- Quarterly Report (10-Q)

Share Name	Share Symbol	Market	Type
Affinity Gold Corp (CE)	USOTC:AFYG	OTCMarkets	Common Stock

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.

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

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.

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

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-1

Statements 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-2

Statement of Stockholders’ Deficit as of June 30, 2009 (unaudited)			F-3

Statements 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-4

Notes 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)
ASSETS
Current Assets
Cash and equivalents	$	87,181		$	28,444
Note receivable – related party		382,000			236,000
Deposits		2,500			0
Total Current Assets		471,681			264,444

Property and equipment, net		1,350			0

TOTAL ASSETS	$	473,031		$	264,444

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities
Accrued expenses	$	6,052		$	21,489
Credit card payable		13,079			1,590
Total Liabilities		19,131			23,079

Stockholders’ Equity
Common Stock, $.001 par value, 2,700,000,000 shares authorized, 65,545,875 and 65,260,815 shares issued and outstanding, respectively		65,546			65,261
Preferred stock, $.001 par value, 10,000,000 shares authorized, no shares issued or outstanding		0			0
Additional paid-in capital		4,182,067			1,426,065
Deficit accumulated during the development stage		(3,793,713	)		(1,249,961	)
Total stockholders’ equity		453,900			241,365

TOTAL 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		$	0

OPERATING EXPENSES
Professional fees		30,971			2,000			142,892
General and administrative		22,772			0			27,461
Consulting		34,000			0			35,945
Stock-based compensation expense		2,456,016			0			3,600,016
TOTAL OPERATING EXPENSES		2,543,759			2,000			3,806,314

NET LOSS FROM OPERATIONS		(2,543,759	)		(2,000	)		(3,806,314	)

OTHER INCOME		7			0			12,601

NET LOSS BEFORE PROVISION FOR INCOME TAXES		(2,543,752	)		(2,000	)		(3,793,713	)

PROVISION FOR INCOME TAXES		0			0			0

NET 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 OUTSTANDING
Basic 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			Total
	Shares		Amount
Issuance of common stock for cash @ $.001		2,150,000	$	2,150	$	40,850		$	-		$	43,000

Net 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	)		38,495

Net 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	)		-			0

Issuance of stock in private placement		760,815		761		303,565			-			304,326

Adjustment for par value		-		21,500		(21,500	)		-			0

Stock-based compensation		-		-		1,144,000			-			1,144,000

Net 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	)		241,365

Common stock issued for cash		285,060		285		299,986			-			300,271

Stock-based compensation		-		-		2,456,016						2,456,016

Net 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 ACTIVITIES
Net loss for the period	$	(2,543,752	)	$	(2,000	)	$	(3,793,713	)
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities
Stock-based compensation		2,456,016			0			3,600,016
Changes in Assets and Liabilities
(Increase) in deposits		(2,500	)					(2,500	)
Increase (decrease) in accrued expenses		(15,437	)		2,000			6,052
Increase in credit card payable		11,489			0			13,079
CASH FLOWS USED BY OPERATING ACTIVITIES		(94,184	)		0			(177,066	)

CASH FLOWS USED IN INVESTING ACTIVITIES
Note 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 ACTIVITIES
Proceeds from sales of common stock		300,271			0			647,597

NET INCREASE IN CASH		58,737			0			87,181

Cash, beginning of period		28,444			0			0
Cash, end of period	$	87,181		$	0		$	87,181

SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid	$	0		$	0		$	0
Income 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 14 th , 2009 as a wholly-owned subsidiary of Syncfeed, Inc. On January 20 th , 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 10 th , 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 2 nd , 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 11 th , 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, 2009
Accrued legal fees	$	0	$	13,125
Accrued audit fees		3,500		6,500
Accrued stock transfer fees		0		1,864
Accrued advertising fees		2,552		0
Total 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:

	2009
Deferred tax asset attributable to:
Net operating loss carryover	$	1,292,000
Valuation 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 10 th , 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 2 nd , 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 11 th , 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 30 th , 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 8 th , 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.

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.

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 3 rd 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.

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 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.

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:

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

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

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.

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:

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

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.

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.

ITEM 5. OTHER INFORMATION

ITEM 6. EXHIBITS

(a)	Exhibit List

	10.1	Extension Agreement #2, dated July 14, 2009, among Affinity Gold Corp., AMR Project Peru S.A.C., Antonio Rotundo and Mario Rotundo
	10.2	Extension Agreement #3, dated July 28, 2009, among Affinity Gold Corp., AMR Project Peru S.A.C., Antonio Rotundo and Mario Rotundo
	31.1	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. §1350
	32.2	Certificate pursuant to 18 U.S.C. §1350

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 Rotundo
	Antonio Rotundo
	President, CEO, CFO and Director (Principal Executive Officer and Principal Financial Officer)

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AFYG Affinity Gold Corp (CE)