UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q





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





For the
quarterly period ended June 30,
2009.


or





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





For the
transition period from
to ___________________ to ___________________





Commission
File Number
:            333-142890.





AFFINITY GOLD
CORP.


(Exact
name of registrant as specified in its charter)





Nevada
                
                26-4152475(State
      or other jurisdiction of incorporation or organization)
                
                (I.R.S.
      Employer Identification No.)7950 Main Street, Suite 217
                  Maple Grove, MN
                
                55369
                  (Zip
      Code)(Address
      of principal executive offices)





763-424-4754(Registrant’s
      telephone number, including area code)N/A(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.


x
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 (§ 229.405 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.





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





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


x
Yes       ̈ No





APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY


PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:





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


 ̈
Yes       ̈ No





APPLICABLE
ONLY TO CORPORATE ISSUERS:





Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date:  65,545,875 shares of common
stock as of August 1, 2009.









TABLE OF
CONTENTS





USE
      OF NAMES
                
                
                3CAUTIONARY
      STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
                
                
                3PART
      I – FINANCIAL INFORMATION
                
                
                4Item
      1. Financial Statements
                
                
                4Item
      2. Management’s Discussion and Analysis of Financial Condition and Results
      of Operations
                
                
                5Item
      3. Quantitative and Qualitative Disclosures About Market
    Risk.
                
                
                9Item
      4T. Controls and Procedures.
                
                
                9PART
      II - OTHER INFORMATION
                
                
                11Item
      1. Legal Proceedings
                
                
                11Item
      1A. Risk Factors
                
                
                11Item
      2. Unregistered Sales of Equity Securities and Use of
    Proceeds
                
                
                11Item
      3. Defaults upon Senior Securities
                
                
                11Item
      4. Submission of Matters to a Vote of Security Holders
                
                
                11Item
      5. Other Information
                
                
                12Item
      6. Exhibits
                
                
                12




2




USE
OF NAMES
 
 In this
quarterly report, the terms “Affinity”, “Company”, “we”, or “our”, unless the
context otherwise requires, mean Affinity Gold Corp. and its subsidiaries, if
any.
 
 CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
 
 This
quarterly report on Form 10-Q and other reports that we file with the SEC
contain statements that are considered forward-looking
statements.  Forward-looking statements give the Company’s current
expectations, plans, objectives, assumptions or forecasts of future
events.  All statements other than statements of current or historical
fact contained in this quarterly report, including statements regarding the
Company’s future financial position, business strategy, budgets, projected costs
and plans and objectives of management for future operations, are
forward-looking statements.  In some cases, you can identify
forward-looking statements by terminology such as “anticipate,” “estimate,”
“plans,” “potential,” “projects,” “ongoing,” “expects,” “management believes,”
“we believe,” “we intend,” and similar expressions.  These statements
are based on the Company’s current plans and are subject to risks and
uncertainties, and as such the Company’s actual future activities and results of
operations may be materially different from those set forth in the forward
looking statements.  Any or all of the forward-looking statements in
this quarterly report may turn out to be inaccurate and as such, you should not
place undue reliance on these forward-looking statements.  The Company
has based these forward-looking statements largely on its current expectations
and projections about future events and financial trends that it believes may
affect its financial condition, results of operations, business strategy and
financial needs.  The forward-looking statements can be affected by
inaccurate assumptions or by known or unknown risks, uncertainties and
assumptions due to a number of factors, including:
 
 ·
              dependence
      on key personnel;
 ·
              competitive
      factors;
 ·
              the
      operation of our business; and
 ·
              general
      economic conditions in the United States and Latin
  America.
 
 These
forward-looking statements speak only as of the date on which they are made, and
except to the extent required by federal securities laws, we undertake no
obligation to update any forward-looking statements to reflect events or
circumstances after the date on which the statement is made or to reflect the
occurrence of unanticipated events.  In addition, we cannot assess the
impact of each factor on our business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements.  All subsequent written
and oral forward-looking statements attributable to the Company or persons
acting on its behalf are expressly qualified in their entirety by the cautionary
statements contained in this quarterly report.




3




PART
I – FINANCIAL INFORMATION





ITEM
1. FINANCIAL STATEMENTS





These
unaudited financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America for interim
financial information and the SEC instructions to Form 10-Q.  In the
opinion of management, all adjustments considered necessary for a fair
presentation have been included.  Operating results for the interim
period ended June 30, 2009, are not necessarily indicative of the results that
can be expected for the full year.




AFFINITY
GOLD CORP.
 
 (A
DEVELOPMENT STAGE COMPANY)
 
 FINANCIAL
STATEMENTS
 
 June
30, 2009
  4
 
 AFFINITY
GOLD CORP.
 
 (A
DEVELOPMENT STAGE COMPANY)
 
 FINANCIAL
STATEMENTS
 
 June
30, 2009
 
 Balance
      Sheets as of June 30, 2009 (unaudited) and March 31, 2009
      (audited)
                    
                    
                    F-1Statements
      of Operations for the three months ended
                      June
      30, 2009 and 2008 and for the period from
                      March
      27, 2007 (Inception) to June 30, 2009 (unaudited)
                    
                    
                    F-2Statement
      of Stockholders’ Deficit as of June 30, 2009 (unaudited)
                    
                    
                    F-3Statements
      of Cash Flows for the three months ended
                      June
      30, 2009 and 2008 and for the period from
                      March
      27, 2007 (Inception) to June 30, 2009 (unaudited)
                    
                    
                    F-4Notes
      to Financial Statements
                    
                    
                    F-5
      – F-11
 
 
 
 AFFINITY
GOLD CORP.
 (A
DEVELOPMENT STAGE COMPANY)
 BALANCE
SHEETS
 As
of June 30, 2009 and March 31, 2009
 
 June 30, 2009
                    (unaudited)
                  
                  
                  March 31, 2009
                    (audited)ASSETSCurrent
      AssetsCash
      and equivalents
                  
                  $
                  87,181
                  
                  
                  $
                  28,444Note
      receivable – related party
                  
                  
                  382,000
                  
                  
                  
                  236,000Deposits
                  
                  
                  2,500
                  
                  
                  
                  0Total
      Current Assets
                  
                  
                  471,681
                  
                  
                  
                  264,444Property
      and equipment, net
                  
                  
                  1,350
                  
                  
                  
