Problem encountered:
Installing mysql2 (0.2.13) with native extensions /home/mike/.rvm/rubies/ruby-1.9.2-p290/lib/ruby/site_ruby/1.9.1/rubygems/installer.rb:552:in `rescue in block in build_extensions’: ERROR: Failed to build gem native extension. (Gem::Installer::ExtensionBuildError)
/home/mike/.rvm/rubies/ruby-1.9.2-p290/bin/ruby extconf.rb
checking for rb_thread_blocking_region()… yes
checking for mysql_query() in -lmysqlclient… no
checking for main() in -lm… yes
checking for mysql_query() in -lmysqlclient… no
checking for main() in -lz… yes
checking for mysql_query() in -lmysqlclient… no
checking for main() in -lsocket… no
checking for mysql_query() in -lmysqlclient… no
checking for main() in -lnsl… yes
checking for mysql_query() in -lmysqlclient… no
checking for main() in -lmygcc… no
checking for mysql_query() in -lmysqlclient… no
*** extconf.rb failed ***
Could not create Makefile due to some reason, probably lack of
necessary libraries and/or headers. Check the mkmf.log file for more
details. You may need configuration options.
Solution:
sudo apt-get install libmysqlclient15-dev
Then bundle install again and it should work.! 
Thanks!