UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, DC 20549

FORM 10-Q

Q    Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2009

£    Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period __________ to __________

Commission File Number:000-51013

Colombia Goldfields Ltd.
(Exact name of registrant as specified in its charter)

Delaware
  76-0730088(State or other jurisdiction of
   incorporation or organization)
  (IRS Employer 
  Identification No.)


#208-8 King Street East, Toronto, Ontario, Canada M5C 1B5
 (Address of principal executive offices)

416-361-9640
 (Registrant's telephone number)

_________________________________________________________
 (Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days

Q Yes            
£ No

Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files).

£ Yes            
£ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer £
  Accelerated Filer £Non-accelerated filer £
  Smaller reporting company Q(Do not check if a smaller reporting company)


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

£ Yes            
Q No

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 104,224,486 common shares as of March 31, 2009

---

TABLE OF CONTENTS

[ga001.jpg]

|        |                                                                                       | Page
|------- | ------------------------------------------------------------------------------------- | ----
|        |                                                                                       |     
|        | PART I - FINANCIAL INFORMATION                                                        |     
|        |                                                                                       |     
|Item 1. | Financial Statements                                                                  | 1   
|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations | 25  
|Item 3. | Quantitative and Qualitative Disclosures About Market Risk                            | 46  
|Item 4. | Controls and Procedures                                                               | 46  
|        |                                                                                       |     
|        | PART II - OTHER INFORMATION                                                           |     
|        |                                                                                       |     
|Item 1. | Legal Proceedings                                                                     | 47  
|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds                           | 47  
|Item 3. | Defaults Upon Senior Securities                                                       | 47  
|Item 4. | Submission of Matters to a Vote of Security Holders                                   | 47  
|Item 5. | Other Information                                                                     | 47  
|Item 6. | Exhibits                                                                              | 47  





---

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

1

---

|COLOMBIA GOLDFIELDS LTD.                                                       
|-------------------------------------------------------------------------------
|(An Exploration Stage Company)                                                 
|CONSOLIDATED BALANCE SHEETS                                                    
|(UNAUDITED)                                                                    
|(Amounts in
      US Dollars, In Thousands, Except Share and Per Share Amounts)



|                                                                               |   | March 31, |   |   | December 31, |  
|------------------------------------------------------------------------------ | - | --------- | - | - | ------------ | -
|                                                                               |   | 2009      |   |   | 2008         |  
|                                                                               |   |           |   |   |              |  
|ASSETS                                                                         |   |           |   |   |              |  
|Current                                                                        |   |           |   |   |              |  
|Cash and cash equivalents                                                      | $ | -         |   | $ | -            |  
|Prepaid expenses
      and deposits                                            |   | 70        |   |   | 85           |  
|                                                                               |   | 70        |   |   | 85           |  
|Non Current                                                                    |   |           |   |   |              |  
|Mineral and exploration properties and rights
      (Note 4)                   |   | 25,758    |   |   | 25,758       |  
|Property and
      equipment, net of accumulated amortization (Note 5)         |   | 251       |   |   | 283          |  
|                                                                               | $ | 26,079    |   | $ | 26,126       |  
|LIABILITIES                                                                    |   |           |   |   |              |  
|Current                                                                        |   |           |   |   |              |  
|Bank indebtedness (Note 5)                                                     | $ | 197       |   | $ | 200          |  
|Accounts payable and accrued liabilities                                       |   | 7,907     |   |   | 8,452        |  
|Mineral property purchase obligations (Notes 4 and 7)                          |   | 4,333     |   |   | 4,957        |  
|Related party advances (Note 8)                                                |   | 3,321     |   |   | 2,875        |  
|Short-term
      promissory note (Note 8)                                      |   | 2,765     |   |   | 2,666        |  
|                                                                               |   | 18,523    |   |   | 19,150       |  
|STOCKHOLDERS EQUITY                                                           |   |           |   |   |              |  
|Common stock (Note 6)                                                          |   |           |   |   |              |  
|Authorized:                                                                    |   |           |   |   |              |  
|200,000,000
      common shares, $0.00001 par value                            |   |           |   |   |              |  
|Issued and outstanding:                                                        |   | 1         |   |   | 1            |  
|104,524,486
      common shares (December 31, 2008: 104,524,486 common shares) |   |           |   |   |              |  
|Additional paid-in
      capital (Note 6)                                      |   | 85,779    |   |   | 89,577       |  
|                                                                               |   | 85,780    |   |   | 89,578       |  
|Deficit
      accumulated during the exploration stage                         |   | (78,224   | ) |   | (82,602      | )
|                                                                               |   | 7,556     |   |   | 6,976        |  
|                                                                               | $ | 26,079    |   | $ | 26,126       |  

See accompanying Notes to Interim Consolidated Financial
Statements

* Going Concern (Note 1) * Commitments and
Contingencies (Note 13)

2

---

|COLOMBIA GOLDFIELDS LTD.                                                       
|-------------------------------------------------------------------------------
|(An Exploration Stage Company)                                                 
|CONSOLIDATED STATEMENTS OF OPERATIONS AND
      COMPREHENSIVE LOSS             
|(UNAUDITED)                                                                    
|(Amounts in
      US Dollars, In Thousands, Except Share and Per Share Amounts)



|                                                            |   |                |   |   |                |   |   | Cumulative     |  
|----------------------------------------------------------- | - | -------------- | - | - | -------------- | - | - | -------------- | -
|                                                            |   |                |   |   |                |   |   | From           |  
|                                                            |   |                |   |   |                |   |   | Inception      |  
|                                                            |   |                |   |   |                |   |   | (March 25,     |  
|                                                            |   | Three Months   |   |   | Three Months   |   |   | 2003           | )
|                                                            |   | Ended          |   |   | Ended          |   |   | through        |  
|                                                            |   | March 31, 2009 |   |   | March 31, 2008 |   |   | March 31, 2009 |  
|                                                            |   |                |   |   |                |   |   |                |  
|REVENUES                                                    | $ | -              |   | $ | -              |   | $ | -              |  
|OPERATING EXPENSES                                          |   |                |   |   |                |   |   |                |  
|Mineral property exploration expenses (Notes 4 and
      6) |   | 280            |   |   | 2,975          |   |   | 29,381         |  
|General and administrative (Note 6)                         |   | 331            |   |   | 2,207          |   |   | 17,201         |  
|Write-down of Mineros deposit and advance
      (Note 3)    |   | -              |   |   | -              |   |   | 9,296          |  
|Write-down of mineral and exploration properties and        |   |                |   |   |                |   |   |                |  
|rights (Note 4)                                             |   | -              |   |   | -              |   |   | 40,545         |  
|Foreign exchange loss (gain)                                |   | (1,154         | ) |   | 1,840          |   |   | (722           | )
|Amortization                                                |   | 15             |   |   | 63             |   |   | 428            |  
|Total operating expenses (income)                           |   | (528           | ) |   | 7,085          |   |   | 96,129         |  
|Other income                                                |   | -              |   |   | (6             | ) |   | (293           | )
|Income (loss) before deferred income taxes                  |   | 528            |   |   | (7,079         | ) |   | (95,836        | )
|Deferred income tax recovery                                |   | -              |   |   | 904            |   |   | 13,762         |  
|Net income (loss) and comprehensive income (loss)           | $ | 528            |   | $ | (6,175         | ) | $ | (82,074        | )
|INCOME (LOSS) PER SHARE  BASIC AND
      DILUTED           | $ | 0.01           |   | $ | (0.07          | ) |   |                |  
|WEIGHTED AVERAGE NUMBER OF COMMON SHARES
      OUTSTANDING  |   |                |   |   |                |   |   |                |  
|Basic and diluted                                           |   | 104,524,486    |   |   | 86,659,772     |   |   |                |  

See accompanying Notes to Interim Consolidated Financial
Statements

* Going Concern (Note 1)

3

---

|COLOMBIA GOLDFIELDS LTD.                                                       
|-------------------------------------------------------------------------------
|(An Exploration Stage Company)                                                 
|CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
      (DEFICIENCY)              
|(UNAUDITED)                                                                    
|(Amounts in
      US Dollars, In Thousands, Except Share and Per Share Amounts)



Common Shares
    
    
    Capital/Stock Additional Paid-in
      Capital
    
    
    Share Purchase Warrants
    
    
    Special Warrants
    
    
    Deficit Accumulated During the
      Exploration Stage
    
    
    Total Stockholders EquityBalance, December 31, 2007
    
    86,590,075
    
    $
    67,189
    
    $
    6,302
    
    $
    -
    
    $
    (22,405
    )
    $
    51,086Year Ended December
      31, 2008Issue of 350,000 share purchase warrants with
      February 8, 2008 short-term promissory note  (Note 6B)
    
    -
    
    
    -
    
    
    100
    
    
    -
    
    
    -
    
    
    100Issue of common stock for cash at $0.85 per unit (common shares
      and warrants) less agents fees and issue costs of $160 on March 31, 2008
    
    6,342,411
    
    
    3,931
    
    
    -
    
    
    -
    
    
    -
    
    
    3,931Issue of 6,341,411 share purchase warrants with
      March 31, 2008 common stock issuance less agents fees and issue costs of
      $48
    
    -
    
    
    -
    
    
    1,252
    
    
    -
    
    
    -
    
    
    1,252Expiry of 6,500,666 share purchase warrants on April 25, 2008
    
    -
    
    
    2,750
    
    
    (2,750
    )
    
    -
    
    
    -
    
    
    -Issue of 11,167,000 special warrants for cash at
      $0.85 per special warrant less agents fees and issue costs of $934 on
      June 18, 2008
    
    -
    
    
    -
    
    
    -
    
    
    8,558
    
    
    -
    
    
    8,558Issuance of 125,000 common shares on August 8, 2008 in connection
      with first bridge loan extension
    
    125,000
    
    
    50
    
    
    -
    
    
    -
    
    
    -
    
    
    50Expiry of 4,241,500 share purchase warrants on
      August 14, 2008
    
    -
    
    
    926
    
    
    (926
    )
    
    -
    
    
    -
    
    
    -Conversion of 11,167,000 special warrants into 11,167,000 common
      shares and 11,167,000 share purchase warrants on September 30, 2008
    
    11,167,000
    
    
    6,121
    
    
    2,437
    
    
    (8,558
    )
    
    -
    
    
    -Issuance of 300,000 common shares on October 7,
      2008 in connection with second bridge loan extension
    
    300,000
    
    
    30
    
    
    -
    
    
    -
    
    
    -
    
    
    30Stock based compensation
    
    -
    
    
    2,166
    
    
    -
    
    
    -
    
    
    -
    
    
    2,166Net loss
      for the year ended December 31, 2008
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (60,197
    )
    
    (60,197
    )Balance December 31,
      2008
    
    104,524,486
    
    $
    83,163
    
    $
    6,415
    
    $
    -
    
    $
    (82,602
    )
    $
    6,976


See accompanying Notes to Interim Consolidated Financial
Statements

* Going concern (Note 1)

4

---

|COLOMBIA GOLDFIELDS LTD.                                                       
|-------------------------------------------------------------------------------
|(An Exploration Stage Company)                                                 
|CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
      (DEFICIENCY)              
|(UNAUDITED)                                                                    
|(Amounts in
      US Dollars, In Thousands, Except Share and Per Share Amounts)



Common Shares
    
    
    Capital/Stock Additional Paid-in Capital
    
    
    Share Purchase Warrants
    
    
    Special Warrants
    
    
    Deficit Accumulated During the Exploration Stage
    
    
    Total Stockholders EquityBalance, December 31, 2008
    
    104,524,486
    
    $
    83,163
    
    $
    6,415
    
    $
    -
    
    $
    (82,602
    )
    $
    6,976Three Months
      Ended March 31, 2009Adjustment to deficit upon adoption of EITF
      07-5 (Note 6(B)) on January 1, 2009
    
    -
    
    
    -
    
    
    (3,850
    )
    
    -
    
    
    3,850
    
    $
    -Stock based compensation
    
    -
    
    
    52
    
    
    -
    
    
    -
    
    
    -
    
    
    52Net income for the three months endedMarch 31, 2009
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    528
    
    
    528Balance, March 31, 2009
    
    104,524,486
    
    $
    83,215
    
    $
    2,565
    
    $
    -
    
    $
    (78,224
    )
    $
    7,556


See accompanying Notes to Interim Consolidated Financial
Statements

* Going concern (Note 1)

5

---

|COLOMBIA GOLDFIELDS LTD.                                                       
|-------------------------------------------------------------------------------
|(An Exploration Stage Company)                                                 
|CONSOLIDATED STATEMENTS OF CASH FLOWS                                          
|(UNAUDITED)                                                                    
|(Amounts in
      US Dollars, In Thousands, Except Share and Per Share Amounts)