                  0TOTAL
      ASSETS
                  
                  $
                  473,031
                  
                  
                  $
                  264,444LIABILITIES
      AND STOCKHOLDERS’ EQUITYCurrent
      LiabilitiesAccrued
      expenses
                  
                  $
                  6,052
                  
                  
                  $
                  21,489Credit
      card payable
                  
                  
                  13,079
                  
                  
                  
                  1,590Total
      Liabilities
                  
                  
                  19,131
                  
                  
                  
                  23,079Stockholders’
      EquityCommon
      Stock, $.001 par value, 2,700,000,000 shares authorized, 65,545,875 and
      65,260,815 shares issued and outstanding, respectively
                  
                  
                  65,546
                  
                  
                  
                  65,261Preferred
      stock, $.001 par value, 10,000,000 shares authorized, no shares issued or
      outstanding
                  
                  
                  0
                  
                  
                  
                  0Additional
      paid-in capital
                  
                  
                  4,182,067
                  
                  
                  
                  1,426,065Deficit
      accumulated during the development stage
                  
                  
                  (3,793,713
                  )
                  
                  
                  (1,249,961
                  )Total
      stockholders’ equity
                  
                  
                  453,900
                  
                  
                  
                  241,365TOTAL
      LIABILITIES AND STOCKHOLDERS’ EQUITY
                  
                  $
                  473,031
                  
                  
                  $
                  264,444
 
 See
accompanying notes to financial statements.
 
 F-1
  AFFINITY
GOLD CORP.
 (A
DEVELOPMENT STAGE COMPANY)
 STATEMENTS
OF OPERATIONS (UNAUDITED)
 For
the Three Months Ended June 30, 2009 and 2008
 Period
from March 27, 2007 (Inception) to June 30, 2009
 
 Three months
                    ended June
                    30, 2009
                    (unaudited)
                  
                  
                  Three months
                    ended June
                    30, 2008
                    (unaudited)
                  
                  
                  Period from
                    March 27,
                    2007
                    (Inception) to
                    June 30, 2009
                    (unaudited)REVENUES
                  
                  $
                  0
                  
                  
                  $
                  0
                  
                  
                  $
                  0OPERATING
      EXPENSESProfessional
      fees
                  
                  
                  30,971
                  
                  
                  
                  2,000
                  
                  
                  
                  142,892General
      and administrative
                  
                  
                  22,772
                  
                  
                  
                  0
                  
                  
                  
                  27,461Consulting
                  
                  
                  34,000
                  
                  
                  
                  0
                  
                  
                  
                  35,945Stock-based
      compensation expense
                  
                  
                  2,456,016
                  
                  
                  
                  0
                  
                  
                  
                  3,600,016TOTAL
      OPERATING EXPENSES
                  
                  
                  2,543,759
                  
                  
                  
                  2,000
                  
                  
                  
                  3,806,314NET
      LOSS FROM OPERATIONS
                  
                  
                  (2,543,759
                  )
                  
                  
                  (2,000
                  )
                  
                  
                  (3,806,314
                  )OTHER
      INCOME
                  
                  
                  7
                  
                  
                  
                  0
                  
                  
                  
                  12,601NET
      LOSS BEFORE PROVISION FOR INCOME TAXES
                  
                  
                  (2,543,752
                  )
                  
                  
                  (2,000
                  )
                  
                  
                  (3,793,713
                  )PROVISION
      FOR INCOME TAXES
                  
                  
                  0
                  
                  
                  
                  0
                  
                  
                  
                  0NET
      LOSS
                  
                  $
                  (2,543,752
                  )
                  
                  $
                  (2,000
                  )
                  
                  $
                  (3,793,713
                  )NET
      LOSS PER SHARE:Basic
      and diluted
                  
                  $
                  (0.04
                  )
                  
                  $
                  (0.00
                  )WEIGHTED
      AVERAGE NUMBER OF SHARES OUTSTANDINGBasic
      and diluted
                  
                  
                  65,451,899
                  
                  
                  
                  2,150,000
 
 See
accompanying notes to financial statements.
 
 F-2
  AFFINITY
GOLD CORP.
 (A
DEVELOPMENT STAGE COMPANY)
 STATEMENT
OF STOCKHOLDERS’ DEFICIT (UNAUDITED)
 Period
from March 27, 2007 (Inception) to June 30, 2009
 
 Common stock
                
                
                Additional
                  paid-in
                  capital
                
                
                Deficit
                  accumulated
                  during the
                  development
                  stage
                
                
                TotalShares
                
                
                AmountIssuance
      of common stock for cash @ $.001
                
                
                2,150,000
                
                
                $
                2,150
                
                
                $
                40,850
                
                
                $
                -
                
                
                $
                43,000Net
      loss for the year ended March 31, 2007
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (4,505
                )
                
                
                (4,505
                )Balance,
      March 31, 2007
                
                
                2,150,000
                
                
                
                2,150
                
                
                
                40,850
                
                
                
                (4,505
                )
                
                
                38,495Net
      loss for the year ended March 31, 2008
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (45,586
                )
                
                
                (45,586
                )Balance
      March 31, 2008
                
                
                2,150,000
                
                
                
                2,150
                
                
                
                40,850
                
                
                
                (50,091
                )
                
                
                (7,091
                )Stock
      split, January 21, 2009
                
                
                62,350,000
                
                
                
                40,850
                
                
                
                (40,850
                )
                
                
                -
                
                
                
                0Issuance
      of stock in private placement
                
                
                760,815
                
                
                
                761
                
                
                
                303,565
                
                
                
                -
                
                
                
                304,326Adjustment
      for par value
                
                
                -
                
                
                
                21,500
                
                
                
                (21,500
                )
                
                
                -
                
                
                
                0Stock-based
      compensation
                
                
                -
                
                
                
                -
                
                
                
                1,144,000
                
                
                
                -
                
                
                
                1,144,000Net
      loss for the year ended March 31, 2009
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (1,199,870
                )
                
                
                (55,870
                )Balance,
      March 31, 2009
                
                
                65,260,815
                
                
                
                65,261
                
                
                
                1,426,065
                
                
                
                (1,249,961
                )
                
                
                241,365Common
      stock issued for cash
                
                
                285,060
                
                
                
                285
                
                
                
                299,986
                
                
                
                -
                
                
                
                300,271Stock-based
      compensation
                
                
                -
                
                
                
                -
                
                
                
                2,456,016
                
                
                
                
                
                
                
                2,456,016Net
      loss for the three months ended June 30, 2009
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (2,543,752
                )
                
                
                (2,543,752
                )Balance,
      June 30, 2009
                
                
                65,545,875
                
                
                $
                65,546
                
                
                $
                4,182,067
                
                
                $
                (3,793,713
                )
                
                $
                453,900
  See
accompanying notes to financial statements.
 
