----

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| þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|-----------------------------------------------------------------------------------------|

| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|------------------------------------------------------------------------------------------|

| Nevada                                   |   | 88-0335710                              |
|------------------------------------------|--------|-----------------------------------------|
| (State or Other Jurisdiction of          |   | (I.R.S. Employer Identification Number) |
| Incorporation or Organization)           |   |                                    |
|                                     |   |                                    |
| 112 North Curry Street, Carson City, NV  |   | 89703                                   |
| (Address of Principal Executive Offices) |   | (Zip Code)                              |

|                 Large accelerated filer o |   | Accelerated filer o |   | Non-accelerated filer   o(Do not check if a smaller reporting company) |   | Smaller Reporting Company þ |
|---------------------------------------------------------------------------------------------------------------------------|--------|---------------------|--------|-----------------------------------------------------------------------------|--------|----------------------------------|

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|           |                                                                                                                                                                                     |   |   | PAGE   |   |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|
| PART I -       | Financial Information                                                                                                                                                                    |   |   |   |   |
|           |                                                                                                                                                                                     |   |   |   |   |
| Item 1.   | Financial Statements                                                                                                                                                                     |   |   |   |   |
|           |                                                                                                                                                                                     |   |   |   |   |
|           | Condensed Consolidated Balance Sheet as of June 30, 2011 (Unaudited) and Consolidated Balance Sheet as of December 31, 2010                                                              |   |   | 3      |   |
|           |                                                                                                                                                                                     |   |   |   |   |
|           | Unaudited Condensed Consolidated Statements of Operations for the six months ended June 30, 2011 and 2010 and for the period from March 28, 1995 (Inception) to June 30, 2011            |   |   | 4      |   |
|           |                                                                                                                                                                                     |   |   |   |   |
|           | Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June  30, 2011 and 2010 and for the period from March 28, 1995 (Inception) to June 30, 2011 |   |   | 5      |   |
|           |                                                                                                                                                                                     |   |   |   |   |
|           | Notes to Unaudited Condensed Consolidated Financial Statements                                                                                                                           |   |   | 6      |   |
|           |                                                                                                                                                                                     |   |   |   |   |
| Item 2.   | Management’s Discussion and Analysis of Financial Condition and Results of Operation                                                                                               |   |   | 10     |   |
|           |                                                                                                                                                                                     |   |   |   |   |
| Item 3.   | Quantitative and Qualitative Disclosures About Market Risk                                                                                                                               |   |   | 14     |   |
|           |                                                                                                                                                                                     |   |   |   |   |
| Item 4.        | Control and Procedures                                                                                                                                                                   |   |   | 14     |   |
|           |                                                                                                                                                                                     |   |   |   |   |
| PART II -      | Other Information                                                                                                                                                                        |   |   |   |   |
|           |                                                                                                                                                                                     |   |   |   |   |
| Item 1.   | Legal Proceedings                                                                                                                                                                        |   |   |   |   |
|           |                                                                                                                                                                                     |   |   |   |   |
| Item 2.   | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                                                              |   |   | 15     |   |
|           |                                                                                                                                                                                     |   |   |   |   |
| Item 3.   | Defaults Upon Senior Securities                                                                                                                                                          |   |   | 15     |   |
|           |                                                                                                                                                                                     |   |   |   |   |
| Item 4.   | Submission of Matters to a Vote of Security Holders                                                                                                                                      |   |   | 15     |   |
|           |                                                                                                                                                                                     |   |   |   |   |
| Item 5.   | Exhibits                                                                                                                                                                                 |   |   | 15     |   |
|           |                                                                                                                                                                                     |   |   |   |   |
| SIGNATURES     |                                                                                                                                                                                     |   |   | 16     |   |
|           |                                                                                                                                                                                     |   |   |   |   |
| CERTIFICATIONS |                                                                                                                                                                                     |   |   |   |   |

