UNITED STATES





SECURITIES AND EXCHANGE COMMISSION





Washington, D.C. 20549





FORM 10-Q


(Mark One)[X]
Quarterly Report Pursuant To Section 13 Or 15(d) Of The Securities Exchange Act Of 1934For the quarterly period ended June 30, 2009[   ]
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





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)





120 North 5th Street


P.O. Box 1049


Jacksonville OR 97530


(Address of principal executive offices)





(541) 821-0760





Issuer's telephone number





Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past twelve 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 [X] No [      ]





Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerate filer or a smaller reporting company. See definitions of “large accelerate filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-3 of the Exchange Act. (Check One).


Large Accelerated Filer [   ] Accelerated Filer [   ]  Non-accelerated Filer [   ] Smaller reporting Company [ X  ]








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





State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: As of May 14, 2009, the Issuer had 96,146,668 shares of common stock issued and outstanding.







1











TABLE OF CONTENTS








PART I. FINANCIAL INFORMATIONPageITEM 1.
Consolidated Financial Statements (unaudited)Consolidated Balance Sheets at June 30, 2009 and December 31, 2008
F-3Consolidated Statements of Operations for the six and three months  ended June 30, 2009 and 2008
F-4Consolidated Statement of Cash Flows for the six and three months  ended June 30, 2009 and 2008
F-5Notes to Financial Statements
F-7-F-15ITEM 2
Management’s Discussion and Analysis or Plan of Operation
4ITEM 3
Controls and Procedures
26ITEM 3A(T)
Controls and Procedures
26PART II. OTHER INFORMATIONITEM 1
Legal Proceedings
26ITEM 2.
Unregistered Sales of Equity Securities and Use of Proceeds
26ITEM 3.
Defaults Upon Senior Securities
27ITEM 4.
Submission of Matters to a Vote of Security Holders.
27ITEM 5.
Other Information
27ITEM 6
Exhibits
27Signatures
28











2





PART I - FINANCIAL INFORMATION





ITEM 1. FINANCIAL STATEMENTS.





The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-QSB 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 six and three months ended June 30, 2009 are not necessarily indicative of the results that can be expected for the year ending December 31, 2009.





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











3








AULTRA GOLD INC.


An Exploration Stage Company





INDEX TO FINANCIAL STATEMENTS





For the six and three month periods Ended June 30, 2009 and 2008  and for the year ended December 31, 2008
PageReport of Independent Registered Certified Public Accounting Firm
F-2Balance Sheets as of June 30, 2009 and December 31, 2008
F-3Statements of Operations for the six and three month periods ended June 30, 2009, and 2008
F-4Statements of Cash Flows for the six and three month  periods ended June 30, 2009  and 2008
F-5Statements of Stockholders’ Equity (Deficit) for the period ended June 30, 2009
F-6Notes to Financial Statements
F-7
















F-1








Aultra Gold Inc.


An Exploration Stage Company


Consolidated Balance Sheets


As at June 30, 2009


(Stated in United States Dollars)




June 30


December 312009



2008$



$A S S E T SCurrent AssetsCash


-0-



-0-Interest receivable and prepaids


-0-



-0-Investment in marketable securities (note 3)


-0-



-0-Accounts receivable and accrued receivables


-0-



-0-Total Current Assets


-0-



-0-Long term AssetsLong term investment (note 3)


6,232



6,232Long term receivables


65,485



65,485Fixed Assets (note 6)


100,000



100,000Total Assets


171,717



171,717L 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’   E Q U I T YCurrent LiabilitiesAccounts payable and accrued liabilities


1,150,683



946,243Total current liabilities


1,150,683



946,243Total Liabilities


1,150,683



946,243S TOCK H O L D E R S ’   E Q U I T YCommon stock, $0.001 par value, 500,000,000 shares authorized: 96,146,668 shares issued and outstanding (note 7(a))


96,147



96,147Cummulative translation adjustment


10,666



10,666Accumulated deficit in the exploration state (January 26, 2005 to June 30, 2009)


(1,434,488
)


(1,230,048
)Additional paid-in capital


348,709



348,709Total stockholders’ equity


(978,966
)


(774,526
)Total liabilities and stockholders’ equity


171,717



171,717











Approved by the Board of Directors:/s/ Rauno Perttu


/s/ John YeeDirector


Director











See notes to financial statements











F-2








Aultra Gold Inc.


An Exploration Stage Company


Consolidated Statement of Operations


From inception on January 26, 2005 to June 30, 2009


(Stated in United States Dollars)





For the three months ended


For the three months ended


For the six months ended


For the six months ended


From inception January 26, 2005 throughJune 30


June 30


June 30


June 30


June 302009


2008


2009


2008


2009$


$


$


$


$REVENUE


0



0



0



-0-



131ExpensesFiling Fees


-0-



-0-



-0-



-0-



9,820Consultants and contractors


90,000



24,000



150,000



78,000



481,668Travel


-0-



-0-



-0-



-0-



18,574Mineral property expenditures


27,263



8,963



51,447



72,463



429,328Office and sundry


893



-0-



3,332



10,163



64,531Professional fees


-0-



10,163



-0-



28,500



358,435Shares for interest expense


-0-



-0-



-0-



-0-



10,833Transfer agent


1,500



1,575



-0-



3,049



11,115Loss for the period


(119,661
)


(44,701
)


(204,779
)


(152,175)



(1,384,304
)Other Revenues and ExpensesForeign Exchange Gain/Loss


-0-



-0-



-0-



-0-



4,154Gain on Extinguishment of Debt


-0-



35,000



-0-



35.000



45,733Bad debt


-0-



-0-



-0-



-0-



97,303Loss on Investment


-



-0-



-0-



(97,303)



(2,999
)Total loss for period


(119,661
)


(9,701
)


(204,779)



(214,478)



(1,434,304
)Deficit – beginning of the period


(1,349,826
)


(800,955
)


(1,230,048
)


(596,178
)


-0-Deficit – end of period


(1,434,488
)


(810,656
)


(1,434,488
)


(810,656
)


(1,434,488
)Loss per shares – basic and diluted


(0.01
)


(0.01
)


(0.01
)


(0.01
)Weighted Average Number of Shares Outstanding


96,146,668



96,146,668



96,146,668



72,704,045








See notes to financial statements






F-3







Aultra Gold Inc.


An Exploration Stage Company


Consolidated Statement of Cash Flows


From January 26, 2005 to June 30, 2009


(Stated in United States Dollars)








Three Months


Ending


Six Months Ending


From inceptionJune 30


June 30


June 30


June 30


January 26, 20052009
$



2008
$



2009
$



2008
$


To June 30, 2009
$Cash flows from operating activitiesLoss for the period


(119,661
)


(9,701
)


(204,400
)


(84,779
)


(1,434,488
)Changes in:Accounts receivables and accrued receivables


-0-



-0-



-0-



97,175



(65,485
)Accounts payable and accrued liabilities


(119,661
)


(20,199
)


204,400



87,175



1,150,685Net cash used in operating activities


-0-



(30,000
)


-0-



-0-



(349,290
)Cash flows from investing activitiesMineral property


-0-



-0-



-0-



-0-



(100,000
)Investments


-0-



-0-



-0-



-0-



(6,232
)Cash used in investing activities


-0-



-0-



-0-



-0-



(106,232
)Cash flows from financing activitiesShare capital issued


-0-



30,000



-0-



30,000



444,856Loans


-0-



-0-



-0-



-0-



-0-Cumulative translation adjustment


-0-



-0-



-0-



-0-



10,666Net cash received from financing activities


-0-



30,000



-0-



30,000



455,522Net increase in cash


-0-



-0-



-0-



-0-Cash – beginning of period


-0-



-0-



-0-



-0-Cash – end of period


-0-



-0-



-0-



-0-











See notes to financial statements








F-4





Aultra Gold Inc.


An Exploration Stage Company


Consolidated Statements of Stockholders’ Equity


From inception on January 26, 2005 to June 30, 2009


(Stated in United States Dollars)





Common Stock


Additional Paid-in


Accumulated Deficit During Exploration


Total EquityShares


Amount


Capital


Stage


(Deficit)$


$


$


$Balance at inception Jan. 26, 2005


-



-



-



-



-Common shares issued for cash at $0.00005 per share, February 9,2005


30,000,000



30,000



(28,500
)


-



1,500Common shares issued for cash at $0.00005 per share, February 17,2005


30,000,000



30,000



(15,000
)


-



15,000Common shares issued for cash at $0.00005 per share, March 7,2005


11,000,000



11,000



44,000



-



55,000Common shares issued for cash at $0.0125 per share, April 8,2005


400,000



400



4,600



-



5,000Shares issued in lieu of payment forInterest on promissory note, May 2006


10,833,333



10,833



-



-



10,833Cumulative Net (Loss)


-



-







(115,691
)


(115,691)Balance, December 31, 2006


82,233,333



82,233



5,100



(115,691
)


(28,358)Shares cancelled on acquisition


(10,833,333
)


(10,833)



-



-



(10,833)Shares issued in acquisition January 22, 2007


24,496,668



24,497



-21,141



-



3,356Common shares issued for cash at $1.50 per share, January 22, 2007


200,000



200



299,800



-



300,000Common shares reissued for cash at $0.50 per share, April 30, 2007


-



-



10,000



-



10,000Common shares issued for Jungo Rights at $0.50 June 1, 2007


50,000



50



24,950



-



25,000Foreign exchange


-



-



-







10,666Shares cancelled by shareholder


(30,000,000)



(30,000)



30,000







-0-Net (Loss) for the period


-



-







(480,487)



(480,487)Balance, December 31, 2007


66,146,668



66,147



348,709



(596,178)



(170,656)Common shares re-issued for services at $0.01 per share, May 22 , 2008


30,000,000



30,000











30,000Net (Loss) for the period














(633,870)



(633,870)Balance, December 31, 2008


96,146,668



96,147



318,709



(1,230,048)



(774,526)Net (Loss) for the period














(204,440)



(204,440)Balance, June  30, 2009


96,146,668



96,147



318,709



(1,434,488)



(978,966)





See notes to financial statements








F-5








Aultra Gold Inc.


An Exploration Stage Company


Notes to Financial Statements


June 30, 2009


(Stated in United States Dollars)





1.      Nature of Operations


a)  Organization





Aultra Gold Inc. (the “Company”) was incorporated under the laws of the State of Nevada on January 26, 2005 as Katie Gold Corp. and it was primarily engaged in the acquisition and exploration of mining properties until April 2006.  The Company’s fiscal year end is December 31.





On March 21, 2006, a Certificate of Amendment was filed with the Secretary of State in Nevada to change the name of the Company from Katie Gold Corp. to Morningstar Industrial Holdings Corp.  At this time, the Company was still engaged in the acquisition and exploration of mining properties.





On April 26, 2006, the Company filed Articles of Merger with the Secretary of State in Nevada to merge with New World Entertainment Corp., a private company incorporated in Nevada.  As a result of the merger, the Company changed its business and its name from Morningstar Industrial Holdings Corp. to New World Entertainment Corp.





On December 7, 2006, a Certificate of Amendment was filed with the Secretary of State in Nevada to change the name of the Company from New World Entertainment Corp. to Aultra Gold Inc.  The Nevada Secretary of Stated declared the amendment effective on January 18, 2007.





On January 22, 2007, the Company entered into a definitive Share Exchange Agreement (the “Agreement”) with Strategic Minerals Inc., a Nevada corporation, Aultra Gold Inc. (fka Dutch Mining (Canada) Ltd.) (“AGI”), a company formed under the laws of the Province of British Columbia, and certain other shareholders of AGI.  Pursuant
to the Agreement, which is subject to certain regulatory approval, the Company agreed to acquire 100% of the outstanding equity of AGI from the stockholders of AGI (the “AGI Shareholders”) in exchange for the issuance by the Company to the AGI Shareholders of one share of common stock, $0.001 par value (the “Common Stock”), of the Company for each issued common share of AGI (the “Acquisition”).  Therefore, subject to certain regulatory approval, the Company shall
be required to issue 24,496,668 shares of Common Stock to the AGI Shareholders (the “Consideration Shares”) and there will be approximately a total of 95,896,668 shares of Common Stock issued and outstanding subsequent to the Acquisition.  AGI was incorporated on January 20, 2006 in Canada under the Business Corporations Act of British Columbia.  AGI’s main business is acquiring and exploring gold and mineral properties with proven and probable reserves principally located
in Nevada and Montana, USA, with the objective of identifying gold and mineralized deposits economically worthy of continued production and/or subsequent development, mining or sale.





b)  Change of Business





On April 26, 2006, the Company filed Articles of Merger with the Secretary of State in Nevada to change its name from Morningstar Industrial Holdings Corp. and underwent a change in management and direction and was involved in the acquisition and licensing of online gaming technologies.





On May 12, 2006 the Company entered into a share exchange agreement with Liverpoole Inc., a privately-owned corporation organized under the laws of Antigua, for the acquisition of all of the issued and outstanding shares of Liverpoole in exchange for 25,000,000 shares of the Company, upon completion of the agreement.  In connection
therewith, in order to secure the right to enter into such agreement with Liverpoole, the Company entered into an agreement with World Mobile Network Corp., a publicly-held corporation, pursuant to which, upon the completion of the agreement, World Mobile Network Corp. agreed to assign its exclusive right to acquire Liverpoole to the Company in exchange for 20,000,000 shares of the Company.  As of December 31, 2006, these agreements were not been finalized.