|                                                                    |   | Three Months Ended March 31, 2009 |   |   | Three Months Ended March 31, 2008 |   |   | Cumulative from Inception (March 25,
      2003) **through March 31, 2009** |  
|------------------------------------------------------------------- | - | --------------------------------- | - | - | --------------------------------- | - | - | --------------------------------------------------------------------------- | -
|                                                                    |   |                                   |   |   |                                   |   |   |                                                                             |  
|OPERATING ACTIVITIES:                                               |   |                                   |   |   |                                   |   |   |                                                                             |  
|Net income (loss)                                                   | $ | 528                               |   | $ | (6,175                            | ) | $ | (82,074                                                                     | )
|Items not requiring cash outlay:                                    |   |                                   |   |   |                                   |   |   |                                                                             |  
|- Consulting fees                                                   |   | -                                 |   |   | -                                 |   |   | 54                                                                          |  
|-
      Amortization                                                |   | 15                                |   |   | 63                                |   |   | 428                                                                         |  
|- Mineral property
      exploration                                |   | -                                 |   |   | -                                 |   |   | 250                                                                         |  
|-
      Stock based compensation                                    |   | 52                                |   |   | 1,021                             |   |   | 7,734                                                                       |  
|- Write down of
      Mineros deposit and advance                   |   | -                                 |   |   | -                                 |   |   | 9,296                                                                       |  
|-
      Write down of mineral and exploration properties and rights |   | -                                 |   |   | -                                 |   |   | 40,545                                                                      |  
|- Deferred income
      taxes                                       |   | -                                 |   |   | (904                              | ) |   | (13,762                                                                     | )
|Changes in non-cash working capital items                           |   |                                   |   |   |                                   |   |   |                                                                             |  
|- Prepaid expenses
      and deposits                               |   | 15                                |   |   | (378                              | ) |   | 135                                                                         |  
|-
      Accounts payable, accrued and other liabilities             |   | (1,053                            | ) |   | 1,620                             |   |   | 7,737                                                                       |  
|- Due to/from related parties                                       |   | -                                 |   |   | -                                 |   |   | 5                                                                           |  
|Net cash used in operating activities                               |   | (443                              | ) |   | (4,753                            | ) |   | (29,652                                                                     | )
|FINANCING ACTIVITIES:                                               |   |                                   |   |   |                                   |   |   |                                                                             |  
|Issuance of equity securities, net of issue
      costs and fees    |   | -                                 |   |   | 5,183                             |   |   | 55,955                                                                      |  
|Issuance of promissory notes and related warrants                   |   | -                                 |   |   | 2,500                             |   |   | 12,200                                                                      |  
|Repayment of promissory notes                                       |   | -                                 |   |   | -                                 |   |   | (9,700                                                                      | )
|Related party advances                                              |   | 446                               |   |   | -                                 |   |   | 3,321                                                                       |  
|Increase (decrease) in bank indebtedness                            |   | (3                                | ) |   | -                                 |   |   | 197                                                                         |  
|Exercise of stock
      options                                     |   | -                                 |   |   | -                                 |   |   | 131                                                                         |  
|Net cash provided by financing activities                           |   | 443                               |   |   | 7,683                             |   |   | 62,104                                                                      |  
|INVESTING ACTIVITIES:                                               |   |                                   |   |   |                                   |   |   |                                                                             |  
|Purchase of mineral exploration rights                              |   | -                                 |   |   | (2,477                            | ) |   | (21,505                                                                     | )
|Purchase of equipment                                               |   | -                                 |   |   | (31                               | ) |   | (1,426                                                                      | )
|Website development costs                                           |   | -                                 |   |   | -                                 |   |   | (21                                                                         | )
|Mineros deposit
      and advance                                   |   | -                                 |   |   | (2,500                            | ) |   | (9,500                                                                      | )
|Net cash used in investing activities                               |   | -                                 |   |   | (5,008                            | ) |   | (32,452                                                                     | )
|DECREASE IN CASH AND CASH EQUIVALENTS                               |   | -                                 |   |   | (2,078                            | ) |   | -                                                                           |  
|CASH AND CASH EQUIVALENTS AT BEGINNING OF
      PERIOD              |   | -                                 |   |   | 6,939                             |   |   | -                                                                           |  
|**CASH
      AND CASH EQUIVALENTS AT END OF PERIOD**                | $ | -                                 |   | $ | 4,861                             |   | $ | -                                                                           |  
|SUPPLEMNTAL CASH FLOW INFORMATION                                   |   |                                   |   |   |                                   |   |   |                                                                             |  
|Interest and financing fees                                         | $ | 100                               |   | $ | 183                               |   | $ | 1,226                                                                       |  
|Income taxes                                                        | $ | -                                 |   | $ | -                                 |   | $ | -                                                                           |  

See accompanying Notes to Interim Consolidated Financial
Statements

* Going Concern (Note 1)

6

---

|COLOMBIA GOLDFIELDS LTD.                                                       
|-------------------------------------------------------------------------------
|(An Exploration Stage Company)                                                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                     
|(UNAUDITED)                                                                    
|(Amounts in
      US Dollars, In Thousands, Except Share and Per Share Amounts)

NOTE 1  GOING CONCERN AND NATURE OF OPERATIONS

The Company was incorporated under the laws of the State of
Nevada, U.S.A., on March 25, 2003. On July 31, 2006, the Companys jurisdiction
of incorporation was changed to the state of Delaware. The Company is currently
in the exploration stage and its operational focus is on the acquisition and
exploration of, and development of mineral properties.

These consolidated financial statements have been prepared
using U.S generally accepted accounting principles applicable to a going concern
which contemplates the realization of assets and settlement of liabilities in
the normal course of business as they come due. The Company has incurred a
cumulative net loss since inception on March 25, 2003 to March 31, 2009 of
$82,074 and has no source of operating revenue. The Companys ability to meet
its obligations and continue as a going concern is dependent on securing future
funding. As a result of the recent turmoil in worldwide financial markets the
Company has been unable to raise the required capital necessary to address the
Companys current working capital deficiency at March 31, 2009. As a result, the
Company is reviewing strategic alternatives, including a sale process for all or
some of the Companys assets. The Company has canvassed a number of qualified
parties with respect to a sale or financing transaction for some or all of the
Companys assets and has also provided data room access pursuant to
confidentiality agreements to interested parties. At the present time there is
no certainty that these initiatives or any financing or sale of one or more of
the Companys projects or the Company itself will be completed.

At March 31, 2009 the Company has a significant working capital
deficiency including $18,523 in current liabilities as follows:

|Bank indebtedness                        | $ | 197    | 
|---------------------------------------- | - | ------ | 
|Accounts payable and accrued liabilities |   | 7,907  | 
|Mineral property purchase obligations    |   | 4,333  | 
|Related party advances                   |   | 3,321  | 
|Short-term promissory note               |   | 2,765  | 
|                                         | $ | 18,523 | 

The Company continues discussions with its creditors and
parties to the Companys mineral property purchase obligations to ascertain
their willingness to work with the Company to restructure its obligations. As
well, the Company has terminated all but essential personnel in both its Toronto
and Medellin offices in order to further reduce the Companys monthly operating
cash requirements. While both i) the Companys President, and ii) the Companys
Vice Chairman, and CEO are supportive of the Companys efforts to restructure
its operations given the current gold prices, their ability to provide
significant additional working capital advances has become increasingly
difficult. While they have not requested repayment of their related party
advances there can be no assurance that additional funding from these
individuals will be available on acceptable terms to the Company or at all. No
interest has been charged or requested on the working capital advances.

7

---

|COLOMBIA GOLDFIELDS LTD.                                                       
|-------------------------------------------------------------------------------
|(An Exploration Stage Company)                                                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                     
|(Amounts in
      US Dollars, In Thousands, Except Share and Per Share Amounts)

The Company has a short-term promissory note obligation with
Global Resource Fund (the Note). The Note is collateralized by the Companys
investment in RNC (Colombia) Ltd. and collateralized by a pledge of the
Companys investments in Compania Minera de Caldas (Caldas) and Gavilan
Minerales S.A. (Gavilan). Caldas is the Companys principal operating
subsidiary and the titleholder of the Companys mineral rights and legal mine
titles. The Note was due December 29, 2008 and the Company has been unable to
repay the Note as of the date of these financial statements. There can be no
assurance that the Companys short-term promissory note will be repaid or that
the holder will not call the loan or exercise its rights to the loans
underlying collateral interests. Certain of the Companys trade creditors have
placed a lien on the Companys mineral properties in order to protect their
rights to payment. The Company is currently working with its advisors to develop
a method for pledging to Global additional security under these
circumstances.

These circumstances lend substantial doubt as to the ability of
the Company to meet its obligations as they become due, and, accordingly, as to
the appropriateness of the use of accounting principles applicable to a going
concern. These consolidated financial statements do not reflect the adjustments
to the carrying values of assets and liabilities and the reported expenses and
balance sheet classifications that would be necessary if the going concern
assumption were not appropriate, and these adjustments could be material.

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying consolidated financial statements have been
prepared in accordance with the accounting principles generally accepted in the
United States.

Use of Estimates

The preparation of financial statements in accordance with U.S.
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amount of revenues and expenses during the period.
Actual results may differ from those estimates.

8

---

|COLOMBIA GOLDFIELDS LTD.                                                       
|-------------------------------------------------------------------------------
|(An Exploration Stage Company)                                                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                     
|(UNAUDITED)                                                                    
|(Amounts in
      US Dollars, In Thousands, Except Share and Per Share Amounts)

Consolidation

Entities that are controlled by the Company, either directly or
indirectly, are consolidated. Control is established by the Companys ability to
determine strategic, operating, investing and financing policies without the
co-operation of others. The Company analyzes its level of ownership, voting
rights and representation on the board of directors in determining if control
exists by any one, or a combination, of these factors.

These consolidated financial statements include the accounts of
(i) Colombia Goldfields Ltd., a Delaware corporation (ii) the Companys 100%
interest in RNC (Colombia) Limited (RNC), a Belize corporation and its 95%
owned subsidiary  Compania Minera De Caldas, S.A. (Caldas), a Colombia
corporation, and (iii) the Companys 94% interest in Gavilan Minerales, S.A.
(Gavilan) a Colombia corporation. Colombian law requires Colombian companies
to have at least five shareholders and, as a result, the remaining 5% of Caldas
and 6% of Gavilan is held by directors and senior management of the Company. All
significant inter-company transactions and balances have been eliminated upon
consolidation.

Since the non-controlling shareholders of RNC and Gavilan have
no obligation to contribute any additional capital and the Company is the
primary entity obligated to fund future exploratory work, no non-controlling
interest related to Caldas or Gavilan has been recognized in the consolidated
statements of operations for the three months ended March 31, 2009 and March 31,
2008 and in the consolidated balance sheets at March 31, 2009 and December 31,
2008. The directors and senior management of Caldas and Gavilan have executed
voting and support agreements in favour of the Company.

Mineral Property Rights Acquisition and Exploration and
Development Expenditures

Costs of acquiring mining properties are capitalized upon
acquisition. Pursuant to Statement of Financial Accounting Standards (SFAS) No.
34,Capitalization of Interest Costs, interest costs attributable to
mineral property acquisitions are also capitalized. Mine development costs
incurred either to develop new ore deposits, expand the capacity of mines, or to
develop mine areas substantially in advance of current production are also
capitalized once proven and probable reserves exist and the property is a
commercially mineable property. Costs incurred to maintain current production or
to maintain assets on a standby basis are charged to operations. Costs of
abandoned projects are charged to operations upon abandonment. The Company
evaluates the carrying value of capitalized mining costs and related property,
plant and equipment costs, to determine if these costs are in excess of their
net recoverable amount whenever events or changes in circumstances indicate that
their carrying amounts may not be recoverable. The periodic evaluation of
carrying values of capitalized costs and any related property, plant and
equipment costs is based upon expected future cash flows and/or estimated
salvage value in accordance with SFAS No. 144, Accounting for Impairment or
Disposal of Long-Lived Assets.

9

---

|COLOMBIA GOLDFIELDS LTD.                                                       
|-------------------------------------------------------------------------------
|(An Exploration Stage Company)                                                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                     
|(UNAUDITED)                                                                    
|(Amounts in
      US Dollars, In Thousands, Except Share and Per Share Amounts)

Asset Retirement Obligations

The Company applies SFAS No. 143, Accounting for Asset
Retirement Obligations which requires that the fair value of a liability for
an asset retirement obligation be recognized in the period in which it is
incurred. SFAS No. 143 requires the Company to record a liability for the
present value using a credit-adjusted risk free interest rate, of the estimated
site restoration costs with a corresponding increase to the carrying amount of
the related long-lived assets. The liability is accreted until it has been fully
incurred and the asset is amortized over the life of the related assets.
Adjustments are made for changes resulting from the passage of time and changes
to either the timing or amount of the original present value estimate underlying
the obligation. As at March 31, 2009 and December 31, 2008 the Company does not
have any asset retirement obligations.

Cash and Cash Equivalents

The Company considers all highly liquid instruments with a
maturity of three months or less at the time of issuance to be cash
equivalents.

Property and Equipment

Property and equipment are carried at cost. For the significant
components of property and equipment, depreciation is provided for using the
following method and time periods:

|Asset                   | Basis         | Period       
|----------------------- | ------------- | -------------
|                        |               |              
|Vehicles                | Straight line | 5 years      
|Buildings               | Straight line | 20 years     
|Equipment and computers | Straight line | 3 to 10 years

The Company evaluates the carrying values of property and
equipment to determine if these costs are in excess of their net recoverable
amount whenever events or changes in circumstances indicate that the carrying
amounts may not be recoverable. The periodic evaluation of the carrying values
of property and equipment costs is based on expected future cash flows and
estimated salvage value.

Environmental Costs

Environmental expenditures that related to current operations
are charged to operations or capitalized as appropriate. Expenditures that
relate to an existing condition caused by past operations, and which do not
contribute to current or future revenue generation, are charged to operations.
Liabilities are recorded when environmental assessments and/or remedial efforts
are probable, and the cost can be reasonably estimated.

Comprehensive Income

In accordance with SFAS No. 130, Reporting Comprehensive
Income (SFAS 130), comprehensive income consists of net income and other
gains and losses affecting stockholders equity that are excluded from net
income, such as unrealized gains and losses on investments available for sale
and foreign currency translation gains and losses when a subsidiary has a
functional currency other than US dollars. For all periods presented, the
Companys financial statements do not include any of the additional elements
that affect comprehensive income. Accordingly, net earnings (loss) and
comprehensive earnings (loss) are identical.

10

---

|COLOMBIA GOLDFIELDS LTD.                                                       
|-------------------------------------------------------------------------------
|(An Exploration Stage Company)                                                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                     
|(UNAUDITED)                                                                    
|(Amounts in
      US Dollars, In Thousands, Except Share and Per Share Amounts)

Stock-Based Compensation

The Company applies SFAS No. 123(R), Share-Based
Payment, to account for stock options and similar equity instruments issued.
Accordingly, compensation expense attributable to stock options or similar
equity instruments granted is measured at the fair value at the grant date using
the Black-Scholes option pricing model and a graded approach and recognized over
the expected vesting period. In the event stock options are forfeited, any
previously recognized compensation expense related to unvested and expiring
awards in excess of estimated forfeitures is recognized in earnings during the
period of forfeiture.

Although the assumptions used to record stock compensation
expense reflect managements best estimates, they involve inherent uncertainties
based on market conditions generally outside of the control of the Company. If
other assumptions were used, stock-based compensation expense could be
significantly impacted. As stock options are exercised, the proceeds received on
exercise, in addition to the previously recognized amounts related to those
stock options, are credited to stockholders equity.

The Company provides direct stock awards to certain directors,
officers, and consultants. Direct stock awards are recorded at fair value on the
grant date, with compensation expense recognized on a straight-line basis over
the agreed upon vesting period.

Foreign Currency Translation

The Companys functional currency is the US dollar.
Accordingly, foreign currency balances are translated into US dollars as follows
i) Monetary assets and liabilities are translated at the period-end exchange
rate ii) Non-monetary assets are translated at the rate of exchange in effect at
their acquisition date; and iii) Revenue and expense items are translated at the
average exchange rate for the respective period. Foreign exchange gains and
losses are recognized as period gains and losses.

Earnings (Loss) per Share

Basic earnings (loss) per share is computed by dividing net
earnings (loss) available to common stockholders by the weighted average number
of common shares outstanding during the period. Diluted net earnings (loss) per
share on the potential exercise of equity-based financial instruments is not
presented where anti-dilutive. For the three months ended March 31, 2009 and
March 31, 2008, outstanding share purchase warrants and options to purchase
common shares were excluded from the computation of diluted earnings per share
as the impact of these instruments was anti-dilutive as a result of losses
incurred in these periods.

