            
            
            
            11,069
            
            
            
            -Net income (loss) for the
      period
            
            $
            (3,784,276
            )
            
            $
            (275,147
            )
            
            $
            (248,553
            )Basic and diluted loss per
      share
            
            
            
            
            
            $
            (0.01
            )
            
            $
            (0.01
            )Weighted average number of common shares
      outstanding
            
            
            
            
            
            
            39,500,000
            
            
            
            30,708,988





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


4
 Table of Contents




CIGMA
      METALS CORPORATION(An
      exploration stage enterprise)Consolidated
      Statements of Cash Flows(Expressed
      in U.S. Dollars)
            
            Cumulative(Unaudited)
            
            January 13
            
            
            Three months
            
            
            Three months1989 (inception)
            
            
            Ended
            
            
            Endedto
      March 31,
            
            
            March 31
            
            
            March 312007
            
            
            2007
            
            
            2006Cash
      flows used in operating activitiesNet
      loss for the period
            
            $
            (3,784,276
            )
            
            $
            (275,147
            )
            
            $
            (248,553
            )Adjustments
      to reconcile net loss to net cash used in operating
    activities-
      depreciation
            
            
            175
            
            
            
            175
            
            
            
            --
      stock compensation expense on stock option grants
            
            
            366,844
            
            
            
            -
            
            
            
            --
      issuance of common stock for mineral property rights
            
            
            600
            
            
            
            -
            
            
            
            --
      expenses satisfied with issuance of common stock
            
            
            138,000
            
            
            
            137,000
            
            
            
            --
      partnership exploration costs
            
            
            1,125,711
            
            
            
            -
            
            
            
            124,000-
      writedown of investment in partnership interest
            
            
            190,601
            
            
            
            -
            
            
            
            6,000-
      writedown of available for sale securities
            
            
            148,180
            
            
            
            -
            
            
            
            --
      minority interest in income (loss) of subsidiary
            
            
            (11,068
            )
            
            
            (11,068
            )
            
            
            -Changes
      in operating assets and liabilities, net of acquired
      subsidiary-
      decrease (increase) in prepaid expenses and other assets
            
            
            (177,513
            )
            
            
            (177,513
            )
            
            
            -- increase (decrease) in accounts payables and
      accrued liabilities
            
            
            (641,957
            )
            
            
            (696,871
            )
            
            
            10,824Net cash used in operating
      activities
            
            
            (2,644,703
            )
            
            
            (1,023,424
            )
            
            
            (107,729
            )Cash
      flows used in investing activities-
      purchase equipment
            
            
            (66,111
            )
            
            
            (66,111
            )
            
            
            --
      investment in available-for-sale securities
            
            
            (329,977
            )
            
            
            -
            
            
            
            --
      investment in partnership interest
            
            
            (1,316,312
            )
            
            
            -
            
            
            
            (130,000
            )- acquisition of mineral property
      costs
            
            
            (300,000
            )
            
            
            (300,000
            )
            
            
            -Net cash used in investing
      activities
            
            
            (2,012,400
            )
            
            
            (366,111
            )
            
            
            (130,000
            )Cash
      flows from financing activities-
      issuance of common stock
            
            
            6,350,000
            
            
            
            -
            
            
            
            -- loan proceeds
            
            
            1,156,111
            
            
            
            1,156,111Net cash provided by financing
      activities
            
            
            7,506,111
            
            
            
            1,156,111
            
            
            
            -Effect
      of exchange rate changes on cash andcash
      equivalents
            
            
            16,164
            
            
            
            16,164
            
            
            
            -Increase
      (decrease) in cash and cash equivalents
            
            
            2,865,172
            
            
            
            (217,260
            )
            
            
            (237,729
            )Cash, beginning of year
            
            
            -
            
            
            
            3,082,432
            
            
            
            250,170Cash, end of period
            
            $
            2,865,172
            
            
            $
            2,865,172
            
            
            $
            12,441





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


5
 Table of Contents


Notes to
Interim Consolidated Financial Statements (Unaudited)





1.
            Nature
      of Business and Going Concern





Cigma
Metals Corporation ("the Company") was formed on January 13, 1989 under the laws
of the State of Florida as Cigma Ventures Corporation. On April 17, 1999 the
Company changed its name to Cigma Metals Corporation and is in the business of
location, acquisition, exploration and, if warranted, development of mineral
properties.  The Company’s focus is on the exploration and development
of its exploration properties located in the Pavlodar Oblast Region in
Kazakhstan and the Tomsk Oblast Region, of the Russian Federation. The Company
has not yet determined whether its properties contain mineral reserves that may
be economically recoverable and has not generated any operating revenues to
date.





These
unaudited consolidated financial statements have been prepared in accordance
with generally accepted accounting principles applicable to a going concern
which contemplates the realization of assets and the satisfaction of liabilities
and commitments in the normal course of business.  The general
business strategy of the Company is to acquire mineral properties either
directly or through the acquisition of operating entities.   The
Company has incurred recurring operating losses since inception, has not
generated any operating revenues to date and used cash of $1,023,424 from
operating activities in 2007. The Company requires additional funds to meet its
obligations and maintain its operations.  These conditions raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in this regard are to raise equity financing through private
or public equity investment in order to support existing operations and expand
its business. There is no assurance that such additional funds will be available
to the Company when required or on terms acceptable to the Company. These
unaudited consolidated financial statements do not include any adjustments that
might result from this uncertainty.





2.
            Significant
      Accounting Policies





We follow
accounting standards set by the Financial Accounting Standards Board, commonly
referred to as the “FASB.”  The FASB sets generally accepted
accounting principles (GAAP) that we follow to ensure we consistently report our
financial condition, results of operations, and cash
flows.  References to GAAP issued by the FASB in these footnotes are
to the FASB Accounting Standards Codification, referred to as codification or
“ASC.”  The FASB finalized the codification effective for periods
ending on or after September 15, 2009.





(a)
            Principles
      of Accounting





The  interim  period
unaudited consolidated financial statements have been prepared by the
Company  pursuant  to  the  rules  and  regulations  of  the
U.S. Securities and
Exchange  Commission  (the  "SEC") and include the
accounts of the Company and its wholly-owned subsidiary, Cigma Metals BVI
Limited (“Cigma BVI”) and its 51% subsidiary share in Dostyk LLP. Collectively,
they are referred to herein as "the Company". Significant inter-company accounts
and transactions have been eliminated in consolidation. Cigma BVI is inactive.
Certain information and footnote disclosures
normally  included  in  consolidated financial
statements prepared in accordance
with  accounting  principles  generally  accepted
in the United States have been
condensed  or  omitted  pursuant  to
such SEC rules and regulations. The interim period  unaudited
consolidated  financial  statements  should  be  read  together
with the audited consolidated financial statements and accompanying notes
included in the Company's  consolidated  audited financial
statements for the years ended
December  31,  2006  and  2005.  In  the  opinion
of the Company, the unaudited
consolidated  financial  statements  contained  herein  contain  all
adjustments (consisting  of a normal recurring nature, with the
exception of the impairment adjustment  discussed  below in
"Long-Lived Assets Impairment") necessary to present a fair
statement  of  the  results  of  the  interim  periods  presented.