Effective January 22, 2007 this transaction was terminated.





Effective January 22, 2007, all management and directorship changed.





F-6








Aultra Gold Inc.


An Exploration Stage Company


Notes to Financial Statements


June 30, 2009


(Stated in United States Dollars)


1.      Nature of Operations-continued





c)  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.





As shown in the accompanying financial statements, the Company has incurred a net loss of $1,434,488 for the period from January 26, 2005 (inception) to June 30, 2009.  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.





d)      Share Exchange Agreement with Liverpoole Inc.





On May 12, 2006 the Company entered into a share exchange agreement with Liverpoole Inc., a privately-owned corporation organized under the laws of Antigua, for the acquisition of all of the issued and outstanding shares of Liverpoole in exchange for 25,000,000 shares of the Company, upon completion of the agreement.  In connection
therewith, in order to secure the right to enter into such agreement with Liverpoole, the Company entered into an agreement with World Mobile Network Corp., a publicly-held corporation, pursuant to which, upon the completion of the agreement, World Mobile Network Corp. agreed to assign its exclusive right to acquire Liverpoole to the Company in exchange for 20,000,000 shares of the Company.  As of December 31, 2006, these agreements have not been finalized.





Effective January 22, 2007, termination of the May 12, 2006 Share Exchange Agreement with Liverpoole Inc. and World Mobile Network Corp.





2.
Significant Accounting Policies





a)      Basis of Accounting





These financial statements are prepared in accordance with generally accepted accounting principles (“GAAP”) in United States.  The Company has elected a December 31 year-end.  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 at 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, investments, accounts payable and accrued liabilities, the fair values of which approximate their carrying amounts due to the short-term nature of these instruments.








F-7








Aultra Gold Inc.


An Exploration Stage Company


Notes to Financial Statements


June 30, 2009


(Stated in United States Dollars)





2.
Significant Accounting Policies-continued





d)      Cash





For the purposes of the statement of cash flows, the company considers all funds held in its bank accounts and funds held in trust by


third parties as cash.





e)      Investment in mining properties





Land and Mining Claims – Land and mining claims are recorded at the lower of cost, less accumulated depletion, or fair value. Costs of developing mining properties (after completion of exploration) are capitalized. Exploration costs are expensed as incurred until the establishment of a commercially minable deposit or reserve which
can be economically and legally produced. When a mining property reaches the production stage, the related capitalized costs are amortized using the units of production method on the basis of proven and probable ore reserves. The Company’s mining properties are periodically assessed for impairment of value and any losses are charged to operations at the time of impairment.


f)       Impairment of Long-Lived Assets


The Company accounts for long-lived assets pursuant to Statement of Financial Accounting Standards (SFAS) No. 144, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of. The Company evaluates its land and mineral properties, buildings, machinery and equipment and other long-lived assets for impairment
at least annually and when indications of possible impairment exist and assesses their recoverability based upon anticipated future cash flows from the asset’s or group of assets’ use or sale. If changes in circumstances lead Company management to believe that any of its long-lived assets may be impaired, the carrying value of long-lived assets are reduced by the estimated excess of the carrying value over the fair value of the assets. Fair value is determined by the discounted future
cash flows from the asset or group of assets. No impairment was recognized during the years ended December 31, 2008 or 2007.





g)      Loss per Share





Basic loss per share is computed by dividing loss attributable to common shareholders by the weighted average number of common shares outstanding during the period.  Fully diluted loss per share is not disclosed as it is anti-dilutive.





h)      Management’s 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 disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts
of revenues and expenses during the reported periods.  Actual results could differ from those estimates.





i)      Share Capital





Share capital issued for non-monetary consideration is recorded at an amount based upon fair market value as estimated by management.











F-8








Aultra Gold Inc.


An Exploration Stage Company


Notes to Financial Statements


June 30, 2009


(Stated in United States Dollars)


2.
Significant Accounting Policies-continued





j)      Comprehensive Income





The Company applies Statement of Financial Accounting Standards No. 130 Reporting Comprehensive Income (SFAS No. 130).  Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non owner sources.  It includes all changes in
equity during a period except from those resulting from investments by owners and distributions to owners.





k)      Income taxes





Deferred Income taxes are provided for temporary differences between the financial reporting and tax basis of assets and liabilities using enacted tax laws and rates for the years when the differences are expected to reverse.





l)      Stock based compensation





The Company accounts for stock-based compensation in accordance with SFAS No. 123 for “Accounting for stock-based compensation” and related interpretations.





The Company’s Board of Directors agreed to the adoption of the Stock Option Plan and ratified it on January 25, 2007 effective as of February 1, 2007 providing the issuance of up to 5,225,000 shares of Common Stock of the Company to the officers, directors, employees and consultants of the Company an/or its subsidiaries.  Pursuant
to the Stock Option Plan, the Company granted options to purchase an aggregate of 200,000 shares of Common Stock at $1.50 per share to the newly appointed directors and officers that held options to purchase ordinary shares of the Company following the completion of the acquisition, as well as to the newly appointed directors and officers of the Company.  These options were cancelled effective January 1, 2008.





On May 6, 2008, the Board of Directors of Aultra Gold, Inc. (the "Company"), approved a 2008 Stock Option Plan which provides  up to 10,000,000 common shares be made available to certain individuals as an incentive.  The plan has a vesting period of 36 month as follows: 10% at the end of six months, an additional 10% at
the end of twelve months, an additional 15% at the end of eighteen months, an additional 15% at the end of twenty four months, an additional 25% at the end of thirty months and finally an additional 25% at the end of thirty-six months





As part of this plan the Board granted 6,500,000 options at the then market price of $.14 per share.





m)                 Asset retirement obligations





Asset retirement obligations requires recognition of a legal liability for obligations relating to retirement of property, plant and equipment, and arising from the acquisition, construction, development, or normal operation of those assets. Such asset retirement cost, must be recognized at fair value, when a reasonable estimate of fair value
can be estimated, in the period in which it is incurred, added to the carrying value of the asset, and amortized into income on a systematic basis over its useful life.





As at June 30, 2009, the Company does not have any asset retirement obligations.





3.      Investment





Details are as follows:


Number of shares


Market Value


Cost$


$Lomiko Resources Inc. (formerly Lomiko Enterprises Ltd.)


20,000



6,232



8,849


This investment represents a minority interest of less than 10%.  The shares were valued at market as stated as at June 30, 2009.








F-9











Aultra Gold Inc.


An Exploration Stage Company


Notes to Financial Statements


June 30, 2009


(Stated in United States Dollars)





4.
Acquisition of Subsidiary





On January 22, 2007, the Company entered into a definitive Share Exchange Agreement (the “Agreement”) with Strategic Minerals Inc., a Nevada corporation, Aultra Gold Inc. (fka Dutch Mining (Canada) Ltd.) (“AGI”), a company formed under the laws of the Province of British Columbia, and certain other shareholders of AGI.  Pursuant
to the Agreement, which is subject to certain regulatory approval, the Company agreed to acquire 100% of the outstanding equity of AGI from the stockholders of AGI (the “AGI Shareholders”) in exchange for the issuance by the Company to the AGI Shareholders of one share of common stock, $0.001 par value (the “Common Stock”), of the Company for each issued common share of AGI (the “Acquisition”).  Therefore, subject to certain regulatory approval, the Company shall
be required to issue 24,496,668 shares of Common Stock to the AGI Shareholders (the “Consideration Shares”) and there will be approximately a total of 95,896,668 shares of Common Stock issued and outstanding subsequent to the Acquisition.





The purchase method of accounting has been applied with the shares issued as consideration being recorded at $3,356 that being the value given up after considering price fluctuations, liquidity issues and exchange rates.





At the date of the acquisition, the value of the identifiable net assets of AGI was as follows:





Assets      Cash

$
256,316Investment in Lomiko


8,066Accounts receivable and accrued receivables


77,541$
341,923Liabilities     Accounts payable and accrued payables

$
38,981Intercompany transactions


299,586338,567Total purchase price

$
3,356








5.
Related Party Balances and Transactions





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





As at December 31, 2007, the Company has a receivable MB Primes Management Ltd. (“MB Primes”), a company with directors in common, $61,995 which was written off during the quarter ended March 31, 2008.





As at December 31, 2007 the Company has a receivable with Bio Remediation Inc. (“Bio Remediation”), a company with directors in common at that time, $27,056 which was written off during the quarter ended March 31, 2008.





As at June 30, 2009 the Company owes it’s President a total of $423,330  which is a combination of unpaid salary of $176,878


and $336,452 of Company expenses paid for by the President.





The Company acquired its Basin Gulch Property from a private company, one principal of whom is a common director with the Company.  Refer to Note 6.














F-10











Aultra Gold Inc.


An Exploration Stage Company


Notes to Financial Statements


June 30, 2009


(Stated in United States Dollars)





6.      Mineral Property Interests





a)      Basin Gulch Property,  Montana, USA





On May 31, 2006, the Subsidiary Aultra Gold Inc. (formerly known as Dutch Mining (Canada) Ltd.) acquired Basin Gulch Property, consisting of eleven patented mineral claims of 217.9 acres, paid by the issuance of 20,000,000 shares of the Company.  The share issuance has been recorded at the carrying costs of the property to the optionor,
as the optionor is a related party to the company and as there has been no substantial change in ownership of the property by the optionors (nominal amount), who received 20,000,000 shares of the 24,496,668 shares outstanding of the Subsidiary.





The three-stage agreement is structured as follows:





Stage 1 initial payment:


The Subsidiary paid an initial cash payment of $10,000 and must fulfill the following:


i) on or before July 30, 2006 report all the exploration and studies conducted on the Property.





Stage 2 advance production royalties:


To further evaluate and develop the minerals, the Subsidiary must fulfill the following


i)  on or before June 10, 2006, the Company must make a cash payment of $15,000 (paid);


ii) on or before September 10, 2006 the Company must make a cash payment of $25,000 (paid);


iii) the Company must make a cash payment of $50,000 due on March 10 and September 10 of each year until production has commenced.





Stage 3 production royalties:


Upon commencement of production, the Subsidiary will pay the greater of:


i)      a twice annual cash payment of $50,000 due on March 10 and September 10 of each year;


ii)     3% of the gross sales receipts of the gold and silver sold, due semi-annually on March 10 and September 10 of each year;





Should production be suspended for a period of 6 months or longer, the twice annual advance production royalty of $50,000 listed above will resume.





Upon the completion of payments totaling US$8,000,000, the Subsidiary will have purchased the mineral rights to this property.  In the current period, payments of $50,000 (paid) have be made, which satisfy this agreement.





b)      Jungo Property, Nevada, USA





On June 1, 2007, the Company entered into a formal binding Agreement of Purchase and Sale (the “Agreement”) with W.R. Hansen, an individual (the “Seller”), pursuant to which the Company acquired from the Seller certain mining claims together with all improvements and all equipment owned by the Seller located thereon,
located in Humboldt County, State of Nevada (the


“Property”).  In consideration of the purchase of the Property, the Company agreed to (i) reimburse the Seller for all staking and filing costs related to the Property, (ii) issue the Seller 50,000 restricted shares of the Company’s common stock, $0.001 par value
per share (the “Common Stock”), valued at $0.50 per share, (iii) upon its sole determination of sufficient mineralization to place the Property in production, to further issue to the Seller additional 50,000 restricted shares of the Company’s Common Stock, such that the Company shall make such a determination not later than 30 days following the acquisition of the data contemplated by paragraph 3.3 of the Agreement, (iv) not later than 10 days following the date the Property is placed into development
for production of metals, to issue to the Seller an additional 100,000 restricted shares of the Company’s Common Stock, and (v) as further consideration after the Property is placed in production, to direct to the Seller a monthly Net Smelter Royalty of 2% upon all gold, silver, copper, or other metals (the “Metals”) produced and sold from the Property (each royalty payment shall be paid not later than 30 days following the last day of the month in which the metals were produced and sold).










F-11





Aultra Gold Inc.


An Exploration Stage Company


Notes to Financial Statements


June 30, 2009


(Stated in United States Dollars)





7.
Share Capital





a)
Details of share capital are as follows:


Authorized: 500,000,000 common shares with a par value of $.001


Number ofShares


Amount$Issued:Balance – inception January 26, 2005


-



-Common Shares issued


71,400,000



71,400Shares issued in lieu of promissory note


10,833,333



10,833Balance-December 31, 2006


82,233,333



82,233Restricted common shares issued


24,496,668



24,497Restricted Common Shares issued for Jungo


50,000



50Common Shares issued


200,000



200Shares cancelled


(40,833,333
)


(40,833
)Balance – December 31, 2007 (d)


66,146,668



66,147Restricted Common Shares issued for Services


30,000,000



30,000Balance – December 31, 2008


96,146,668



96,147Balance – June 30, 2009


96,146,668



96,147








b)
On January 23, 2007, the Company entered into a Private Placement Agreement with 555 Holdings LLC, a Nevada limited liability company (“555 LLC”), whereby it sold 200,000 units (each a “Unit”, and collectively the “Units”) to 555 LLC at a price of $1.50 per Unit, for gross proceeds of $300,000.  Each
Unit consists of one share of Common Stock of the Company and one non-transferable Common Stock purchase warrant (a “Warrant”).  Each Warrant will entitle 555 LLC to purchase one share of the Common Stock of the Company for a period of one year commencing from the Closing Date at an exercise price of $2.50 per share.c)
Refer to note 9.