----

|                                                                    |   | June 30,    |        |   | December 31, |   |
|-------------------------------------------------------------------------|--------|-------------|-------------|--------|--------------|--------|
|                                                                    |   | 2011        |        |   | 2010         |   |
|                                                                    |   | (Unaudited) |        |   |         |   |
|                                                                    |   |        |        |   |         |   |
| ASSETS                                                                  |   |
|                                                                    |   |        |        |   |         |   |
| CURRENT ASSETS                                                          |   |        |        |   |         |   |
| Cash and cash equivalents                                               |   | $           | 1,673       |   |         | $      | 1,617 |   |
|                                                                    |   |        |        |   |         |   |   |   |
| TOTAL CURRENT ASSETS                                                    |   |        | 1,673       |   |         |   | 1,617 |   |
|                                                                    |   |        |        |   |         |   |   |   |
|                                                                    |   |        |        |   |         |   |   |   |
| TOTAL ASSETS                                                            |   | $           | 1,673       |   |         | $      | 1,617 |   |
|                                                                    |   |        |        |   |         |   |   |   |
|                                                                    |   |        |        |   |         |   |   |   |
| LIABILITIES AND (DEFICIENCY) IN STOCKHOLDERS' EQUITY               |   |
|                                                                    |   |        |        |   |         |   |   |   |
| CURRENT LIABILITIES                                                     |   |        |        |   |         |   |   |   |
| Accounts payable                                                        |   | $           | 6,224       |   |         | $      | 5,503 |   |
| Accrued Liabilities                                                     |   |        | 83,500      |   |         |   | 61,500 |   |
| Accrued Liabilities-Interest                                            |   |        | 4,255       |   |         |   | - |   |
| Notes payable related party                                             |   |        | -           |   |         |   | 103,717 |   |
|                                                                    |   |        |        |   |         |   |   |   |
| TOTAL CURRENT LIABILITIES                                               |   |        | 93,979      |   |         |   | 170,720 |   |
|                                                                    |   |        |        |   |         |   |   |   |
| LONG TERM LIABILITIES                                                   |   |        |        |   |         |   |   |   |
|                                                                    |   |        |        |   |         |   |   |   |
| Notes payable related party                                             |   |        | 121,717     |   |         |   | - |   |
| Derivative liabilities                                                  |   |        | 352,979     |   |         |   | - |   |
|                                                                    |   |        |        |   |         |   |   |   |
| TOTAL LONG TERM LIABILITIES                                             |   |        | 474,696     |   |         |   | - |   |
|                                                                    |   |        |        |   |         |   |   |   |
| TOTAL LIABILITIES                                                       |   | $           | 568,675     |   |         | $      | 170,720 |   |
|                                                                    |   |        |        |   |         |   |   |   |
| COMMITMENTS AND CONTINGENCIES                                           |   |        |        |   |         |   |   |   |
|                                                                    |   |        |        |   |         |   |   |   |
| (DEFICIENCY) IN SHAREHOLDERS' EQUITY                                    |   |        |        |   |         |   |   |   |
| Common stock, $0.0002 par value, 300,000,000 shares authorized;         |   |        |        |   |         |   |   |   |
| 29,477,766 and 27,277,766  shares issued and outstanding      |   |        |        |   |         |   |   |   |
|  as of  June 30, 2011 and December 31, 2010 respectively |   |        | 5,895       |   |         |   | 5,455 |   |
| Additional paid - in capital                                            |   |        | 30,318,145  |   |         |   | 30,649,564 |   |
| Deficit accumulated during the exploration stage                        |   |        | (30,891,042 | )      |         |   | (30,824,122 | ) |
|                                                                    |   |        |        |   |         |   |   |   |
| TOTAL (DEFICIENCY) IN SHAREHOLDERS' EQUITY                              |   |        | (567,002    | )      |         |   | (169,103 | ) |
|                                                                    |   |        |        |   |         |   |   |   |
|                                                                    |   |        |        |   |         |   |   |   |
| TOTAL LIABILITIES AND  (DEFICIENCY) IN SHAREHOLDERS' EQUITY   |   | $           | 1,673       |   |         | $      | 1,617 |   |