 F-3
  AFFINITY
GOLD CORP.
 (A
DEVELOPMENT STAGE COMPANY)
 STATEMENTS
OF CASH FLOWS (UNAUDITED)
 For
the Three Months Ended June 30, 2009 and 2008
 Period
from March 27, 2007 (Inception) to June 30, 2009
 
 Three Months
                      Ended June
                      30, 2009
                      (Unaudited)
                    
                    
                    Three Months
                      Ended June
                      30, 2008
                      (Unaudited)
                    
                    
                    Period from
                      March 27,
                      2007
                      (Inception) to
                      June 30,
                      2009
                      (Unaudited)CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      loss for the period
                    
                    $
                    (2,543,752
                    )
                    
                    $
                    (2,000
                    )
                    
                    $
                    (3,793,713
                    )Adjustments
      to Reconcile Net Loss to Net Cash Used in Operating
    ActivitiesStock-based
      compensation
                    
                    
                    2,456,016
                    
                    
                    
                    0
                    
                    
                    
                    3,600,016Changes
      in Assets and Liabilities(Increase)
      in deposits
                    
                    
                    (2,500
                    )
                    
                    
                    
                    
                    
                    
                    (2,500
                    )Increase
      (decrease) in accrued expenses
                    
                    
                    (15,437
                    )
                    
                    
                    2,000
                    
                    
                    
                    6,052Increase
      in credit card payable
                    
                    
                    11,489
                    
                    
                    
                    0
                    
                    
                    
                    13,079CASH
      FLOWS USED BY OPERATING ACTIVITIES
                    
                    
                    (94,184
                    )
                    
                    
                    0
                    
                    
                    
                    (177,066
                    )CASH
      FLOWS USED IN INVESTING ACTIVITIESNote
      receivable – related party
                    
                    
                    (146,000
                    )
                    
                    
                    0
                    
                    
                    
                    (382,000
                    )Acquisition
      of property and equipment
                    
                    
                    (1,350
                    )
                    
                    
                    0
                    
                    
                    
                    (1,350
                    )CASH
      FLOWS USED BY INVESTING ACTIVITIES
                    
                    
                    (147,350
                    )
                    
                    
                    0
                    
                    
                    
                    (383,350
                    )CASH
      FLOWS FROM FINANCING ACTIVITIESProceeds
      from sales of common stock
                    
                    
                    300,271
                    
                    
                    
                    0
                    
                    
                    
                    647,597NET
      INCREASE IN CASH
                    
                    
                    58,737
                    
                    
                    
                    0
                    
                    
                    
                    87,181Cash,
      beginning of period
                    
                    
                    28,444
                    
                    
                    
                    0
                    
                    
                    
                    0Cash,
      end of period
                    
                    $
                    87,181
                    
                    
                    $
                    0
                    
                    
                    $
                    87,181SUPPLEMENTAL
      CASH FLOW INFORMATIONInterest
      paid
                    
                    $
                    0
                    
                    
                    $
                    0
                    
                    
                    $
                    0Income
      taxes paid
                    
                    $
                    0
                    
                    
                    $
                    0
                    
                    
                    $
                    0
 
 See
accompanying notes to financial statements.
 
 F-4
 
 AFFINITY
GOLD CORP.
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO THE FINANCIAL STATEMENTS
 June
30, 2009
 
 NOTE
1 – SUMMARY OF ACCOUNTING POLICIES
 
 Nature of
Business
 Affinity
Gold Corporation (“Affinity Gold Corp.”), is a development stage mineral
exploration and development company engaged in the acquisition, exploration and
development of gold mineralization properties
internationally.  Affinity Gold Corp.’s current focus is gold
exploration in Peru.
 
 Affinity
Gold Corp. was incorporated on January 14th, 2009
as a wholly-owned subsidiary of Syncfeed, Inc. On January 20th, 2009,
Affinity Gold Corp. and Syncfeed, Inc. approved the merger between the two
companies with Syncfeed, Inc. carrying on as the surviving company under the
name Affinity Gold Corp.
 
 On
February 10th, 2009
Affinity Gold Corp. entered into a Leter of Intent to acquire the mining
concession rights from AMR Project Peru, S.A.C. (“AMR”), a Peruvian
corporation.  On March 2nd, 2009
the Company entered into an asset purchase agreement (“Asset Purchase
Agreement”) with AMR to acquire the mining concession title named “AMR Project”
covering 500 hectares and the physical mining concession certificate as
evidenced by Certificate No. 7996-2006-INACC-UADA granted to AMR by the Republic
of Peru, National Institute of Concessions and Mining Cadastre on December
11th,
2006.
 
 Affinity
Gold Corp. currently operates out of its head office in Maple Grove,
Minnesota.
 
 See Note
8.
 
 Basis of
Presentation
 The
accompanying financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America and the
rules of the Securities and Exchange Commission (“SEC”). In the opinion of
management, all adjustments necessary in order for the financial statements to
be not misleading have been reflected herein.  The results of
operations for interim periods are not necessarily indicative of the results to
be expected for the full year.
 
 Basis of
Accounting
 The
financial statements have been prepared on the accrual basis of accounting in
conformity with accounting principles generally accepted in the United States of
America.  Revenues are recognized as income when earned and expenses
are recognized when they are incurred. The Company does not have significant
categories of cost as its income is recurring with high margins. Expenses such
as wages, consulting expenses, legal and professional fees, and rent are
recorded when the expense is incurred.
 
 F-5
 
 AFFINITY
GOLD CORP.
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO THE FINANCIAL STATEMENTS
 June
30, 2009
 
 NOTE
1 – SUMMARY OF ACCOUNTING POLICIES (continued)
 
 Development Stage
Company
 The
accompanying financial statements have been prepared in accordance with the
Statement of Financial Accounting Standards No. 7 ”Accounting and Reporting by
Development-Stage Enterprises”.  A development-stage enterprise is one
in which planned principal operations have not commenced or if its operations
have commenced, there has been no significant revenues there from.
 