6
 Table of Contents


2.
            Significant
      Accounting
Policies   (continued)





(b)
            Accounting
      Estimates





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





(c)
            Cash
      Equivalents





Cash
equivalents comprise certain highly liquid instruments with a maturity of three
months or less when purchased.  The Company did not have any cash
equivalents at March 31, 2007 and December 31, 2006. No amounts were paid for
income taxes or interest in 2007 or 2006. No amounts were paid for income taxes
or interest in 2007 or 2006.





(d)
            Marketable
      Securities





The
Company's available-for-sale securities consist of shares of common stock of
three publicly traded companies at March 31, 2007 and 2006, and are stated at
fair value. The cost of these securities is $181,797, at March 31, 2007 (2006 -
$181,797) and the net unrealized holding loss of $48,893 and (2006 - $15,488) is
included in accumulated other comprehensive income (loss) at March 31, 2007. If
a loss in value in the available-for-sale securities is considered to be other
than temporary, it is recognized in the determination of net income. All
unrealized holding losses at March 31, 2007 are on securities that have a fair
market value of $132,904 at March 31, 2007. Cost is based on the specific
identification method for the individual securities to determine realized gains
or losses.





Fair
values determined by Level 1 inputs utilize quoted prices (unadjusted) in active
markets for identical assets or liabilities.  The following table
presents information about the Company’s financial assets that have been
measured at fair value as of March 31, 2007 and December 31, 2006, and indicates
the fair value hierarchy of the valuation inputs utilized to determine such fair
value.








Description
            
            Fair Value at March 31,
      2007
            
            
            Quoted Prices in Active
Markets
              (Level 1)Assets:Cash
            
            $
            2,865,172
            
            
            $
            2,865,172Available-for-sale
      securities
            
            
            132,904
            
            
            
            132,904Assets
      measured at fair value at March 31, 2007
            
            $
            2,998,076
            
            
            $
            2,998,076








Description
            
            Fair Value at December 31,
      2006
            
            
            Quoted Prices in Active
Markets
              (Level 1)Assets:Cash
            
            $
            3,082,432
            
            
            $
            3,082,432Available-for-sale
      securities
            
            
            166,309
            
            
            
            166,309Assets
      measured at fair value at December 31, 2006
            
            $
            3,248,741
            
            
            $
            3,248,741


7
 Table of Contents


2.
            Significant
      Accounting Policies   (continued)





(e)
            Equipment





Depreciation
is based on the estimated useful lives of the assets and is computed using the
straight-line method.  Equipment is recorded at
cost.  Depreciation is provided over the following useful
lives:





Vehicles
            10
      years


Office
      equipment, furniture and fixtures
            2
      to 5 years





(f)
            Mineral
      Properties and Exploration Expenses





The
Company accounts for its mineral properties on a cost basis whereby all direct
costs, net of pre-production revenue, relative to the acquisition of the
properties are capitalized.  All sales and option proceeds received
are first credited against the costs of the related property, with any excess
credited to earnings. Once commercial production has commenced, the net costs of
the applicable property will be charged to operations using the
unit-of-production method based on estimated proven and probable recoverable
reserves. The net costs related to abandoned properties are charged to
operations.





Exploration
costs are charged to operations as incurred until such time that proven reserves
are discovered. From that time forward, the Company will capitalize all costs to
the extent that future cash flow from mineral reserves equals or exceeds the
costs deferred. Exploration activities conducted jointly with others are
reflected at the Company's proportionate interest in such
activities.





The
Company reviews the carrying values of its mineral properties on a regular basis
by reference to the project economics including the timing of the exploration
and/or development work, the work programs and the exploration results
experienced by the Company and others. The review of the carrying value of any
producing property will be made by reference to the estimated future operating
results and net cash flows. When the carrying value of a property exceeds its
estimated net recoverable amount, provision is made for the decline in value.
The deferred costs will be amortized over the recoverable reserves when a
property reaches commercial production. As of March 31, 2007 and December 31,
2006, the Company did not have proven reserves.





The
recoverability of the amounts shown for mineral properties is dependent on the
confirmation of economically recoverable reserves, confirmation of the Company’s
interest in the underlying mineral claims, the ability of the Company to obtain
the necessary financing to successfully complete their development and the
attainment of future profitable operations or proceeds from
disposition.





Estimated
costs related to site restoration programs during the commercial development
stage of the property are accrued over the life of the project.





(g)
            Share-Based
      Payment





The
Company accounts for share-based payments under the fair value method of
accounting for stock-based compensation consistent with GAAP.





Under the
fair value recognition provisions of this statement, stock-based compensation
cost is measured at the grant date based on the fair value of the award and is
recognized as expense on a straight-line basis over the requisite service
period, which is generally the vesting period.


8
 Table of Contents


2.
            Significant
      Accounting
Policies   (continued)





(h)
            Foreign
      Currency Translations and
Transactions





The
Company's reporting currency is the U.S. Dollar.  Dostyk LLP is a
foreign operation and its functional currency is the Kazakhstan Tenge (Tenge).
Certain contractual obligations in these consolidated financial statements are
stated in Kazakhstan Tenges. The Kazakhstan Tenge to U.S. dollar exchange rate
at March 31, 2007 was U.S. $0.00841 to 1 Tenge.





The
Company translates foreign assets and liabilities of its subsidiaries, other
than those denominated in U.S. dollars, at the rate of exchange at the balance
sheet date. Revenues and expenses are translated at the average rate of exchange
throughout the year. Gains or losses from these translations are reported as a
separate component of other comprehensive income (loss) until all or a part of
the investment in the subsidiaries is sold or liquidated. The translation
adjustments do not recognize the effect of income tax because the Company
expects to reinvest the amounts indefinitely in operations.





Transaction
gains and losses that arise from exchange rate fluctuations on transactions
denominated in a currency other than the local functional currency are included
in interest, bank charges, and foreign exchange loss in the consolidated
statements of operations and were not material in 2007 or 2006 or in the
cumulative period ending March 31, 2007.





(i)
            Concentration
      of Credit Risk





The
Company places its cash with high credit quality financial institutions in
Canada and Kazakhstan. The Company had funds deposited in banks beyond the
insured limits as of March 31, 2007 and December 31, 2006.





(j)
            Long-Lived
      Assets Impairment





Long-lived
assets are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable, in accordance with the
GAAP. An impairment loss would be recognized when the carrying amount of an
asset exceeds the estimated undiscounted future cash flows expected to result
from the use of the asset and its eventual disposition.





The
amount of the impairment loss to be recorded is calculated by the excess of the
asset's carrying value over its fair value.  Fair value is generally
determined using a discounted cash flow analysis. The Company has not recognized
any impairment losses through March 31, 2007.





(k)
            Comprehensive
      income





The
Company has adopted, Reporting
Comprehensive Income, which establishes standards for reporting and
display of comprehensive income, its components and accumulated balances. The
Company is disclosing this information on its Consolidated Statement of
Stockholders’ Equity (Deficiency). Comprehensive income comprises equity except
those resulting from investments by owners and distributions to
owners.