Income Taxes

The Company accounts for income taxes using the asset and
liability method which requires the recognition of deferred tax assets and
liabilities for the expected future tax consequences of events that have been
recognized in the Companys financial statements or tax returns.

11

---

|COLOMBIA GOLDFIELDS LTD.                                                       
|-------------------------------------------------------------------------------
|(An Exploration Stage Company)                                                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                     
|(UNAUDITED)                                                                    
|(Amounts in
      US Dollars, In Thousands, Except Share and Per Share Amounts)

Financial Instruments

The Companys financial instruments have consisted of cash and
cash equivalents, bank indebtedness, accounts payable and accrued liabilities,
related party advances short-term promissory notes, and mineral property
purchase obligations. The carrying value of these financial instruments
approximates their fair value based on their liquidity or their short-term
nature. The Company is not exposed to significant interest or credit risk
arising from these financial instruments.

NOTE 3  MINEROS DEPOSIT AND ADVANCE

On January 29, 2008 the Company entered into a Share Purchase
and Sale Agreement (the Agreement) to purchase all of the issued and
outstanding shares of Mineros Nacionales S.A., (Mineros) a corporation
organized under the laws of the Republic of Colombia, for cash consideration of
$35,000. The Mineros Agreement provided that the transaction would be completed
on April 29, 2008, unless such closing date is extended by mutual agreement. The
Company provided a deposit guarantee in the amount of 4.9 billion pesos (US
$2,296), which would be payable to the vendors if the transaction was not
completed for any reason. The guarantee was collateralized by a term deposit
held by the Company in the amount of 4.9 billion pesos (US $2,296).

The Company and Mineros subsequently agreed to modify the
Agreement and extend the completion date of the Mineros transaction from April
29, 2008 to July 31, 2008. In connection with this extension, on June 19, 2008
the Company advanced $7,000, representing 20% of the $35,000 purchase price with
the balance due upon completion of the transaction.

On September 22, 2008 the Company and Mineros agreed to further
extend the completion date to October 31, 2008. Both the deposit and guarantee
were non-refundable if the transaction was not completed for any reason. On
October 31, 2008 Mineros notified the Company it was unwilling to extend the
closing of the transaction beyond October 31, 2008 and terminated the
transaction. Mineros exercised its right to the non refundable advance and term
deposit. As a result, a write-down of $9,296 with respect to these items was
recognized in the Consolidated Statements of Operations for the year ended
December 31, 2008.

NOTE 4  MINERAL PROPERTIES AND EXPLORATION RIGHTS

Mineral Property Rights Acquisition and Exploration
Expenditures

The Companys mineral property acquisition and exploration
expenditures consist of

| | I)   | The acquisition of mineral concessions;                                            
| | ---- | -----------------------------------------------------------------------------------
| |      |                                                                                    
| | II)  | The acquisition of mineral and exploration rights from
      existing titleholders;
| |      |                                                                                    
| | III) | The exploration of acquired mineral properties and
      related activities; and   
| |      |                                                                                    
| | IV)  | Stock-based compensation allocated pursuant to SFAS No.
      123(R)               

12

---

|COLOMBIA GOLDFIELDS LTD.                                                       
|-------------------------------------------------------------------------------
|(An Exploration Stage Company)                                                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                     
|(UNAUDITED)                                                                    
|(Amounts in
      US Dollars, In Thousands, Except Share and Per Share Amounts)

During the fourth quarter of 2008, problems with the global
financial system accelerated. This impacted and continues to impact the
Companys ability to access the capital markets in order to fund the Companys
operations and, like many junior exploration companies, the decline in the
Companys market capitalization suggests that the previously recognized carrying
amounts of mineral and exploration properties and rights may not be recoverable.
At December 31, 2008 there were 92 legal and valid mining titles in the name of
Caldas. While the Company continues to hold these titles, in preparing the
Companys 2008 annual consolidated financial statements, the carrying value of
the Companys mineral rights was reviewed for recoverability and impairment
based on the Companys enterprise value and feedback received from the Companys
discussions with potential strategic partners. As a result of the Companys
review, a write-down of $40,545 ($34,194 net of deferred tax recoveries of
$6,351) was recognized in the consolidated statement of operations and
comprehensive loss for the year ended December 31, 2008.

The following table summarizes the Companys mineral and
exploration properties and rights and mineral property exploration expenses:

|                                       |   | Mineral and Exploration Properties and
      Rights |   |   | Mineral Property Exploration Expenses | 
|-------------------------------------- | - | --------------------------------------------------- | - | - | ------------------------------------- | 
|Balance, December 31, 2007             |   | 65,377                                              |   |   | 12,580                                | 
|Additions  fiscal 2008                |   | 926                                                 |   |   | 16,521                                | 
|Write-down of investment  fiscal 2008 |   | (40,545                                             | ) |   | -                                     | 
|Balance, December 31, 2008             |   | 25,758                                              |   |   | 29,101                                | 
|Additions  fiscal 2009                |   | -                                                   |   |   | 280                                   | 
|Balance, March
      31, 2009          | $ | 25,758                                              |   | $ | 29,381                                | 

Title to mineral properties and mining and exploration rights
involves certain inherent risks due to the difficulties of determining the
validity of certain claims as well as the potential for problems arising from
the frequently ambiguous conveyance history characteristic of many mining
properties. When the Company acquires title to mineral properties either
individually or through the acquisition of subsidiaries, the conveyance of such
titles can be time consuming and subject to the interpretation of Colombian
laws. Furthermore, as disclosed in Note 7 and Note 14, certain mineral
properties remain subject to contractual obligations. The Company cannot give
any assurance that title to its properties will not be challenged or impugned
and cannot be certain that the Company will have valid title to its mining
properties. The Company relies on title opinions by legal counsel who base such
opinions on the laws of countries in which the Company operates. As disclosed in
Note 1, the ability of the Company to continue as a going concern and realize
the carrying value of the Companys mineral and exploration properties and
rights is dependent upon a number of external factors. Should the Company be
unable to continue as a going concern, or be able to successfully advance its
discussions with its creditors, the carrying values of the rights could be
further impacted in future periods and such adjustments may be significant.

13

---

|COLOMBIA GOLDFIELDS LTD.                                                       
|-------------------------------------------------------------------------------
|(An Exploration Stage Company)                                                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                     
|(UNAUDITED)                                                                    
|(Amounts in
      US Dollars, In Thousands, Except Share and Per Share Amounts)

NOTE 5  PROPERTY AND EQUIPMENT

|                         |   | March 31, 2009 |   |   | December 31, 2008 |  
|------------------------ | - | -------------- | - | - | ----------------- | -
|Equipment and computers  | $ | 243            |   | $ | 243               |  
|Building                 |   | 87             |   |   | 87                |  
|Vehicles                 |   | 82             |   |   | 99                |  
|Accumulated amortization |   | 412            |   |   | 429               |  
|                         |   | (161           | ) |   | (146              | )
|Total                    | $ | 251            |   | $ | 283               |  

The Companys bank indebtedness of $197 is collateralized by a
mortgage against the Companys office building in Medellin, Colombia.

NOTE 6  STOCKHOLDERS EQUITY

A) Common Stock and Special Warrants

|                           |   | March 31, 2009 |  |   | December 31, 2008 | 
|-------------------------- | - | -------------- |  | - | ----------------- | 
|                           |   |                |  |   |                   | 
|Authorized:                |   |                |  |   |                   | 
|200,000,000 common shares, |   |                |  |   |                   | 
|$0.00001 par value         |   |                |  |   |                   | 
|Issued and Outstanding:    |   |                |  |   |                   | 
|104,524,486 common         |   |                |  |   |                   | 
|shares (December 31, 2008: |   |                |  |   |                   | 
|104,524,486 common shares) | $ | 1              |  | $ | 1                 | 



|i) | During the year ended December 31, 2008 the Company
      completed the following transactions:
|-- | -----------------------------------------------------------------------------------------------
|   |                                                                                                
|   | a)                                                                                             
|   |                                                                                                
|   | b)                                                                                             

14

---

|COLOMBIA GOLDFIELDS LTD.                                                       
|-------------------------------------------------------------------------------
|(An Exploration Stage Company)                                                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                     
|(UNAUDITED)                                                                    
|(Amounts in
      US Dollars, In Thousands, Except Share and Per Share Amounts)



| | c) | On March 31, 2008 the Company completed a private equity
      offering of 6,342,411 Units at $0.85 per Unit to a total of 7 investors.
      Each Unit consists of one share of common stock and one warrant, for a
      total of 6,342,411 common shares and 6,342,411 warrants issued. The total
      gross proceeds raised were $5,391. Each warrant is exercisable for one
      common share at an exercise price of $1.10 and exercisable at any time up
      to two years from the issue date.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | In connection with this private equity offering, the
      Company paid as a commission $158 and incurred issue costs of
  $50.                                                                                                                                                                                                                                                                                                                                                                          
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | The Company has allocated the total net proceeds from the
      offering of $5,183 to the underlying equity instruments comprising the
      equity offering, based on the estimated relative fair value of each
      instrument at the offering date as follows:                                                                                                                                                                                                                                       



| |                                                       |   | Net Proceeds | 
| | ----------------------------------------------------- | - | ------------ | 
| | Common shares and                                     |   |              | 
| | Additional paid in capital  common shares            | $ | 3,931        | 
| | Additional paid in capital  share purchase warrants  |   | 1,252        | 
| | Total net
      proceeds from private equity offering | $ | 5,183        | 



| | d) | On June 18, 2008 the Company completed a private equity
      offering of 11,167,000 special warrants (the Special Warrants) at a
      price of $0.85 per Special Warrant to a total of 16 investors. Each
      Special Warrant was automatically exercisable for no additional
      consideration to acquire one unit (the Units) upon the earlier of a) the
      issuance of a receipt for the prospectus of the Units and b) four months
      following the closing date of the offering. Each Unit consisted of one
      common share of the Company (the Common Shares) and one common share
      purchase warrant (the Warrant). Each Warrant entitles the holder to
      acquire one Common Share at a price of $1.50 up to June 18,
2013.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    | In connection with the offering, the Company paid as a
      commission $664 and incurred issue costs of $270. The Company issued
      781,690 special broker warrants (the Special Broker Warrants) to the
      agents retained for the offering, each Special Broker Warrant exercisable
      for no additional consideration into one broker warrant of the Company
      (Broker Warrants), and each Broker Warrant entitling the holder, to
      purchase one Common Share at an exercise price of $0.85 per Common Share
      up to June 28, 2010.                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    | In connection with the Offering, the Company entered into
      registration rights agreements with the holders and agents pursuant to
      which the Company agreed to prepare and file with the SEC a registration
      statement to register the resale of Common Shares and the Common Shares
      issuable upon exercise of the Warrants by the purchasers in the Offering
      as well as the Common Shares issuable upon exercise of the Broker
      Warrants.                                                                                                                                                                                                                                                                                       

15

---

|COLOMBIA GOLDFIELDS LTD.                                                       
|-------------------------------------------------------------------------------
|(An Exploration Stage Company)                                                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                     
|(UNAUDITED)                                                                    
|(Amounts in
      US Dollars, In Thousands, Except Share and Per Share Amounts)



| |    | In the event the registration statement registering the
      resale of the Common Shares issued in connection with the Offering i) did
      not become effective on or before October 18, 2008 and, subject to certain
      exceptions; ii) ceased to be effective and available for use any time it
      is required to be effective and available for use or, if, at a time the
      registration statement is not available for use, Rule 144 is not available
      for use for a period of five consecutive business days by holders of such
      securities because of certain breaches by the Company, the Company was
      obligated i) to issue to each purchaser of Special Warrants that hold
      Common Shares or Warrants issued pursuant to the Special Warrants or
      Common Shares issued pursuant to the Warrants a number of Common Shares
      and Warrants (together referred to as Additional Units), equal to 10% of
      the number of Special Warrants purchased by purchasers in the Offering and
      issue to the agents a number of Broker Warrants equal to 10% of the Broker
      Warrants initially issued to the agents; and is obligated ii) to issue to
      each such purchaser 279,175 Additional Units (subject to an aggregate
      maximum of 558,350 Additional Units) for each 30 days after the four month
      anniversary of the closing date of the Offering (whether or not
      continuous) when neither the registration statement nor Rule 144 is
      available for resale of securities of the Company. In lieu of issuing such
      Additional Units, the Company had the option, or if shareholder approval
      was not obtained, to pay the cash equivalent of such Additional Units,
      deemed to be $0.85 per Additional Unit.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | On September 17, 2008 the SEC declared the Companys
      registration statement effective and on September 30, 2008 the Company
      requested shareholder approval for items i) and ii) above and the Company
      has received these approvals from its shareholders.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | e) | On August 6, 2008 the Company issued 100,000 options to
      purchase the Companys common stock to an employee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | f) | On August 8, 2008 the Company issued 125,000 common
      shares in connection with the first extension of the Companys bridge loan
      with Global Resource Fund.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | g) | On August 13, 2008 the Company issued 100,000 options to
      purchase the Companys common stock to an employee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | h) | On August 14, 2008 4,241,500 Stock Purchase Warrants
      expired unexercised.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | i) | On September 30, 2008 the Company converted 11,167,000
      Special Warrants issued in connection with the Companys June 18, 2008
      private placement into 11,167,000 common shares and 11,167,000 Common
      Share Purchase Warrants exercisable at a price of $1.50 per common share
      up to June 18, 2013. The Company also converted 781,690 Special Broker
      Warrants into 781,690 Broker Warrants exercisable at a price of $0.85 per
      common share up to June 18, 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | The Company has allocated the total net proceeds from the
      June 18, 2008 offering of $8,558 to the underlying equity instruments
      comprising the offering, based on the estimated relative fair value of
      each instrument at the offering date as
follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          



| |                                                                    |   | Net
      Proceeds | 
| | ------------------------------------------------------------------ | - | ------------------ | 
| | Common shares and Additional paid in capital  common
      shares | $ | 6,121              | 
| | Additional paid in
      capital  share purchase warrants         |   | 2,437              | 
| |                                                                    | $ | 8,558              | 

16

---

|COLOMBIA GOLDFIELDS LTD.                                                       
|-------------------------------------------------------------------------------
|(An Exploration Stage Company)                                                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                     
|(UNAUDITED)                                                                    
|(Amounts in
      US Dollars, In Thousands, Except Share and Per Share Amounts)



| | j) | On October 7, 2008 the Company issued 300,000 common
      shares in connection with the second extension of the Companys bridge
      loan with Global Resource Fund.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

B) Fair Value

4,241,500 warrants and 508,980 Agents Warrants issued in
connection with the Companys August 14, 2007 private placement, 4,582,613
warrants and 595,739 Agents Warrants issued in connection with the Companys
December 28, 2007 private placement and 350,000 Warrants issued in connection
with the Companys February 8, 2008 short-term promissory note issuance are
denominated in Canadian dollars while the Companys functional and reporting
currency is the U.S. Dollar. As a result, the fair value of the warrants and
Agents Warrants fluctuates based on their time and expiry and changes in the
exchange rate between the U.S. and Canadian dollar.

