Affinity Gold Corp. announced it has entered into a letter of intent with Colombia Crest Gold Corp., giving Colombia Crest the right to earn a 30% interest in Affinity's Peruvian gold-silver project, Machacala, in exchange for an investment of one million five hundred thousand dollars ($1,500,000). According to the terms of the letter of intent, Colombia Crest has the option to earn an undivided 30% legal and beneficial interest in and to Machacala Project in exchange for a total capital investment of one million five hundred thousand dollars ($1,500,000) over the course of twelve months following the signing of the definitive agreement.

The terms and schedule of the capital investment are as follows, subject to modification with mutual consent of the parties: $10,000 upon execution of this letter of intent; $40,000 cash payment, 250,000 common shares and 250,000 warrants of the company, both priced in accordance with TSX Guidelines upon execution of a definitive agreement, which will be not more than 120 days after executing this Letter of Intent; $250,000 within six months from execution of definitive agreement for which proceeds are to be used towards development and production expenditures on the mine tailings; $1,200,000 additional over the 12 months following the execution of the Definitive Agreement for which proceeds are to be used towards accelerating production. After the $1.5 million expenditure, Colombia Crest will have earned a 30% interest in machacala project and a joint venture arrangement will be formed between Colombia Crest, Affinity Gold Corp. and Corizona Mining Partners, LLC.

Colombia Crest will receive 75% of net proceeds from the production at Machacala until full $1.5 million of investment capital is recovered; upon Colombia Crest recovering its full $1.5 million capital invested the net revenue percentages will revert to: 30% to Colombia Crest, 30% to Affinity and 40% Corizona Mining Partners, LLC; all future capital costs will be divided 30% Colombia Crest, 30% Affinity Gold Corp. and the balance 40% Corizona Mining Partners, LLC.