Affinity enters option deal to acquire Discovery Lake

Executive Summary

• Affinity Metals Corp. has entered a three-year option agreement to acquire a 100% interest in the Discovery Lake gold property near Sioux Lookout, Ontario.
• Full exercise of the option requires an aggregate cash payment of $64,000 and the issuance of 200,000 common shares over the three-year period.
• The property carries a 1.5% net smelter returns (NSR) production royalty, with an option for the company to reduce it to 1.0% for a $500,000 payment.

Key Details

• Transaction Structure: Three-year option agreement to acquire 100% interest in the Discovery Lake property.
• Counterparty: Private company owned by Perry English.
• Consideration: Aggregate cash payment of $64,000 and issuance of 200,000 common shares payable over the three-year option term.
• Royalty Terms: Optionors retain a 1.5% NSR production royalty. The company or its assigns hold the right to purchase a 0.5% royalty reduction for $500,000, leaving the optionor with a 1.0% NSR.
• Security Restrictions: All common shares issued under the agreement are subject to a hold period of four months and one day from issuance, per Canadian Securities Exchange policies.
• Property Details: Over 2,500 hectares located in the highly prospective Abram-Minnitaki Lake greenstone belt, immediately adjacent to Heritage Mining's Drayton-Black Lake project.
• Exploration Plans: Management intends to plan an upcoming exploration program and commence field operations.

Notable Quotes

• Rob Edwards, Chief Executive Officer: "We are excited to expand into this area of Ontario, one of Canada's, and the world's, most prolific gold mining regions that is renowned for its high-grade gold deposits and having produced over 30 million ounces of gold to date. The Discovery Lake property itself has highly prospective underlying geology and is situated within a very active gold-producing greenstone belt. The property has great access with additional infrastructure located close by. We look forward to planning the upcoming exploration program and getting boots on the ground."