Initiating Report August 14, 2009 3 Recommendation ANTIOQUIA GOLD INC. Speculative Buy ($0.22 TSX-V: AGD) Risk High Price (August 14, 2009) $0.22 52-Week Range $0.265 - $0.025 Intrinsic Value $0.60 - $0.75 Data Source: www.BigCharts.com Target Price (12 Months) $0.65 UPFRONT Investors who purchase shares in junior mining exploration companies, Shares O/S typically those whose shares are trading under 50 cents, acknowledge that any 26.15 million such investment is highly speculative. The investor fervently hopes that the Market Cap miner will be successful with the drill bit and that the share price subsequently $5.75 million reflects that success. Given the risk, the investment reward has to be substantial. Ideally, the investor is looking for a “ten-bagger”, and these do Average Daily Volume occur. A double from 10 cents to 20 cents a share sounds good in terms of 50-day: 74,100 percentage gain, but an investor/speculator wants more than that, preferably 200-day: 39,300 the stock reaching a dollar. Year-End March 31 Antioquia Gold Inc. (“Antioquia” or the “Company”), in our opinion, has a legitimate chance of achieving that sought-after ten-bagger. The Company’s Salient Statistics initial drill program commences around the end of August 2009, with Book Value Per Share $0.06 preliminary results probably announced in October. Rock samplings, while Price/Book Value 3.7x small-scale, were highly encouraging, showing a weighted average of 2.50 Properties Per Share $0.07 metres @ 32.3 grams of gold per tonne. Cash (Est.) (mill) $1.3M Cash Per Share $0.05 With positive drill results, Antioquia could emulate Ventana Gold Corp., Monthly “Burn” (Est.) $55,000 which is also active in Colombia. Ventana has been announcing favourable drill results on its La Bodega property since early 2009 and, as a result, its stock price rose from $0.04 per share last November to a high of $6.30 in June. Analysts Eric Eng, B.A. MBA Bob Weir, B.Sc., B.Comm, CFA RECOMMENDATION We recommend Antioquia Gold Inc. as a Speculative Buy for long-term risk- tolerant investors. eResearch Corporation 56 Temperance Street PROFILE Suite 501 Antioquia Gold Inc. is a mineral exploration company focused on exploring Toronto, ON M5H 3V5 for precious metals and other minerals in Colombia. The Company’s primary Telephone: 416-643-7650 venture is its Cisneros gold project, which is located 70 kilometers northeast of Toll Free: 877-856-0765 Medellin, the principal city in the Department of Antioquia. eResearch Corporation: Securities Adviser and Limited Market Dealer www.eresearch.ca Antioquia Gold Inc. Initiating Report ______________________________________________________________________________ HIGHLIGHTS ! Antioquia’s flagship Cisneros Gold Property has a resource estimate, internally generated and based on rock samples with no drilling and no NI 43-101 technical report, of approximately 430,000 oz of gold on a small portion of the Property; ! Antioquia has spent approximately $1.7 million to date on exploration of the Cisneros Gold Property and is ready to start a 3,000-metre drill program by the end of August 2009; ! The drill program is a first step towards generating NI 43-101 compliant resource estimates on the Cisneros Gold Property; ! Strategic alliance with IGTER Ltda. gives the Company access to a portfolio of over one million hectares of mining exploration concessions; and ! Colombia has produced over 80 million ounces of gold, and is believed to have a significant amount of untapped exploration potential for gold, platinum, and base metals. THE COMPANY Antioquia Gold Inc. is focused on acquiring and developing mineral and resource opportunities in Latin America, and in particular Colombia. It was formed through the amalgamation of AM-VES Resources, Inc. (a private resource company founded by ten mining professionals) and High American Gold, Inc. (a public junior mining company de-listed in 2003). Exploration is underway at Cisneros, the Company's flagship project. Antioquia is currently negotiating with a major international mining company and, if successful in these negotiations, it would give the Company access to a large portfolio of quality lands throughout Colombia. CISNEROS GOLD PROPERTY LOCATION The Company’s Cisneros Gold Property (the “Property”) in Colombia is shown on the following map. It is located in the northwest part of the country and is strategically situated insofar as it is close to the area’s major city and is transected by a major highway. Source: The Company eResearch Corporation: Securities Adviser and Limited Market Dealer 2 Antioquia Gold Inc. Initiating Report ______________________________________________________________________________ PROPERTY HIGHLIGHTS The following is a summary of the significant features of the Cisneros Gold Property. A detailed description of the Property is provided on page 17. ! The Cisneros Project is located in the central portion of the Department of Antioquia, about 70 kilometers northeast of Medellin, the Department’s largest and the country’s second-largest city. ! The site has excellent access