Components
      of comprehensive income (loss)
            
            March 31,
              2007
            
            
            December 31,
              2006Net
      income (loss) for the period
            
            $
            (275,147
            )
            
            $
            (1,545,617
            )Foreign
      currency translation adjustments
            
            
            10,199
            
            
            
            -Unrealized
      gains (loss) on available-for-sale securities
            
            
            (48,893
            )
            
            
            (15,488
            )Total
      comprehensive income (loss)
            
            $
            (313,841
            )
            
            $
            (1,561,105
            )


9
 Table of Contents


2.
            Significant
      Accounting
Policies   (continued)





(l)
            Fair
      Value of Financial Instruments and
Risks





Fair
value estimates of financial instruments are made at a specific point in time,
based on relevant information about financial markets and specific financial
instruments.  As these estimates are subjective in nature, involving
uncertainties and matters of significant judgment, they cannot be determined
with precision.  Changes in assumptions can significantly affect
estimated fair value.





The
carrying value of cash, accounts payable and accrued expenses, and accounts
payable – related parties approximate their fair value because of the short-term
nature of these instruments. Available for sale securities are recorded at the
current market value.





Management
is of the opinion that the Company is not exposed to significant interest or
credit risks arising from these financial instruments.





The
Company operates outside of the United States of America (primarily in
Kazakhstan) and is exposed to foreign currency risk due to the fluctuation
between the currency in which the Company operates in and the U.S.
dollar.





(m)
            Income
      Taxes





The
Company has adopted the ASC 740, Accounting for Income Taxes,
which requires the Company to recognize deferred tax liabilities and assets for
the expected future tax consequences of events that have been recognized in the
Company's financial statements or tax returns using the liability
method.  Under this method, deferred tax liabilities and assets are
determined based on the differences between the financial statement carry
amounts and tax bases of assets and liabilities using enacted tax rates in
effect in the years in which the differences are expected to
reverse.





In July
2006, the Financial Accounting Standards Board (“FASB”) issued an interpretation
which clarifies the accounting for uncertainty in income taxes recognized in a
company’s financial statements in accordance with GAAP.  This
interpretation prescribes a recognition threshold and measurement attribute for
the financial statement recognition and measurement of a tax position taken in a
tax return.  It also provides guidance on derecognition,
classification, interest and penalties, accounting in interim periods,
disclosure and transition.





Recognition
criterion to a tax position is effective for fiscal years beginning after
December 15, 2006.  The adoption of this interpretation did not have a
material impact on the Company’s results of operations or financial
position.  As such, the Company has not recorded any liabilities for
uncertain tax positions or any related interest and penalties.  The
Company’s tax returns are open to audit for the years ending December 31, 2003
to 2007.





(n)
            Earnings
      (Loss) Per Share





Earnings
(loss) per share is computed by dividing net income or loss available to common
stockholders by the weighted average number of common shares outstanding during
the year including common stock issued effective the date committed. Diluted
loss per common share is computed by dividing net loss by the sum of (a) the
basic weighted average number of shares of common stock outstanding during the
period and (b) additional shares that would have been issued and potentially
dilutive securities and is equivalent to basic loss per share for 2007 and 2006
because potentially dilutive securities were anti-dilutive due to the net losses
incurred in each year. Potentially dilutive securities outstanding consist of
800,000 stock options for 2007 (2006 – 900,000) and 8,000,000 warrants for 2007
(2006 – 8,000,000).


10
 Table of Contents


3.
            Equipment





March 31,
              2007
            
            
            December 31,
              2006Machinery
      and Equipment
            
            $
            5,518
            
            
            $
            -Transport
      Vehicles
            
            
            55,600
            
            
            
            -Other
      Fixed Assets
            
            
            4,394
            
            
            
            -Computer Software
            
            
            59966,111
            
            
            
            -Accumulated depreciation
            
            
            (175
            )
            
            
            -$
            65,936
            
            
            $
            -








The
majority of equipment held at March 31, 2007 is located in
Kazakhstan.





4.
            Loan
      Payable





The
Company’s subsidiary Dostyk had a loan payable to Eureka Mining PLC. The loan is
unsecured, non- interest bearing with repayment to begin when the Company shall
begin to generate profit as a direct or non direct result of exploration. On
March 15, 2007, the Company and Eureka signed an Assignment Agreement under
which the Company assumed responsibility for repayment of all amounts due under
the loan. The Company does not expect to generate funds from Dostyk’s operations
during the next five years to make any principal repayments on the loan. No
repayment of principal, interest and default interest has been made under the
Agreement. The loan balance at March 31, 2007 is $1,162,050 (2006 -
$0).





5.
            Available-for-sale
      securities








Cost
            
            
            Gross
      Unrealized Gains
            
            
            Gross
      Unrealized (Losses)
            
            
            Net
      Accumulated Unrecognized Gains (Losses)
            
            
            Market
      Value$
            
            
            $
            
            
            $
            
            
            $
            
            
            $December
      31, 2006, equity securities
            
            
            181,797
            
            
            
            36,504
            
            
            
            (51,992
            )
            
            
            (15,488
            )
            
            
            166,309Change during the period
            
            
            -
            
            
            
            -
            
            
            
            (33,405
            )
            
            
            (33,405
            )
            
            
            (33,405
            )March 31, 2007, equity
      securities
            
            
            181,797
            
            
            
            36,504
            
            
            
            (85,397
            )
            
            
            (48,893
            )
            
            
            132,904








6.
            Common
      stock





As at
March 2007 the Company had not issued any new common stock. During the quarter
ended March 31, 2006 the Company issued 400,000 pre-forward split common shares
for cash of $300,000 which was received in the year ended December 31,
2005.





In March
2006, the Company offered, on a no minimum basis, up to an aggregate of
3,500,000 Units at a price of US $1.00 per Unit. Each Unit shall be comprised of
one (1) pre-forward split share of the Company’s common stock US $0.0001 par
value per share and one (1) pre-forward split stock purchase warrant, each
warrant entitling the holder to purchase one (1) additional common share of the
Company at a price of US $1.35 per share for a period of one (1) year from the
closing date of the placement and at a price of US $1.50 per share for a period
of one (1) year commencing on the first anniversary of the Closing
Date.  All amounts with respect to this offering, other than par
value, are subject to adjustment pursuant to the 2:1 forward stock split. The
total amount received was $4,000,000.





On April
7, 2006, the Company’s Board of Directors approved a 2:1 forward stock split
effective May 15, 2006 which was subject to regulatory approval which was
received on May 19, 2006.The par value and the
number of authorized but unissued shares of the Company’s common stock was not
changed as a result of the forward stock split.


11
 Table of Contents


6.
            Common
      stock





Private
Placements


During
the quarter ended March 31, 2006 the Company issued 800,000 common shares for
cash of $300,000 which was received in the year ended December 31,
2005.





On May
12, 2006 the Company completed a private placement to non-affiliated offshore
investors of 6,540,000 Units priced at $0.50 per unit for a total consideration
of $3,270,000 pursuant to the exemption from registration requirements of the
Securities Act of 1933 as amended afforded by Regulation S as promulgated by the
Act. Each Unit is comprised of one share of the Company’s common stock US
$0.0001 par value per share and one stock purchase warrant, each warrant
entitling the holder to purchase one additional common share of the Company at a
price of US $0.675 per share for a period of one year from the closing date of
the placement and at a price of US $0.75 per share for a period of one year
commencing on the first anniversary of the Closing Date.