EITF 07-5 indicates warrants with exercise prices denominated
in a different currency than an entitys functional currency should not be
classified as equity for years beginning on or after December 15, 2008. As a
result, these instruments would be treated as derivatives and recorded as
liabilities carried at their fair value, with period to period changes in the
fair value recorded as a gain or loss in the statement of operations and
comprehensive loss. The Company adopted the recommendations of EITF 07-05 on
January 1, 2009 and adjusted the warrants to liabilities at that date.

As a result, the Company recorded an adjustment of $3,850 to
retained earnings at January 1, 2009 and a $26 charge to general and
administrative expenses in fiscal 2009 as follows:

|                                                            |   | Total  |  
|----------------------------------------------------------- | - | ------ | -
|Fair value  At Inception of instruments                    | $ | 3,865  |  
|Decrease in fair
      value of instruments - 2007 and 2008 |   | (3,850 | )
|Fair value  December 31, 2008                              | $ | 15     |  
|Increase in fair
      value of instruments - 2009          |   | 26     |  
|Fair value  March 31, 2009                                 | $ | 41     |  

C) Other

In connection with certain of the Companys historical private
placements totalling $51,586, the Company historically committed to penalties
ranging between 1.5% and 15% of the gross proceeds received in the event the
subsequent registration statements are not declared effective by the SEC and/or
remain effective within specified periods following the closing of the
offerings. Pursuant to EITF 00-19-2 Accounting for Registration Payment
Arrangements, the Company concluded that at inception and at the balance
sheet date, payments under these commitments are not probable. As a result, no
liabilities for registration payment obligations are required to be recognized
in the consolidated balance sheets at March 31, 2009 and December 31, 2008.

17

---

|COLOMBIA GOLDFIELDS LTD.                                                       
|-------------------------------------------------------------------------------
|(An Exploration Stage Company)                                                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                     
|(UNAUDITED)                                                                    
|(Amounts in
      US Dollars, In Thousands, Except Share and Per Share Amounts)

C) Warrants

As at March 31, 2009, the following warrants were issued and
outstanding:

|Number of
      Warrants                                             | Exercise Price           | Expiry Date        
|-------------------------------------------------------------------- | ------------------------ | -------------------
|390,040                                                              | $ 2.00 USD per share     | April 25, 2009*    
|541,200                                                              | 1.00 USD per share       | March 22, 2010     
|508,980                                                              | 1.40 CDN per share       | August 14, 2010    
|4,582,613                                                            | 2.00 CDN per share       | December 28, 2012  
|595,739                                                              | 1.20 CDN per share       | December 28, 2009  
|350,000                                                              | 1.10 CDN per share       | February 8, 2010   
|5,992,411                                                            | 1.10 USD per share       | March 28, 2010     
|350,000                                                              | 1.10 USD per share       | March 31, 2010     
|11,167,000                                                           | 1.50 USD per share       | June 18, 2013      
|781,690                                                              | 0.85
      USD per share | June
      18, 2010
|25,259,673                                                           | $ 1.45 USD per share     |                    
|* On April 25, 2009 these 390,040 warrants
      expired unexercised |                         

D) Stock Options and Other Stock-Based Compensation

Stock Options

The Company maintains two Stock Incentive Plans, a 2006 Stock
Incentive Plan and a 2008 Stock Incentive Plan, (collectively, the Plans)
which provides for the grant of incentive stock options, non-qualified stock
options, stock appreciation rights, restricted stock, performance shares and
performance units, and stock awards to officers, directors, or employees of, as
well as advisors and consultants to, the Company.

All stock options and rights vest over a period determined by
the Board of Directors and expire not more than ten years from the date granted.
All outstanding stock options currently vest at a rate of 25% every six months
over a period of two years, and have a life of 10 years, unless certain change
in control provisions are triggered, in which cases the Plans provide for
accelerated vesting.

The following is a summary of the Plans at March 31, 2009:

|          | Options Available for Issue | Shares Reserved for Issuance
|--------- | --------------------------- | ----------------------------
|2006 Plan | 1,305,000                   | 6,325,000                   
|2008 Plan | 3,922,449                   | 3,922,449                   
|          | 5,227,449                   | 10,247,449                  

18

---

|COLOMBIA GOLDFIELDS LTD.                                                       
|-------------------------------------------------------------------------------
|(An Exploration Stage Company)                                                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                     
|(UNAUDITED)                                                                    
|(Amounts in
      US Dollars, In Thousands, Except Share and Per Share Amounts)

A summary of stock options granted, and exercised and
outstanding, under the Plans are as follows:

|                                           |  | Shares    |   |   | Weighted Average Exercise Price | 
|------------------------------------------ |  | --------- | - | - | ------------------------------- | 
|Options outstanding at December 31, 2008   |  | 5,170,000 |   | $ | 1.29                            | 
|Granted in fiscal 2009                     |  | -         |   |   | -                               | 
|Exercised in fiscal 2009                   |  | -         |   |   | -                               | 
|Forfeited and
      expired in fiscal 2009 |  | (150,000  | ) |   | 1.29                            | 
|Options outstanding at March 31, 2009      |  | 5,020,000 |   | $ | 1.29                            | 



|                                                                       |   | Fiscal 2009 |  |   | Fiscal 2008 | 
|---------------------------------------------------------------------- | - | ----------- |  | - | ----------- | 
|Weighted average fair value of options
      granted during the period | $ | -           |  | $ | 0.71        | 
|Weighted average
      fair value of options vested during the period  | $ | 0.92        |  | $ | 1.11        | 



Range of Exercise Prices
    
    Number Outstanding
    
    
    Weighted Average Exercise Price
    
    
    Weighted Average Remaining
      Contractual Life (yrs)
    
    
    Number Exercisable
    
    
    Weighted Average Exercise Price$0.42 - $1.00
    
    400,000
    
    $
    0.68
    
    
    7.69
    
    
    300,000
    
    $
    0.73$1.01 - $1.90
    
    4,620,000
    
    
    1.34
    
    
    7.98
    
    
    3,795,000
    
    
    1.33$0.42 - $1.90
    
    5,020,000
    
    $
    1.29
    
    
    7.96
    
    
    4,095,000
    
    $
    1.29


19

---

|COLOMBIA GOLDFIELDS LTD.                                                       
|-------------------------------------------------------------------------------
|(An Exploration Stage Company)                                                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                     
|(UNAUDITED)                                                                    
|(Amounts in
      US Dollars, In Thousands, Except Share and Per Share Amounts)

The fair value of options granted in 2008 has been estimated as
of the date of the grant using the Black-Scholes option pricing model with the
following assumptions: risk-free interest rate of 4.5%, dividend yield 0%, an
estimated average volatility of 69%, and expected term of 10 years, equal to the
full life of the options as at the grant date the Company did not expect any
material option awards to be forfeited or exercised early.

On August 11, 2008 the Company issued 125,000 common shares to
Global Resource Fund (Global) as consideration for extending the Companys
bridge loan from July 31, 2008 to September 30, 2008. The fair value of this
common stock award was $50, based on the market price of the Companys common
shares at the issue date. The Company accounted for this award by recognizing an
expense ratably over the extension period, commencing on the grant date.

On October 7, 2008 the Company issued 300,000 common shares to
Global as consideration for extending the Companys bridge loan from September
30, 2008 to December 29, 2008. The fair value of this common stock award was
$30, based on the market price of the Companys common shares at the issue date.
The Company accounted for this award by recognizing an expense ratably over the
extension period, commencing on the grant date.

Summary of Stock-Based Compensation Expenses

The following table summarizes stock-based compensation
recorded in the consolidated statements of operations:

|                                      |   | Three Months
      Ended March 31, 2009 |  |   | Three Months
      Ended March 31, 2008 |  |   | Cumulative From
      Inception **(March 25, 2003)** **through**
      **March 31,** **2009** | 
|------------------------------------- | - | --------------------------------------- |  | - | --------------------------------------- |  | - | --------------------------------------------------------------------------------------------- | 
|Mineral property exploration expenses | $ | 27                                      |  | $ | 248                                     |  | $ | 1,726                                                                                         | 
|General and
      administrative      |   | 25                                      |  |   | 773                                     |  |   | 6,008                                                                                         | 
|Total stock-based compensation        | $ | 52                                      |  | $ | 1,021                                   |  | $ | 7,734                                                                                         | 

As at March 31, 2009, there was $187 of unrecognized
compensation cost related to unamortized stock options. (December 31, 2008:
$397)

NOTE 7  MINERAL PROPERTY PURCHASE OBLIGATIONS

In the normal course of business the Company enters into
contractual obligations with Colombian titleholders to acquire mineral and
exploration rights. Upon signing, typically 25% of the negotiated purchase price
is immediately due and payable with an additional 25% due when all required
documentation has been submitted to the local mining department and the final
50% due when the mining claim has been successfully transferred and registered
in the Companys name. The Company records the full contractual obligation as a
contract liability upon signing. The timing and magnitude of repayment of these
obligations will vary between periods as will cash flows related to these
obligations.

20

---

|COLOMBIA GOLDFIELDS LTD.                                                       
|-------------------------------------------------------------------------------
|(An Exploration Stage Company)                                                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                     
|(UNAUDITED)                                                                    
|(Amounts in
      US Dollars, In Thousands, Except Share and Per Share Amounts)

NOTE 8  SHORT TERM PROMISSORY NOTE AND RELATED PARTY
ADVANCES

On February 8, 2008 the Company entered into a $2,500
short-term promissory note with Global. One of the Companys former directors
serves as Chief Executive Officer of a company that is a participant in the note
(this Director resigned from his position on the Companys Board of Directors on
January 31, 2009). The loan, collateralized by a joint and several guarantee of
RNC (Colombia), Caldas and Gavilan, in turn secured by the Companys investment
in Caldas and Gavilan, was due and payable on or before July 31, 2008. Upon
signing, a $75 fee was paid to the note holder. The note bears interest at 12.5%
per annum, with monthly interest payments commencing February 29, 2008.

In connection with this promissory note, the Company issued
warrants to purchase 350,000 shares of the Companys common stock with each
warrant exercisable at any time up to February 8, 2010 at an exercise price of
CDN $1.10 per share. If the warrants are not exercised by the expiration date,
the lender may require the Company to repurchase the warrants for $50.

The Company has allocated the total net proceeds received of
$2,500 to the underlying instruments, based on the estimated relative fair value
of each instrument as follows:

|                                                           |   | Net Proceeds | 
|---------------------------------------------------------- | - | ------------ | 
|Short-term promissory note                                 | $ | 2,400        | 
|Additional paid in
      capital  share purchase warrants |   | 100          | 
|                                                           | $ | 2,500        | 

On August 7, 2008 Global agreed to extend repayment of the loan
until September 30, 2008 (the first extension). In return for this extension,
the Company agreed to pay Global $50 upon maturity and issued 125,000 shares of
the Companys common stock.

On October 7, 2008 Global agreed to extend repayment of the
short-term promissory note until December 29, 2008 (the second extension). In
return for this extension, the Company agreed to pay Global a further $50 and
issued to Global 300,000 shares of the Companys common stock. In connection
with this extension, the interest rate payable on the loan from the date of the
second extension was increased to 15% per annum, and the Companys commitment to
repurchase the lenders 350,000 warrants was increased from $50 to $100 in the
event the warrants expire unexercised.

Included in the $2,765 amount reflected on the consolidated
balance sheet at March 31, 2009 is outstanding principal of  $2,600 (representing the original $2,500 principal and August 7, 2008 and October 11,
2008 extension fees) and interest of $165 (representing unpaid interest for the
five months ended March 31, 2009).

The Company was unable to repay the Note on December 29, 2008
and as a result, pursuant to the Notes contractual terms, Global has the right
to exercise its right to the Notes underlying security interest, being the
Companys investments in RNC (Colombia), Caldas and Gavilan. Global has not
demanded payment of the note and continues to work with the Company while the
Company reviews its strategic alternatives. In March, 2009 the
Company agreed to pledge to Global additional security in the form of the
Companys mineral exploration properties and rights held by Caldas and Gavilan.
Subsequent to March 31, 2009, the Company was informed that certain of the
Companys trade creditors placed a lien on the Companys mineral properties in
order to protect their rights to payment. The Company is currently working with
its advisors to develop a method of pledging additional security to Global under
these circumstances.

21

---

|COLOMBIA GOLDFIELDS LTD.                                                       
|-------------------------------------------------------------------------------
|(An Exploration Stage Company)                                                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                     
|(UNAUDITED)                                                                    
|(Amounts in
      US Dollars, In Thousands, Except Share and Per Share Amounts)

Certain of the Companys officers have provided working capital
advances totalling $3,321 at March 31, 2009 (December 31, 2008 - $2,875). These
advances, which are unsecured, are non-interest bearing, and have no specified
repayment terms, have been classified as current liabilities in the consolidated
balance sheet.

NOTE 9  RELATED PARTY TRANSACTIONS

During the normal course of operations, the Company engages in
transactions with certain directors, senior officers, and shareholders of the
Company.

Related party transactions reflected within the Companys
consolidated financial statements include:

| | a) | Management and consulting fees paid to certain directors,
      senior officers, and shareholders of the Company in fiscal 2009 and
      2008.                                                                                                   
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                   
| | b) | The issuance of a short-term promissory note during the
      first quarter of fiscal 2008 whereby one of the Companys former directors
      serves as an executive of a company that is a participant in the note as
      disclosed in Note 8.
| |    |                                                                                                                                                                                                                                                   
| | c) | Unsecured working capital advances provided by a Company
      controlled by i) the Companys President, and ii) the Companys Vice
      Chairman and CEO in fiscal 2009 and 2008.                                                               

During the three months ended March 31, 2009 the Company:

| | a) | Paid $NIL for board and committee meeting fees to
      non-management directors of the Company (three months ended March 31,
      2008: $135).        
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                         
| | b) | Paid $8 in management, salary, and consulting fees to
      non-management directors of the Company (three months ended March 31,
      2008: $28).     
| |    |                                                                                                                                                         
| | c) | Paid $NIL in management, salary, and consulting fees to
      non-management shareholders of the Company (three months ended March 31,
      2008: $51).

Included in accounts payable and accrued liabilities at March
31, 2009 is $755 owing to directors and senior management of the Company.
Related party advances at March 31, 2009 total $3,321.