and there is solid infrastructure in the area; one of Colombia’s principal highways, #62, transects the Company’s property. ! The Property comprises 8 concessions, totaling 5,522 hectares. ! Structurally controlled, mesothermal, high-grade vein deposits; ore minimization includes gold, silver, copper and molybdenum, with an internally-calculated non-compliant estimate of 430,000 oz of gold and a potential for up to 3 million oz of gold. ! Over $1.7 million in exploration expenditures have been spent to date, with another $2.5 million expected to be spent over the next 12 months for further exploration and possibly a NI 43-101 resource estimate for the Cisneros Project. ! Exploration projects in the vicinity are being carried out by AngloGold Ashanti Limited, B2Gold Corp., Colombian Mines Corporation, and ColGold Inc. INVESTMENT PERSPECTIVE In our opinion, the potential for the Company’s stock is largely dependent upon how management can increase the value of the Cisneros Gold Property. We have identified four major factors that could have a significant influence on property value creation. (1) Property Attributes: The Cisneros Project has great potential to host millions of oz of gold; good samples (hundreds of rock samples, soil samples, surface and tunnel mapping samples) have been collected on the property; a drill program is about to begin; and a NI 43-101 compliant resource estimate is expected to be completed within the next 12 months. (2) Sound Financing: The Company is well on its way to fully finance its 2009-2010 drill program. It is expected to spend about $2.5 million over the next 12 months, of which approximately $1.9 million will be spent on its drill program. To date, over half of the required funds have been arranged and the remaining is expected to be completed in Q3/2009. (3) High Quality Management: The Company has assembled a reputable and experienced management team in the mining and finance industries (see Management and Directors, page 10). The management team does not rely on one particular key person and uses its expertise in mining and finance to acquire and develop properties with good potential. (4) Strategic Alliance: Antioquia has signed a Letter of Intent (LOI) to purchase IGTER Ltda. (see below) and all of its assets. Once this acquisition is completed, the Company will gain access to more than a million hectares of land and a relationship with a major international mining company. eResearch Corporation: Securities Adviser and Limited Market Dealer 3 Antioquia Gold Inc. Initiating Report ______________________________________________________________________________ IGTER LTDA PROPOSED ACQUISITION IGTER Ltda. is a Colombian consulting firm that has been offering geology and mining expertise and personnel to both national and international companies over the past four years. Some of the key benefits the Company gains from the acquisition of IGTER are as follows: ! IGTER Ltda. will supply and support Antioquia in the following areas: geologists, field labour, logistical support, administration, accounting, and office space as well as conduct environmental, community and social studies work; ! IGTER Ltda. currently owns several mining properties and has options on additional properties that are included in the purchase; ! Antioquia will have access to a large portfolio of gold properties in Colombia that IGTER Ltda. holds the titles to on behalf of a multi-national gold mining company. A Letter of Intent has been signed between IGTER Ltda. and the multi-national gold mining company that defines the strategic alliance between the parties and the terms to acquire the properties consisting of over one million hectares; and ! No cash expenditures will be required to acquire any holdings from the multi-national company, which will be allowed to have a back-in right of 60% under specified conditions. COMMENT: We believe the strategic alliance will enhance the Company’s ability to supply its own labour force (a ready and experienced work-force), and gain more access to other properties. The financing risk of the proposed acquisition is low given that there is a nominal cash payment and issuance of shares involved, and no other financial obligations assumed by the Company. COMMENT: We expect further announcements shortly regarding the multi-national gold mining company, including the divulging of its identity, all of which should be positive for the Company and its stock price. VALUATION We use two valuation methodologies in our determination of a valuation assessment for Antioquia. These valuation methodologies are: 1. Property Ratio Method; and 2. Enterprise Value Method. In using these methodologies, we are focusing on corporate comparisons and have used the following criteria in selecting the companies for our comparison: ! Companies that are similar in terms of being at the same stage in the production cycle (see chart below); ! Companies located in the same region or in regions that are geologically similar; and ! Companies having properties that host similar mineralization characteristics.