On May
26, 2006 the Company completed a private placement to non-affiliated offshore
investors of 1,460,000 Units priced at $0.50 per Unit for a total consideration
of $730,000 pursuant to the exemption from registration requirements of the
Securities Act of 1933 as amended afforded by Regulation S as promulgated by the
Act. Each Unit is comprised of one share of the Company’s common stock US
$0.0001 par value per share and one (1) stock purchase warrant, each warrant
entitling the holder to purchase one additional common share of the Company at a
price of US $0.675 per share for a period of one year from the closing date of
the placement and at a price of US $0.75 per share for a period of one year
commencing on the first anniversary of the Closing Date.





7.
            Share
      Purchase Warrants





A summary
of the Company’s warrants outstanding at March 31, 2007 and December 31, 2006
and changes during the three months ended March 31, 2007 is presented
below:








Number of warrants to Purchase
      shares
            
            
            Weighted Average Exercise
    PriceBalance, December 31, 2006
            
            
            8,000,000
            
            
            $
            0.713Warrants granted in 2007
            
            
            -
            
            
            
            -Balance, March 31, 2007
            
            
            8,000,000
            
            
            $
            0.713








1.
            Each
      warrant entitling the holder to purchase one additional common share of
      the Company at a price of US $0.675 per share for a period of one year
      from the May 12, 2006, closing date of the placement, and at a price of US
      $0.75 per share for a period of one year commencing on the first
      anniversary of the Closing Date.


2.
            Each
      warrant entitling the holder to purchase one additional common share of
      the Company at a price of US $0.675 per share for a period of one year
      from the May 26, 2005, closing date of the placement, and at a price of US
      $0.75 per share for a period of one year commencing on the first
      anniversary of the Closing Date.





8.
            Related
      Party Transactions





Related
party transactions not disclosed elsewhere in these consolidated financial
statements include:





a.
            During
      the three months ended March 31, 2007 Consulting Fees of $40,000 (three
      months ended March 31, 2006 - $39,320) were incurred by the Company. The
      transactions were recorded at the exchange amount, being the value
      established and agreed to by the related
  parties.





b.
            Included
      in accounts payable - related parties at March 31, 2007 is $0 (2006 -
      $6,974) payable to directors of the Company and its subsidiary for
      consulting fees and various expenses incurred on behalf of the
      Company


12
 Table of Contents


9.
            Mineral
      Properties Dostyk LLP – Maykubensk area in the Pavodar Oblast of the
      Republic of Kazakhstan





During
2007 we have been evaluating our property holdings in order to determine whether
to implement exploration programs on our existing properties or to acquire
interests in new properties.





In
January 2007, the Company entered in an agreement with Eureka Mining PLC, a
company registered in the United Kingdom, to acquire an ownership interest in
the Dostyk Limited Liability Partnership, (the “Partnership” or "Dostyk"). The
Partnership holds the exploration rights to explore 14,000 square kilometers in
the Maykubensk area in the Pavodar Oblast of the Republic of Kazakhstan for
precious and base metals.





Under the
terms of the agreement with Eureka Mining PLC, the Company acquired a 51%
interest in the Partnership by paying US $300,000 (paid January 25, 2007) into
the charter capital of the Partnership. The acquisition is accounted for using
purchase accounting. As a result of the purchase, the Company acquired control
of Dostyk and consolidated the financial results of Dostyk including
consideration of a non-controlling interest. In June 2007, the Company increased
its ownership in the Partnership from 51% to 71% by contributing a further US
$700,000 (paid June 13, 2007) to the Partnership’s charter capital. On September
14, 2007, the Company increased its ownership interest in the Partnership from
71% to 90% by contributing a further US $1,000,000 to the Partnership’s charter
capital. In February 2008 the Company increased its ownership in the Partnership
from 90% to 100% by paying US $400,000 (paid February 13, 2008) to the owners of
the Partnership.





The
Company’s results of operations include Dostyk’s results of operations since the
date of acquisition. Pro forma results for the pre-consolidation period are not
presented as they are not materially different from the Company’s historical
consolidated financial statements.





As of
March 31, 2007, the Company held a 51% interest in Dostyk. The aggregate cost of
the acquisition through March 31, 2007 was $300,000. The following represents a
summary of the assets acquired and the liabilities assumed during the period
ending March 31, 2007. Assets and liabilities at the dates of acquisition have
been translated from Dostyk’s functional currency, the Kazakhstan Tenge
(“Tenge”). The average effective exchange rate used was US$ 0.00841 to 1
Tenge.





Cash
            
            $
            154,283Prepaids
      and other assets
            
            
            1,326Mineral
      properties
            
            
            1,258,724Accounts
      payable and accrued expenses
            
            
            (2,935
            )Long-term
      debt
            
            
            (592,972
            )Minority
      interest
            
            
            (518,426
            )Purchase
      price paid March 31, 2007
            
            $
            300,000





During
January 2010, subject to shareholder approval, the Company agreed to sell its
ownership interest in its Kazakhstan subsidiary to a third party for $1,500,000
and other consideration.  The total value of the potential
consideration to be received has not been determined.  The only
significant asset owned by the subsidiary is the mineral exploration license
described in these financial statements.  Management continues to
believe that the value of the mineral property owned by the subsidiary has not
been impaired, however an agreement for the sale of the subsidiary for less than
its carrying value of $2,509,597 as of January 2010, would be an indication of
impairment and result in the Company recording a loss on the
sale.


13
 Table of Contents


Item2.
            Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations





(A)
            General





This
portion of the Quarterly Report provides management's discussion and analysis of
the financial condition and results of operations to enable a reader to assess
material changes in financial condition and results of operations as at and for
the three months ended March 31, 2007, in comparison to the corresponding
prior-year period. This MD&A has been prepared as of February 17, 2010. This
MD&A is intended to supplement and complement the unaudited interim
consolidated financial statements and notes thereto, prepared in accordance with
US GAAP, for the three months ended March 31, 2007 and 2006 (collectively, the
"Financial Statements"), which are included in this Quarterly Report. The reader
is encouraged to review the Financial Statements in conjunction with your review
of this MD&A. This MD&A should be read in conjunction with both the
annual audited consolidated financial statements for the year ended December 31,
2006 and the related annual MD&A included in the December 31, 2006 Form 10-K
on file with the US Securities and Exchange Commission. Certain notes to the
Financial Statements are specifically referred to in this MD&A and such
notes are incorporated by reference herein. All dollar amounts in this MD&A
are in US dollars, unless otherwise specified.




For the
purposes of preparing this MD&A, we consider the materiality of information.
Information is considered material if: (i) such information results in, or would
reasonably be expected to result in, a significant change in the market
price or value of Cigma Metals Corporation's shares; or (ii) there is a
substantial likelihood that a reasonable investor would consider it important in
making an investment decision or if it would significantly alter the total mix
of information available to investors. Materiality is evaluated by reference to
all relevant circumstances, including potential market sensitivity.





This
document contains numerous forward-looking statements relating to our
business.  The United States Private Securities Litigation Reform Act
of 1995 provides a “safe harbor” for certain forward-looking
statements.  Operating, exploration and financial data, and other
statements in this document are based on information we believe reasonable, but
involve significant uncertainties as to future gold and silver prices, costs,
ore grades, estimation of gold and silver reserves, mining and processing
conditions, changes that could result from our future acquisition of new mining
properties or businesses, the risks and hazards inherent in the mining
business  (including environmental hazards, industrial accidents,
weather or geologically related conditions),  regulatory and
permitting matters,  and risks inherent in the ownership and operation
of, or investment in, mining properties or businesses in foreign countries.
Actual results and timetables could vary significantly from the estimates
presented. Readers are cautioned not to put undue reliance on forward-looking
statements. We disclaim any intent or obligation to update publicly these
forward-looking statements, whether as a result of new information, future
events or otherwise.