8.       Income Taxes





A reconciliation of income taxes at statutory rates is as follows:


June 30, 2009Net loss

$
(204,440)Total income taxes


-0-





The Company has non-capital losses of approximately $269,173, which are available to reduce future taxable income in Canada and which expire in 2027. Subject to certain restrictions the Company also has mineral property expenditures of approximately $100,000 available to reduce taxable income in future years. The Company has not recognized
any future benefit for these tax losses and resource deductions, as it is not considered likely that they will be utilized.










F-12











Aultra Gold Inc.


An Exploration Stage Company


Notes to Financial Statements


June 30, 2009


(Stated in United States Dollars)








8.       Income Taxes-continued





Income Tax Operating
Loss Carry ForwardAmount


Expiry Date2005

$
24,981



20252006

$
90,710



20262007

$
480,487



20272008

$
633,870



2028Total income tax operating loss carry forward

$
1,230,048








9.
Commitments





None




10.           Recent Accounting Pronouncements





In February 2007, the Financial Accounting Standards Board (the “FASB”) issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (SFAS 159).  SFAS 159 allows the company to choose to measure many financial assets and financial liabilities at fair value.  Unrealized gains
and losses on items for which the fair value option has been elected are reported in earnings.  SFAS 159 is effective for fiscal years beginning after November 15, 2007.  The Company is currently evaluating the requirements of SFAS 159 and the potential impact on the Company’s financial statements.





In September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans – an amendment of FASB Statements No. 87, 88, 106 and 132(R)” (SFAS 158”). SFAS 158 requires an employer that sponsors one or more single-employer defined benefit plans to (a) recognize
the overfunded or underfunded status of a benefit plan in its statement of financial position, (b) recognize as a component of other comprehensive income, net of tax, the gains or losses and prior service costs or credits that arise during the period but are not recognized as components of net periodic benefit cost pursuant to SFAS 87, “Employers’ Accounting for Pensions”, or SFAS 106, “Employers’ Accounting for Postretirement Benefits Other Than Pensions”, (c) measure defined
benefit plan assets and obligations as of the date of the employer’s fiscal year-end, and (d) disclose in the notes to financial statements additional information about certain effects on net periodic benefit cost for the next fiscal year that arise from delayed recognition of the gains or losses, prior service costs or credits, and transition asset or obligation. SFAS 158 is effective for the Company’s fiscal year ending December 31, 2007. The adoption of SFAS No. 158 is not expected to have
a material impact on the Company’s financial position, results of operations or cash flows.








F-13








Aultra Gold Inc.


An Exploration Stage Company


Notes to Financial Statements


June 30, 2009


(Stated in United States Dollars)





10.           Recent Accounting Pronouncements-continued





In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurement" ("SFAS 157"). The Statement provides guidance for using fair value to measure assets and liabilities. The Statement also expands disclosures about the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value,
and the effect of fair value measurement on earnings. This Statement applies under other accounting pronouncements that require or permit fair value measurements. This Statement does not expand the use of fair value measurements in any new circumstances. Under this Statement, fair value refers to the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the entity transacts. SFAS 157 is effective for the Company
for fair value measurements and disclosures made by the Company in its fiscal year beginning on January 1, 2008.





In February 2006, the FASB issued SFAS No. 155, “Accounting for Certain Hybrid Financial Instruments”, which amends SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”
and SFAS No. 140.  SFAS No. 155 permits fair value measurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation, establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or hybrid financial instruments containing embedded derivatives.  The adoption of SFAS No. 155 is not expected to have a material impact on the Company’s financial
position, results of operations or cash flows.

















F-14







ITEM 3. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.





The following discussion should be read in conjunction with our audited 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.





All such forward-looking information involves risks and uncertainties and may be affected by many factors, some of which are beyond our control. These factors include:





·
Develop the reputation of AGI as a successful mining property acquisition and exploration company;·
Successfully identify and exploit mining opportunities;·
Develop viable strategic alliances; and·
Maintain sufficient volume of successful new mining opportunities.·
Regulatory, competitive or other economic influences.





Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Factors that may cause actual results, our performance
or achievements, or industry results, to differ materially from those contemplated by such forward-looking statements include without limitation:





·Our ability to obtain additional funding as the exploration for commercially exploitable mineral deposits or reserves, as well as general, legal, accounting and administrative expenses associated with our reporting
requirements with the SEC, is expected to require from us total expenditures over the next two years in an approximate amount of $21,850,000.


·Our ability to obtain additional funding as we presently do not have sufficient funds to pursue our stated plan of


operation for the next twelve-month period.


·Our ability to be successful in our acquisition and exploration of gold and mineral properties activities.


·Our ability to attract and retain management.


·The intensity of competition for commercially exploitable mineral deposits or reserves; and


·existing and potential performance issues with suppliers and customers;


·governmental export and import policies;


·global trade policies;


·worldwide political stability and economic growth;


·potential entry of new, well-capitalized competitors into our markets;


·changes in our capital structure and cost of capital; and


·General economic conditions.





The words “believe”, “expect”, “anticipate”, “intend”, “project”, “estimate” and “plan” or the negative or other variations, or by discussions of strategy that involve risks and uncertainties, identify forward-looking statements. We urge you to be cautious
of the forward-looking statements, that such statements, which are contained in this Annual Report, reflect our current beliefs with respect to future events and involve known and unknown risks, uncertainties and other factors affecting our operations, market growth, services, products and licenses. No assurances can be given regarding the achievement of future results, as actual results may differ materially as a result of the risks we face, and actual events may differ from the assumptions underlying the statements
that have been made regarding anticipated events.





References in this Annual Report on Form 10-KSB (the “Annual Report”) to “we”, “us,” “our,” “the Company,” “Aultra Gold” and “AGI” mean Aultra Gold Inc. and our subsidiaries, unless the context otherwise requires.








4








Item 1. Description of Business





Description of Aultra Gold, Inc (fka New World Entertainment Corp.) Business





Organizational History





Aultra Gold Inc. (formerly known as New World Entertainment Corp. and Morningstar Industrial Holdings Corp.) was incorporated under the laws of the State of Nevada on January 26, 2005 as Katie Gold Corp. and it was primarily engaged in the acquisition and exploration of mining properties until April 2006.





On March 10, 2006, our shareholders unanimously adopted a resolution to conduct a forward split of our common stock on a 20 share for 1 share basis, payable as a dividend.  The record date for the dividend was Friday, March 17, 2006, and the pay date was Monday, March 20, 2006.  As a result of the dividend, the amount of our issued
and outstanding common stock increased from 3,570,000 shares to 71,400,000 shares.





On March 21, 2006, a Certificate of Amendment was filed with the Secretary of State in Nevada to change our name from Katie Gold Corp. to Morningstar Industrial Holdings Corp. At this time, we were still engaged in the acquisition and exploration of mining properties.





On April 26, 2006, we filed Articles of Merger with the Secretary of State in Nevada to merge with New World Entertainment Corp., a private company incorporated in Nevada. As a result of the merger, we changed its name from Morningstar Industrial Holdings Corp. to New World Entertainment Corp and underwent a change in management.





On May 26, 2006, we entered into a Loan Agreement under which 10,833,333 additional shares of our common stock were to be issued (as further described below). For reasons discussed below we subsequently decided to terminate such arrangement without further obligations whatsoever, and the resolution to issue the 10,833,333 shares of common
stock was revoked without such shares issuance taking place.





In addition, for reasons discussed below on January 22, 2007, we entered into a Share Exchange Agreement to issue 24,496,668 shares of our common stock and we expect a total of 95,896,668 shares of commons tock will be issued subsequent to this issuance (which is reduced from the amount of 106,730,001 shares previously reported under an 8K
Report filed February 28, 2007 by cancellation of 10,833,333 common shares associated with the termination of the May 26, 2006 Loan Agreement as discussed below).





On January 18, 2007, we filed a Certificate of Amendment to increase the number of shares of Common Stock which we are authorized to issue from 75,000,000 shares of Common Stock to 150,000,000 shares.





On March 22, 2007, we filed a Certificate of Correction to correctly provide that the number of shares of Common Stock which we are actually authorized to issue is 500,000,000 shares and not 75,000,000 shares. The increase to 500,000,000 was approved by our shareholders holding majority of our issued and outstanding shares of common stock
as of April 26, 2006, and our filing of a Certificate of Amendment on January 18, 2007, erroneously referenced that we were only authorized to issue up to 150,000,000 shares of our common stock.





As discussed further above and below, on April 26, 2006, we filed Articles of Merger with the Secretary of State in Nevada to merge with New World Entertainment Corp., a private company incorporated in Nevada. At the time of the merger with New World Entertainment Corp., we intended to pursue acquisition and licensing of online gaming technologies;
however, pursuant to the terms of the Release Agreement as more fully described forth below, we have since abandoned the strategy of acquiring and licensing of online gaming technologies.





On October 22, 2007 one of our shareholders, Aultra Gold Capital, agreed to cancel 30,000,000 shares which reduced the number of outstanding shares to 65,293,334 as of that date. However in April 2008 the Company agreed to re-issue those shares to Rauno Perttu.





Our fiscal year end is December 31.








5





Description Of Events Leading Up To, And Including, The Share Exchange Agreement Dated January 22, 2007 - Via Which We Acquired Aultra Gold Inc. (Canada)





Organizational History





Aultra Gold Inc. (Canada) (hereinafter referred to as “AGI”) was incorporated on January 20, 2006 as Dutch Mining (Canada) Ltd. under the laws of Canada, pursuant to the Business Corporations Act of British Columbia. It completed a formal name change to Aultra Gold Inc. on December 8, 2006. On January 22, 2007 (the “Closing
Date”), we entered into a definitive Share Exchange Agreement (the "Agreement") with Strategic Minerals Inc., a Nevada corporation, AGI and certain other shareholders of AGI. Pursuant to the Agreement we agreed to acquire up to 100% of the outstanding equity of AGI from the stockholders of AGI (the “AGI Shareholders”) in exchange for the issuance by us to the AGI Shareholders of one share of our common stock, $0.001 par value (the “Common Stock”), for each issued common share of
AGI (the “Acquisition”).





General Overview of Business





AGI is engaged in the business of acquiring and exploring gold and mineral properties with proven and probable reserves principally located in Nevada and Montana, USA, with the objective of identifying gold and mineralized deposits economically worthy of continued production and/or subsequent development, mining or sale.





On May 31, 2006, AGI acquired the Basin Gulch property in Granite County, Montana, from Strategic Minerals, Inc. a Nevada corporation (“Strategic”) whereby Strategic granted AGI the exclusive right to explore, evaluate, develop, and mine the Basin Gulch Property. In consideration of the acquisition of the Basin Gulch Property,
AGI issued to Strategic 20,000,000 of its common shares. Strategic is a related party to AGI.





Recent Developments





Change in Authorized Share Capital





On January 18, 2007, we filed a Certificate of Amendment to increase the number of shares of Common Stock which we are authorized to issue from 75,000,000 shares of Common Stock to 150,000,000 shares.





On March 22, 2007, we filed a Certificate of Correction to correctly provide that the number of shares of Common Stock which we are actually authorized to issue is 500,000,000 shares of Common Stock and not 75,000,000 shares. The increase to 500,000,000 was approved by our shareholders holding majority of our issued and outstanding shares
of common stock as of April 26, 2006, and our filing of a Certificate of Amendment on January 18, 2007, erroneously referenced that we were only authorized to issue up to 150,000,000 shares of our common stock.





On October 22, 2007 one of our shareholders, Aultra Gold Capital, agreed to cancel 30,000,000 shares which reduced the number of outstanding shares to 65,293,334 as of that date. In April 2008 it was agreed that those shares would be re-issued to Mr. Rauno Perttu.





Other Information





On April 6, 2006 Robert Biagioni resigned as our President, Chief Executive Officer and as a member of our board of directors. In addition, on that date Victoria Arnott also resigned as a member of our board of directors.





On April 6, 2006 Michelle Dobson was appointed as our President, Chief Executive Officer and sole director to fill the corresponding vacancies.





Effective January 22, 2007, Ms. Dobson resigned from her positions as our Chief Executive Officer, President, Chief Financial Officer and sole director. Effective as of equal date, Mr. Rauno Perttu was appointed as our President, Secretary and Director to fill the corresponding vacancies created. In addition, effective as of the same date,
Messrs. Edward Lawson, Richard Crofts and Jeremy Caddy were also appointed as our directors, and Ms. Baljinder Bhullar was appointed as our Chief Financial Officer to fill the corresponding vacancy created.








6





On January 23, 2007 we also completed a private placement for 200,000 units (the “Units”) at a price of $1.50 per Unit for aggregate gross proceeds of $300,000. Each Unit consists of one share of our Common Stock and one warrant (the “Warrant”) entitling the purchaser to purchase one share of the our Common Stock at
an exercise price of $2.50 per share for a period of one year commencing from the Closing Date.





On March 22, 2007 Jeremy Caddy resigned as our director and Ms. Baljinder Bhullar was appointed as a member of our board of directors to fill the corresponding vacancy created.





On October, 12, 2007 Mr. Edward Lawson resigned as a director of the Company.





On October 12, 2007 Mr. John Yee was appointed as a Director, replacing Mr. Lawson who had resigned on October 12, 2007and Secretary, replacing Mr. Perttu who resigned as Secretary on the same date.





On November 6, 2007 Ms. Balhjinder Bhullar resigned as Chief Financial Officer and a director.  Mr. Rauno Perttu was appointed Interim Chief Financial Officer until the Company could find a replacement.