Included in prepaid expenses and deposits at December 31, 2008
is $45 related to a director of the Company. Included in accounts payable and
accrued liabilities at December 31, 2008 is $78 owing to directors and senior
management of the Company.

22

---

|COLOMBIA GOLDFIELDS LTD.                                                       
|-------------------------------------------------------------------------------
|(An Exploration Stage Company)                                                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                     
|(UNAUDITED)                                                                    
|(Amounts in
      US Dollars, In Thousands, Except Share and Per Share Amounts)

NOTE 10 - SEGMENTED INFORMATION

The Company has determined that it operates in a single
reportable segment, being the acquisition of, exploration for, and development
of mineral properties.

NOTE 11  FAIR VALUE OF FINANCIAL INSTRUMENTS

The Companys bank indebtedness is with major Colombian
financial institutions. Colombian account balances are converted to U.S. dollars
at the closing exchange rate at the balance sheet date and accordingly are
classified within Level 1 of the fair value hierarchy. The Companys short term
promissory note is classified within Level 1 of the fair value hierarchy. The
Companys related party advances are classified within Level 2 of the fair value
hierarchy. For all financial instruments fair value is equivalent to carrying
value at March 31, 2009 and December 31, 2008.

NOTE 12  ACCOUNTING DEVELOPMENTS

|a) | In February 2007 the FASB issued FAS 159  The Fair
      Value Option for Financial Assets and Financial Liabilities. FAS 159
      offers an irrevocable option to carry eligible financial assets and
      liabilities at fair value, with the election to be made on an instrument
      by instrument basis, with changes in fair value recorded in earnings. FAS
      159 expands the use of fair value measurement for many companies, which is
      consistent with the FASBs long-term measurement objectives for accounting
      for financial instruments. FAS 159 is effective as of an entitys first
      fiscal year that begins after November 15, 2007 and is applied
      prospectively. The adoption of FAS 159 had no impact on the Companys
      financial statements.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|b) | In December 2007, the FASB issued FAS 141(R), Business
      Combinations, which replaces FAS 141 prospectively effective for
      business combinations in the first annual reporting period after December
      15, 2008. Early adoption is not permitted. Under FAS 141(R), business
      acquisitions will be accounted for under the acquisition method,
      compared to the purchase method mandated by FAS 141. The adoption of FAS
      141(R) had no impact on the Companys financial statements.                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|c) | In December 2007, the FASB issued FAS 160 
      Non-Controlling Interests in Consolidated Financial Statementswhich is effective for periods beginning after December 15, 2008.
      Under FAS 160, non-controlling interests are measured at 100% of the fair
      value of assets acquired and liabilities assumed and are classified as a
      separate component of shareholders equity. The provisions of FAS 160 are
      to be applied prospectively with the exception of the presentation and
      disclosure, which are to be applied for all prior periods presented in the
      financial statements. The adoption of FAS 160 had no impact on the
      Companys financial statements.                                                                                       

23

---

|COLOMBIA GOLDFIELDS LTD.                                                       
|-------------------------------------------------------------------------------
|(An Exploration Stage Company)                                                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                     
|(UNAUDITED)                                                                    
|(Amounts in
      US Dollars, In Thousands, Except Share and Per Share Amounts)

NOTE 13  COMMITMENTS AND CONTINGENCIES

|i) | Caramanta Properties
|-- | --------------------
|   |                     
|   | a)                  
|   |                     
|   | b)                  
|   |                     
|   | c)                  

NOTE 14  SUBSEQUENT EVENTS

In April, 2009 the Company was informed that certain of the
Companys trade creditors have placed a lien on the Companys mineral properties
in order to protect their rights to payment.

NOTE 15  RECLASSIFICATIONS

Certain prior period amounts have been reclassified to conform
to the current period presentation.

24

---

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

Introduction

This Managements Discussion and Analysis (MD&A), prepared as of April 30, 2009, is intended to supplement and complement our unaudited interim consolidated financial statements and notes thereto (our Financial
Statements) for the three month ended March 31, 2009 prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). You are encouraged to review our Financial Statements in
conjunction with your review of this MD&A. Additional information relating to our Company is available at
www.sec.gov.com and www.sedar.com. All dollar amounts in our MD&A are expressed in U.S. dollars, unless otherwise
specified.

Forward-Looking Statements

This MD&A contains forward-looking statements that are based on the beliefs of our management and reflect our current expectations as contemplated under section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended.  When used in this MD&A, the words estimate, project, believe, anticipate, intend, expect, plan, predict,
may, should, will, can, the negative of these words, or such other variations thereon, or comparable terminology, are all intended to identify forward-looking statements.  Such statements reflect the
current views of Colombia Goldfields Ltd. with respect to future events based on currently available information and are subject to numerous assumptions, risks and uncertainties, including but not limited to, risks and uncertainties pertaining to
development of mining properties, changes in economic conditions and other risks, uncertainties and factors, which may cause the actual results, performance, or achievement expressed or implied by such forward-looking statements to differ materially
from the forward looking statements.

See Risks and Uncertainties elsewhere in this MD&A. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

Our Business

We were incorporated under the laws of the State of Nevada, U.S.A., on March 25, 2003 and changed our name from Secure Automated Enterprises, Inc. to Colombia Goldfields Ltd. (CGL or the Company) on May 13, 2005. On July 31,
2006, our jurisdiction of incorporation was changed to the state of Delaware.

We are an exploration stage company engaged in the acquisition and exploration of mineral resource properties.  The Companys head office is located in Toronto, Canada and its exploration and administrative office is located in the city of
Medellin, Colombia. Our main activity is the exploration and development of the Marmato Mountain Gold District in Western Colombia.  The Marmato Mountain Gold District is located 80 km south of Medellin. We are focused on two areas within the
Marmato Mountain Gold District. These are Zona Alta (Upper Zone) of Marmato Mountain and the Caramanta Exploration Properties. The Caramanta Exploration Properties surround the Marmato Mountain.

25

---

First Quarter 2009 Overview

In light of recent economic instability, created primarily by
the banking and credit crisis in the U.S. and the resulting deterioration of
global financial markets, at the end of the third quarter of fiscal 2008 the
Company determined it necessary to revisit its short-term operating plan. In
connection with this review, in the fourth quarter of 2008 we announced the
suspension of additional drilling beyond the completed 46,000 meters on Zona
Alta to reduce our ongoing operating expenses. Results from the 46,000 meters of
Zona Alta drilling are being reviewed to update our resource estimate for the
Marmato Project. In light of current market conditions, we also commenced
evaluating strategic options to address our short-term and long-term project
development goals and liquidity issues. During the first quarter of fiscal 2009,
the Companys ongoing operations continued to be financed by unsecured working
capital advances from a company controlled by i) the Companys President, and
ii) the Companys Vice Chairman, Chief Executive Officer.

As a result of the recent turmoil in worldwide financial
markets and the reluctance of investors to participate in the exploration
sector, the Company has been unable to raise the required capital necessary to
complete the Zona Baja (Mineros) transaction and address the Companys current
working capital deficiency.

The Company is therefore unable at this time to advance its
ultimate goal of combining Zona Alta and Zona Baja and continues to review all
strategic alternatives, including a potential sale of all or some of the
Companys assets. The Company has canvassed a number of qualified parties with
respect to a possible strategic transaction with the Company and several
interested parties continue to review information regarding the Company pursuant
to confidentiality agreements. In addition, the Company continues to explore
potential financing opportunities. At the present time there is no certainty
that these initiatives or any financing or strategic transaction will be
completed.

At March 31, 2009 the Company has a significant working capital
deficiency including $18,523 in current liabilities as follows:

|Bank indebtedness                        | $ | 197    | 
|---------------------------------------- | - | ------ | 
|Accounts payable and accrued liabilities |   | 7,907  | 
|Mineral property purchase obligations    |   | 4,333  | 
|Related party advances                   |   | 3,321  | 
|Short-term promissory note               |   | 2,765  | 
|                                         | $ | 18,523 | 

In the fourth quarter of 2008 the Company commenced discussions
with its creditors and parties to the Companys mineral property purchase
obligations to ascertain their willingness to work with the Company to
restructure its obligations and these discussions continued in the first quarter
of 2009. As well, the Company has now completed terminating all but essential
personnel in both its Toronto and Medellin offices in order to further reduce
the Companys monthly operating cash requirements. There can be no assurance
that impacted parties will cooperate with the Company in respect to these
initiatives. Both the Companys i) President, and ii) Vice Chairman, CEO are
supportive of the Companys efforts to restructure its operations given the
current gold prices, however their ability to provide significant additional
working capital advances has become increasingly difficult. There can be
no assurance that additional funding from these individuals will be available on acceptable terms to the Company or at all.

26

---

The Company has outstanding a short-term promissory note to Global Resource Fund (Global). The note is collateralized by the Companys investment in RNC (Colombia) Ltd. and collateralized by a pledge of the Companys
investments in Caldas and Gavilan.  Caldas is the Companys principal operating subsidiary and the titleholder of the Companys mineral rights and legal mine titles. The loan was due December 29, 2008 and the Company was unable to repay
the note at that time. In connection with the Companys attempts to advance other strategic and/or financing alternatives, the Company has advised the holder of the Companys efforts to secure additional financing and/or a strategic
partner. There can be no assurance the Companys short-term promissory note will be repaid or that the holder will not call the loan or exercise its rights to the loans underlying collateral.

The ability of the Company to continue as a going concern is dependent on the ongoing discussions and/or forbearance with its lenders, creditors, and mineral property obligation holders, as well as obtaining additional financing. There is no
assurance that our lenders will cooperate with the Company, that the Companys creditors will provide accommodations, or that a financing or other transaction can be completed on terms acceptable to the Company.

The Company has reduced its staffing levels to approximately 30 at March 31, 2009 and has suspended further exploration activities while management continues its ongoing review of strategic alternatives.

Impact of Market Conditions

As of the date of the MD&A, the current economic uncertainty and weakness in the capital markets continues to negatively impact the industry. Similar to other companies in the industry, we continue to experience difficulty raising the additional
capital necessary to fund our ongoing operations.  The Company continues to canvass qualified parties regarding a potential merger or sale of some or all of the Companys assets, however management believes there are a large number of junior
mining companies pursuing similar strategies and a finite number of potential acquirers given the current economic environment.

The Company has been unable to pay its promissory note with Global that was due December 29, 2008. The note holder has not demanded repayment of the note and continues to work with the Company while the Company reviews its strategic alternatives. In
return, in March, 2009 the Company agreed to pledge the Companys Colombian mineral and exploration properties and rights as additional security for the note. In April, 2009 the Company was informed that certain of the Companys trade
creditors have also placed a lien on the mineral properties.

Management believes that it is able to continue as a going concern based on the reduced level of expenditures and continued unsecured working capital advances received from a company controlled by i) the Companys President, and ii) the
Companys Vice Chairman and CEO. Should these working capital advances become unavailable or should the Companys creditors become unwilling to work with the Company while it endeavors to secure additional financing or a strategic partner,
the going concern assumption may cease to be valid in the future and the impact on the Companys ability to continue operations could be significant.

27

---

Marmato Mountain  Zona Alta

As at March 31, 2009, the Zona Alta of Marmato Mountain in Colombia hosts approximately 275 small mines, and Compañia Minera de Caldas, S.A. (Caldas), our Colombian subsidiary, is seeking to purchase each of these. We own 95% of
Caldas, with the remaining 5% held directly or indirectly by directors, officers, and senior management of the Company, as Colombian law requires a minimum of five shareholders. Of these mines, 83 have registered titles in the Ministry of Mines in
the province of Caldas. We refer to these mines as Category 1. Another 36 mines, referred to as Category 2, are located in an area called CHG-081, in which there is one mining concession contract, and we refer to these mines as Category 2. Once the
Category 2 mines have been purchased, Caldas will own the entire CHG-081 contract. Our objective is to secure ownership of these 119 properties. Approximately 90 of the remaining mines have made applications for legalization. We refer to these mines
as Category 3. Of the applications made, management believes that less than 20 will be approved. Approximately 66 are illegal mines.

Certain mining properties have been purchased or optioned and are awaiting final payment once the documentation and registration is complete. The total number of legal mining titles acquired by Caldas at March 31, 2009 is 109, compared to 109 at
December 31, 2008. Of these mines, 92 are currently registered in the name of Caldas. In April, 2009 we were informed that certain of our trade creditors have placed liens on our mining properties to protect their rights to payment.

Principal factors affecting our results of operations

Our consolidated financial statements are prepared in accordance with U.S. GAAP, and we maintain our accounts in U.S. Dollars.

We believe the key determinants of our operating and financial results are:

|(a) | The state of capital markets, which affects our ability to finance acquisitions and exploration activities;                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                    
|(b) | The valuation of mineral properties, as exploration results provide further information relating to the underlying reserves of such properties; and
|    |                                                                                                                                                    
|(c) | Prices for metals, particularly gold.                                                                                                              

There is no assurance that commercially exploitable reserves of gold exist on any of our property interests. In the event that commercially exploitable reserves of gold exist on any of our property interests, there is no guarantee that we will make
a profit. If we cannot acquire or locate gold deposits, or if it is not economic to recover the gold deposits, our business and operations will be materially adversely affected.

Revenues

We have not yet completed our economic feasibility studies to establish the existence of proven or probable reserves for our properties. To date, we have not produced any gold, and, as a result, we have not recognized any revenues from mining
activities for the period since incorporation to March 31, 2009.

28

---

Expenses

Our primary expenses consist of mineral property exploration expenditures and general and administrative expenses.

Critical accounting policies

The following are the accounting policies that we consider to be critical accounting policies. Critical accounting policies are those that are both important to the portrayal of our financial condition and results of operations and those that
require the most difficult, subjective, or complex judgments, often as result of the need to make estimates about the effect of matters that are subject to a degree of uncertainty.

Going Concern

We incurred a net loss of $82,074,000 for the period from inception on March 25, 2003 to March 31, 2009, and we are not presently generating any revenue. We have a working capital deficiency of $18,453,000 at March 31, 2009. Furthermore, we
have used $62,104,000 during this period to fund our operations and mineral acquisitions program.

As at March 31, 2009 we do not have any cash resources and we will need to raise additional debt or equity financing during fiscal 2009 to continue to execute our business plan. We currently do not have any secure arrangements for additional
financing. There can be no assurance that additional financing will be available to us on acceptable terms, or at all. These factors, among others, raise substantial doubt about our ability to continue as a going concern. Our financial statements do
not include any adjustments to reflect the possible future effect on the recoverability and classification of the assets or the amounts and classification of liabilities that may result should we cease to continue as a going concern. Readers of this
MD&A should refer to the Companys Annual Consolidated Financial Statements for the year ended December 31, 2008 and our unaudited interim Consolidated Financial Statements for the three months ended March 31, 2009 and in particular Note 1
 Going Concern and Nature of Operations to these consolidated financial statements for further information.