We are a
mineral exploration company engaged in the exploration of base, precious metals
and industrial minerals worldwide.  We were incorporated under the
laws of the State of Florida on January 13, 1989, under the name "Cigma Ventures
Corp."





We have
no revenues, have sustained losses since inception, have been issued a going
concern opinion by our auditors and rely upon the sale of our securities to fund
operations. We will not generate revenues even if any of our exploration
programs indicate that a mineral deposit may exist on our properties.
Accordingly, we will be dependent on future financings in order to maintain our
operations and continue our exploration activities. Funds raised in fiscal 2007
and 2006 were used for exploration of our properties and general
administration.





(B)
            Significant
      developments during the three months ended March 31, 2007 and Subsequent
      Events





During
2007 we have been evaluating our property holdings in order to determine whether
to implement exploration programs on our existing properties or to acquire
interests in new properties.


14
 Table of Contents


In
January 2007, the Company entered in an agreement with Eureka Mining PLC, a
company registered in the United Kingdom, to acquire an ownership interest in
the Dostyk Limited Liability Partnership, (the “Partnership” or "Dostyk"). The
Partnership holds the exploration rights to explore 14,000 square kilometers in
the Maykubensk area in the Pavodar Oblast of the Republic of Kazakhstan for
precious and base metals.





Under the
terms of the agreement with Eureka Mining PLC, the Company acquired a 51%
interest in the Partnership by paying US $300,000 (paid January 25, 2007) into
the charter capital of the Partnership. The acquisition is accounted for using
purchase accounting. As a result of the purchase, the Company acquired control
of Dostyk and consolidated the financial results of Dostyk including
consideration of a non-controlling interest. In June 2007, the Company increased
its ownership in the Partnership from 51% to 71% by contributing a further US
$700,000 (paid June 13, 2007) to the Partnership’s charter capital. On September
14, 2007, the Company increased its ownership interest in the Partnership from
71% to 90% by contributing a further US $1,000,000 to the Partnership’s charter
capital. In February 2008 the Company increased its ownership in the Partnership
from 90% to 100% by paying US $400,000 (paid February 13, 2008) to the owners of
the Partnership.





The
Company’s results of operations include Dostyk’s results of operations since the
date of acquisition. Pro forma results for the pre-consolidation period are not
presented as they are not materially different from the Company’s historical
consolidated financial statements.





As of
March 31, 2007, the Company held a 51% interest in Dostyk. The aggregate cost of
the acquisition through March 31, 2007 was $300,000. The following represents a
summary of the assets acquired and the liabilities assumed during the period
ending March 31, 2007. Assets and liabilities at the dates of acquisition have
been translated from Dostyk’s functional currency, the Kazakhstan Tenge
(“Tenge”). The average effective exchange rate used was US$ 0.00841 to 1
Tenge.





Cash
            
            $
            154,283Prepaids
      and other assets
            
            
            1,326Mineral
      properties
            
            
            1,258,724Accounts
      payable and accrued expenses
            
            
            (2,935
            )Long-term
      debt
            
            
            (592,972
            )Minority
      interest
            
            
            (578,426
            )Purchase
      price paid March 31, 2007
            
            $
            300,000





As of
December 31, 2007, the Company held a 90% interest in Dostyk. The aggregate cost
of the acquisition through December 31, 2007 was $2,000,000. The following
represents a summary of the assets acquired and the liabilities assumed during
the year. Assets and liabilities at the dates of acquisition have been
translated from





Dostyk’s
functional currency, the Kazakhstan Tenge (“Tenge”). The average effective
exchange rate used was US$ 0.00846 to 1 Tenge.





Cash
            
            $
            1,040,115Prepaids
      and other assets
            
            
            39,540Mineral
      properties
            
            
            2,676,096Equipment
            
            
            119,341Accounts
      payable and accrued expenses
            
            
            (46,806
            )Long-term
      debt
            
            
            (1,168,818
            )Minority
      interest
            
            
            (659,468
            )Purchase
      price paid in 2007
            
            $
            2,000,000





During
the three month period ended March 31, 2008, the Company acquired an additional
10% interest in Dostyk for a purchase price of US$400,000. At that date, the
balance of non-controlling interest was in excess of the purchase price by
$166,499. This amount was credited against the capitalized balance in mineral
properties. As of that date, the Company owned 100% of Dostyk.





The 2008
acquisition of the remaining 10% interest in Dostyk was accounted for using the
purchase method. The aggregate allocation of purchase price to mineral
properties was $2,509,597.


15
 Table of Contents


(C)
            Exploration
      and Development





We
conduct our exploration and property acquisition activities from our head
office, which is located at 18, 80 Furmanova Str, Almaty, Republic of
Kazakhstan. The telephone number is +7 327 2611 026.





Our
general business strategy is to acquire mineral properties either directly or
through the acquisition of operating entities.  Our continued
operations and the recoverability of mineral property costs is dependent upon
the existence of economically recoverable mineral reserves, confirmation of our
interest in the underlying properties, our ability to obtain necessary financing
to complete the development and upon future profitable production.





We are
currently concentrating our exploration activities in Kazakhstan.





Since
1989 we have acquired and disposed of a number of properties. We have not been
successful in any of our exploration efforts to establish reserves on any of the
properties that we owned or in which we have or have had an
interest.





Our
properties are in the exploration stage only and are without a known body of
mineral reserves. Development of the properties will follow only if satisfactory
exploration results are obtained. Mineral exploration and development involves a
high degree of risk and few properties that are explored are ultimately
developed into producing mines.  There is no assurance that our
mineral exploration and development activities will result in any discoveries of
commercially viable bodies of mineralization. The long-term profitability of our
operations will be, in part, directly related to the cost and success of our
exploration programs, which may be affected by a number of factors.





Russian
Federation





Haldeevskaya
License





The
Haldeevskaya exploration license covers an area of 576 km2 and is located
approximately 16 kilometers NE from Tomsk via paved highway. Excellent
infrastructure is currently in place, including, maintained tarmac access roads,
high tension power lines at 500 kilowatts per line, gravel vehicular access
roads over the project area with close-spaced, 100 meter, cut lines over the
target areas. The area is also close to the railheads in Tomsk, with links to
the Trans Siberian Railway, and all infrastructures associated with a regional
centre.