Share Exchange Agreement





On January 22, 2007 (the “Closing Date”) we entered into a definitive Share Exchange Agreement (the "Agreement") with Strategic Minerals Inc., a Nevada corporation, AGI and certain other shareholders of AGI. Pursuant to the Agreement, which is subject to certain regulatory approval, we agreed to acquire 100% of the outstanding
equity of AGI from the AGI Shareholders, and AGI Shareholders agreed to assign and transfer to us 98.2% of the outstanding equity of AGI, in exchange for the issuance by us to the AGI Shareholders of one share of our Common Stock for each issued common share of AGI (the “Acquisition”). As of the date of this Annual Report, we are continuing to negotiate with the remaining AGI Shareholders to acquire the remaining portion of the outstanding equity of AGI not acquired upon the execution of the Agreement.
Therefore, subject to certain regulatory approval, we would be required to issue up to 24,496,668 shares of our Common Stock to the AGI Shareholders (the “Consideration Shares”) and there will be approximately 95,896,668 shares of our common stock issued and outstanding subsequent to the issuance of the Consideration Shares (which is reduced from the amount of 106,730,001 shares previously reported under in our Current Report on Form 8-K filed on February 28, 2007 due to cancellation of 10,833,333
shares associated with the termination of the May 26, 2006 Loan Agreement as discussed below). AGI’s main business is acquiring and exploring gold and mineral properties with proven and probable reserves principally located in Nevada and Montana, USA, with the objective of identifying gold and mineralized deposits economically worthy of continued production and/or subsequent development, mining or sale.





Contemporaneously with the Acquisition, we entered into a Registration Rights Agreement with the AGI Shareholders pursuant to which we agreed to use our best efforts to prepare and file a registration statement with the SEC on Form SB-2 (the “Registration Statement”) registering for offer and sale 17,160,000 of the Consideration
Shares (the “Registrable Securities”) within 120 days of the Closing Date, and to use our best efforts to cause the Registration Statement to become effective under the Securities Act of 1933, as amended (the “Securities Act”) no later than the earlier of (i) 240 days after the Closing Date and (ii) the sixth (6th) business day following the date on which we are notified by the SEC that such Registration Statement will not be reviewed or is no longer subject to further review and comments
(subject to a 20 day extension if fully reviewed) (the "Effective Date"). The Registration Statement may also at our discretion and with the consent of the required investors include our securities other than the Registrable Securities.





In addition, on January 23, 2007, we entered into a Subscription Agreement with 555 Holdings LLC, a Nevada limited liability company (“555 LLC”), whereby we sold 200,000 units (each a “Unit”, and collectively the “Units”) to 555 LLC at a price of $1.50 per Unit, for gross proceeds of $300,000. Each Unit
consists of one share of Common Stock and one non-transferable Common Stock purchase warrant (the “Warrant”). Each Warrant will entitle 555 LLC to purchase one share of our Common Stock for a period of one year commencing from the Closing Date at an exercise price of $2.50 per share.





The aforementioned transactions resulted in a change in control of our company. As a result of the Agreement, (i) AGI became our wholly-owned subsidiary, (ii) we succeeded to the business of AGI, and (iii) we underwent a change of our management (as further provided below) and business direction, and will from the Closing Date be solely involved
in AGI’s business of acquiring and exploring gold and mineral properties with proven and probable reserves principally located in Nevada and Montana, USA, with the







7







objective of identifying gold and mineralized deposits economically worthy of continued production and/or subsequent development, mining or sale. Furthermore, in connection with the foregoing on January 18, 2007, we amended our articles of incorporation to change our name from New World Entertainment Corp. to Aultra Gold Inc (the “Amendment”).
The Nevada Secretary of State declared the Amendment effective as of January 18, 2007. In addition, as a result, our trading symbol has changed from NWWE.OB to AGDI.OB.





We claimed an exemption from the registration requirements of the Securities Act for the private placement of the aforementioned securities pursuant to Section 4(2) of the Securities Act and/or Regulation D promulgated thereunder since, among other things, the transaction did not involve a public offering, the investors are accredited investors
and/or qualified institutional buyers, the investors had access to information about our company and their investment, the investors took the securities for investment and not resale, and we took appropriate measures to restrict the transfer of the securities.





Termination of a Material Definitive Agreement.





On April 26, 2006, we filed Articles of Merger with the Secretary of State in Nevada to merge with New World Entertainment Corp., a private company incorporated in Nevada. As a result of the merger, we changed its name from Morningstar Industrial Holdings Corp. to New World Entertainment Corp and underwent a change in management. At the time
of the merger with New World Entertainment Corp., we intended to pursue acquisition and licensing of online gaming technologies; however, pursuant to the terms of the Release Agreement as more fully set forth above, we have since abandoned the strategy of acquiring and licensing of online gaming technologies.





We have resolved to focus our business on continuing to engage in the acquisition, and exploration of mineral properties with a view to exploiting any mineral deposits it discovers that demonstrate economic feasibility. In furtherance of this focus, the following transactions have been terminated:





Termination of May 2006 Loan Agreement





On May 3, 2006, we entered into a $3,250,000 secured Loan Agreement (the "Loan Agreement") with 555 LLC and Global Developments Inc., a Delaware company (“Global”, collectively referred to as the "Lenders"), pursuant to which Loan Agreement we issued $3,250,000 in aggregate principal amount of promissory notes (collectively the
"Notes") to the Lenders. In lieu of the interest on the Notes, we agreed to simultaneously with the issuance of the Notes to issue three and one third restricted shares of our Common Stock for every dollar loaned by the Lenders, amounting to 10,833,333 shares of Common Stock (the "Shares"). We claimed an exemption from registration requirements of the Securities Act pursuant to Section 4(2) of the Securities Act and/or Regulation D promulgated thereunder based upon the representations of the Lenders that they
are each an "accredited investor" (as defined under Rule 501 of Regulation D) and that they were purchasing such securities without a present view toward a distribution of the securities.





The proceeds of the Loan Agreement were used in connection with a further loan arrangement with Liverpoole, Inc., a privately-owned corporation organized under the laws of Antigua (“Liverpoole”), whereby the amount of $3,250,000 (the “Loan Amount”) would have been repaid to us by Liverpoole. On May 7, 2007 with quarterly
installments due to us from Liverpoole in the amount $500,000 each, and the first quarterly payment due on August 3, 2006, Liverpoole defaulted under all of its repayment obligations to us, and further failed to complete its obligations under a certain share exchange agreement as set forth below.





Termination of the Share Exchange Agreement with Liverpoole Inc. and World Mobile Network Corp.





On May 12, 2006, in connection with the Loan Agreement, we entered into a share exchange agreement with Liverpoole (the “Liverpoole Share Exchange Agreement”) for the acquisition of all of the issued and outstanding shares of Liverpoole in exchange for 25,000,000 shares of our Common Stock. In connection therewith, in order to
secure the right to enter into such agreement with Liverpoole, we entered into an agreement with World Mobile Network Corp., a publicly-held corporation (“World Mobile”), pursuant to which World Mobile agreed to assign us its exclusive right to acquire Liverpoole in exchange for 20,000,000 shares of our Common Stock.





Pursuant to its business plan, Liverpoole intended to enter into an agreement to purchase a 75% interest in various assets of a privately owned corporation organized under the laws of Antigua, which sought to acquire an interest in an online gaming business. Such assets included the rights to URL's, customer lists, certain software and licenses,
as well as the rights to certain Internet domain names. In order to secure the right to enter into such agreement with Liverpoole, we entered into the aforementioned arrangement with World Mobile. Subsequently the principal of Liverpoole refused to complete his obligations under the Liverpoole Share Exchange Agreement.




8






On September 30, 2006 the US Congress passed H.R. 4954 the Safe Port Act, including “The Unlawful Internet Gambling Enforcement Act of 2006”, which was signed by President Bush on October 13, 2006, prohibiting acceptance of any payment instrument for unlawful Internet gambling. In consequence, we, 555 LLC, Global, Liverpoole and
World Mobile, the parties to the aforementioned agreements, including the Loan Agreement and the Liverpoole Share Exchange Agreement (collectively the “Agreements”), entered into a certain Settlement and Release Agreement dated December 8, 2006 (the “Release Agreement”), terminating all rights and obligations as they related to us under the Agreements. Specifically, (i) Global an d 555 LLC each  irrevocably released us from our obligation to repay the Loan Amount to Global  and
555 LLC, and each further  released Liverpoole  from all obligations associated with the Loan





Amount, including any right to demand repayment of the Loan Amount from Liverpoole; (ii) we released Liverpoole from all obligations associated with the Loan Amount, including any right to demand repayment of the Loan Amount or to demand an exchange of the shares from Liverpoole pursuant to the Liverpoole Share Exchange Agreement; (iii)
Liverpoole released us from all of our obligations associated with the Liverpoole Share Exchange Agreement, including any right to demand an exchange of the shares pursuant to the Liverpoole Share Exchange Agreement; and (iv) World Mobile released us from all of our obligations associated with the Loan Amount and the Liverpoole Share Exchange Agreement, including any right to demand an exchange of the shares pursuant to the Liverpoole Share Exchange Agreement. Pursuant to the terms of the Release Agreement,
we terminated our relationship, rights and all obligations previously associated with Liverpoole, World Mobile or the privately owned Antiguan entity and any associated interests in any online gaming businesses and further abandoning the strategy of acquiring and licensing of online gaming technologies.





DESCRIPTION OF AGI’S BUSINESS





General Overview of Business





AGI is engaged in the business of acquiring and exploring gold and mineral properties with proven and probable reserves principally located in Nevada and Montana, USA, with the objective of identifying gold and mineralized deposits economically worthy of continued production and/or subsequent development, mining or sale. On May 31, 2006, AGI
acquired the Basin Gulch property in Granite County, Montana, from Strategic Minerals, Inc. a Nevada corporation (“Strategic”) whereby Strategic granted AGI the exclusive right to explore, evaluate, develop, and mine the Basin Gulch Property. In consideration of the acquisition of the Basin Gulch Property, AGI issued to Strategic 20,000,000 of its common shares.





Mining Lease Agreement





On May 31, 2006, AGI entered into a Mining Lease Agreement with Strategic, whereby Strategic granted AGI the exclusive right to explore, evaluate, develop, and mine the Basin Gulch Property, Montana, in consideration of AGI issuing to Strategic 20,000,000 common shares of its capital stock. The advanced exploration and test mining project
consists of eleven patented mineral claims, surrounded by the Deer Lodge National Forest, totaling about 217.9 acres. The claims are all located at the head of Basin Gulch, on the northern slopes of the West Fork Buttes, within the Sapphire Range of the Western Montana Rocky Mountains with proven and probable reserves of 426,135 ounces as estimated by an independent geologist. The Company acquired its Basin Gulch Property from a private company, principals of whom were also common directors with the Company.





The three-stage Mining Lease Agreement is structured as follows:





Stage 1 initial payment:





The Company paid its initial cash payment of $10,000 and prior to July 30, 2006 satisfied its reporting obligations to Strategic regarding all the exploration and studies conducted on the premises of Basin Gulch Property.





Stage 2 advance production royalties:





To further evaluate and develop the minerals, the AGI fulfilled the following obligations:





i) by June 10, 2006, it paid a cash payment of $15,000 directly to the underlying property owner;


ii) by September 10, 2006 made a cash payment of $25,000 directly to the underlying property owner;


iii) a cash payment of $50,000 will become due and payable on March 10, 2007 and September 10, 2007 and thereafter on those anniversary dates of each year until production has commenced.







9





Stage 3 production royalties:





Upon commencement of production, AGI must pay the greater of:





i)a twice annual cash payment of $50,000 due on March 10 and September 10 of each year; or





ii)3% of the gross sales receipts of the gold and silver sold, due semi-annually on March 10 and September 10 of each year;





Should production be suspended for a period of 6 months or longer, the twice annual advance production royalty of $50,000 listed above resume. Upon the completion of payments totaling $8,000,000, AGI will have purchased the mineral rights to this property. In the current 2007 fiscal, payments totaling $50,000 have be made directly to the underlying
property owner, which satisfy AGI’s interpretation of its minimum obligations of AGI under the Mining Lease Agreement and are consistent with the interpretation of Mining Lease Agreement since it was signed in 2006 AGI believes that the issuance of 20,000,000 shares valued at $0.50 satisfies its purchase obligation with Strategic Minerals, Inc.  There are two principals involved in Strategic.   In February 2008 one principal in Strategic claimed that the Company was in default and
that individual had taken possession of the property by means of a “private foreclosure”.  AGI and the other principal of Strategic believe the attempted action is without merit and intend to vigorously defend its rights to the property.





Description of AGI’s Properties





Description of Basin Gulch Property, Montana





The Basin Gulch area has historically been mined by traditional placer methods, including hydraulic mining since the early part of the last century. The remains of this mining activity still exist on the site in the form of collapsed short adits, excavations, mine ponds, remains of log cabins and out buildings, and log and dirt dams and hydraulic
diversion structures. Cable Mountain Mine Inc. (CMM), who discovered the Basin Gulch deposit, explored the lode source of the placer gold from the late 1980s until 1997. To date, 323 reverse circulation and core holes have been drilled on the property for a total of 89,800 feet, with holes ranging from 80 feet to 1,050 feet in depth. In addition, 40 test trenches with a total length of 17,000 feet have taken place. In addition to the drilling, there have been two geophysical surveys, soil geochemistry surveys,
topographic surveys, and geologic mapping projects carried out on the property. A large portion of these studies, in whole, or in part, was reviewed in preparation of this report.