 Cash and Cash
Equivalents
 Affinity
Gold Corp. considers all highly liquid investments with maturities of three
months or less to be cash equivalents.  At June 30, 2009 and 2008, the
Company had $87,181 and $-0- of cash.
 
 Fair Value of Financial
Instruments
 The
Company’s financial instruments consist of cash and cash equivalents, loans to a
related party, accrued expenses and credit card payables. The carrying amount of
these financial instruments approximates fair value due either to length of
maturity or interest rates that approximate prevailing market rates unless
otherwise disclosed in these financial statements.
 
 Use of
Estimates
 The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date the financial statements and the
reported amount of revenues and expenses during the reporting
period.  Actual results could differ from those
estimates.
 
 Basic loss per
share
 Basic
loss per share has been calculated based on the weighted average number of
shares of common stock outstanding during the period. The weighted average
shares outstanding have been cacluated assuming the stock split had occurred at
the beginning of the March 31, 2008 fiscal year.
 
 Recent Accounting
Pronouncements
 Affinity
Gold Corp. does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on the Company’s results of
operations, financial position or cash flow.
 
 F-6
 
 AFFINITY
GOLD CORP.
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO THE FINANCIAL STATEMENTS
 June
30, 2009
 
 NOTE
2 – LOAN TO A RELATED PARTY
 
 Effective
January 21, 2009, the Company agreed to loan up to $400,000 to a related party,
AMR Project Peru, S.A.C. to be used to purchase equipment and supplies to
conduct exploration and  for other related expenses on the mining
concession named “AMR Project”.  The Company intends to acquire AMR
Project Peru, S.A.C. as a wholly owned subsidiary, in which case, the loan will
become an intercompany loan and dealt with as the board of directors
determine.  The loan is non-interest bearing and is due on April 30,
2010.  As of June 30, 2009 and March 31, 2009 the amount of the loan
was $382,000 and $236,000, respectively.
 
 NOTE
3 – ACCRUED EXPENSES
 
 Accrued
expenses consisted of the following:
 
 June 30,2009
                        
                        
                        March 31,2009Accrued
      legal fees
                        
                        $
                        0
                        
                        
                        $
                        13,125Accrued
      audit fees
                        
                        
                        3,500
                        
                        
                        
                        6,500Accrued
      stock transfer fees
                        
                        
                        0
                        
                        
                        
                        1,864Accrued
      advertising fees
                        
                        
                        2,552
                        
                        
                        
                        0Total
      Accrued Expenses
                        
                        $
                        6,052
                        
                        
                        $
                        21,489
 
 NOTE
4 – CAPITAL STOCK
 
 On
January 21, 2009, the Company filed a Certificate of Change to effect a forward
stock split on a basis of 30 new shares for each one old share resulting in the
authorized common shares going from 90,000,000 common shares to 2,700,000,000
common shares (the preferred shares were not affected and remain at 10,000,000
preferred shares) and the issued and outstanding common shares going from
2,150,000 to 64,500,000 shares.  The weighted average shares
outstanding have been cacluated assuming the stock split had occurred at the
beginning of the March 31, 2008 fiscal year.
 
 Additionally,
there was a private placement of 760,815 shares for total cash of $304,326 that
took place during the year ended March 31, 2009.  There were
65,260,815 shares of common stock issued and outstanding at March 31,
2009.
 
 During
the three months ended June 30, 2009, there was a private placement of 285,060
shares for total cash of $300,271.  There were 65,545,875 shares of
common stock issued and outstanding at June 30, 2009.
 
 F-7
 
 AFFINITY
GOLD CORP.
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO THE FINANCIAL STATEMENTS
 June
30, 2009
 
 NOTE
5 – STOCK-BASED COMPENSATION
  Effective
January 1, 2006, the Company adopted SFAS No. 123 (revised), "Share-Based
Payment: (SFAS 123(R)) utilizing the modified prospective approach. Prior to the
adoption of SFAS 123(R) we accounted for stock option grant in accordance with
APB Opinion No. 25, "Accounting for Stock Issued to
Employees," and accordingly, recognized compensation expense for stock
option grants using the intrinsic value method.
 
 Under the
modified prospective approach, SFAS 123(R) applies to new awards and to awards
that were outstanding on January 1, 2006 that are subsequently modified,
repurchased or cancelled. Under the modified prospective approach, compensation
cost recognized in the first quarter of fiscal 2006 includes compensation cost
for all share-based payments granted prior to, but not yet vested as of January
1, 2006 based on the grant-date fair value estimated in accordance with the
original provisions of SFAS 123, and compensation cost for all share-based
payments granted subsequent to January 1, 2006 based on the grant-date fair
value estimated in accordance with the provisions of SFAS 123(R). For all
quarters after the first quarter of fiscal 2006, compensation costs recognized
will include the compensation costs for all share-based payments granted based
on the grant date fair value estimated in accordance with the provisions of SFAS
123(R).
  The fair
value of each option granted for the year ended March 31, 2009 is estimated on
the date of grant using the Black-Scholes option-pricing model with the
following weighted average assumptions: dividend yield of 0%, expected
volatility of 500%, risk-free interest rate of 1.85% and expected life of 60
months. The Company recognized expense of $1,144,000 on the 1,320,000 options
issued and vested during the year ended March 31, 2009.
 
 The fair
value of each option granted for the period ended June 30, 2009 is estimated on
the date of vesting using the Black-Scholes option-pricing model with the
following weighted average assumptions: dividend yield of 0%, expected
volatility that varied each month and ranged between 99% and 140%, risk-free
interest rate of 1.85% and expected life of 60 months. The Company recognized
expense of $2,456,016 on the 660,000 options issued and vested during the period
ended June 30, 2009.
 
 F-8
  AFFINITY
GOLD CORP.
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO THE FINANCIAL STATEMENTS
 June
30, 2009
 
 NOTE
6 – INCOME TAXES
 
 For the
period ended June 30, 2009, Affinity Gold Corp. has incurred net losses and,
therefore, has no tax liability.  The net deferred tax asset generated
by the loss carry-forward has been fully reserved.  The cumulative net
operating loss carry-forward is approximately $3,800,000 at June 30, 2009, and
will expire beginning in the year 2027.  For income tax purposes,
usage of the net operating losses incurred prior to the merger may be limited on
an annual basis due to the change in control.
 