Geology
of Haldeevskaya area is represented by the mid Devonian volcanogenic-sedimentary
sediments of the Mitrofan suite, terrigenous (“black shale”) sediments of the
Jurginsk, Pachinsk, Salamat suites of upper Devonian, and the Yarsk,
Lagernosadsk stratus of the lower Carboniferous age.  The rock
formations are deformed into the linear folds with the north-north-eastern
strike and they are cut by the series of longitudinal, lateral and diagonal
fractures of different type and order.  The area is located at the
front zone of the Tomsk thrust above the granitoid intrusions that are inferred
by geophysics. Dolerite and Monzonite dikes intrude Paleozoic rocks forming the
series of dike zones with a north-western trend with an echelon-like arrangement
of some dikes and their groups.  Mineralisation is focussed into areas
associated with the thrusting. Towards the end of 19th and first half of the
20th centuries the region was one of the most prolific gold mining spots in
Russia. The coarse gold was panned from the Tom river and the numerous drainage
systems around the city of Tomsk. In late 1980 Geosphera made its first gold
discoveries in hard rock.  As a result of the  geochemical
and geophysical surveys a series of 6 highly prospective gold soil anomalies
have been outlined   Of the 6 large anomalies the area currently
considered the most perspective are the Semiluzhenskoye, Verkhnekamensk and
Sukhorechenskoye prospects.  The Verkhnekamensk anomaly is located in
the eastern part of the Haldeiskaja license on the tectonic contact between the
clay shales and volcanics. As a result of the litho-geochemical, geological and
geophysical studies, conducted by Cigma, two mineralized zones of east-west
strike have been outlined and plotted at 1:20,000. These zones were traced
across the area for 3 kilometres with widths ranging from 250 to 700 meters.
Within these zones 3 anomalies were found and appear prospective for gold
mineralization. The first diamond drilling program has outlined vast areas of
hydrothermal alteration, preliminary mineralogical investigations have
discovered free gold in drill core from the upper part of the mineralization
zone.


16
 Table of Contents


Tugojakovsk
License





The
Tugojakovsk exploration license covers an area of 164 km2 and
is located 25 kilometers SE from the regional centre of Tomsk via paved highway.
An excellent infrastructure is in place including excellent sealed roads, close
access to railheads and the infrastructure associated with the regional centre
of Tomsk.





The
geology of Tugojakovsk area is represented by the sedimentary rock formations of
Carboniferous age composed of carbonaceous shales, siltstones and sandstones
united under the common term "black shale". The rocks are deformed into linear
folds and cut by the series of longitudinal, lateral and diagonal faults. The
dolerite and monzonite
dikes intrude Palaeozoic rocks forming a series of dike zones controlling quartz
stock works with gold mineralization.





The
Baturinsk occurrence, located within the Tugojakovsk license is composed of a
series silicified shear zones (mylonite zones) consisting of numerous, locally
intense, small quartz veinlets carrying gold. The surrounding geological units
are composed of mineralized carbonaceous shales.





Republic of
Kazakhstan





Dostyk Area, Pavlodar
Oblast





The
Company through its 51% subsidiary Dostyk Ltd holds high potential Maykubinsk
exploration and mining license located in Pavlodar Oblast Region in Kazakhstan
and two mineral exploration licenses in the Tomsk Oblast Region, of the Russian
Federation. In 2007 the Company was focused on exploration on Maykubinsk license
in Kazakhstan due to advanced exploration stage of this area and high potential
to discovery large-scale gold-copper porphyry deposits.  The Company’s
strategy is to concentrate its investigations into: (i) Existing operations
where an infrastructure already exists; (ii) Properties presently being
developed and/or in advanced stages of exploration which have potential for
additional discoveries; and (iii) Grass-roots exploration
opportunities.





The
region’s economy of Central Kazakhstan is predicated on mining, power generation
and agriculture. Mining consists of giant coal mining at Karaganda, Ekibastuz
and Maikube, mining of polymetallic, gold-rich volcanogenic massive sulphide
deposits at Abyz, Maikain, Alpys and Souvenir. Roads and trails criss-cross the
region to serve the agriculture
and mining areas. Numerous high-tension power lines radiate out of several power
generation stations in Ekibastuz to serve Kazakhstan and for power export to
Russia.





Regional Geology and
mineralization





Central
Kazakhstan geological structure is represented by strong folded and dislocated
Cambrian-Ordovician submarine volcanic and sedimentary rocks, covered by
Silurian-Devonian sediments and Devonian felsitic volcanic suites with a whole
series of stocks, dikes and sills of various ages. Late Paleozoic rocks are
represented by Carboniferous and Jurassic marine and continental
suites.





Mineral
deposits are related in time and space to the various lithologies:


Gold-rich
volcanogenic massive sulphide (VMS) deposits associated with Ordovician
submarine volcanic rocks.


Porphyry
gold-copper deposits associated with altered sub-volcanic dioritic intrusives
presumable of Ordovician age.


Epithermal
gold deposits associated with quartz veins and quartz-sulphide stockworks in
Ordovician, Devonian and Permian intrusives of diorite to granite
composition.


Lead-zinc
mineralization associated with Silurian-Devonian siltstone and carbonate
beds.


Coal
deposits associated with Carboniferous marine and deltaic sedimentary
rocks.


Titanium
and zirconium-rich sands in Late Carboniferous beach sands.


Bauxite
and nickel laterite deposits formed from modern weathering of Paleozoic
limestones and Cambrian ultramafic rocks.


17
 Table of Contents


License and Contract
commitments





License
#785 of Central Kazakhstan area dated January 8, 1996 and Subsoil Contract #
759, dated Oct 11, 2001 belongs to Dostyk Ltd. Contract is valid until Jan 8,
2021. Exploration period expires on Dec 31, 2009. Dostyk has currently
submitted to Kazakh Government an application for exploration extension till Dec
2011. The area of contract territory is at the present 2,774 sq km. The contract
territory will be returned to the State by December 2011 except areas, which
Dostyk would claim as commercial discoveries i.e. those prospects on which
Kazakh style resources of C1-C2 categories would be proved.





Exploration
Works 2007





After
reviewing historical data and first drilling results, the exploration works in
2007 were focused mainly on following prospects: Beskauga, Berezki East,
Quartzite Gorka, Ushtogan and Anino-Nikolaevo.





March
2007 Quarter was a time of transfer of the Dostyk project from previous
owner to the Company. At the same time the Dostyk exploration team gathered
historical geological and exploration data to establish an exploration program
for 2007.





(D)
            Results
      of Operations





Three
Months Ended March 31, 2007 versus Three Months Ended March 31,
2006





For the
three months ended March 31, 2007 we recorded a net loss of $275,147 (2006 net
loss - $248,553) or $0.01 per share (2006 - $0.01).





Expenses
– For the three months ended March 31, 2007 we recorded expenses of $319,648
(2006 - $243,795). This amount includes, professional fees - accounting $7,796
(2006 - $13,686) and legal $52,102 (2006 - $26,376).  Administrative
and general expenses were $11,018 (2006 – $18,554), management and consulting
fees $72,391 (2006 – $42,349), interest, bank charges and foreign currency
losses $1,633 (2006 - $1,113). There were no property investigation costs in
2007 and in 2006 they amounted to $17,717.





For the
three months ended March 31, 2007 we recorded exploration expenses of $174,708
(2006 - $124,000). The following is a breakdown of the exploration expenses by
property: Maykubinsk license, Kazakhstan $174,708 (2006 - $0) and Tomsk Oblast,
Russian Federation $0 (2006 - $24,000 – HaldeyGold, $100,000 -
Tugojakovsk).





Depreciation
expense – For the three months ended March 31, 2007 we recorded depreciation
expense of $175 (2006 - $0).





(E)
            Capital
      Resources and Liquidity





March 31,
2007 versus March 31, 2006





At March
31, 2007, we had cash of $2,865,172 (2006 - $12,441) and working capital of
$3,134,828 (2006 working capital - $273,602) respectively. Total liabilities as
of March 31, 2007 were $1,202,846 as compared to $54,704 on March 31, 2006, an
increase of $1,148,142.