The Basin Gulch Project is an advanced stage exploration project with a substantial investment already made in previous exploration work on the property. However, no mining has yet taken place on the site, beyond the older placering and very limited lode prospect pits. In addition, due diligence studies have been carried out on the Basin Gulch
Mine property over the last 20 years or so by a number of investigators, and a number of publicly-available reports have been produced by the Montana Bureau of Mines and Geology (MBMG) and the USGS on the general geology of the area.





A NI 43-101, Independent Third-Party Evaluation, prepared by David Brown and Associates (“DBA”) has been provided for the Basin Gulch project, which is an advanced exploration and test mining gold porphyry project. 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.Basin Gulch consists of eleven patented mining claims, surrounded by the Deer Lodge National
Forest, totaling about 217.9 acres and 50 unpatented claims totaling approximately 900 acres. A number of consultants, exploration companies, and Federal and State of Montana Agencies, other than DBA, prepared the geological and mineralogical models of Basin Gulch. The claims are all located at the head of Basin Gulch, on the northern slopes the West Fork Buttes, within the Sapphire Range of the Western Montana Rocky Mountains. The property is about 19 road miles west of the town of Philipsburg, Montana, within
the Rock Creek Mining District of Granite County. The property is owned by the Metesh Family of Philipsburg, and is under lease agreement to AGI. The Basin Gulch area is historically a placer mining area lacking a historical association with an operating lode mine. The local placers have been operated since before the turn of the 20th century up until just recently. A title study was not part of this report, nor was a claims validation study made. However, those studies were done by Anderson Engineering of Dillon,
Montana in the mid-1990s, and there is no reason to believe the results of their work have changed. The property deeds can be viewed at the Granite County Courthouse in Philipsburg, Montana.








10





The Claims:





The claims are all located in south-central Granite County, in portions of Section 34, Township 7 North, Range 16 West, and Sections 3, 4, and 9, Township 6 North, Range 16 West. The patented mining claims making up the Basin Gulch Group include the following:





i)
Landes
(Mineral Survey 5565)ii)
Shylock
(Mineral Survey 6354)iii)
Shively
(Mineral Survey 5755)iv)
Quartz Hill
(Mineral Survey 5564)v)
Spencerian
(Mineral Survey 8140)vi)
Gold Hill 5
(Mineral Survey 5755)vii)
Basin
(Mineral Survey 9026)viii)
Blue Bell Lode
(Mineral Survey 9530)ix)
White Pine
(Mineral Survey 8137)x)
Yellow Pine
(Mineral Survey 8139)xi)
Jack White
(Mineral Survey 8138)





These claims were re-traced on the ground by Anderson Engineering of Dillon, Montana in 1996.





Mineralization:





The lode mineralization at the head of Basin Gulch is associated with a gaseous Eocene silicic intrusive that invaded between the plates of two Precambrian thrust sheets. The intrusive formed a major diatreme complex that is centered on the gold and silver mineralization. The intrusive event also formed a number of smaller, parasitic diatremes
and breccia zones scattered throughout the property and off the property for several miles in all directions. The gold mineralization is found throughout the site near the surface and at depths in excess of 1,000 feet at levels averaging about 0.01 ounces per ton, with higher grade areas and intercepts, with the higher grade zones associated with the edges of the various diatremes and post- and pre-diatreme faulting that cut the diatremes. The highest grades appear associated with voids formed near and within
the diatreme when juvenile and surrounding bedrock material fell back into the diatreme throat during periods of quiescence. This association with voids and faulting has been recognized at other gold sites and is well described in literature.





Mr. Rauno Perttu, who discovered the Basin Gulch deposit in 1987, explored the lode source of the placer gold from the late 1980s until 1997. To date, 323 reverse circulation and core holes have been drilled on the property for a total of 89,800 feet, with holes ranging from 80 feet to 1,050 feet in depth. In addition, 40 test trenches with
a total length of 17,000 feet have taken place. AGI’s predecessors, Cable Mountain Mine, Inc., Chevron Resources, and Cyprus Exploration have performed the work at various stages in the project. In addition to the drilling, there have been two geophysical surveys, soil geochemistry surveys, topographic surveys, and geologic mapping projects carried out on the property.





Two targets, termed  Block A and  Block B, have been blocked out to a certain extent on the property with drilling. These two blocks have been explored with 82 drill holes and some 25,546 feet of drilling. In addition, assay samples of every 5-foot interval were taken, for a total of just over 4,700 samples analyzed. They
are both located on the edges of the major diatreme complex at the head of Basin Gulch. The mineralization itself is fairly simple, with the gold being fine to very coarse in nature, and easily extracted using cyanidation, and possibly other recovery methods. Test work done for Cable Mountain Mine indicates a recovery rate of over 90% with a simple cross-current mill.





A previous investigation and evaluation by CMM for the site using the GEMCON computer program yielded a volume of 129,000,000 tons of rock grading 0.019 ounce per ton for the entire areas A and B site.  The results of this study were not available for inspection in preparation of the above mentioned NI 43-101. However, this data
base was used for the gold volume calculation made of Block A and Block B.  The evaluation did not include several other areas of gold mineralization identified by surface sampling, trenching and drilling.








11





A recently recovered informal evaluation by GEMCOM  indicated that a portion  of the property contains a completely open resource of 625,513,400 tons which contain 7,600,000 ounces at 0.012 opt, within which are 2,803,970 ounces at 0.026 opt.  This estimate is based on the results of about a third of 323 drill
holes and 17,000 feet of trenching.  The other holes also contain extensive mineralization which extends for several thousand feet outward from the diatreme complex, but the other holes were not drilled in sufficient density to be used for resource estimates.





The majority of the holes were shallow and did not follow up on scattered high-grade intercepts that appeared to be vein structures and high-grade breccia zones.  Perhaps most importantly, the large diatreme complex has not been drilled to its boiling zone, nor significantly explored, although it was the likely gold source for historic
placer mining.  Aultra expects  follow-up drilling on the high-grade intercepts and drilling of the diatreme to define areas of high grade mineralization that is expected to increase the overall grade and volume.





As a start to new exploration, Aultra commissioned a new independent study based on the newly rediscovered data.  This new report is expected to be completed during the third quarter.





Based on the results of this third-party evaluation, several recommendations are made to complete field evaluation of this advanced exploration project. The following are those basic elements.





i)Complete drilling and sampling of two identified high grade zones with diamond core drilling to give adequate evaluation of potential mineralization volumes.





ii)Complete several core holes in the areas of one and two-point anomalies that were encountered during the previous exploration efforts.





iii) Perform test underground mining in the two high grade targets after completion of the drilling recommended above.





Plans are also being completed to initiate drilling of the diatreme complex for bodies of high-grade mineralization.





Permitting Status:





The previous exploration permits on the property have lapsed. New exploration drilling permits are being applied for by AGI, and the previous permitting process in the 1990s is expected to streamline the new permits.





In Montana, public and private lands are handled similarly in the permitting process. AGI must apply for either a blanket exploration permit for Montana, or a specific permit for the Basing Gulch project. In either case, proposed drill sites and trenches must be located on a map, with a detailed description of how the preparation and reclamation
of each site will be completed. The State will then have the choice of sending out an inspector to review the proposed plan. The State will subsequently calculate and reclamation bond amount for the work proposed, based on existing State standards. Upon AGI posting the bond, it may then proceed with the exploration work.





During work in the 1990s, none of the proposed exploration follow-up sites had any deleterious aspects that needed mitigating, so no significant obstacles to exploration are anticipated.





Regarding anticipated test mining, this work will be conducted under Small Miner’s Exclusion (SME) provisions of the Montana permitting process. The SME process is much faster and simpler than the permitting process for larger mines in Montana, and can be completed within months of filling of an application .This property contains large,
open-ended areas of gold and silver mineralization, part of which are believed to be potentially mineable under relatively rapid small mine regulations, if economic and if permitted.





This property was extensively drilled as a large, low-grade open-pit mine, but is being revaluated for its localized high-grade deposits. This property is believed to have major potential for deeper high-grade reserves. The property at Basin Gulch, Montana will be evaluated for an initial small miner’s permit to begin development of
the first “gold hot spot”, based on extensive existing data. As funding permits, drilling of the first known vein target and of the deep “boiling zone” of the southeastern-most nested diatreme will commence.







12











Test Mining





The following is AGI’s current future test mining plan if money is available.  Additional testing and drilling may modify this plan.





i)Upon completion of the follow-up evaluation in the BG94-42(1) area, DMC will drive an intercept tunnel, starting approximately 100 feet below the drill collar, to evaluate the high-grade zone by bulk sampling. This audit will be located to
allow extension of the drift to also bulk sample the high-grade diatreme zone encountered in hole BG94-5(1). The gold in the BG94-42 (1) area was found to be free gold and should be recoverable by simple gravity methods. The tunnel will be completed to a standard that will allow it to be used as a production facility under and State of Montana Small Miner’s Exclusion operating permit.





ii)While the work in the first area is progressing, follow-up exploration of the other identified areas of high-grade mineralization will continue, as will step-out exploration for new potential shoots. With success in these new areas, AGI
anticipates that the initial Small Miner’s Exclusion operation will be systematically expanded into a larger mining operation.








Projected Costs for Plan of Mining Operations





Our business plan calls for significant expenses in connection with the mining plans for development of production on the Basin Gulch Property.  Until funding becomes available, the plan cannot be implemented.





We do not have sufficient funds to conduct the 2009 work phases of further drilling and assaying, and completion of the mine plan on the Basin Gulch Property, and the Company will require additional financing in order to complete the work.





We do not have sufficient funds to make either the lease payments or the payments to the BLM which are due by August 31st.





Description of Jungo





On June 1, 2007, Aultra Gold, Inc. (the "Company"), entered into a formal binding Agreement of Purchase and Sale (the "Agreement") with W.R. Hansen, an individual (the “Seller”), pursuant to which the Company acquired from the Seller certain mining claims together with all improvements and all equipment owned by the Seller
located thereon, located in Humboldt County, State of Nevada (the “Property”). In consideration of the purchase of the Property, the Company agreed to: (i) reimburse the Seller for all staking and filing costs related to the Property, (ii) issue to the Seller 50,000 restricted shares of the Company’s common stock, $0.001 par value per share (the “Common Stock”), valued at $0.50 per share, (iii) upon its sole determination of sufficient mineralization to place the Property in production,
to further issue to the Seller additional 50,000 restricted shares of the Company’s Common Stock, such that the Company shall make such a determination not later than 30 days following the acquisition of the data contemplated by paragraph 3.3 of the Agreement, (iv) not later than 10 days following the date the Property is placed into development for production of metals, to issue to the Seller an additional 100,000 restricted shares of the Company’s Common Stock, and (v) as further consideration after
the Property is placed in production, to direct to the Seller a monthly Net Smelter Royalty of 2% upon all gold, silver, copper, or other metals (the “Metals”) produced and sold from the Property (each royalty payment shall be paid not later than 30 days following the last day of the month in which the metals were produced and sold). Closing of the sale and purchase of the Property occurred on the same date, as under the Agreement both the Company and the Seller have performed their mutual obligations
under paragraph 2.2 and Section 4 thereof.





We do not have sufficient funds to make the payments to the BLM which are due by August 31st.





The Jungo property is located on the eastern margin of the  Jackson Mountains in Townships 37 and 38 North, and Range 31 East, in Humboldt County, Nevada.  It consists of 95 unpatented lode claims totaling about 1,900 acres.  The claims cover the projection of a gold-mineralized hot springs system at the eastern
margin of the Jackson Mountains.  The system can be followed for approximately 2,000 feet, where it disappears under shallow cover.







13





Geology and Mineralization





·
Surface samples contain up to 0.6 opt gold.


·
Two long trenches and a small prospect pit exposed extensive brecciated and silicified gold-mineralized rocks.


·
The northern trench crosscut 160 feet of hot springs silica.


·
Ten and twenty foot trench intervals assayed 0.01 ounce per ton (opt) gold.


·
A 32 foot interval averaged 0.015 opt gold.


·
A twenty foot interval of the hot springs rock assayed 0.042 opt gold and more than 0.5 opt silver.  A select sample of the hot springs rock assayed 0.6 opt gold and 4.44 opt silver.





One isolated pit was dug on projection of the hot springs zone under alluvial cover almost 2,000 feet to the northwest.  It encountered hot springs silica that assayed 0.11 opt gold and 3.80 opt silver.





This mineralization is considered to be very high in the gold system.





Additional trenching, followed by drilling, are planned as soon as funding is available.








Announced Merger





Aultra has been in merger discussions with Dutch Gold Resources (Other OTC: DGRI.PK) for the past year.  The discussions have been slowed because Aultra requires that DGRI have financing in place prior to final agreement of terms for the proposed merger.  The delay in funding remains a key factor slowing the merger discussions.





Other Opportunities in Nevada:





With funding, AGI plans to stake claims over a new Nevada exploration target in the middle of north-central Nevada. This region contains several large existing gold mines.  Additionally, AGI has been offered additional attractive gold properties, subject to near-term funding.





We do not have sufficient funds to stake any additional properties.