----

|                                                   |   |                  |       |   |                          |   |       | For the Period From |   |
|--------------------------------------------------------|--------|-----------------------|------------|--------|-------------------------------|--------|------------|---------------------|--------|
|                                                   |   | For the Quarter Ended |       |   | For the Six Months Ended |   |       | March 28, 1995      |   |
|                                                   |   | June 30,              |       |   | June 30,                      |   |       | (Inception) to      |   |
|                                                   |   | 2011                  |       |   | 2010                          |   |       | 2011                |   |   | 2010 |   |   | June 30, 2011 |   |
|                                                   |   |                  |       |   |                          |   |       |                |   |   |   |   |   |   |   |
|                                                   |   |                  |       |   |                          |   |       |                |   |   |   |   |   |   |   |
| REVENUES                                               |   | $                     | -          |   |                          | $      | -          |                |   | $ | - |   |   | $ | - |   |   | $ | - |   |
|                                                   |   |                  |       |   |                          |   |       |                |   |   |   |   |   |   |   |   |   |   |   |   |
| TOTAL REVENUES                                         |   |                  | -          |   |                          |   | -          |                |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                   |   |                  |       |   |                          |   |       |                |   |   |   |   |   |   |   |   |   |   |   |   |
| EXPENSES:                                              |   |                  |       |   |                          |   |       |                |   |   |   |   |   |   |   |   |   |   |   |   |
| Exploration cost                                       |   |                  | -          |   |                          |   | 53,792     |                |   |   | 4,450 |   |   |   | 53,792 |   |   |   | 1,845,147 |   |
| Asset impairment Charges                               |   |                  | -          |   |                          |   | -          |                |   |   | - |   |   |   | - |   |   |   | 17,344,110 |   |
| General and administrative                             |   |                  | 30,764     |   |                          |   | 33,207     |                |   |   | 58,215 |   |   |   | 97,299 |   |   |   | 15,729,694 |   |
|                                                   |   |                  |       |   |                          |   |       |                |   |   |   |   |   |   |   |   |   |   |   |   |
| TOTAL OPERATING EXPENSES                               |   |                  | 30,764     |   |                          |   | 86,999     |                |   |   | 62,665 |   |   |   | 151,091 |   |   |   | 34,918,951 |   |
|                                                   |   |                  |       |   |                          |   |       |                |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                   |   |                  |       |   |                          |   |       |                |   |   |   |   |   |   |   |   |   |   |   |   |
| NET LOSS FROM OPERATIONS                               |   |                  | (30,764    | )      |                          |   | (86,999    | )                   |   |   | (62,665 | ) |   |   | (151,091 | ) |   |   | (34,918,951 | ) |
|                                                   |   |                  |       |   |                          |   |       |                |   |   |   |   |   |   |   |   |   |   |   |   |
| OTHER INCOME (EXPENSES)                                |   |                  |       |   |                          |   |       |                |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss on abandonment of mining camp                     |   |                  | -          |   |                          |   | -          |                |   |   | - |   |   |   | - |   |   |   | (50,000 | ) |
| Gain of forgiveness of debt                            |   |                  | -          |   |                          |   | -          |                |   |   | - |   |   |   | - |   |   |   | 1,828,932 |   |
| Gain on sale of mining properties                      |   |                  | -          |   |                          |   | -          |                |   |   | - |   |   |   | - |   |   |   | 2,100,000 |   |
| Miscellaneous Income (Loss)                            |   |                  | -          |   |                          |   | -          |                |   |   | - |   |   |   | - |   |   |   | (11,393 | ) |
| Gain (loss) on foreign exchange rate transactions      |   |                  | -          |   |                          |   | -          |                |   |   | - |   |   |   | (76 | ) |   |   | 149,372 |   |
| Interest expense                                       |   |                  | (125,972   | )      |                          |   | -          |                |   |   | (4,255 | ) |   |   | - |   |   |   | (151,249 | ) |
| Gain on change in fair value of derivative liabilities |   |                  | 121,717    |   |                          |   | -          |                |   |   | 121,717 |   |   |   | - |   |   |   | 121,717 |   |
| Interest income                                        |   |                  | -          |   |                          |   | -          |                |   |   | - |   |   |   | - |   |   |   | 40,530 |   |
| TOTAL OTHER INCOME (EXPENSES)                          |   |                  | (4,255     | )      |                          |   | -          |                |   |   | (4,255 | ) |   |   | (76 | ) |   |   | 4,027,909 |   |
|                                                   |   |                  |       |   |                          |   |       |                |   |   |   |   |   |   |   |   |   |   |   |   |
| NET LOSS BEFORE INCOME TAXES                           |   | $                     | (35,019    | )      |                          | $      | (86,999    | )                   |   | $ | (66,920 | ) |   | $ | (151,167 | ) |   | $ | (30,891,042 | ) |
|                                                   |   |                  |       |   |                          |   |       |                |   |   |   |   |   |   |   |   |   |   |   |   |
| INCOME (TAX) BENEFIT                                   |   |                  | -          |   |                          |   | -          |                |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                   |   |                  |       |   |                          |   |       |                |   |   |   |   |   |   |   |   |   |   |   |   |
| NET LOSS                                               |   | $                     | (35,019    | )      |                          | $      | (86,999    | )                   |   | $ | (66,920 | ) |   | $ | (151,167 | ) |   | $ | (30,891,042 | ) |
|                                                   |   |                  |       |   |                          |   |       |                |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive Loss                                     |   |                  |       |   |                          |   |       |                |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividends Paid                                         |   |                  | -          |   |                          |   | -          |                |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                   |   |                  |       |   |                          |   |       |                |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Comprehensive Loss                               |   | $                     | (35,019    | )      |                          | $      | (86,999    | )                   |   | $ | (66,920 | ) |   | $ | (151,167 | ) |   | $ | (30,891,042 | ) |
|                                                   |   |                  |       |   |                          |   |       |                |   |   |   |   |   |   |   |   |   |   |   |   |
| WEIGHTED AVERAGE NUMBER OF SHARES                      |   |                  |       |   |                          |   |       |                |   |   |   |   |   |   |   |   |   |   |   |   |
| OUTSTANDING-BASIC  AND DILUTED               |   |                  | 29,170,074 |   |                          |   | 23,585,678 |                |   |   | 28,759,534 |   |   |   | 31,889,664 |   |   |   |   |   |
|                                                   |   |                  |       |   |                          |   |       |                |   |   |   |   |   |   |   |   |   |   |   |   |
| LOSS PER COMMON SHARES-                                |   |                  |       |   |                          |   |       |                |   |   |   |   |   |   |   |   |   |   |   |   |
| BASIC AND DILUTED                                      |   | $                     | (0.00      | )      |                          | $      | (0.00      | )                   |   | $ | (0.00 | ) |   | $ | (0.00 | ) |   |   |   |   |