Our
general business strategy is to acquire mineral properties either directly or
through the acquisition of operating entities. Our consolidated financial
statements have been prepared in accordance with generally accepted accounting
principles in the United States of America and applicable to a going concern
which contemplates the realization of assets and the satisfaction of liabilities
and commitments in the normal course of business. As discussed in note 1 to the
financial statements, the Company has incurred recurring operating losses since
inception, has not generated any operating revenues to date and used cash of
$1,023,424 from operating activities in 2007. The Company requires additional
funds to meet its obligations and maintain its operations.  We do not
have sufficient working capital to (i) pay our administrative and general
operating expenses through March 31, 2008 and (ii) to conduct our preliminary
exploration programs. Without cash flow from operations, we may need to obtain
additional funds (presumably through equity offerings and/or debt borrowing) in
order, if warranted, to implement additional exploration programs on our
properties. While we may attempt to generate additional working capital through
the operation, development, sale or possible joint venture development of its
properties, there is no assurance that any such activity will generate funds
that will be available for operations.  Failure to obtain such
additional financing may result in a reduction of our interest in certain
properties or an actual foreclosure of its interest. We have no agreements or
understandings with any person as to such additional financing.


18
 Table of Contents


Our
exploration properties have not commenced commercial production and we have no
history of earnings or cash flow from its operations. While we may attempt to
generate additional working capital through the operation, development, sale or
possible joint venture development of its property, there is no assurance that
any such activity will generate funds that will be available for
operations.





(F)
            Plans
      for Year 2007





During
the next 12 months we intend to raise additional funds through equity offerings
and/or debt borrowing to meet its administrative/general operating expenses and
to conduct work on our exploration properties. There is, of course, no assurance
that we will be able to do so.





The
exploration program of Year 2007 has aimed broad review of a large 14,600 sq km
Maikubinsk license area to select most prospective targets for further
exploration.





Out from
over 140 occurrences and mineralized areas the Company has selected 10 prospects
with four of them as top priority prospects:





·
            Beskauga,


·
            Berezki
      East,


·
            Quartzite
      Gorka,


·
            Ushtogan
      Anino-Nikolaevo





Since all
of the prospects undergo in Soviet times preliminary exploration, the Company
has established an exploration program targeting the most advanced prospects by
diamond drilling, intense sampling, metallurgical and mineralogical
studies.




Dostyk
      Exploration Program 2007Program
            
            Units
            
            
            Q-ty
            
            
            Price
            
            
            Total
      US$Diamond
      drilling
            
            m
            
            
            
            15,000
            
            
            
            102.89
            
            
            
            1,543,350core
      samples splitting, crushing, pulverization
            
            sample
            
            
            
            15,000
            
            
            
            11.00
            
            
            
            165,000Assays
            
            analyse
            
            
            
            17,100
            
            
            
            7.00
            
            
            
            119,700Metallurgical
      test
            
            sample
            
            
            
            1
            
            
            
            2,850.00
            
            
            
            2,850Resource
      estimation, Kaz standard
            
            prospect
            
            
            
            2
            
            
            
            8,250.00
            
            
            
            16,500Transportation
            
            month
            
            
            
            12
            
            
            
            11,000.00
            
            
            
            132,000Subtotal
      drilling+assays+resource
            
            $
            
            
            
            
            
            
            
            
            
            
            
            1,979,400Exploration
      staff salary
            
            $
            
            
            
            
            
            
            
            
            
            
            
            83,809Other
      on-site expenses
            
            $
            
            
            
            
            
            
            
            
            
            
            
            16,282Total
      exploration works
            
            $
            
            
            
            
            
            
            
            
            
            
            
            2,079,491Overheads
            
            $
            
            
            
            
            
            
            
            
            
            
            
            30,292Other
      administration expenses
            
            $
            
            
            
            
            
            
            
            
            
            
            
            66,000Sub
      total
            
            $
            
            
            
            
            
            
            
            
            
            
            
            2,175,783Sundries
      5 %
            
            $
            
            
            
            
            
            
            
            
            
            
            
            108,789Total
            
            $
            
            
            
            
            
            
            
            
            
            
            
            2,284,572


19
 Table of Contents


(G)
            Application
      of Critical Accounting Policies





The
accounting policies and methods we utilize in the preparation of our unaudited
consolidated financial statements determine how we report our financial
condition and results of operations and may require our management to make
estimates or rely on assumptions about matters that are inherently uncertain.
Our accounting policies are described in note 2 of our December 31, 2006 and
March 31, 2007 unaudited consolidated financial statements. Our accounting
policies relating to depreciation and amortization of property, plant and
equipment are critical accounting policies that are subject to estimates and
assumptions regarding future activities.





Depreciation
is based on the estimated useful lives of the assets and is computed using the
straight-line method.  Equipment is recorded at
cost.  Depreciation is provided over the following useful
lives:  vehicles 10 years and office equipment, furniture and fixtures
2 to 5 years.





Exploration
costs are charged to operations as incurred until such time that proven reserves
are discovered. From that time forward, the Company will capitalize all costs to
the extent that future cash flow from mineral reserves equals or exceeds the
costs deferred. The deferred costs will be amortized over the recoverable
reserves when a property reaches commercial production. As at March 31, 2007 and
December 31, 2006, the Company did not have proven reserves.





Exploration
activities conducted jointly with others are reflected at the Company's
proportionate interest in such activities.





Costs  related  to  site  restoration  programs  are  accrued
over the life  of  the  project.





US GAAP
requires us to consider at the end of each accounting period whether or not
there has been an impairment of the capitalized property, plant and equipment.
This assessment is based on whether factors that may indicate the need for a
write-down are present. If we determine there has been impairment, then we would
be required to write-down the recorded value of its property, plant and
equipment costs which would reduce our earnings and net assets.





(H)
            Off-balance
      Sheet Arrangements and Contractual
Obligations





We do not
have any off-balance sheet arrangements or contractual obligations that are
likely to have or are reasonably likely to have a material 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 have not been disclosed in our financial statements.





Item3.
            Quantitative
      and Qualitative Disclosures About Market
Risk





Our
exposure to market risk is confined to our cash equivalents and short-term
investments. We invest in high-quality financial instruments; primarily money
market funds, federal agency notes, and US Treasury obligations, with the
effective duration of the portfolio within one year which we believe are subject
to limited credit risk. We currently do not hedge interest rate exposure. Due to
the short-term nature of our investments, we do not believe that we have any
material exposure to interest rate risk arising from our
investments.





Item4T.
            Controls
      and Procedures





Attached
as exhibits to this Interim Report on Form 10-Q are certifications of our Chief
Executive Officer (CEO) and Chief Financial Officer (CFO), which are required
pursuant to Rule 13a-14 of the Exchange Act. This “Controls and Procedures”
section of this Interim Report on Form 10-Q includes information concerning the
controls and controls evaluation referenced in the certifications. This section
of the Interim Report on Form 10-Q should be read in conjunction with the
certifications for a more complete understanding of the matters
presented.


20
 Table of Contents


Evaluation
of disclosure controls and procedures





We
evaluated the effectiveness of the design and operation of our disclosure
controls and procedures as of the end of the period covered by this Interim
Report on Form 10-Q. Disclosure controls and procedures are designed to ensure
that information required to be disclosed in our reports filed under the
Exchange Act, such as this Interim Report on Form 10-Q is recorded, processed,
summarized and reported within the time periods specified by the SEC. Disclosure
controls are also designed to ensure that such information is accumulated and
communicated to our management, including the CEO and CFO, as appropriate, to
allow timely decisions regarding required disclosure.