Compliance with Government Regulation





We will be required to comply with all regulations, rules and directives of governmental authorities and agencies applicable to the exploration of minerals in United States generally, and in Montana and Neveda specifically. Such operations are subject to various laws governing land use, the protection of the environment, production, exports,
taxes, labor standards, occupational health, waste disposal, toxic substances, well safety and other matters. Unfavorable amendments to current laws, regulations and permits governing operations and activities of resource exploration companies, or more stringent implementation thereof, could have a materially adverse impact and cause increases in capital expenditures which could result in a cessation of operations. The Company has had no material costs related to compliance and/or permits in recent years, and
anticipates no material costs in the next year. The Company will not be required to obtain a permit in order to conduct Phases 1 and 2 of its proposed exploration program for Basin Gulch.





We will have to sustain the cost of reclamation and environmental mediation for all exploration and development work undertaken.  The amount of these costs is not known at this time as we do not know the extent of the exploration program that will be undertaken beyond completion of the currently planned work programs. Because there is
presently no information on the size, tenor, or quality of any resource or reserve at this time, it is impossible to assess the impact of any capital expenditures on earnings or our competitive position in the event a potentially economic deposit is discovered. If we enter into production, the cost of complying with permit and regulatory environment laws will be greater than in the exploration phases because the impact on the project area is greater.  Permits and regulations will control all aspects of any
production program if the project continues to that stage because of the potential impact







14








on the environment. Examples of regulatory requirements include:


·
Water discharge will have to meet water standards;·
Dust generation will have to be minimal or otherwise re-mediated;·
Dumping of material on the surface will have to be re-contoured and re-vegetated;·
An assessment of all material to be left on the surface will need to be environmentally benign;·
Ground water will have to be monitored for any potential contaminants;·
The socio-economic impact of the project will have to be evaluated and if deemed negative, will have to be re-mediated; and·
There will have to be an impact report of the work on the local fauna and flora.





Competition





Many companies are engaged in the exploration and development of mineral properties. The Company is at a disadvantage with respect to those competitors whose technical staff and financial resources exceed the Company’s. Our lack of revenues and limited financial resources further hinder our ability to acquire additional mineral interest.





Employees





As of May 14, 2009, the Company had a full time employment agreement with Mr. Rauno Perttu, the Company’s CEO, President and director, pursuant to which Mr. Perttu provides services to the Company. The Company anticipates that it will be conducting most of its business through agreements with consultants and third parties.





RISK FACTORS





You should carefully consider the risks described below as well as other information provided to you in this document, including information in the section of this document entitled “Information Regarding Forward Looking Statements.” The risks and uncertainties described below are not the only ones facing the Company. Additional
risks and uncertainties not presently known to the Company or that the Company currently believes are immaterial may also impair the Company’s business operations. If any of the following risks actually occur, the Company’s businesses, financial condition or results of operations could be materially adversely affected, the value of the Company common stock could decline, and you may lose all or part of your investment.





Risks Related to Our Financial Results:





Our company was recently formed, and we have not proven that we can generate a profit. If we fail to generate income and achieve profitability, an investment in our securities may be worthless.


We have no operating history and have not proved that we can operate successfully. We face all of the risks inherent in a new business. If we fail, your investment in our common stock will become worthless. From our inception on January 26, 2005 to the end of the period ended March 31, 2009, we have not earned any revenue.. We presently do
not have sufficient funds to pursue our stated plan of operation for the next twelve-month period. We will require additional financing for our operational expenses, and further exploration work for commercially exploitable mineral deposits or reserves. We are seeking these additional funds via equity financing, private placements or loans from our directors or current shareholders. Currently, we do not have arrangements for additional funds. Your investments in our common stock must therefore be regarded as
the placing of funds at a high risk in a recently formed company with all the unforeseen costs, expenses, problems, and difficulties to which such companies without proven record are subject to.





We have had losses since our inception. We expect losses to continue in the future and there is a risk we may never become profitable.


We have incurred operating losses of $633,870 and $480,487 during the year ended December 31, 2008 and 2007, respectively. In addition, during that period, we have used cash of $-0- and $-0-  in our operating activities, and had a net working capital deficiency of $946,243 at December 31, 2008. We expect to continue to incur significant
operating expenses as we maintain our current line of power-line products and continue research and development toward new advance power-line technologies. Our operating expenses have been and are expected to continue to outpace revenues and result in significant losses in the near term. We may never be able to reduce these losses, which will require us to seek additional debt or equity financing. If such financing is available, of which there can be no assurance, you may experience significant additional dilution.





15








We have a limited operating history. There can be no assurance that we will be successful in growing our gold and other mineral exploration activities.





We have a limited history of operations. As a result, there can be no assurance that we will be successful in our acquisition and exploration of gold and mineral properties activities. Our success to date in entering into ventures to acquire mineral properties is not indicative that we will be successful in entering into any further ventures. Any
potential for future growth in our mineral exploration activities will place additional demands on our executive officers, and any increased scope of our operations will present challenges due to our current limited management resources. Our future performance will depend upon our management and their ability to locate and negotiate additional exploration opportunities in which we are solely involved or participate in as a joint venture partner. There can be no assurance that we will be successful in our efforts.
Our inability to locate additional opportunities, to hire additional management and other personnel, or to enhance our management systems, could have a material adverse effect on our results of operations. There can be no assurance that our operations will be profitable.





If we do not obtain additional financing, our business will fail.


We did not obtain any outside financing during fiscal 2008, we will need to obtain additional financing in order to complete our business plan. We currently do not have any operations and we have no income. We do not have any arrangements for financing and we may not be able to find such financing if required. Obtaining additional financing
would be subject to a number of factors, including investor acceptance of mineral claims and investor sentiment. These factors may adversely affect the timing, amount, terms, or conditions of any financing that we may obtain or make any additional financing unavailable to us.





Our independent auditors have expressed doubt about our ability to continue as a going concern, which may hinder our ability to obtain future financing.


In their report dated April 10, 2009, our independent auditors stated that our accompanying financial statements filed herewith were prepared assuming that we will continue as a going concern. However, we have incurred operating losses, of $633,870 and $480,487, during the year ended December 31, 2008 and 2007, respectively. In addition, during
these periods, we have used cash of $-0- and $-0-, respectively, in our operating activities. We are uncertain if we will have sufficient cash to operate for the next twelve months, our ability to sustain our operations beyond this period without further financing cannot be assured.





We continue to experience net operating losses. Our ability to continue as a going concern is subject to our ability to generate a profit and/or obtain necessary funding from outside sources, including obtaining additional funding from the sale of our securities, increasing sales or obtaining loans and grants from various financial institutions
where possible. The going concern uncertainty modification in the auditor's report increases the difficulty in meeting such goals and there can be no assurances that such methods will prove successful.





Fluctuations in our operating results and announcements and developments concerning our business affect our stock price.


Our quarterly operating results, the number of stockholders desiring to sell their shares, changes in general economic conditions and the financial markets, the execution of new contracts and the completion of existing agreements and other developments affecting us, could cause the market price of our common stock to fluctuate substantially.





Our management believes that long-term profitability and growth will depend on its ability to:


§ Develop the reputation of AGI as a successful mining property acquisition and exploration company;


§ Successfully identify and exploit mining opportunities;


§ Develop viable strategic alliances; and


§ Maintain sufficient volume of successful new mining opportunities.





RISKS RELATED TO OUR BUSINESS AND OUR INDUSTRY





We will need to increase the size of our organization, and may experience difficulties in managing growth.





We are a small company with only one employee as of December 31, 2008 and as of March 31, 2009. We hope to experience a period of expansion in headcount, facilities, infrastructure and overhead and anticipate that further expansion will be required to address potential growth and market opportunities. Future growth will impose significant
added responsibilities on members of management, including the need to identify, recruit, maintain and integrate additional independent contractors and managers. Our future financial performance and our ability to compete effectively will depend, in part, on our ability to manage any future growth effectively.







16






We require additional working capital in order to achieve commercial production at the Basin Gulch Property.





The Company has no current operating funds to complete the intended plan of mining operations for the Basin Gulch Property and/or the Jungo property.  The Company does not have sufficient funds on hand for the unpaid amounts of our estimated costs related to maintaining the minimum annual payment obligations associated with the maintenance
of the Basin Gulch Property as discussed in this Current Report and our estimated administrative costs for 12 months from the date of this Current Report. Therefore, we will need to obtain additional financing in order to complete our business plan. As of December 31, 2008, the Company had no cash. The Company has no income from operations.





Our business plan calls for significant expenses in connection with the continued evaluation and development to production of the Basin Gulch Property. The Company does not have sufficient funds to conduct the initial mine development work on the property.  The Company will require additional financing in order to complete remaining
phases of mine development and production capacity. The Company will also require additional financing if the costs of the mine development for the Basin Gulch Property are greater than anticipated.  Even after completing all proposed plans for mining operations the Company will have to spend substantial funds on further drilling and engineering studies in order to establish the diatreme targets for the Basin Gulch Property.





Our officers and directors are involved in other businesses which may cause them to devote less time to our business.





Our officers' and directors' involvement with other businesses may cause them to allocate their time and services between us and other entities. Consequently, they may give priority to other matters over our needs which may materially cause us to lose their services temporarily which could affect our operations and profitability.





We are dependent on our management and the loss of any officer could hinder the implementation of our business plan.





We are heavily dependent on the members of our management team, the loss of any of whom could have a material adverse affect on our ability to implement our business plan. While we have entered into employment agreement with our Chief Executive Officer, employment agreements could be terminated for a variety of reasons. If, for some reason,
the services of our management, or of any member of management, were no longer available to us, our operations and proposed businesses and endeavors may be materially adversely affected. Mr. Perttu, our Chief Executive Officer, and our Chief Financial Officer, is primarily responsible for the success of our business operations. As we continue with our intended operations, other officers may be instrumental in setting up our financial and operational controls and procedures, and we may need to hire additional
personnel to perform such functions. Any failure of management to implement and manage our business strategy and growth may have a material adverse affect on us. There can be no assurance that our operating control systems will be adequate to support its future operations and anticipated growth. Failure to manage our growth properly could have a material adverse affect on our business, financial condition or result of operations.





Our proposed exploration plan is dependent on additional financing.  After obtaining funding to conduct exploration and development, at the completion of each phase of our operating plan we will evaluate the results and make a determination to proceed to the next phase of mine development and its associated estimated cost.  The
results of each phase of work will allow us to update our geological information on the Basin Gulch Property and the Jungo Property, and will be used to base our decision to proceed to the next phase of mine evaluation and development.





Each subsequent phase of mine development will require additional funds beyond the Company’s current cash resources. The


Company will need to obtain additional financing from the sale of its securities to fund these operational expenditures and future administrative costs. Our administrative costs will be dependent upon the time frame undertaken to complete the remaining phases of our plan of mining operations. We do not have funding in our current operating
funds sufficient to cover our administrative costs for the period of one year from the date of this Current Report, which are estimated to be $150,000. To the extent we need more than one year to complete the remaining exploration or our administrative costs are higher than estimated, we will require additional financing to cover administrative costs.





We will require additional financing to sustain our business operations if we are not successful in earning revenues once initial production work is complete. We do not currently have any arrangements for financing and may not be able to find such financing if required. Obtaining additional financing would be subject to a number of factors,
including the market price for gold and precious metals, investor acceptance of our property and general market conditions. These factors may make the timing, amount, terms or conditions of additional financing unavailable to us.








17





The imprecision of mineral deposit estimates may prove any resource calculations that we make to be unreliable.





Mineral deposit estimates and related databases are expressions of judgment based on knowledge, mining experience, and analysis of drilling results and industry practices. Valid estimates made at a given time may significantly change when new information becomes available. By their nature, mineral deposit estimates are imprecise and depend
upon statistical inferences, which may ultimately prove unreliable. Mineral deposit estimates included here, if any, have not been adjusted in consideration of these risks and, therefore, no assurances can be given that any mineral deposit estimate will ultimately be reclassified as reserves.





We are sensitive to fluctuations in the price of gold and other minerals, which is beyond our control. The price of gold and other metals is volatile and price changes are beyond our control.





The prices for gold and other metals fluctuate and are affected by numerous factors beyond our control. Factors that affect the price of gold and other metals include consumer demand, economic conditions, over supply from secondary sources and costs of production. Price volatility and downward price pressure, which can lead to lower prices,
could have a material adverse effect on the costs of and the viability of our projects.





Mineral exploration and prospecting is highly competitive and speculative business and we may not be successful in seeking available opportunities.





The process of mineral exploration and prospecting is a highly competitive and speculative business. In seeking available opportunities, we will compete with a number of other companies, including established, multi-national companies that have more experience and financial and human resources than us. Because we may not have the financial
and managerial resources to compete with other companies, we may not be successful in our efforts to acquire new projects. However, while we compete with other exploration companies, there is no competition for the exploration or removal of mineral from our claims.





Compliance with environmental considerations and permitting could have a material adverse effect on the costs or the viability of our projects. The historical trend toward stricter environmental regulation may continue, and, as such, represents an unknown factor in our planning processes.





All mining in United States is regulated by the government agencies at the Federal and State levels. Compliance with such regulation could have a material effect on the economics of our operations and the timing of project development. Our primary regulatory costs will be related to obtaining licenses and permits from government agencies before
the commencement of mining activities. An environmental impact study that must be obtained on each property, in order to obtain governmental approval to mine on the properties, is also a part of the overall operating costs of a mining company.