----

|                                                                       |   |                     |     |   |           |   |     | For the Period From |   |
|----------------------------------------------------------------------------|--------|--------------------------|----------|--------|----------------|--------|----------|---------------------|--------|
|                                                                       |   | For the Six Months Ended |     |   | March 28, 1995 |   |
|                                                                       |   | June 30,                 |     |   | (Inception) to |   |
|                                                                       |   | 2011                     |     |   | 2010           |   |     | June 30, 2011       |   |
|                                                                       |   |                     |     |   |           |   |     |                |   |
|                                                                       |   |                     |     |   |           |   |     |                |   |
| CASH FLOW FROM OPERATING ACTIVITIES                                        |   |                     |     |   |           |   |     |                |   |
| Net loss from operations                                                   |   | $                        | (66,920  | )      |           | $      | (151,167 | )                   |   | $ | (30,891,042 | ) |
| Adjustment to reconcile net loss to net cash                               |   |                     |     |   |           |   |     |                |   |   |   |   |
|      used in operating activities:                |   |                     |     |   |           |   |     |                |   |   |   |   |
|      Asset impairment charges                     |   |                     | -        |   |           |   | -        |                |   |   | 17,344,110 |   |
| Issuance of common stock toward legal settlement charges                   |   |                     | -        |   |           |   | 16,000   |                |   |   | 16,000 |   |
| Issuance of common stock for services                                      |   |                     | -        |   |           |   | 59,000   |                |   |   | 11,042,792 |   |
| Beneficial conversion discount                                             |   |                     | 121,717  |   |           |   | -        |                |   |   | 143,717 |   |
|  Change in fair value of derivative liabilities                       |   |                     |     |   |           |   |     |                |   |   |   |   |
| Changes in operating assets and liabilities:                               |   |                     | (121,717 | )      |           |   | -        |                |   |   | (121,717 | ) |
|      Prepaid expenses                             |   |                     | -        |   |           |   | 3,000    |                |   |   | - |   |
|      Mining camp                                  |   |                     | -        |   |           |   | -        |                |   |   | 50,000 |   |
|      Accounts payable                             |   |                     | 721      |   |           |   | 36,450   |                |   |   | 376,881 |   |
|      Accrued expenses                             |   |                     | 26,255   |   |           |   | (896     | )                   |   |   | 91,911 |   |
| Net cash used in operating activities                                      |   |                     | (39,944  | )      |           |   | (37,613  | )                   |   |   | (1,947,348 | ) |
|                                                                       |   |                     |     |   |           |   |     |                |   |   |   |   |
| CASH FLOW FROM FINANCING ACTIVITIES                                        |   |                     |     |   |           |   |     |                |   |   |   |   |
| Dividends distributions                                                    |   |                     | -        |   |           |   | -        |                |   |   | (240,000 | ) |
| Notes payable related party                                                |   |                     | 40,000   |   |           |   | -        |                |   |   | 143,717 |   |
| Sale of common stock                                                       |   |                     | -        |   |           |   | 12,000   |                |   |   | 2,045,304 |   |
| Net cash provided by financing activities                                  |   |                     | 40,000   |   |           |   | 12,000   |                |   |   | 1,949,021 |   |
|                                                                       |   |                     |     |   |           |   |     |                |   |   |   |   |
|                                                                       |   |                     |     |   |           |   |     |                |   |   |   |   |
|                                                                       |   |                     |     |   |           |   |     |                |   |   |   |   |
| Net Increase (decrease) in cash and cash equivalents                       |   |                     | 56       |   |           |   | (25,613  | )                   |   |   | 1,673 |   |
|                                                                       |   |                     |     |   |           |   |     |                |   |   |   |   |
| Cash and cash equivalents at beginning of period                           |   |                     | 1,617    |   |           |   | 35,123   |                |   |   | - |   |
|                                                                       |   |                     |     |   |           |   |     |                |   |   |   |   |
| Cash and cash equivalents at end of period                                 |   | $                        | 1,673    |   |           | $      | 9,510    |                |   | $ | 1,673 |   |
|                                                                       |   |                     |     |   |           |   |     |                |   |   |   |   |
| Supplemental Disclosure of Cash Flow Information:                          |   |                     |     |   |           |   |     |                |   |   |   |   |
|         Cash paid for:             |   |                     |     |   |           |   |     |                |   |   |   |   |
|            Interest |   |                     | -        |   |           |   | -        |                |   |   | - |   |
|            Taxes    |   |                     | -        |   |           |   | -        |                |   |   | - |   |
|                                                                       |   |                     |     |   |           |   |     |                |   |   |   |   |
| Non-cash investing and financing activities                                |   |                     |     |   |           |   |     |                |   |   |   |   |
|       Common Stock Issued for Notes Payable  |   |                     | 22,000   |   |           |   | -        |                |   |   | 22,000 |   |
|       Beneficial conversion features         |   |                     | 121,717  |   |           |   | -        |                |   |   | 143,717 |   |
|       Issuance of common stock for services  |   |                     | -        |   |           |   | -        |                |   |   | 222,000 |   |