Based on
the evaluation, our Chief Executive Officer and Chief Financial Officer, after
evaluating the effectiveness of our “disclosure controls and procedures” (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), have concluded that,
subject to the inherent limitations noted in this Part II, Item 4, as of March
31, 2007, our disclosure controls and procedures were not effective due to the
existence of several material weaknesses in our internal control over financial
reporting, as discussed below.





Limitations
on Effectiveness of Controls





Our
management, including our Chief Executive Officer and Chief Financial Officer,
does not expect that our disclosure controls or our internal control over
financial reporting 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.
Additional controls can be circumvented by the individual acts of some persons,
by collusion of two or more people, or by management override of the controls.
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.





Material
Weaknesses Identified





In
connection with the preparation of our consolidated financial statements for the
period ended March 31, 2007, certain significant deficiencies in internal
control became evident to management that represent material weaknesses,
including,





(i)
            Lack
      of a sufficient number of independent directors for our board and audit
      committee.  We currently only have one independent director on
      our board, which is comprised of two directors, and on our audit
      committee, which is comprised of two directors. As a publicly-traded
      company, we should strive to have a majority of our board of directors be
      independent.


(ii)
            Lack
      of an independent financial expert on our audit committee.  We
      currently do not have an independent audit committee financial expert on
      our audit committee as defined by the SEC.  Pursuant to Section
      407, we are required to disclose whether we have at least one "audit
      committee financial expert" on our audit committee in addition to whether
      the expert is independent of management. Since we do not have an
      independent audit committee financial expert, we have disclosed this fact;
      however, it is still the expectation that we obtain a financial expert on
      our audit committee.


(iii)
            Insufficient
      segregation of duties in our finance and accounting functions due to
      limited personnel.  During the period ended March 31, 2007, we
      had one person on staff at our executive office and two persons at our
      Kazakhstan office that performed nearly all aspects of our financial
      reporting process, including, but not limited to, access to the underlying
      accounting records and systems, the ability to post and record journal
      entries and responsibility for the preparation of the financial
      statements.  This creates certain incompatible duties and a lack
      of review over the financial reporting process that would likely result in
      a failure to detect errors in spreadsheets, calculations, or assumptions
      used to compile the financial statements and related disclosures as filed
      with the SEC.  These control deficiencies could result in a
      material misstatement to our interim or annual consolidated financial
      statements that would not be prevented or
  detected.


21
 Table of Contents


(iv)
            Insufficient
      corporate governance policies.  Although we have a code of
      ethics which provides broad guidelines for corporate governance, our
      corporate governance activities and processes are not always formally
      documented.  Specifically, decisions made by the board to be
      carried out by management should be documented and communicated on a
      timely basis to reduce the likelihood of any misunderstandings regarding
      key decisions affecting our operations and
  management.





Plan
for Remediation of Material Weaknesses





We intend
to take appropriate and reasonable steps to make the necessary improvements to
remediate these deficiencies. We intend to consider the results of our
remediation efforts and related testing as part of our year-end 2007 assessment
of the effectiveness of our internal control over financial
reporting.





We have
implemented certain remediation measures and are in the process of designing and
implementing additional remediation measures for the material weaknesses
described in this Quarterly Report on Form 10-Q. Such remediation activities
include the following:





•
            We
      continue to recruit one or more additional independent board members to
      join our board of directors.  We continue to recruit at least
      one additional financial expert to join as an independent board member and
      as an audit committee member.


•
            In
      addition, we will continue to update the documentation of our internal
      control processes, including formal risk assessment of our financial
      reporting processes.




There
were no significant changes in the Company’s internal control over financial
reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act)
during the most recent fiscal quarter that materially affected, or are
reasonably likely to materially affect, our internal control over financing
reporting.





PART
II.           OTHER
INFORMATION





Item1.
            Legal
      Proceedings





We are
not party to any litigation, and have no knowledge of any pending or threatened
litigation against us.





Item1A.
            Risk
      Factors





Not
Applicable





Item2.
            Unregistered
      Sales of Equity Securities and Use of
Proceeds





Not
Applicable





Item3.
            Defaults
      Upon Senior Securities





Not
Applicable


22
 Table of Contents


Item4.
            Submission
      of Matters to a Vote of Security
Holders





Not
Applicable





Item5.
            Other
      Information





None.





Item6.
            Exhibits





3.1.1
            Certificate
      of Incorporation incorporated by reference to the registration statement
      on Form 10SB filed on September 16, 1999 (SEC File No. 000-27355
      99712713). *





3.1.2
            Certificate
      of Amendment to the Certificate of Incorporation incorporated by reference
      to the Form 10SB12G filed on September 16, 1999 (SEC File No. 000-27355
      99712713).*





3.2.1
            By-laws
      incorporated by reference to the Form 10SB12G filed on September 16, 1999
      (SEC File No. 000-27355 99712713).
*





10.1.1
            Haldeevskaya
      Joint Activity Agreement dated August 30, 2004, incorporated by reference
      to the Form 10-KSB filed on June 6, 2006 (SEC File No.
      000-27355-06888704). *





10.1.2
            Amendment
      to Haldeevskaya Joint Activity Agreement dated April 22, 2005,
      incorporated by reference to the Form 10-KSB filed on June 6, 2006 (SEC
      File No. 000-27355-06888704). *





10.1.3
            Amendment
      to Haldeevskaya Joint Activity Agreement dated December 31, 2005,
      incorporated by reference to the Form 10-KSB filed on June 6, 2006 (SEC
      File No. 000-27355-06888704). *





10.1.4
            Amendment
      to Haldeevskaya Joint Activity Agreement dated July 7, 2006, incorporated
      by reference to the Form 10-QSB filed on August 14, 2006 (SEC File No.
      000-27355-061028644). *





10.2.1
            Tugoyakovka
      Joint Activity Agreement dated June 17, 2005, incorporated by reference to
      the Form 10-KSB filed on June 6, 2006 (SEC File No. 000-27355-06888704).
      *





10.2.2
            Amendment
      to Tugoyakovka Joint Activity Agreement dated December 31, 2005,
      incorporated by reference to the Form 10-KSB filed on June 6, 2006 (SEC
      File No. 000-27355-06888704). *





10.2.3
            Amendment
      to Tugoyakovka Joint Activity Agreement dated July 7, 2006, incorporated
      by reference to the Form 10-QSB filed on August 14, 2006 (SEC File No.
      000-27355-061028644). *





31.1
            Certification
      of Chief Executive Officer and Chief Financial Officer pursuant to Section
      302 of the Sarbanes-Oxley Act of
2002





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





99.1
            Corporate
      Governance Principles, incorporated by reference to the registration
      statement on Form 10KSB filed on November 4, 2004 SEC File No. 000-27355
      041117794). *





*
Previously filed


23
 Table of Contents


SIGNATURES





Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.








Cigma Metals CorporationRegistrantDate:
      February 17,
      2010
            BY:
            /s/ Agustin Gomez de
  SeguraAgustin
      Gomez de SeguraDirectorDate:
      February 17,
      2010
            BY:
            /s/ Waldemar MuellerWaldemar
      MuellerDirector






24