Basis of Presentation

Entities that are controlled by us, either directly or indirectly, are consolidated. Control is established by our ability to determine strategic, operating, investing and financing policies without the co-operation of others. We analyze our level
of ownership, voting rights and representation on the board of directors in determining if control exists by any one, or a combination, of these factors.

Our consolidated financial statements include the accounts of (i) Colombia Goldfields Ltd., a Delaware Corporation, (ii) our wholly-owned subsidiary RNC (Colombia) Limited, a Belize corporation and its 95% owned subsidiary, Compania Minera de
Caldas, S.A., a Colombia corporation, and (iii) our 94% interest in Gavilan Minerales, S.A. (Gavilan), a Colombia Corporation. Colombian law requires a minimum of five shareholders for Colombian companies; as a result, the remaining 5%
ownership of Caldas and 6% ownership of Gavilan are held by directors, and senior management of the Company. The directors and senior management of Caldas and Gavilan have executed voting and support agreements in favor of the Company.  All
significant inter-company transactions and balances are eliminated upon consolidation.

29

---

Mineral Property Rights Acquisition and Exploration and Development Expenditures

Our mineral property rights acquisition and exploration activities consist of

|i)   | The acquisition of mineral concessions;                                                     
|---- | --------------------------------------------------------------------------------------------
|ii)  | The acquisition of mineral and exploration rights from existing titleholders;               
|iii) | The exploration of acquired mineral properties and related activities; and                  
|iv)  | The allocation of stock-based compensation related to participants in our stock option plan.

Costs of acquiring mining properties, including interest costs attributable to mineral property acquisitions, are capitalized upon acquisition. Pursuant to Statement of Financial Accounting Standards (SFAS) No.34, Capitalization of Interest
Costs, interest costs attributable to mineral property acquisitions are also capitalized. Mine development costs incurred either to develop new ore deposits, expand the capacity of mines, or to develop mine areas substantially in advance of
current production are also capitalized once proven and probable reserves exist and the property is commercially mineable. Costs incurred to maintain current production or to maintain assets on a standby basis are charged to operations. Costs of
abandoned projects are charged to operations upon abandonment. We evaluate the carrying value of capitalized mining costs and related property, plant and equipment costs, to determine if these costs are in excess of their net recoverable amount
whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. The periodic evaluation of carrying values of capitalized costs and any related property, plant and equipment costs are based upon expected
future cash flows and/or estimated salvage value in accordance with SFAS No. 144, Accounting for Impairment or Disposal of Long-Lived Assets.

Title on mineral properties and mining and exploration rights involve certain inherent risks due to the difficulties of determining the validity of certain claims, as well as the potential for problems arising from the frequently ambiguous
conveyance history of many mining properties.  We cannot give any assurance that title to such properties will not be challenged or impugned and we cannot be certain that we will have valid title to our mining properties.  We rely on title opinions
by legal counsel in Colombia.

Stock-Based Compensation

On January 1, 2006, we applied SFAS No. 123(R), Share-Based Payment, to account for stock options and similar equity instruments issued. Accordingly, compensation expense attributable to stock options or similar equity instruments granted is
measured at the fair value at the grant date, using the Black-Scholes option pricing model and a graded approach and the resultant compensation expenses are classified in our consolidated statement of operations based on the classification of the
underlying option plan participants related compensation expenses. In the event stock options are forfeited, any previously recognized compensation expense related to unvested and expiring awards is recognized in earnings in the period of
forfeiture. The majority of our stock-based compensation relates to either i) mineral exploration activities associated with our exploration personnel or ii) general and administrative expenses associated with our administrative employees,
directors, and consultants.

Although the assumptions used to record stock compensation expense reflect managements best estimates, they involve inherent uncertainties based on market conditions generally outside of our control. If other assumptions were used, stock-based
compensation expense could be significantly impacted. As stock options are
exercised, the proceeds received on exercise, in addition to the previously
recognized amounts related to those stock options, are credited to stockholders
equity.

30

---

Selected Financial Information

The following table sets forth selected financial information
for the three months ended March 31, 2009 and March 31, 2008. This summary of
selected financial information is derived from, and should be read in
conjunction with, and is qualified in its entirety by reference to, our audited
financial statements for the three months ended March 31, 2009 and the related
note disclosures.

|                                                |   |              |   |   |              |   |   | Cumulative      |  
|----------------------------------------------- | - | ------------ | - | - | ------------ | - | - | --------------- | -
|                                                |   |              |   |   |              |   |   | from Inception  |  
|                                                |   |              |   |   |              |   |   | (March 25, 2003 |  
|                                                |   | Three Months |   |   | Three Months |   |   | through         |  
|                                                |   | Ended March  |   |   | Ended March  |   |   | March 31,       |  
|                                                |   | 31, 2009     |   |   | 31, 2008     |   |   | 2009            | )
|Statement of
      Loss and Deficit             |   |              |   |   |              |   |   |                 |  
|Total Operating
      Expenses (income)         | $ | (528,000     | ) | $ | 7,085,000    |   | $ | 96,129,000      |  
|Net loss and
      comprehensive income (loss)  | $ | 528,000      |   | $ | (6,175,000   | ) | $ | (82,074,000     | )
|Income (loss) per
      Share-basic and diluted | $ | 0.01         |   | $ | (0.07        | ) |   |                 |  
|                                                |   |              |   |   |              |   |   |                 |  
|Balance Sheet Data                              |   | As at        |   |   | As at        |   |   |                 |  
|                                                |   | March 31,    |   |   | December 31, |   |   |                 |  
|                                                |   | 2009         |   |   | 2008         |   |   |                 |  
|Total Assets                                    | $ | 26,079,000   |   | $ | 26,126,000   |   |   |                 |  
|Total Long-Term
      Debt                      | $ | -            |   | $ | -            |   |   |                 |  
|Total Liabilities                               | $ | 18,523,000   |   | $ | 19,150,000   |   |   |                 |  
|Total
      Shareholders Equity                | $ | 7,556,000    |   | $ | 6,976,000    |   |   |                 |  

Results of Operations First Quarter 2009 Compared with
First Quarter 2008

For the three months ended March 31, 2009, we recorded net
income of $528,000 (2008- Net loss of $6,175,000). We generated interest and
other income of $NIL (2008-$6,000). The primary contributors to our net income
for the three months ended March 31, 2009 were mineral property exploration
expenses of $280,000 (of which $27,000 related to non-cash stock-based
compensation expenses) and general and administrative expenses of $331,000 (of
which $25,000 related to non-cash stock-based compensation expenses), along with
foreign exchange gains of $1,154,000, primarily related to unrealized foreign
exchange gains on the translation of foreign currency-denominated accounts
payable and accrued liabilities, and mineral property purchase obligations.

For the comparative period, the primary contributors to our net
loss were mineral property exploration expenses of $2,975,000 (of which $248,000
related to non-cash stock-based compensation expenses) and general and
administrative expenses of $2,207,000 (of which $773,000 related to non-cash
stock-based compensation expenses).

31

---

Our operations typically involve the following activities and
expenditures:

|i)   | The acquisition of mineral concessions: To March
      31, 2009, this has consisted primarily of payments for the assignment
      contracts and subsequent full legal titles associated with
  the Caramanta properties, the acquisition of Zona Alta concessions via our purchases of RNC, and the purchase of the Kedahda properties. The concessions we acquire typically grant to the concessionaire the right to carry out, within
the given area, the studies, works and installations necessary to establish the existence of the minerals and to exploit them according to rules and criteria belonging to the accepted techniques of geology and mining engineering. During the three
months ended March 31, 2009, we did not expend any cash on the acquisition of mineral concessions.                                                                                                                                                                                                                        
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|ii)  | The acquisition of mineral and exploration rights. This typically involves staged payments to affected landholders and related stakeholders. The procedure for payment is normally a payment of 25% of the total negotiated
purchase price on signing, 25% when title to all documentation has been submitted to the local mining department and the final 50% payment when the mining claim has been registered in Caldas name. Satisfactory resolution of local landowner
concerns is essential to the eventual development and operation of modern gold mines on Marmato Mountain. As at
March 31, 2009, we had reached agreements with the titleholders to secure 109 legal titles deemed desirable in our business plan, with
92 titles registered in Caldas name. During the three months ended March 31, 2009, we did not expend any cash on mineral and exploration rights and have obligations as at March 31, 2009 to make payments of $4,333,000 pursuant to amounts
owing under our purchase agreements; and
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|iii) | The exploration of acquired mineral properties and related activities. This typically involves the payment of salaries, wages, and other costs attributable to furthering our mineral concessions and rights, along with
allocated stock-based compensation costs. During the three months ended March 31, 2009, we expended a total of $280,000 on exploration activities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

As a result of the scale-back of our operations at the end of fiscal 2008, our mineral property exploration expenses decreased significantly for the three months ended March 31, 2009 to $280,000 (including $27,000 in stock-based
compensation) from $2,975,000 (including $248,000 in stock-based compensation) for the three months ended March 31, 2008.

General and administrative expenses also decreased in the three months ended March 31, 2009 to $331,000 compared to $2,207,000 for the three months ended March 31, 2008. A significant component of general and administrative expenses in the
first quarter of fiscal 2009 was allocated stock-based compensation, which totaled $25,000 compared to $775,000 in the first quarter of fiscal 2008. As well, in fiscal 2009 the Company incurred $1,154,000 in foreign exchange gains on the
translation of foreign currency-denominated monetary assets and liabilities, as the majority of the Companys accounts payable and accrued liabilities are denominated in Colombian pesos and are impacted by fluctuations in foreign currency
rates. During fiscal 2009 the U.S. dollar strengthened against the Colombian peso by approximately 14%
(CP 2,244 to 1 USD at December 31, 2008 vs CP 2,561 to 1 USD at March 31, 2009), resulting in the aforementioned foreign exchange gains on translation of foreign currency denominated working capital items.

During the first quarter of fiscal 2009, we used cash of $443,000 in operations (2008 - $4,753,000). The majority of our operating cash requirements consisted of exploration costs incurred in our Colombian operations, and consulting fees,
travel expenses, and audit and legal fees related to regulatory compliance.

During the first quarter of fiscal 2009, we received $443,000 in related party advances and experienced a decrease in bank indebtedness of $3,000.

32

---

As at March 31, 2009, our working capital deficiency of
$18,453,000 consisted of i) prepaid expenses and deposits of $70,000; and ii)
current liabilities of $18,523,000, consisting primarily of amounts owing to
Marmato titleholders under our mineral and exploration rights purchase
agreements (at March 31, 2009, $4,333,000 is owing pursuant to these
agreements), $2,765,000 related to our short-term promissory note with Global,
$3,321,000 in related party advances and the balance associated with accounts
payable and accrued liabilities. While we endeavor to manage the timing of these
payments, the timing of settlement of these liabilities remain uncertain.
Payment of our mineral and exploration rights agreements are typically due as
the contracts progress through the Colombian government approval process.

Liquidity and Capital Resources

Our cash and working capital positions as at the dates
indicated were as follows:

|                                 |   | As at          |   |   | As at             |  
|-------------------------------- | - | -------------- | - | - | ----------------- | -
|                                 |   | March 31, 2009 |   |   | December 31, 2008 |  
|Cash and cash equivalents        | $ | -              |   | $ | -                 |  
|Working capital
      deficiency | $ | (18,453,000    | ) | $ | (19,065,000       | )

We have historically relied on equity capital to fund our
operations and mineral property acquisition and exploration activities. For the
cumulative period from March 25, 2003 to March 31, 2009 we have raised
$62,104,000 from the issuance of shares of common stock, special warrants, share
purchase warrants, and short-term bridge loans (net of repayments) and used
$62,104,000 to fund operations and mineral property acquisition and exploration
activities, leaving nominal cash resources and a working capital deficiency of
$18,453,000 as at March 31, 2009.

On February 8, 2008, we borrowed $2,500,000 from Global
pursuant to a promissory note issued to Global (the Promissory Note). Auramet
Trading, LLC is a participant in the loan and one of our then directors, James
Verraster, serves as Chief Executive Officer of Auramet Trading, LLC. The
Promissory Note provided for a $2,500,000 secured loan maturing on July 31,
2008. The borrowing under the Promissory Note is secured by guarantees and
pledges of our subsidiaries. The guarantee is, in turn, secured by first
priority pledges of the shares of such subsidiaries held directly and indirectly
by the Company. The borrowing under the Promissory Note bore interest at the
rate of 12.5% per annum, and interest payments are due monthly on the last day
of the month, commencing on February 29, 2008. Proceeds from the borrowing were
used in connection with the Companys bid to acquire all the issued and
outstanding shares of Mineros, as described elsewhere in the MD&A, as well
as for general corporate purposes. In connection with the loan, we issued
350,000 common share purchase warrants to Global and we paid an up-front fee
equal to 3.0% of the borrowing under the promissory note. Each warrant entitles
the holder to purchase one common share at an exercise price of CDN $1.10 for a
period of 24 months from the date of closing. If the warrants were not exercised
by the expiration date, pursuant to the loan the holder could require us to
repurchase the warrants for $50,000.

On August 7, 2008 the lender extended the maturity of the loan
to September 30, 2008 in exchange for an extension fee of $50,000 and the
issuance by the Company of 125,000 shares of our common stock. On October 7,
2008 the lender further extended the loan to December 29, 2008 in exchange for
an extension fee of $50,000 and the issuance by the Company of 300,000 shares of
our common stock. In
addition, the agreement provides that the price that the lender could require the Company to repurchase its 350,000 warrants was increased to $100,000.

33

---

We were unable to make certain required interest payment in the fourth quarter of fiscal 2008 and were unable to repay the loan on December 29, 2008. As a result, the lender has the right to exercise its right to the loans underlying security.
There can be no assurance that the lender will exercise its right to its security, in which included our investments in RNC (Colombia), Caldas and Gavilan. In March, 2009 we agreed to pledge as additional security the Companys mineral and
exploration properties and rights while we continue to review our strategic and financing alternatives. In April, 2009 we were informed that certain of our trade creditors have placed a lien on our mineral properties in order to protect their rights
to payment.  We are currently working with our advisors to develop a method of pledging additional security to Global under these circumstances.

As at March 31, 2009, we do not have any cash resources and we will need to raise additional equity financing to continue operations.  There can be no assurance that we will be successful in raising additional funding. If we are not able to secure
additional funding, the implementation of our business plan will be impaired and we may lose our option to purchase certain mining and mineral rights, our rights to certain Zona Alta mineral properties, and there can be no assurance that such
additional financing will be available to us on acceptable terms or at all.