The gold and mineral mining business is subject not only to worker health and safety, and environmental risks associated with all mining businesses, but is also subject to additional risks uniquely associated with gold and other minerals mining. Although we believe that our operations will be in compliance, in all material respects, with all
relevant permits, licenses and regulations involving worker health and safety, as well as the environment, the historical trend toward stricter environmental regulation may continue. The possibility of more stringent regulations exists in the areas of worker health and safety, the dispositions of wastes, the decommissioning and reclamation of mining and milling sites and other environmental matters, each of which could have an adverse material effect on the costs or the viability of a particular project.





Mining and exploration activities are subject to extensive regulation by Federal and State governments. Future changes in governments, regulations and policies, could adversely affect our results of operations for a particular period and our long-term business prospects.





Mining and exploration activities are subject to extensive regulation by Federal and State Governments. Such regulation relates to production, development, exploration, exports, taxes and royalties, labor standards, occupational health, waste disposal, protection and remediation of the environment, mine and mill reclamation, mine and mill
safety, toxic substances and other matters. Compliance with such laws and regulations has increased the costs of exploring, drilling, developing, constructing, operating mines and other facilities. Furthermore, future changes in governments, regulations and policies, could adversely affect our results of operations in a particular period and its long-term business prospects.







18






The development of mines and related facilities is contingent upon governmental approvals, which are complex and time consuming to obtain and which, depending upon the location of the project, involve various governmental agencies. The duration and success of such approvals are subject to many
variables outside of our control.





Because of the inherent dangers involved in mineral exploration and production, there is a risk that we may incur liability or damages as we conduct our business.





Exploration and establishment of mining operations to production involves numerous hazards. As a result, the Company may become subject to liability for such hazards, including pollution, cave-ins and other hazards against which the Company cannot insure or against which the Company may elect not to insure. The payment of such liabilities
may have a material adverse effect on the Company’s financial position.





If we do not conduct mineral exploration on our mineral claims and keep the claims in good standing, then our right to the mineral claims will lapse and we will lose everything that we have invested and expended towards these claims.





We must complete mineral exploration work on our mineral claims and keep the claims in good standing. If we do not fulfill our work commitment requirements on our claims or keep the claims in good standing, then our right to the claims will lapse and we will lose all interest that we have in these mineral claims.





We are subject to compliance with securities law, which exposes us to potential liabilities, including potential rescission rights.





We have periodically offered and sold our common stock to investors pursuant to certain exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) as well as those of various state securities laws. The basis for relying on such exemptions is factual; that is, the applicability
of such exemptions depends upon our conduct and that of those persons contacting prospective investors and making the offering. We have not received a legal opinion to the effect that any of our prior offerings were exempt from registration under any federal or state law. Instead, we have relied upon the operative facts as the basis for such exemptions, including information provided by investors themselves.





If any prior offering did not qualify for such exemption, an investor would have the right to rescind its purchase of the securities if it so desired. It is possible that if an investor should seek rescission, such investor would succeed. A similar situation prevails under state law in those states where the securities may be offered without
registration in reliance on the partial preemption from the registration or qualification provisions of such state statutes under the National Securities Markets Improvement Act of 1996. If investors were successful in seeking rescission, we would face severe financial demands that could adversely affect our business and operations. Additionally, if we did not in fact qualify for the exemptions upon which it has relied, we may become subject to significant fines and penalties imposed by the SEC and state securities
agencies.





RISKS RELATED TO OUR COMMON STOCK





There is no active trading market for our common stock.





Our common stock is quoted on the Pink Sheets, and we are currently in the process of seeking to reestablish quotation of our common stock on the Over the Counter Bulletin Board quotation service. However, currently, there is no active trading market for any of our securities, and we cannot assure you that a market for our stock will develop.
Consequently, our shareholders may not be able to use their shares for collateral or loans and may not be able to liquidate at a suitable price in the event of an emergency. In addition, our shareholders may not be able to resell their shares at or above the price they paid for them or may not be able to sell the shares at all. Accordingly, there can be no assurance as to the liquidity of any markets that may develop for the securities, the ability of holders of the securities to sell their securities, or the
prices at which holders may be able to sell their securities.





The shares of common stock eligible for future sale could negatively affect the market price of our common stock





Subject to certain regulatory approval of the acquisition of AGI by the Company, there will be approximately a total of 95,896,668 shares of Common Stock issued and outstanding.   If the Company's stockholders sell substantial amounts of the Company's common stock in the public market, including shares issued upon the exercise of outstanding
options or warrants, the market price of its common stock could fall. These sales also may make it more difficult for the Company to sell equity or equity-related securities in the future at a time and price that the Company deems reasonable or appropriate. Stockholders who have been issued shares in the Acquisition will be able to sell their shares pursuant to Rule 144 under the Securities Act of 1933, beginning one year after the stockholders acquired their shares.








19









Our common stock may be deemed to be a penny stock and, as such, we are subject to the risks associated with “penny stocks”. Regulations relating to “penny stocks” limit the ability of our shareholders to sell their shares and, as a result, our shareholders may have to hold their
shares indefinitely.





Our common stock is currently listed for trading on the Over the Counter Market, which is generally considered to be a less efficient market than markets such as NASDAQ or other national exchanges, and which may cause difficulty in obtaining future financing. Furthermore, our common stocks may be deemed to be “penny stock” as that
term is defined in Regulation Section “240.3a51 -1” of the Securities and Exchange Commission (the “SEC”). Penny stocks are stocks: (a) with a price of less than U.S. $5.00 per share; (b) that are not traded on a “recognized” national exchange; (c) whose prices are not quoted on the NASDAQ automated quotation system (NASDAQ -where listed stocks must still meet requirement (a) above); or (d) in issuers with net tangible assets of less than U.S. $2,000,000 (if the issuer has
been in continuous operation for at least three years) or U.S. $5,000,000 (if in continuous operation for less than three years), or with average revenues of less than U.S. $6,000,000 for the last three years.





Section “15(g)” of the United States Securities Exchange Act of 1934, as amended, and Regulation Section “240.15g(c) 2” of the SEC require broker dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt
of the document before effecting any transaction in a penny stock for the investor’s account. Potential investors in the Company’s common shares are urged to obtain and read such disclosure carefully before purchasing any common shares that are deemed to be “penny stock”.





Moreover, Regulation Section “240.15g -9” of the SEC requires broker dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any penny stock to that investor. This procedure requires the broker dealer to: (a) obtain from the investor information concerning his or her financial
situation, investment experience and investment objectives; (b) reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions; (c) provide the investor with a written statement setting forth the basis on which the broker dealer made the determination in (ii) above; and (d) receive a signed and dated copy of such statement
from the investor confirming that it accurately reflects the investor’s financial situation, investment experience and investment objectives. Compliance with these requirements may make it more difficult for investors in the Company’s common shares to resell their common shares to third parties or to otherwise dispose of them. Stockholders should be aware that, according to Securities and Exchange Commission Release No. 34-29093, dated April 17, 1991, the market for penny stocks has suffered in recent
years from patterns of fraud and abuse. Such patterns include:





(i) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer;





(ii) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases;





(iii) boiler room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons;





(iv) excessive and undisclosed bid-ask differential and markups by selling broker-dealers; and





(v) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequent investor losses.





Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being
established with respect to our securities.





As an issuer of “penny stock” the protection provided by the federal securities laws relating to forward looking statements does not apply to us.





Although the federal securities law provide a safe harbor for forward-looking statements made by a public company that files reports under the federal securities laws, this safe harbor is not available to issuers of penny stocks. As a result, if we are a penny stock we will not have the benefit of this safe harbor protection in the event of
any claim that the material provided by us contained a material misstatement of fact or was misleading in any material respect because of our failure to include any statements necessary to make the statements not misleading.







20








Failure to achieve and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and operating results and stockholders could lose confidence in our financial reporting.





Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud. If we cannot provide reliable financial reports or prevent fraud, our operating results could be harmed. We may be required in the future to document and test our internal control procedures in order to satisfy the requirements
of Section 404 of the Sarbanes-Oxley Act, which requires increased control over financial reporting requirements, including annual management assessments of the effectiveness of such internal controls and a report by our independent certified public accounting firm addressing these assessments. Failure to achieve and maintain an effective internal control environment, regardless of whether we are required to maintain such controls could also cause investors to lose confidence in our reported financial information,
which could have a material adverse effect on our stock price.





Shares eligible for future sale, if at all, may adversely affect the market price of our common stock, as the future sale of a substantial amount of our restricted stock in the public marketplace could reduce the price of our common stock.





From time to time, certain of our stockholders may be eligible, if at all, to sell all or some of their shares of common stock by means of ordinary brokerage transactions in the open market pursuant to Rule 144, promulgated under the Securities Act (“Rule 144”), subject to certain limitations. In general, pursuant to Rule 144,
a stockholder (or stockholders whose shares are aggregated) who has satisfied a one-year holding period may, under certain circumstances, sell within any three-month period a number of securities which does not exceed the greater of 1% of the then outstanding shares of common stock or the average weekly trading volume of the class during the four calendar weeks prior to such sale. Rule 144 also permits, under certain circumstances, the sale of securities, without any limitations, by a non-affiliate of our company
that has satisfied a two-year holding period. Any substantial sale of common stock pursuant to Rule 144 or pursuant to any resale prospectus may have an adverse effect on the market price of our securities.





We do not expect to pay dividends in the future. Any return on investment may be limited to the value of the Company’s stock.





We do not anticipate paying cash dividends on our stock in the foreseeable future. The payment of dividends on our stock will depend on our earnings, financial condition and other business and economic factors affecting us at such time as the board of directors may consider relevant. If we do not pay dividends, its stock may be less valuable
because a return on your investment will only occur if our stock price appreciates.





FORWARD LOOKING STATEMENTS





Some of the statements contained in this Current Report that are not historical facts are "forward-looking statements" which can be identified by the use of terminology such as "estimates," "projects," "plans," "believes," "expects," "anticipates," "intends," or the negative or other variations, or by discussions of strategy that involve risks
and uncertainties. We urge you to be cautious of the forward-looking statements, that such statements, which are contained in this Current Report, reflect our current beliefs with respect to future events and involve known and unknown risks, uncertainties and other factors affecting our operations, market growth, services, products and licenses. No assurances can be given regarding the achievement of future results, as actual results may differ materially as a result of the risks we face, and actual events may
differ from the assumptions underlying the statements that have been made regarding anticipated events. Factors that may cause actual results, our performance or achievements, or industry results, to differ materially from those contemplated by such forward-looking statements include without limitation:





1. Actions of regulatory agencies, changes in regulations and in interpretation of regulations;


2. Our ability to raise appropriate capital within expected time periods;


3. Commodity price fluctuations;


4. Availability of goods and services; and


5. Variations in geological conditions.





All written and oral forward-looking statements made in connection with this Current Report that are attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Given the uncertainties that surround such statements, you are cautioned not to place undue reliance on such forward-looking
statements.





Plan of Operation





We do not have sufficient funds to conduct   work phases of further drilling and assaying, and completion of the mine plan on the Basin Gulch Property or the Jungo Property, we will require additional financing in order to complete the work associated with the projected cost to initial production.







21






We do not have sufficient funds to pay for the annual fees associated with either the Jungo or Basin Gulch properties and may lose either or both properties.





Basin Gulch Management





The following sections contain proposed work that is dependent on financing that is not currently available, on permitting that has not been completed, and on informal generalized cost estimates .  The postulated mine plan described is conceptual in nature.





Aultra Gold’s Basin Gulch project in place in Montana is scheduled for early development, with the first work planned for this coming 2009 spring. Although Basin Gulch contains open-ended gold/silver mineralization that contains well in excess of a million ounces, with outstanding high-grade exploration targets untested, the current
rules in Montana mean that a large-scale open pit gold mine will be too difficult to permit. Several local higher grade targets were discovered in the previous exploration of the property. These can be permitted and developed in a short period of time, especially under the small miners provisions in Montana. In addition, the property contains excellent targets for bulk high-grade gold/silver within a nested diatreme complex and along associated structures. These targets will be systematically explored. Outlined
below is AGI’s planned staged development of the Basin Gulch property. The initial resources can be mined under Montana’s small mine provisions, so permitting can be completed in weeks instead of years.





Our officers and directors will handle our administrative duties with the help of three consultants as discussed below. Mr. Rauno Perttu, our CEO, has more than 35 years in economic geology and management. He discovered and explored the Basin Gulch property.





The contractor who, with funding,  will initially develop the drift into the first high-grade zone on the Basin Gulch property was Mr. William R. Hansen, a veteran mining engineer who graduated from the school of mines in nearby Butte, Montana. Mr. Hansen has his own drilling company and contract underground mining business. He is
familiar with Basin Gulch and is experienced with Montana’s regulations and regulators. He brings his own experienced miners, which is a major advantage in today’s tight mining labor market. Both Mr. Perttu and Mr. Hansen know and can quickly bring in key consultants who are very knowledgeable and respected in the region, if needed.





Under Montana’s regulations, development at Basin Gulch will be initiated through a step by step process beginning with a Small Miner’s exclusion that will allow the adit (i.e. horizontal mine entry) to be started within a few weeks time after the application is filed.





As a result of the Exchange Agreement, (i) AGI became our wholly-owned subsidiary, and (ii) we succeeded to the business of AGI, which was formed in January 2006, as our sole business. Our results of operations for the fiscal year ended December 31, 2006 are set forth on the audited financial statements filed as part of this Annual Report.
This discussion and analysis should be read in conjunction with the financial statements and notes, and financial statements and notes, included with this Annual Report.