----

----

----

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | June 30,2011 |    |   | December 31, 2010 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|--------|-------------------|--------|
| Note payable to related party, with 10% interest per annum. The note matures on December 31, 2012. In consideration for the credit facility provided to the Company, CFCC or its designee shall receive a 15% non-dilution interest in all real and personal properties held by the Company through its 99% GISOR SA subsidiary in the Democratic Republic of the Congo as of the date hereof, and not as security for the payment of the Note, but subject to any liens or other security interests arising from bona fide indebtedness of the Company and its subsidiaries. |   | $            | 121,717 |   |              | $      | 0 |   |
| Note payable to related party, non-interest bearing and unsecured. The note is due on demand and does not have any specific repayment terms.                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |         | 0       |   |              |   | 81,717 |   |
| Convertible Note payable to related party with 6% interest per annum. The note is convertible into common stock of the Company at a conversion price of $0.01 per share.                                                                                                                                                                                                                                                                                                                                                                                                 |   |         | 0       |   |              |   | 15,000 |   |
| Convertible Note payable to related party with 6% interest per annum. The note is convertible into common stock of the Company at a conversion price of $0.01 per share.                                                                                                                                                                                                                                                                                                                                                                                                 |   |         | 0       |   |              |   | 7,000 |   |
| Total notes payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | $            | 121,717 |   |              |   | 103,717 |   |
| Less: current portion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |         | 121,717 |   |              |   | 103,717 |   |
| Notes payable – long term                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | $            | 0       |   |              | $      | 0 |   |

----

----

----

| ·   | The identification of potential gold mineralization based on superficial analysis; |
|--------------------|------------------------------------------------------------------------------------|

| ·   | The quality of our management and our geological and technical expertise; and |
|--------------------|-------------------------------------------------------------------------------|

| ·   | The capital available for exploration and development. |
|--------------------|--------------------------------------------------------|

----

----

----

----

|   | GILLA INC. |                               |
|--------|------------|------------------------------------|
|   |       |                               |   |
|   | By:        | /s/ Georges Benarroch         |   |
|   |       | Georges Benarroch, President & |   |
|   |       | Chief Financial Officer            |   |
|   |       |                               |   |

|                                    |   |                                     |   |                          |
|-----------------------------------------|--------|------------------------------------------|--------|-------------------------------|
| Name                                    |   | Title                                    |   | Date                          |
|                                    |   |                                     |   |                          |
| /s/  Georges Benarroch   |   | PresidentChief Financial OfficerDirector |   | August 15, 2011     |