 The
cumulative tax effect at the expected rate of 34% of significant items
comprising our net deferred tax amount is as follows:
 2009Deferred
      tax asset attributable to:Net
      operating loss carryover
                        
                        $
                        1,292,000Valuation
      allowance
                        
                        
                        (1,292,000
                        )Net
      deferred tax asset
                        
                        $
                        -
 
 NOTE
7 – LIQUIDITY AND GOING CONCERN
  Affinity
Gold Corp. has incurred operating losses since inception, and has not yet
received revenues from sales of products or services.  These factors
create substantial doubt about the Company’s ability to continue as a going
concern.  The financial statements do not include any adjustment that
might be necessary if the Company is unable to continue as a going
concern.
  The
ability of Affinity Gold Corp. to continue as a going concern is dependent on
the Company generating cash from the sale of its common stock and/or obtaining
debt financing and attaining future profitable
operations.  Management’s plans include selling its equity securities
and obtaining debt financing to fund its capital requirement and ongoing
operations; however, there can be no assurance the Company will be successful in
these efforts.
 
 NOTE
8 – SUBSEQUENT EVENTS
 
 On
February 10th, 2009
Affinity Gold Corp. entered into a Leter of Intent to acquire the mining
concession rights from AMR Project Peru, S.A.C. (“AMR”), a Peruvian corporation,
changing the business direction to mineral exploration concentrating on gold
exploration in Peru.
 
 On March
2nd,
2009 the Company entered into an asset purchase agreement (“Asset Purchase
Agreement”) with AMR to acquire the mining concession title named “AMR Project”
covering 500 hectares and the physical mining concession certificate as
evidenced by Certificate No. 7996-2006-INACC-UADA granted to AMR by the Republic
of Peru, National Institute of Concessions and Mining Cadastre on December
11th,
2006.
 
 F-9
  AFFINITY
GOLD CORP.
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO THE FINANCIAL STATEMENTS
 June
30, 2009
 
 NOTE
8 – SUBSEQUENT EVENTS (CONTINUED)
 
 On April
30th, 2009
Affinity Gold Corp. and AMR entered into an amendment agreement (the “Amendment
Agreement”) whereby the parties have decided to amend the arrangement by
changing the structure of the arrangement from an asset purchase agreement to a
share exchange agreement resulting in AMR becoming a wholly-owned subsidiary of
the Company.  Under the Amendment Agreement, both parties agreed to
terminate the Asset Purchase Agreement so as to be no longer in
effect.
 
 On May
8th,
2009, Affinity Gold Corp. entered into a Share Exchange Agreement (“Share
Exchange Agreement”) with AMR, and all the shareholders of AMR, whereby the
Company has agreed to acquire 99.99% of the issued and outstanding shares in the
capital of AMR in exchange for 12,000,000 shares of the Company in aggregate to
the shareholders of AMR on a pro rata basis in accordance with each AMR
shareholder’s percentage of ownership in AMR.
 
 On June
12, 2009, our Board of Directors unanimously adopted resolutions approving the
amendment to the articles of incorporation to decrease the authorized common
stock from 2,700,000,000 shares to 250,000,000 shares and recommended that the
Shareholders approve the Amended Articles as set forth in the draft Certificate
of Amendment to the Articles of Incorporation.  In connection with the
adoption of these resolutions, the Board of Directors elected to seek the
written consent of the holders of at least a majority of our outstanding shares
in order to reduce associated costs and implement the proposals in a timely
manner.
 
 On June
12, 2009 (the “Record Date”), the Company had 65,545,875 shares of common stock
issued and outstanding with the holders thereof being entitled to cast one vote
per share.  Except for the shares of common stock, no other class of voting
securities were outstanding as at the Record Date.  The written consent of
shareholders of the Company holding at least 32,772,938 shares of Common Stock
was necessary to approve the Amended Articles.  The approval of the
majority shareholders holding in the aggregate 34,800,000 shares of common stock
was obtained on June 19, 2009, by written consent.
 
 On June
29, 2009, the parties to the Share Exchange Agreement entered into an Extension
Agreement to extend the latest closing date 14 days until July 14, 2009.
 
 On July
14, the parties to the Share Exchange Agreement entered into an Extension
Agreement #2 to extend the latest closing date 14 days until July 28,
2009.
 
 F-10
 
 AFFINITY
GOLD CORP.
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO THE FINANCIAL STATEMENTS
 June
30, 2009
 
 NOTE
8 – SUBSEQUENT EVENTS (CONTINUED)
 
 On July
28, 2009, the parties to the Share Exchange Agreement entered into an Extension
Agreement #3 to extend the latest closing date 14 days until August 11,
2009.  If the Share Exchange Agreement does not close on or before
August 11, 2009, then we will enter into a fourth extension agreement to provide
up to August 25, 2009 to close the Share Exchange Agreement.
 
 On August
10, 2009, we issued 60,320 (post forward stock split) shares of our Common Stock
to one individual due to the closing of our private placement at $0.75 per share
for total gross proceeds of $45,240
 
 F-11





ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS





You
should read the following plan of operation together with our financial
statements and related notes appearing elsewhere in this quarterly
report.  This plan of operation contains forward-looking statements
that involve risks, uncertainties, and assumptions.  The actual
results may differ materially from those anticipated in these forward-looking
statements as a result of certain factors.





Overview





Affinity
Gold Corp. is a junior mining company engaged in the exploration, acquisition
and development of small and medium sized mining concessions located within
Latin America. Our core strategy is to acquire and develop high-grade
low-cost gold properties, conducive to alluvial and open pit mining operations,
either through direct acquisition, joint ventures or partnerships.





We were
incorporated as “Syncfeed Inc.” in the State of Nevada on March 27,
2007.  Effective February 10, 2009, with the State of Nevada, we
completed a merger with our wholly-owned subsidiary, Affinity Gold
Corp.  As a result, we changed our name from “Syncfeed Inc.” to
“Affinity Gold Corp.” to better reflect the intended direction and business of
our Company.





Also
effective February 10, 2009, with the State of Nevada, we effected a thirty (30)
for one (1) forward stock split of our authorized, issued and outstanding common
stock (the “Common Stock”).  As a result, our authorized capital
increased from 90,000,000 shares of Common Stock with a par value of $0.001 to
2,700,000,000 shares of Common Stock with a par value of $0.001.  Our
issued and outstanding share capital increased from 2,150,000 shares of Common
Stock to 64,500,000 shares of Common Stock.