Off-balance sheet arrangements, Commitments, and Contingencies

Caramanta Properties

a)     Concession No. 669-17

Pursuant to an option agreement to purchase concession No. 669-17 in the Caramanta region, in the event that we determine it in the best interest of the Company to continue exploration, the contract specifies the following scheduled payments
required to obtain a 100% interest in the project: fiscal 2007 - 300 million pesos; fiscal 2008  660 million pesos and fiscal 2009  1.44 billion pesos. To March 31, 2009 we have made payments totalling 543 million pesos (approximately
$212,000) against the total 2.4 billion pesos (approximately $937,000) contract.  In
the event we chose not to continue the project, no further payments are required and the option would be terminated.

b)     Concession No. 653-17

Pursuant to an option agreement to purchase concession No. 653-17 in the Caramanta region, in the event that we determine it in the best interest of the Company to continue exploration, the contract specifies the following scheduled payments
required to obtain a 100% interest in the project: fiscal 2008  450 million pesos; fiscal 2009  350 million pesos; fiscal 2010-200 million pesos. To March 31, 2009 we have made payments totalling 300 million pesos (approximately
$117,000) against the total 1.0 billion pesos (approximately $390,000) contract.  In
the event we chose not to continue the project, no further payments are required and the option would be terminated.

34

---

c)     Other Concessions and Legalization Proposals (644-17, 805-17)

The Company has other options with various unrelated parties that provide us with options to acquire other property interests in the Caramanta Region.  The Company has options to pay a total of 730 million pesos (approximately $285,000) to
acquire 100% interests in the properties, subject to the concessions being granted to the underlying applicants and subsequently being transferred to and registered in the name of the Company. To date we have made payments totalling 635 million
pesos (approximately $248,000).

Contractual obligations

We have an employment contract with Mr. J. Randall Martin, our Chief Executive Officer and Vice Chairman, through September 30, 2011. Under the contract, Mr. Martin is entitled to receive monthly compensation of $20,000, and is eligible to
participate in our share compensation arrangements. In addition, Mr. Martin is entitled to reimbursement of all reasonable out-of-pocket expenses incurred in the performance of his duties. If Mr. Martins contract is terminated without cause,
he is entitled to receive a lump sum equal to 12 months monthly compensation and accelerated vesting of his options. Under the contract, Mr. Martin has disclaimed any rights to all intellectual property created by him or jointly with others while
with us. In addition, following termination of the contract, Mr. Martin will be subject to a one year non-competition covenant.

We have a two-year consulting contract with Dr. Stewart Redwood, our Vice President of Exploration, through September 30, 2010. Under the contract, Dr. Redwood is entitled to receive compensation at the rate of $1,000 per day and is eligible to
participate in our share compensation arrangements. In addition, he is entitled to reimbursement of all reasonable out-of-pocket expenses incurred in the performance of his duties.

We have an employment contract with Mr. Thomas Lough, our President, through October 15, 2011. Mr. Lough is also the President and a director of Investcol. We purchased our 100% interest in RNC from Investcol. Under the contract, Mr. Lough is
entitled to receive monthly compensation of CDN $15,000. In addition, Mr. Lough is entitled to reimbursement of all reasonable out-of-pocket expenses incurred in the performance of his duties. If Mr. Loughs contract is terminated without
cause, he is entitled to recover a lump sum equal to 12 months monthly compensation and accelerated vesting of his options. Under the contract, Mr. Lough has disclaimed any rights to all intellectual property created by him or jointly with others
while with us. In addition, following termination of the contract, Mr. Lough will be subject to a one year non-competition covenant.

Related Party Transactions

During certain periods, we paid management and consulting fees to
directors, senior officers and shareholders. Further information on these
transactions is provided in our accompanying consolidated financial statements
under Related Party Transactions.

The Company has received from time to time advances totaling $3,321,000 at March 31 2009 from RNC (Management) Ltd., a Company controlled by i) the Companys President, and ii) the Companys Vice
Chairman and CEO. The advances are unsecured, non-interest bearing, and are being used to finance the Companys ongoing operations while alternative sources of financing are pursued.

35

---

One of our directors, Edward Flood, serves as Managing Director, Investment Banking with Haywood Securities, UK, Limited. The Company pays fees to Haywood from time to time for services rendered as agent in connection with financings undertaken by
the Company.  Certain of our directors also receive consulting fees from the Company as described elsewhere in this annual report.

Risks and Uncertainties

An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below and the other information in the prospectus and amendments thereto we filed in connection with our recent private placements
(available on www.sec.gov.com) before investing in our common stock. If any of the following risks occur, our business, operating results and financial condition could be seriously harmed.

Going Concern

We incurred a net loss of $82,074,000 for the period from inception on March 25, 2003 to March 31, 2009, and we are not presently generating any revenue. Furthermore, we have used $62,104,000 during this period to fund our operations and
mineral acquisitions program. At March 31, 2009, we have a $18,453,000 working capital deficiency. Our future and ability to meet our anticipated exploration expense, mineral properties, and rights acquisitions is dependent upon our ability to
obtain additional financing and upon future acquisition, exploration and development of profitable operations from our mineral properties. We have made efforts to reduce or eliminate certain costs in order to continue as a going concern.  Management
expects to monitor and control the Companys operating costs to a minimum until cash is available through external financing sources.  In the interim, a Company controlled by certain officers of the Company has provided unsecured working
capital advances to maintain the continuity of our operations.

As at March 31, 2009 we do not have any cash resources and we will need to raise additional equity financing during fiscal 2009 to continue operations. We will also need to negotiate with our creditors to reduce our external amounts owing to
creditors and there can be no assurance we will be successful in these negotiations. These factors, among others, raise substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not include any
adjustment to reflect the possible future effect on the recoverability and classification of the assets or the amounts and classification of liabilities that may result should we cease to continue as a going concern.

Limited Operating History

We have a very limited operating history upon which an evaluation of our future success or failure can be made. It was only recently that we took steps in a plan to engage in the acquisition of interests in exploration and development properties in
Western Colombia, and it is premature to evaluate the likelihood that we will be able to operate our business successfully. To date, we have been involved primarily in the acquisition of property interests and mining rights in Western Colombia. We
have not earned any revenues from our current operations and we have experienced significant losses and have a working capital deficiency as of March 31, 2009.

36

---

Title Risk

We do not maintain insurance against title. Title on mineral properties and mining rights involves certain inherent risks due to the difficulties of determining the validity of certain claims as well as the potential for problems arising from the
frequently ambiguous conveyance history of many mining properties. Currently, we are in the process of investigating the title of mineral concessions for which we hold either directly or through our equity interest in our Colombian subsidiaries. We
cannot give any assurance that title to properties we acquired individually or through historical share acquisitions will not be challenged or impugned and cannot be certain that we will have or acquire valid title to these mining properties. For
example, there is a risk that the Colombian government may in the future grant additional titles in excess of the Companys expectations to currently illegal miners or we may be unable to convince currently illegal miners to vacate our
properties. Furthermore, although the Company believes that mechanisms exist to integrate the titles of legal mineral properties currently not owned by the Company, there is a risk that this process could be time consuming and costly. As the Company
begins the processes of integration, the costs of acquiring the remaining properties and associated surface rights could rise significantly or become cost prohibitive. Furthermore, the risk exists that one or more of the remaining titleholders could
delay the integration process through administrative avenues. The possibility also exists that title to existing properties or future prospective properties may be lost due to an omission in the claim of title, or by our inability to honor our
contractual purchase obligations. Furthermore, given our current financial condition, and the continued deterioration of the global capital markets, if we are unable to secure further financing our trade and/or other creditors may seek to lay claims
against our assets or otherwise impede our business. As a result, any claims against us may result in liabilities or costs we will not be able to afford or significant delays resulting in the failure of our business.

Town Relocation Risk

Our business plan includes the relocation of the town of Marmato from its current location on the Marmato Mountain to a safer location. While we are currently working with city, state, and federal governments to facilitate this relocation, we are
subject to the risk of political, economic, or social circumstances that could delay our ability to complete the town relocation. If we are unable to complete the town relocation, our ability to advance our Marmato project could be impaired.

Political and Economic Uncertainties

Our property interests and proposed exploration activities in Western Colombia are subject to political, economic and other uncertainties, including the risk of expropriation, nationalization, renegotiation or nullification of existing contracts,
mining licenses and permits or other agreements, changes in laws or taxation policies, currency exchange restrictions, and changing political conditions and international monetary fluctuations. Future government actions concerning the economy,
taxation, or the operation and regulation of nationally important facilities such as mines, could have a significant effect on us. Any changes in regulations or shifts in political attitudes are beyond our control and may adversely affect our
business. Exploration may be affected in varying degrees by government regulations with respect to restrictions on future exploitation and production, price controls, export controls, foreign exchange controls, income and/or mining taxes,
expropriation of property, environmental legislation and mine and/or site safety.  No assurances can be given that our plans and operations will not be adversely affected by future developments in Colombia. Colombia is home to South Americas
largest and longest running insurgency. Any changes in regulations or shifts in political attitudes are beyond the control of the Company and may adversely affect our business.

37

---

Government, Environmental, and Legal Risks

Our operations are subject to Colombian and local laws and regulations regarding environmental matters, the abstraction of water, and the discharge of mining wastes and materials. Any changes in these laws could affect our operations and economics.
Environmental, employment and laws and regulations change frequently, and the implementation of new, or the modification of existing, laws or regulations could harm us. We cannot predict how agencies or courts in Colombia will interpret existing
laws and regulations or the effect these adoptions and interpretations may have on our business or financial condition. We may be required to make significant expenditures to comply with governmental laws and regulations.

Any significant mining operations will have some environmental impact, including land and habitat impact, arising from the use of land for mining and related activities, and impact on water resources near the project sites, resulting from water use,
rock disposal and drainage run-off. No assurances can be given that such environmental issues will not have a material adverse effect on our operations in the future. While we believe we do not currently have any material environmental obligations,
exploration activities may give rise in the future to significant liabilities on our part to the government and third parties and may require us to incur substantial costs of remediation.

Additionally, we do not maintain insurance against environmental risks. As a result, any claims against us may result in liabilities we will not be able to afford resulting in the failure of our business. Failure to comply with applicable laws,
regulations, and permitting requirements may result in enforcement actions, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital
expenditures, installation of additional equipment, or remedial actions. Parties engaged in exploration operations may be required to compensate those suffering loss or damage by reason of the exploration activities and may have civil or criminal
fines or penalties imposed for violations of applicable laws or regulations and, in particular, environmental laws.

Our plans to significantly curtail our Medellin and Toronto operations may result in unforeseen expenses and/or restructuring liabilities.  Given our termination of all but essential personnel in Toronto and Medellin, there can be no assurance that
the Company will not be subject to government or civil penalties or additional severance costs should individuals and/or government agencies impacted by the Companys termination plans choose to bring legal actions against the Company or
otherwise impede our restructuring plans. Furthermore, we may not have adequate resources to resolve any unforeseen restructuring issues or costs.

Amendments to current laws, regulations and permits governing operations and activities of exploration companies, or more stringent implementation thereof, could have a material adverse impact on the Company and cause increases in expenditures and
costs, or require abandonment or delays in developing new mining properties.

Competition

The mineral exploration business is highly competitive. Many of our competitors have greater financial resources than we do. As a result, we may experience difficulty competing with other businesses when conducting mineral exploration activities or
in the retention of qualified personnel.  Our plans to
significantly curtail our Medellin and Toronto operations may result in unforeseen expenses and/or restructuring liabilities. No assurances can be given that we will be able to compete effectively.

38

---

Commodity Fluctuations

The availability of markets and the volatility of market prices are beyond our control and represent a significant risk. Even if commercially viable deposits of gold are found to exist on our property interests, a ready market may not exist for the
sale of the reserves. Numerous factors beyond our control may affect the marketability of any substances discovered. These factors include market fluctuations, the proximity and capacity of markets and processing equipment, government regulations,
including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental protection. These factors could inhibit our ability to sell gold in the event that commercially viable deposits
are found to exist.

Production Risks

We have limited prior experience in placing mineral properties into production and our ability to do so will be dependent upon us using the services of appropriately experienced personnel or entering into agreements with other major resource
companies that can provide such expertise. There can be no assurance that we will have available to us the necessary expertise when and if we place our resource properties into production.

Dependence on Key Management

The ability to identify, negotiate and consummate transactions that will benefit us is dependent upon the efforts of our management team. The loss of the services of any member of management could have a material adverse effect on us. Our future
drilling activities may require significant investment in additional personnel and capital equipment. Given the current shortage of equipment and experienced personnel within the mining industry, there can be no assurance that we will be able to
acquire the necessary resources to successfully implement our business plan.  We have historically experienced significant delays in recovering quality assay and verified assay results from our third-party analytical laboratories. The delays stem
from issues with our third-party labs quality control systems, as we have implemented a rigorous in-house quality control program that our external labs have experienced difficulty meeting. While we believe our current Quality Control programs
to be comprehensive due to our, and the industry in general, reliance on third-party labs to complete resource estimates, there can be no assurance that we will be able to complete and update our resource estimates on a timely basis.

Dependence on a Single Exploration Region

The Company is currently dependent upon one principal mineral exploration region, that being the Marmato Mountain Gold District in Colombia. The Marmato Mountain Gold District may never develop into commercially viable ore bodies, which would have a
materially adverse affect on the Companys potential mineral resource production, profitability, financial performance and results of operations.

39

---

Exploration and Mining Risks

The business of exploring for and mining of minerals involves a high degree of risk.  Only a small proportion of the properties that are explored are ultimately developed into producing mines. At present,
none of our properties have proven or probable reserves and the proposed programs are an exploratory search for proven or probable reserves. The mining areas presently being assessed by us may not contain economically recoverable volumes of minerals
or metals. Our operations may be disrupted by a variety of risks and hazards which are beyond our control, including fires, power outages, labor disruptions, flooding, explosions, cave-ins, land slides and the inability to obtain suitable or
adequate machinery, equipment or labor and other risks involved in the operation of mines and the conduct of exploration programs. We have relied and may continue to rely upon consultants and others for operating expertise. Should economically
recoverable volumes of minerals or metal be found, substantial expenditures will be required to establish reserves through drilling, to develop metallurgical processes, and to develop the mining and processing facilities and infrastructure at any
site chosen for mining. Although substantial benefits may be derived from the discovery of a major mineralized deposit, no assurance can be given that minerals will be discovered in sufficient quantities or having sufficient grade to justify
commercial operations or that funds required for development can be obtained on a timely basis. The economics of developing gold and other mineral properties are affected by many factors, including: the cost of operations, variations of the grade of
ore mined, fluctuations in the price of gold or other minerals produced, costs of processing equipment, the government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals and
environmental protection. In addition, the grade of mineralization ultimately mined may differ from that indicated by drilling results and such differences could be material. Short term factors, such as the need for orderly development of ore bodies
or the processing of new or different grades, may have an adverse effect on mining operations and on our results of operations. There can be no assurance that minerals recovered in small scale laboratory tests will be duplicated in large scale tests
under on-site conditions or in production scale operations. Material changes in geological resources, grades, stripping ratios or recovery rates may affect the economic viability of projects. Depending on the price of gold or other minerals
produced, which have fluctuated widely in the past, we may determine that it is impractical to commence or continue commercial production.