Limited Operating History- Need for Additional Capital





There is limited historical information about us upon which to base an evaluation of our performance. We are at an exploration stage operation and have had limited revenues. We cannot guarantee that we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise.
We must raise approximately $3.5 to $5 million in planned equity financing and three trenches of $5 million each in debt financing over the next three years in order to carry-out our Plan of Operations as discussed further 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 and we may lose either or both properties: Jungo and Basin Gulch.





Results of Operations for the Period from Inception through December 31, 2008





We have not earned any revenues from our incorporation on January 26, 2005 to December 31, 2008.  We do not anticipate earning revenues unless we enter into commercial production on the Basin Gulch Property, which will not happen for the foreseeable future.  We have not commenced the exploration stage of our business and can provide
no assurance that we will discover economic mineralization on the property, or if such minerals are discovered, that we will enter into commercial production.








22





We incurred operating expenses in the amount of $633,870 for fiscal 2008 compared to $480,487 for fiscal 2007. These operating expenses were comprised of mineral property costs of $136,834 (2007 $ 172,414), transfer agent costs of $4,049, professional fees of $227,041 (2007-$20,944) filing fees of $4,049 (2007 $4,691) and office, bank charges
and other sundries, of $20.9444.  The professional fees for 2008 include the accrued costs of the Canadian judgement which although dispute and will be contested in the US has been reflected in the financial statements.





We have not attained profitable operations and are dependent upon obtaining financing to pursue exploration activities.  For these reasons our auditors believe that there is substantial doubt that we will be able to continue as a going concern.





General and Administrative Expenses-June 30, 2009





General and administrative expense consisted of accounting and professional fees and other general expenses. General and administrative expenses for the for the six month  period ended June 30, 2009 were $204,770, as compared to $152,175 for the fiscal period  ended June 30, 2008. The primary reason for the increase in
general and administrative expenses was an increase of consulting of $72,000 (2009-$150,000 from 2008-$78,000)  and a decrease of mineral property expenditures of $21,016 (2009-$51,463 from 2008-$72,463).  Overall spending decreased as a result of decreased amounts of cash and corporate resources.








Net income (loss) for the period ended to June 30, 2009 was a loss of ($204,779), as compared to a net loss of ($152,175) for the period ended June 30, 2008.





Liquidity and Capital Resources-June 30, 2009





At June 30, 2009, our cash was $-0- and we had currently liabilities of $1,150,683. Since our inception on January 20, 2005, to the end of the period ended June 30, 2009, we have incurred losses of $1,434,488. We attribute our net loss to having no revenues to offset our operating expenses. At June 30, 2009, we had an accumulated deficit of
$1,434,488.





We have no cash flow from operations and do not have cash and or equivalents to meet our core operational requirements for the next 12 months, but we will also be required to raise additional working capital to fund our Plan of Mining Operations of approximately $3.5 to $5 Million in planned equity financing and three trenches of $5 Million
each in debt financing over the next three years in order to carry-out the Plan of Operations as discussed further 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.





Future Plans





Aultra’s goals and objective for the current year will be adjusted according to the availability of funds and changing market conditions.  Management has identified several work programs for its Basin Gulch and Jungo properties which vary in the amount of funding required from less than $1,000,000 to as much as $22,000,000.  Management’s
goal is to raise at least $2,000,000 to move these properties forward.  As additional funds become available, management plans to continue to advance its current properties and also plans the acquisition of additional properties which it has identified.  Management’s goal is to perform additional evaluation and exploration with a view to possibly obtaining a JV partner on those projects to allow the Company to grow more quickly and to expand the Company’s project base.  Management
estimates that the initial cost to pursue this course of action to be approximately


$1,000,000.  In addition Management is reviewing additional mineral properties throughout the world.  The acquisition of such properties appears very attractive however such an approach would require even more immediate or short term cash, in the range of $6,000,000.  Management has had and will continue to have discussions
both for acquisitions and financing with the goal that both the properties and financing can be arranged in a coordinated time frame.  Management’s focus in these efforts is to enhance shareholder value and create a base of operations from which future expansion and growth can occur.







23









Much of the past year has been spent to obtaining funding.  The Company has had discussions  with Dutch about coming operations based on Dutch’s ability to raise funds. If Dutch is successful then the Company would have a 50:1 reverse split.  There is no agreement with Dutch and there are many other issues
to resolve with Dutch.





Critical Accounting Policies





Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires us to make estimates and judgments
that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. For a description of those estimates, see Note 3, Significant Accounting Policies, contained in the explanatory notes to our audited financial statements for the year ended December 31, 2007, contained in this Current Report. On an on-going basis, we evaluate our estimates, including those related to reserves, deferred tax assets and valuation allowance, impairment of long-lived
assets, fair value of equity instruments issued to consultants for


services and estimates of costs to complete contracts. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates under different assumptions or conditions; however, we believe that our estimates, including those for the above-described items, are reasonable.





Revenue Recognition





Revenue is recognized when the product is shipped to a customer, or in the limited circumstances, at destination, when terms provide that title passes at destination. Estimated amounts for sales returns and allowances are recorded at the time of sale.





Recent Accounting Pronouncements





FASB Interpretation No 47, “Accounting for Conditional Asset Retirement Obligations” (“FIN 47”) was issued in March 2005 and clarifies the accounting prescribed in SFAS No. 143, “Accounting for Asset Retirement Obligations”. FIN 47 requires the recognition of a liability for the fair value of a
conditional asset retirement obligation if the fair value can be reasonably estimated, even though uncertainty exists as to the timing and method of settlement. Management is currently evaluating the requirements of FIN 47 and has not yet determined the impact on the financial statements.





FASB Interpretation No 48, “Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109” (“FIN 48”), was issued in July 2006. This interpretation clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements in accordance with
SFAS No. 109, “Accounting for Income Taxes.” It prescribes a recognition threshold and measurement attribute for financial statement disclosure of tax positions taken, or expected to be taken, on a tax return. The Company will be required to adopt FIN 48 in the first quarter of fiscal 2008. Management is currently evaluating the requirements of FIN 48 and has not yet determined the impact on the financial statements.





In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurement” (“SFAS 157”), which defines fair value, establishes a framework for measuring fair value and expands disclosures about assets and liabilities measured at fair value. The Company will be required to adopt SFAS 157 in the first quarter
of fiscal 2009. Management is currently evaluating the requirements of SFAS 157 and has not yet determined the impact on the financial statements.





ITEM 3. 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.
 
 
 24





Based on this evaluation, our chief executive officer and principal accounting officer concluded that, as of the end of the period covered by this report, 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. Our conclusion is premised on the following reasons:





-We overlooked the inclusion of our “Management’s Annual Report on Internal Control over Financial Reporting” in our initial Annual Report filed on Form 10-KSB for the year ended December 31, 2007 and, as a result, we have determined that we had a material weakness in our ability to determine certain changes in the laws
that affect our disclosure obligations.





-We also during 2007 we filed quarterly report late.





-We lack insufficient trained personnel in the accounting and financial reporting function due to the size of our Company and our lack of financial resources to pay such personnel.





-We do not have a sufficient of employees to adequately segregate accounting duties to provide for sufficient internal control.





In light of the above weakness, we are developing a plan to ensure that we are aware of changes in the laws that affect our disclosure obligations, to ensure that all information required to be disclosed by us in the reports we submit under the Exchange Act is recorded, processed, summarized and reported accurately and timely. As of the date
of this report, we have taken the following steps to address the material weakness in our disclosure controls and procedures:





1.Before each report is prepared, we will review the SEC’s website (www.sec.gov) in an effort to determine
any recent changes in the laws affecting our disclosure obligations; and





2.As each report is prepared, we will discuss with our independent consultants, who assist us in the preparation of the reports and financial statements included within the reports, whether they are aware of any recent changes in the laws affecting
our disclosure obligations.





The remainder of our plan involves seeking additional training of existing personnel in the area of SEC reporting issues and/or, to the extent deemed necessary and subject to financing, the possible hiring of personnel or outside consultants who are familiar and conversant with SEC reporting issues. We also plan to allot sufficient time and
resources to conduct management’s review of internal control over financial reporting prior to the end of the fiscal year ending December 31, 2008 and to timely file our “Management’s Report on Internal Control Over Financial Reporting” in our Annual Report on Form 10 for the year ending December 31, 2008.





Limitations on the Effective of Controls





Our management does not expect that our disclosure controls or our internal controls over financial reporting will prevent all error and fraud. A control system, no matter how well conceived and operated, can provide only reasonable, but no absolute, assurance that the objectives of a control system are met.  Further, any control system
reflects limitations on resources, and the benefits of a control


system must be considered relative to its costs.  These limitations also include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of 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
override of a control. A design of a control system is also based upon certain assumptions about 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 may not be detected.





(b) Changes in Internal Controls




During the most recent quarter ended June 30, 2008, there has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. However, as discussed
above, changes have been implemented subsequent to the period covered by this Form 10-K to add additional controls to correct the material weakness in internal control over financial reporting.






25







ITEM 3A (T). CONTROLS AND PROCEDURES





Not applicable.





PART II - OTHER INFORMATION





ITEM1. LEGAL PROCEEDINGS.





In the course of normal business, we may be subject to the threat of litigation, claims and assessments. Our management believes that unfavorable decisions in any pending procedures or threat of procedures or any amount it might be required to pay will not have a material adverse impact on our financial condition.





On or about April 17, 2007, a lawsuit was filed by 761273 B.C. Ltd., Calderan Ventures Ltd., Scott Kostiuk, William Parkin, Ronald Oliver, Lubomir Palecek and Krista Dayton under the laws of the Province of British Columbia, Canada in the British Columbia Supreme Court for a total amount of $ 203,311.88 ( CAD$225,000*1)
against our company, Rauno Perttu, our President, Chief Executive Officer and a member of our board of directors, and Baljinder Bhullar, our Chief Financial Officer and a member of our board of directors, and others with regards to an alleged contractual obligation and resulting alleged restitution obligation pursuant to an alleged settlement agreement entered into by Aultra Gold Inc. The Action was commenced by Writ of Summons without a Statement of Claim. Six of approximately 57 shareholders of Aultra
Gold (Canada) decided not to participate in the January 22, 2007 share exchange transaction the Company, despite facts that four of the six complainants had executed their share exchange materials. The six minority shareholders requested the return of their share subscription funds from Aultra Gold (Canada), and a settlement arrangement was being negotiated to accommodate their requests, with a prospective April 15th, 2007 closing date. These discussions were deferred pending receipt of certain public financings
in the Company. In early 2009 the Company received notice that a judgement had been entered against the Company in the amount of CAD $239,206.  The Company received no prior notice of a hearing. In communications with the complainants attorney  stated that notice was provided to an attorney who they believed was representing Aultra.  This attorney denies representing Aultra.  Aultra has no assets in Canada and intends to vigously defend itself should this action be pursued
in the United States.





There are two principals involved in Strategic.   In February 2008 one principal in Strategic claimed that the Company was in default and that individual  had taken possession of the property by means of a “private foreclosure”.  AGI and the other principal of Strategic believe the attempted action
is without merit and intend to vigorously defend its rights to the property. No action has been filed to day





From time to time we may be a defendant and plaintiff in various legal proceedings arising in the normal course of our business. We are currently not a party to any material pending legal proceedings or government actions, including any bankruptcy, receivership, or similar proceedings. In addition, management is not aware of any known litigation
or liabilities involving the operators of our properties that could affect our operations. Should any liabilities incurred in the future, they will be accrued based on management’s best estimate of the potential loss. As such, there is no adverse effect on our consolidated financial position, results of operations or cash flow at this time. Furthermore, our management does not believe that there are any proceedings to which any of our directors, officers, or affiliates, any owner of record of the beneficially
or more than five percent of our common stock, or any associate of any such director, officer, affiliate, or security holder is a party adverse to our company or has a material interest adverse to us.





ITEM2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.





Sales of Unregistered Securities





The following unregistered securities have been issued by us since December 31 2008, and have not been previously disclosed in our Annual Report on Form 10-KSB or in our Current Reports on Form 8-K:





Second  fiscal quarter ended June 30, 2009





None.





Purchases of Equity Securities by the Small Business Issuer and Affiliated Purchasers





None.





26











ITEM3.
DEFAULTS UPON SENIOR SECURITIES.None.ITEM4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.





None.





ITEM 5.
OTHER INFORMATION.





(a)As of the date of this Quarterly Report, we do not have any board of directors committees. No material changes to the procedures by which security holders may recommend nominees to our board of directors occurred or implemented since our last periodic filing, our Annual Report filed
on Form 10-KSB for the fiscal year ended December 31, 2008.





ITEM 6.
EXHIBITS.Exhibit
Number

Description of Exhibits3.1

Articles of Incorporation. (1)3.2

Bylaws, as amended. (1)4.1

Form of Share Certificate. (1)31.1

Certification of Chief Executive Officer as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *31.2

Certification of Chief Financial Officer as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *32.1

Certification of Chief Executive Officer as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *32.2

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





Notes


* Filed herewith.


(1)
Incorporated by reference to the Company’s Registration Statement on Form SB-2 filed with the SEC on July 21, 2005









27







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.





AULTRA GOLD INC.Date:
August 12, 2009
By:
/s/ Rauno PerttuRauno PerttuPresident and Chief Executive OfficerDate:
August 12, 2009
By:
/s/Rauno PerttuRauno PerttuChief Financial Officer (and Acting Principal Accounting Officer)


























28