The name
change and forward stock split took effect on the market at the open of business
on February 13, 2009.





Effective
July 23, 2009, we amended our Articles of Incorporation by reducing our
authorized capital of 2,700,000,000 shares of Common Stock with a par value of
$0.001 per share and 10,000,000 shares of Preferred Stock with a par value of
$0.001 per share to 250,000,000 shares of Common Stock with a par value of
$0.001 per share and 10,000,000 shares of Preferred Stock with a par value of
$0.001 per share.  The issued and outstanding shares were not affected
as a result of the decrease in the authorized shares of Common
Stock.





Our
Business






We were
previously engaged in the business of developing, manufacturing, and selling
commercial feed for commercially raised and harvested Chinese Mitten-handed
Crabs.  Following a change in control of our Company on January 9,
2009, and subsequent merger with our subsidiary Affinity Gold Corp. and forward
stock split effective February 10, 2009, we changed our focus to mineral
exploration concentrating on gold exploration in Peru and Latin
America.





On March
2, 2009, we entered into an asset purchase agreement (the “Asset Purchase
Agreement”) with AMR Project Peru, S.A.C. (“AMR”), a Peruvian
corporation.  Pursuant to the Asset Purchase Agreement, we agreed to
pay US$200,000 and to issue 12,000,000 shares of our Common Stock to AMR as
consideration for the acquisition of the mining concession title named the “AMR
Project”.  The AMR Project covers 500 hectares represented by the
physical mining concession Certificate No. 7996-2006-INACC-UADA granted to AMR
by the Republic of Peru, National Institute of Concessions and Mining Cadastre
on December 11, 2006, and includes all improvements, structures and equipment on
and used by AMR on such mining concession rights (collectively, the “Mining
Concession Rights”).  The Mining Concession Rights are located in the
Inambari River Basin of Puno, Peru.  See “Item 2 – Properties” below
for a further description of the AMR Project.  The foregoing
description of the Asset Purchase Agreement does not purport to be complete and
is qualified in its entirety by reference to the Asset Purchase Agreement, which
was attached as Exhibit 10.1 to the Form 8-K filed on March 11, 2009, which is
incorporated herein by reference.





5




The
closing of the Asset Purchase Agreement was to occur by April 30, 2009, or on
such earlier or later date as the parties agreed to in advance in
writing.





However,
on April 30, 2009, we entered into an Amendment Agreement (the “Amendment
Agreement”) with AMR, whereby the parties have decided to amend the arrangement
by changing the structure of the arrangement from an asset purchase agreement to
a share exchange agreement resulting in AMR becoming our wholly owned subsidiary
upon closing of the share exchange agreement.  In addition, under the
Amendment Agreement, the parties agreed to terminate the Asset Purchase
Agreement so it will no longer have any force and effect.  The
foregoing description of the Amendment Agreement does not purport to be complete
and is qualified in its entirety by reference to the Amendment Agreement, which
was attached as Exhibit 10.1 to the Form 8-K filed on May 7, 2009, and which is
incorporated herein by reference.





On May 8,
2009, we entered into a share exchange agreement (the “Share Exchange
Agreement”) with AMR and all the shareholders of AMR, whereby we agreed to
acquire 99.99% of the issued and outstanding shares in the capital of AMR in
exchange for the issuance of 12,000,000 shares of our Common Stock in aggregate
to the shareholders of AMR on a pro rata basis in accordance with each AMR
shareholders’ percentage of ownership in AMR.





The
closing of the Share Exchange Agreement was to be held on June 15, 2009, with
the latest closing date being June 30, 2009, or on such earlier or later closing
date as may be agreed to in advance and in writing by each of the parties to the
Share Exchange Agreement, with any extension of the closing date being a maximum
of 14 days per extension.  The foregoing description of the Share
Exchange Agreement does not purport to be complete and is qualified in its
entirety by reference to the Share Exchange Agreement, which was attached as
Exhibit 10.1 to the Form 8-K filed on May 13, 2009, and which is incorporated
herein by reference.





Mr.
Antonio Rotundo, who is the President, CEO, CFO and a director of the Company is
also a major shareholder of AMR along with his father, Mario Rotundo who is the
other major shareholder of AMR.





Since the
closing of the Share Exchange Agreement was to occur at the latest on June 30,
2009 and has not occurred yet, we have entered into Extension Agreement #1,
dated June 29, 2009, Extension Agreement #2, dated July 14, 2009, and Extension
Agreement #3, dated July 28, 2009 with AMR, Antonio Rotundo and Mario Rotundo,
whereby the closing date has now been extended to close on or before August 11,
2009.  If the Share Exchange Agreement does not close on or before
August 11, 2009, then we will enter into a fourth extension agreement to provide
up to August 25, 2009 to close the Share Exchange
Agreement.  Extension Agreement #2 and Extension Agreement #3 are
attached hereto as exhibits 10.1 and 10.2.
  6




Plan
of Operations





Our
overall strategy is to target the exploration and acquisition of small and
medium sized mining concessions that allow for economically viable development
and production with minimal net environmental impact when employing industry
best practices.  In addition to direct acquisitions, we plan to
compliment our growth through strategic joint ventures and partnerships where
and when appropriate.





We are
targeting small and medium-sized mining concessions for the following
reasons:





(1)
            the
      projects become revenue-producing within a relatively short period of
      time;





(2)
            overall
      startup costs are less of a burden;





(3)
            once
      started, these projects can quickly self-fund future
      development;





(4)
            environmental
      impacts can be managed and minimized;
and





(5)
            community
      relations and support tend to be easier to build and
    maintain.





Our
exploration target is to find mineral bodies containing gold. Our success
depends upon finding mineralized material. This will require a determination by
a geological consultant as to whether any of our mineral properties intended to
be acquired contains reserves. Mineralized material is a mineralized body, which
has been delineated by appropriate spaced drilling or underground sampling to
support sufficient tonnage and average grade of minerals to justify
removal.





We
continue to identify strategic acquisitions of additional concession rights
within the area of the AMR Project to ensure progress towards achieving future
growth objectives.