Risks Inherent in Estimating Mineral Reserves and Production

No assurance can be given that any proven or probable reserves will be discovered or that any particular level of recovery of minerals will in fact be realized or that any identified reserves will ever qualify as a commercially mineable (or viable)
deposit which can be legally and economically exploited. In addition, the grade of mineralization which may ultimately be mined may differ from that indicated by drilling results and such differences could be material. Production can be affected by
such factors as permitting regulations and requirements, weather, environmental factors, unforeseen technical difficulties, unusual or unexpected geological formations and work interruptions.

Conflicts of Interest

The Companys directors and officers may serve as directors or officers of other companies or have significant shareholdings in other resource companies and, to the extent that such other companies may participate in ventures in which the
Company may participate, the directors of the Company may have a conflict of interest in negotiating and concluding terms respecting the extent of such participation. In the event that such a conflict of interest arises at a meeting of the
Companys directors, a director who has such a conflict will abstain from voting for or against the approval of such participation or such terms. In accordance with the laws of the State of Delaware, the directors of the Company are required to
act honestly, in good faith and in the best interests of the Company. In determining whether or not the Company will participate in a particular program and the interest therein to be acquired by it, the
directors will primarily consider the degree of risk to which the Company may be exposed and its financial position at that time.

40

---

Repatriation of Earnings

There are currently no restrictions on the repatriation from Colombia of earnings to foreign entities. However, there can be no assurance that restrictions on repatriations of earnings from Colombia will not be imposed in the future.

Currency Fluctuations

The Companys operations in Colombia make it subject to foreign currency fluctuations and such fluctuations may materially affect the Companys financial position and results. We report our financial results in U.S. dollars and incur
expenses in U.S. dollars, Canadian dollars, and Colombian pesos. As the exchange rate between the Canadian dollar and Colombian peso fluctuates against the U.S. dollar, we will experience foreign exchange gains and losses, both realized and
unrealized, and such gains and losses may be significant. We do not hedge any of our foreign currency exposure.

Enforcement of Civil Liabilities

Substantially all the assets of the Company are located outside of the Unites States, and certain of the directors and officers of the Company are resident outside of the United States. As a result, it may be difficult or impossible to enforce
judgments granted by a court in the United States against the assets of the Company or the directors and officers of the Company residing outside of the United States.

Internal Controls

Effective internal controls are necessary for us to provide reliable financials reports and effectively prevent fraud. If we cannot provide reliable financial reports or prevent fraud, our operating results could be harmed. We have in the past
discovered, and may in the future discover, areas of our internal controls that need improvement. Any failure to implement required new or improved controls, or difficulties encountered in their implementation, or lack of resources to properly
implement internal controls, could harm our operating results or cause us to fail to meet our reporting obligations. Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a
negative effect on the trading price of our stock.

Sarbanes Oxley

The Sarbanes-Oxley Act of 2002 was enacted in the United States in response to public concerns regarding corporate accountability in connection with recent accounting scandals. The stated goals of the Sarbanes-Oxley Act are to increase corporate
responsibility, to provide for enhanced penalties for accounting and auditing improprieties at publicly traded companies, and to protect investors by improving the accuracy and reliability of corporate disclosures pursuant to the securities laws.
The Sarbanes-Oxley Act generally applies to all companies that file or are required to file periodic reports with the SEC, under the Securities Exchange Act of 1934. As a public company, we are required to comply with the Sarbanes-Oxley Act. The
enactment of the Sarbanes-Oxley Act of 2002 has resulted in a series of rules and regulations by the SEC that increase responsibilities and liabilities of directors and executive officers. The perceived increased personal risk associated with these
recent changes may deter
qualified individuals from accepting these roles. As a result, it may be more difficult for us to attract and retain qualified persons to serve on our board of directors or as executive officers. Sarbanes Oxley 404 compliance, is a costly and
time-consuming process and there can be no assurance that we will continue to be compliant. We have limited internal and external resources to devote to maintaining SOX 404 compliance and there can be no assurance that we can maintain compliance. We
continue to evaluate and monitor developments with respect to these rules, and we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.

41

---

Completion of Colombia Gold Transaction

The Company has previously announced the proposed acquisition of Colombia Gold. There can be no assurance that this transaction will be completed, as significant regulatory, due diligence, and legal matters are outstanding.  Furthermore, the
acquisition of Colombia Gold continues to be delayed primarily due to delays by Colombia Gold in delivering certain outstanding due diligence materials. In addition, the Board of Directors of Colombia Gold has indicated that they intend to terminate
the Letter of Intent. We have informed Colombia Gold that it does not have the ability to terminate the Letter of Intent at this time. There can be no assurance that we will have the financial and management resources to successfully complete this
transaction in the future.

Recently Issued Accounting Standards

On January 1, 2009 we adopted EITF 07-5 with respect to outstanding share purchase warrants denominated in a different currency than our functional currency. As a result, all outstanding warrants denominated in Canadian dollars were recognized as
liabilities at January 1, 2009, resulting in a decrease in our deficit of $3,850,000 on January 1, 2009 and a decrease in our net income and comprehensive income for the three months ended March 31, 2009 of $26,000.

In February 2007 the FASB issued FAS 159  The Fair Value Option for Financial Assets and Financial Liabilities. FAS 159 offers an irrevocable option to carry eligible financial assets and liabilities at fair value, with the election to
be made on an instrument by instrument basis, with changes in fair value recorded in earnings.  FAS 159 expands the use of fair value measurement for many companies, which is consistent with the FASBs long-term measurement objectives for
accounting for financial instruments. FAS 159 is effective as of an entitys first fiscal year that begins after November 15, 2007 and is applied prospectively.  The adoption of FAS 159 had no impact on the Companys consolidated financial
statements.

In December 2007, the FASB issued FAS 141(R), Business Combinations, which will replace FAS 141 prospectively effective for business combinations consummated in the first annual reporting period commencing after December 15, 2008. Early
adoption is not permitted. Under FAS 141(R), business acquisitions will be accounted for under the acquisition method, compared to the purchase method mandated by FAS 141(R). The adoption of FAS 141(R) had no impact on the
Companys consolidated financial statements.

In December 2007, the FASB issued FAS 160  Non-Controlling Interests in Consolidated Financial Statements which is effective for periods beginning after December 15, 2008. Under FAS 160, non-controlling interests are measured at 100% of
the fair value of assets acquired and liabilities assumed and are classified as a separate component of shareholders equity. The provisions of FAS 160 are to be applied prospectively with the exception of the presentation and disclosure, which
are to be applied for all prior periods presented in the financial statements.
The adoption of FAS 160 had no impact on the Companys financial statements.

42

---

Share Data

At March 31, 2009, we had 104,524,486 common shares outstanding. In addition, we had outstanding:

|i)  | 5,020,000 stock options, each of which is exercisable into one common share; and              
|--- | ----------------------------------------------------------------------------------------------
|ii) | 25,259,673 common share purchase warrants, each of which is exercisable into one common share;

Fiscal 2009 Exploration Activities and Exploration Outlook

Marmato Properties

We have been working on the Marmato Mountain Development Project since 2005. The main focus of work since then has been to negotiate the purchase of numerous small mines that comprise the Zona Alta portion of the mountain. In the third quarter of
2008 we continued technical studies started in 2007 to carry out a scoping study scheduled for completion in the second quarter of 2008 and a pre-feasibility study scheduled for fiscal 2009, should the Company be able to secure the necessary
additional resources. We completed a preliminary resource estimate in the second quarter of 2008 based on the results of the initial drilling and underground mine sampling.

Drilling and Underground Sampling

Our original objective was to drill a cumulative total of 60,000 meters by the end of fiscal 2008.

On September 23, 2008 we announced that we had completed 46,000 meters of our drilling program on Zona
Alta. Results from this drilling are being used to update the Companys resource
estimate for the entire mountain. In connection with the recent turmoil in the
worldwide financial markets, the Company temporarily suspended additional
drilling in order to reduce the Companys ongoing operating expenses while the
Company continues to review its strategic alternatives in 2009.

The underground channel sampling program at Marmato continued during 2008 and was completed before site work was temporarily suspended. The program comprised continuous saw-cut channel samples from all cross-cuts, mine faces and at regular intervals
along the backs in the numerous artisanal mines in the Zona Alta. This was carried out in conjunction with detailed surveying of the mine portals by differential global positioning system instruments and detailed surveying of the underground mines
by theodolite and total station survey instruments. This has enabled a three-dimensional model of the mines and veins to be constructed. A total of 1,572 channel samples with a total length of 2,200 meters were taken in this program, and a total of
30,263 meters of underground mine working were surveyed. A program of mine maintenance and rehabilitation was carried out for access for surveying and sampling. In addition, drill chambers were prepared underground in order to carry out diamond
drilling from underground.

Resource Estimate

We contracted Micon International Limited of Toronto, Ontario to carry out a resource estimate of the Zona Alta of Marmato based on our drilling and underground sampling results. A preliminary inferred resource estimate was announced on May 12, 2008
based on the first 12,000 meters of diamond drilling
in 68 holes, 1165 meters of cross-cut samples, and 500 meters of individual underground samples. On September 2, 2008 we announced the results of our drill program.
Further work on the resource estimate will continue as resources permit in 2009.

43

---

Metallurgy

SGS Lakefield Research Limited (SGS) of Lakefield, Ontario was contracted by us to carry out preliminary scoping metallurgy test work to develop a process flow sheet for our Scoping Study. The report was received in April, 2008, a
summary of which was disclosed in our press release in April, 2008.

Geotechnical Studies

Golder Associates Ltd. (Golder) of Mississagua, Ontario was contracted by us to carry out geotechnical data collection and interpretation for open pit design, to make a preliminary selection and evaluation of sites for waste rock and
tailings disposal, and to carry out preliminary heap leach pad design. This will form part of the Scoping Study. Geotechnical logs were made of the drill core by our geologists and Golder used this and other data to carry out data analysis and pit
slope determination at a scoping study level. These studies continued until the third quarter of 2008. A preliminary report on the pit slope study was received in June, 2008, and a preliminary report on waste rock and tailings was received in
December, 2008.

Environmental Studies

An Environmental Baseline Study was completed in 2007 by LHC Consultores Ambientales (LHC) of Colombia. This study gives a full year of environmental data for incorporation into the Scoping Study. The study will form the basis for our
future environmental permits and our Social and Environmental Impact Statement (EIS). We believe that we have no current environmental liability for past practices of others and we have received approval for drilling from Corpocaldas under an
approved Environmental Management Plan. Nevertheless, we intend to meet or exceed modern global standards of environmental stewardship in the preparation of the Baseline study and subsequent EIS.

Knight Piesold of Denver, Colorado were contracted to carry out validation of environmental data collection and management, and a social impact study, including independent supervision of the baseline study that was carried out by LHC. SGS was
contracted by us to carry out a preliminary and rock drainage study (ARD) on tailings and waste rock and the report was received in 2007. Collection of environmental data continued in 2008 to give a second year of baseline data.

Scoping Study

We have contracted Micon International Limited of Toronto, Ontario to carry out a Scoping Study and preliminary evaluation assessment of Marmato. This work was temporarily suspended in October 2008.

44

---

Caramanta Properties

We currently control 19,060 hectares (191 square kilometers) of exploration licenses in the Caramanta Exploration Project. This includes five new and distinctive gold targets that we defined by surface exploration and sampling in 2007. These show
that a cluster of gold targets surrounds the Marmato Mountain Development Project and form a 12 km-diameter gold district. These five targets are named
Oro Fino, El Salto, Pácora, Campana, and San Bartolome. Our objective was to acquire additional licenses to consolidate the district and to carry out initial drill testing of these targets in 2008. None of these targets has been drilled
before. The program consisted of 2,000 meters of drilling on each of the targets for a total of 10,000 meters. The drill testing has been postponed for financial reasons and to focus resources on Marmato. We believe that there is good potential for
discovery of additional gold deposits in the Caramanta Exploration Region in a cluster of targets surrounding our core Marmato Mountain Development Project.

The results of a helicopter-borne magnetic and radiometric survey were received in the third quarter of 2008. Additional high resolution (1 meter) satellite imagery and derived 2 meter contour topographic map and digital elevation model (DEM) were
contracted from PhotoSat of Vancouver in the first quarter of 2008 to cover the five new gold targets identified in the Caramanta Exploration Project. This was merged with and extends our previous coverage centered on Marmato to give high resolution
imagery and topography over an area of 329 square kilometers. The satellite image requires cloud-free weather conditions and was collected in December 2008, and the final products were received in March 2009. The results of these programs will be
used to better define drill targets.





45

---

Item 3. Quantitative and Qualitative Disclosure About Market Risk

As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by this Item 3.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and President, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, such officers have concluded that our disclosure controls and procedures are effective as of the end of such period.

Changes in internal control over financial reporting

There have been no changes during the period covered by this Quarterly Report on Form 10-Q in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the effectiveness of controls and procedures

Our management, including our Chief Executive Officer and President, does not expect that our controls and procedures will prevent all potential error and fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

46

---

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3. Defaults upon Senior Securities

We have been unable to repay our short-term promissory note with Global Resource Fund, due December 29, 2008.  For futher information, refer to Management Discussion of Financial Condition and Results of Operations.

Item 4. Submission of Matters to a Vote of Security Holders

None.

Item 5. Other Information

None.

Item 6. Exhibits

|Exhibit | Description                                                                                                                                                            
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |                                                                                                                                                                        
|        |                                                                                                                                                                        
|31.1    | Certification of Chief Executive Officer, and Vice Chairman pursuant to Rule 13a-15e or 15d-15(e), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|        |                                                                                                                                                                        
|31.2    | Certification of President and Principal Accounting Officer pursuant to Rule 13a-15e or 15d-15(e), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|        |                                                                                                                                                                        
|32.1    | Certification of Chief Executive Officer, and Vice Chairman pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002   
|        |                                                                                                                                                                        
|32.2    | Certification of President and Principal Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002   

47

---

SIGNATURES

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

Colombia Goldfields Ltd.



By:
/s/
J. Randall Martin
J. Randall Martin
Title: Chief Executive Officer and Vice Chairman
Date: April 30 , 2009



By: /s/
T. W. Lough
T. W. Lough
Title: President and Principal Accounting Officer
Date: April 30 , 2009



48

---