Objectives





We have
the following objectives:





(1)
            to
      successfully develop the AMR Project in Peru with initial operations
      commencing in the 3rd
      quarter of 2009;





(2)
            to
      become a 25,000 ounce per year gold producer within the next two
      years;





(3)
            to
      build a significant proven gold reserve base through acquisitions, joint
      ventures and partnerships; and





(4)
            to
      become a dominant holder of mining concessions in Peru for small and
      medium size projects containing alluvial gold
  reserves.





Limited
Operating History; Need for Additional Capital





There is
limited historical financial information about us upon which to base an
evaluation of our performance.  We are an exploration stage corporation and
have not generated any revenues from operations.  We cannot guarantee
we will be successful in our business operations.  Our business is
subject to risks inherent in the establishment of a new business enterprise,
including limited capital resources, possible delays in the exploration of any
properties, and possible cost overruns due to price and cost increases in
services.





To become
profitable and competitive, we will conduct research and exploration of any
properties we acquire before we start production of any minerals we may
find.  If we don't find mineralized material or we cannot remove
mineralized material, either because we do not have the money to do it or
because it is not economically feasible to do it, we will cease operations and
our investors will lose their investment.





7




Liquidity
and Capital Resources





Our
independent registered auditors have issued a going concern
opinion.  This means that there is substantial doubt that we can
continue as an on-going business for the next 12 months unless we obtain
additional capital to pay our bills.  This is because we have not
generated any revenues and no revenues are anticipated until we locate mineral
deposits and begin removing and selling minerals.  There is no
assurance we will ever reach this point.  Accordingly, we must raise
cash from sources other than the sale of minerals found on any properties we
acquire.  Our only other source for cash at this time is investments
by others in the Company.  We must raise cash to implement our project
and stay in business.





At June
30, 2009, we had working capital of $452,550, whereas at June 30, 2008, we had a
working capital deficiency of $9,091.  Cash and cash equivalents from
March 27, 2007 (inception) to June 30, 2009, have been insufficient to provide
the working capital necessary to operate.  At June 30, 2009, our total
assets consisted of cash of $87,181, notes receivable of $382,000 and deposits
of $2,500 compared to assets with a value of $Nil at June 30, 2008.





We may
not have enough money to complete our planned exploration of the AMR Project in
Peru, or any newly acquired properties.  If it turns out that we have
not raised enough money to complete our anticipated exploration programs, we
will try to raise additional funds from private placements or
loans.  At the present time, we are in the process of attempting to
raise additional money through a private placement and there is no assurance
that we will raise additional money in the future or that future financings will
be available to us on acceptable terms.  If we require additional
money and are unable to raise it, we will have to suspend or cease
operations.  Equity financing could result in additional dilution to
existing shareholders.





On March
5, 2009, we issued 760,815 (post forward stock split) shares of our Common Stock
to 11 individuals due to the closing of our private placement at $0.40 per share
for total gross proceeds of $304,326.





On April
30, 2009, we issued 285,060 (post forward stock split) shares of our Common
Stock to 2 individuals due to the closing of our private placement at $0.50 per
share for total gross proceeds of $142,530.





On August
10, 2009, we issued 60,320 (post forward stock split) shares of our Common Stock
to one individual due to the closing of our private placement at $0.75 per share
for total gross proceeds of $45,240





On June
23, 2009, we received gross proceeds of $100,000 from one investor for the
subscription of 100,000 (post forward stock split) shares of our Common Stock at
a price of $1.00 per share.





Results
of Operation






As of
June 30, 2009, our total assets were $471,681 compared to $Nil as of June 30,
2008; our total liabilities were $19,131 compared to $9,091 as of June 30, 2008;
and we had cash resources of $87,181 compared to $Nil as of June 30,
2008.




Net
Loss.  Our net loss from March 27, 2007 (inception) to June 30,
2009 is $3,793,713.  Our net loss for the three month period ended
June 30, 2009 is $2,543,752.  The principal components of our losses
for the three month period ended June 30, 2009, included legal and professional
expenses of $30,971 compared to $2,000 for the three months ended June 30, 2008,
engineering services of $34,000 compared to $Nil for the three months ended June
30, 2008, general and administrative costs of $22,772 compared to $Nil for the
three months ended June 30, 2008, and stock based compensation expenses of
$2,456,016 compared to $Nil for the three months ended June 30,
2008.  $3,600,016 of our total net loss amount of $3,793,713 from
inception to June 30, 2009 was attributable to stock-based compensation
expense.  This condition raises substantial doubt about our ability to
continue as a going concern.  Our continuation as a going concern is
dependent on our ability to meet our obligations, to obtain additional financing
as may be required and ultimately to attain profitability.  The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.


Net Operating
Losses.  As of June 30, 2009, we had a net operating loss carry
forward of approximately $3,800,000 which will expire beginning in the year
2027.





8




Revenues.  We
have not generated any revenues to date from our operations.






Off-Balance
Sheet Arrangements





We have
no off-balance sheet arrangements.





ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.





As a
“smaller reporting company” (as defined by §229.10(f)(1)), we are not required
to provide the information required by this Item.





ITEM
4T. CONTROLS AND PROCEDURES.





Evaluation
of Disclosure Controls and Procedures





Our
management, with the participation of our Chief Executive Officer and our Chief
Financial Officer, evaluated the effectiveness of our disclosure controls and
procedures as of the end of the period covered by this report.  Based
on that evaluation, our Chief Executive Officer and Chief Financial Officer
concluded that our disclosure controls and procedures as of the end of the
period covered by this report were effective such that the information required
to be disclosed by us in reports filed under the Securities Exchange Act of 1934
is: (i) recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and forms and (ii) accumulated and communicated to
our management, including our Chief Executive Officer and Chief Financial
Officer, as appropriate to allow timely decisions regarding disclosure. A
controls system cannot provide absolute assurance, however, that the objectives
of the controls system are met, and no evaluation of controls can provide
absolute assurance that all control issues and instances of fraud, if any,
within a company have been detected.





Internal
Control over Financial Reporting





Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting.  Internal control over financial
reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the
Securities Exchange Act of 1934 as a process designed by, or under the
supervision of, the company’s principal executive and principal financial
officers and effected by the company’s board of directors, management and other
personnel, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with accounting principles generally accepted in the
United States of America and includes those policies and procedures
that:





1.
            Pertain
      to the maintenance of records that in reasonable detail accurately and
      fairly reflect the transactions and dispositions of the assets of the
      company;





2.
            Provide
      reasonable assurance that transactions are recorded as necessary to permit
      preparation of financial statements in accordance with accounting
      principles generally accepted in the United States of America and that
      receipts and expenditures of the company are being made only in accordance
      with authorizations of management and directors of the company;
      and





3.
            Provide
      reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use or disposition of the company’s assets that
      could have a material effect on the financial
  statements.





Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements.  Projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.  All internal control
systems, no matter how well designed, have inherent
limitations.  Therefore, even those systems determined to be effective
can provide only reasonable assurance with respect to financial statement
preparation and presentation.  Because of the inherent limitations of
internal control, there is a risk that material misstatements may not be
prevented or detected on a timely basis by internal control over financial
reporting. However, these inherent limitations are known features of the
financial reporting process.  Therefore, it is possible to design into
the process safeguards to reduce, though not eliminate, this risk.





9




As of
June 30, 2009, management assessed the effectiveness of our internal control
over financial reporting based on the criteria for effective internal control
over financial reporting established in Internal Control—Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission
("COSO") and SEC guidance on conducting such assessments.  Based on
that evaluation, they concluded that, during the period covered by this report,
such internal controls and procedures were not effective to detect the
inappropriate application of US GAAP rules as more fully described
below.  This was due to deficiencies that existed in the design or
operation of our internal controls over financial reporting that adversely
affected our internal controls and that may be considered to be material
weaknesses.





The
matters involving internal controls and procedures that our management
considered to be material weaknesses under the standards of the Public Company
Accounting Oversight Board were: (1) lack of a functioning audit committee due
to a lack of a majority of independent members and a lack of a majority of
outside directors on our board of directors, resulting in ineffective oversight
in the establishment and monitoring of required internal controls and
procedures; (2) inadequate segregation of duties consistent with control
objectives; and (3) ineffective controls over period end financial disclosure
and reporting processes.  The aforementioned material weaknesses were
identified by our Chief Executive Officer in connection with the review of our
financial statements as of June 30, 2009.





Management
believes that the material weaknesses set forth in items (2) and (3) above did
not have an effect on our financial results.  However, management
believes that the lack of a functioning audit committee and the lack of a
majority of outside directors on our board of directors results in ineffective
oversight in the establishment and monitoring of required internal controls and
procedures, which could result in a material misstatement in our financial
statements in future periods.





Management’s Remediation
Initiatives





In an
effort to remediate the identified material weaknesses and other deficiencies
and enhance our internal controls, we have initiated, or plan to initiate, the
following series of measures:





1.
            We
      plan to create a position to segregate duties consistent with control
      objectives and plan to increase our personnel resources and technical
      accounting expertise within the accounting function when funds are
      available to us; and





2.
            We
      plan to appoint one or more outside directors to our board of directors
      who shall be appointed to an audit committee resulting in a fully
      functioning audit committee who will undertake the oversight in the
      establishment and monitoring of required internal controls and procedures
      such as reviewing and approving estimates and assumptions made by
      management when funds are available to
us.





Management
believes that the appointment of one or more outside directors, who shall be
appointed to a fully functioning audit committee, will remedy the lack of a
functioning audit committee and a lack of a majority of outside directors on our
Board.





We
anticipate that these initiatives will be at least partially, if not fully,
implemented by December 31, 2009.





Changes
in Internal Controls Over Financial Reporting





There was
no change in our internal controls over financial reporting that occurred during
the period covered by this report, which has materially affected, or is
reasonably likely to materially affect, our internal controls over financial
reporting.





10




PART
II - OTHER INFORMATION





ITEM
1. LEGAL PROCEEDINGS





We are
not a party to any pending legal proceeding. We are not aware of any pending
legal proceeding to which any of our officers, directors, or any beneficial
holders of 5% or more of our voting securities are adverse to us or have a
material interest adverse to us.





ITEM
1A. RISK FACTORS





As a
“smaller reporting company” (as defined by §229.10(f)(1)), we are not required
to provide the information required by this Item.





ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS





On August
10, 2009, we issued 60,320 shares of our Common Stock to 1 individual due to the
closing of our private placement at $0.75 per share for total gross proceeds of
$45,240.  We believe that the issuance is exempt from registration
under Regulation S promulgated under the Securities Act as the securities were
issued to the individual through an offshore transaction which was negotiated
and consummated outside of the United States.





The funds
received from the sale of our equity securities will be used for working capital
and general corporate purposes.





ITEM
3. DEFAULTS UPON SENIOR SECURITIES





None.





ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS





No
matters have been submitted to our security holders for a vote, through the
solicitation of proxies or otherwise, during the quarterly period ended June 30,
2009.  However, on June 12, 2009 our Board of Directors approved to
submit to a limited number of our shareholders holding at least a majority of
the voting power over the shares of our common stock the proposal to reduce our
authorized shares of Common Stock from 2,700,000,000 to 250,000,000, which was
approved by such shareholders by written consent resolution on June 19,
2009.





11




ITEM
5. OTHER INFORMATION





On August
10, 2009, we issued 60,320 shares of our Common Stock to 1 individual due to the
closing of our private placement at $0.75 per share for total gross proceeds of
$45,240.  We believe that the issuance is exempt from registration
under Regulation S promulgated under the Securities Act as the securities were
issued to the individual through an offshore transaction which was negotiated
and consummated outside of the United States.




ITEM
6. EXHIBITS





(a)
            Exhibit
      List10.1
            Extension
      Agreement #2, dated July 14, 2009, among Affinity Gold Corp., AMR Project
      Peru S.A.C., Antonio Rotundo and Mario Rotundo10.2
            Extension
      Agreement #3, dated July 28, 2009, among Affinity Gold Corp., AMR Project
      Peru S.A.C., Antonio Rotundo and Mario Rotundo31.1
            Certificate
      pursuant to Rule 13a-14(a)31.2
            Certificate
      pursuant to Rule 13a-14(a)32.1
            Certificate
      pursuant to 18 U.S.C. §135032.2
            Certificate
      pursuant to 18 U.S.C. §1350





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SIGNATURE





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.





AFFINITY
      GOLD CORP.
                  (Registrant)Date:  August
      11, 2009
                By: /s/ Antonio RotundoAntonio
      RotundoPresident,
      CEO, CFO and Director
                  (Principal
      Executive Officer and Principal
                  Financial
      Officer)





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