Technical Report of the Granja Nueva Early Stage Exploration Project Department of ,

Prepared for: Granja De Oro Inversiones Mineras, S. A. C. Prepared by: William R. Henkle, Jr., P. Geol.

Henkle and Associates

January, 2012

HENKLE AND ASSOCIATES 230 Finch Way, Carson City, NV 89704 775-849-1683 775-849-9578 fax

2 Granja Nueva NI-43-101 Report

TABLE OF CONTENTS Page # 1 Summary 6 2 Introduction and Terms of Reference 9 2.1 Purpose of the Report 9 2.2 Terminology 9 2.3 Sources of Information 9 2.4 Extent of Field and Office Involvement 10 3 Reliance on Other Experts - Disclaimer 12 4 Property Description and Location 13 4.1 Description and Location 13 4.2 Ownership and Burdens 15 4.3 Land Tenure 16 4.4 Environmental Considerations 17 4.5 Civil Unrest 17 5 Accessibility, Climate, Infrastructure and Physiography 20 5.1 Accessibility 20 5.2 Climate 20 5.3 Local Resources 22 5.4 Infrastructure 22 5.5 Physiography 22 6 History 23 6.1 Recent Ownership History 23 6.2 Historical Resources and Reserves 23 6.3 Production 23 7 Geology 24 7.1 Regional Geology 24 7.2 Prospect Scale Geology 26 7.3 Mineralization 30 7.3.1 Pena Negra Zone 30 7.3.2 Casquin Zone 30 7.3.3 Colpar I Zone 30 7.3.4 Colpar XX Zone 30 8 Deposit Types 32 8.1 Surface Alteration Patterns 32 8.2 Subsurface Alteration 35 8.3 Exploration Model 41 9 Exploration 43 9.1 Cambior ‘s Exploration Campaigns 43 9.1.1 Surface Mapping and Sampling 43 9.1.2 Geophysics 43 9.2 Vena Resources Exploration Campaigns 47 9.2.1 2007 Sampling / Mapping Expedition 47 9.2.2 2011 Sampling / Mapping Expedition 47 9.2.3 Re-interpretation of Geologic Model 49 10 Drilling 53

3 Granja Nueva NI-43-101 Report

TABLE OF CONTENTS - continued Page # 11 Sample Preparation, Analysis and Security 55 11.1 Sample Preparation 55 11.2 Analysis 55 11.2.1 Laboratory Sample Preparation 56 11.2.2 Laboratory Quality Assurance/Quality Control 56 11.2.3 Adequacy of sampling 57 11.3 Sample Security 57 12 Data Verification 58 13 Mineral Processing and Metallurgical Testing 61 14 Mineral Resource Estimate 61 15 Mineral Reserve Estimates 61 16 Mining Methods 61 17 Recovery Methods 61 18 Project Infrastructure 61 19 Market Studies and Contracts 61 20 Environmental Studies, Permitting and Social or Community Impact 61 21 Capital and Operating Costs 61 22 Economic Analysis 62 23 Adjacent Properties 62 24 Other Relevant Data and Information 62 25 Interpretation and Conclusions 63 25.1 Interpretations 63 25.2 Conclusions 65 26 Recommendations 66 26.1 Specific Recommendations 66 26.2 Proposed Budget 67 27 References 68

Granja Nueva NI-43-101 Report

FIGURES Page # 1 Location & Access, Granja Nueva Project 14 2 Regional Claims Map, Granja Nueva Project 19 3 Regional Geology 25 4 Stratigraphic Column 26 5 Local Geology 28 6 Structures and Intrusives 29 7 Main Exploration Area Geology 31 8 Alterations Map 35 9 Idealized Exploration Model 42 10 Total Field Analytical Signal Contours (Magnetics) 44 11 IP Chargeability (200m Depth) 45 12 Resistivity (100m Depth) 46

4 13 Rock Chip, Stream and Soil Geochemistry, Sampling Cambior & Inca Gold 48 14 Geochemical Map - Gold (ppm) 49 15 Geochemical Map - Mercury (ppm) 50 16 Idealized Exploration Model 52 17 Location of Diamond Drill Holes 54 18 QP’s Check Core Samples (in blue) – Gold 59 19 QP’s Check Core Samples (in blue) – Copper 59

Granja Nueva NI-43-101 Report

TABLES Page # 1 Granja Nueva Project Planned Work Program 8 2 Mining Concession Details 15 3 Physical Access Details – Granja Nueva Prospect 20 4 Alteration Minerals Identified by PIMA Analysis 34 5 Subsurface Alteration Minerals Identified by Terra Spec Analysis 36 6 Cambior Drilling Details 53 7 Listing of Check Samples – Cambior Core 58 8 Granja Nueva Project Planned Work Program 67

Granja Nueva NI-43-101 Report

PHOTOS Page # 1 Rhyolite Dome with Phreatomagmatic Breccias 27 2 CQ – 001 – Advanced Argillic Alteration 37 3 CQ -004 – Intermediate Argillic Alteration 38 4 CQ – 005 – High Temp – Advanced Argillic Alteration 39 5 CQ – 006 - High Temp – Advanced Argillic Alteration 40 6 Phreatomagmatic Breccia Outcrop 41

5 1.0 Summary The Granja Nueva Project Area, composed of four contiguous mining concessions, is located in the country of Peru, in the in the province of Chota, and the district of Querocoto as shown on Fig 1. The property is approximately 1000 kilometres by road and trail northeast of Lima and about 278 kilometres by road and trail north northeast of the city of .

The Granja Nueva Project Area is comprised of 3,300.00 contiguous hectares of mining concessions as shown on Fig 2. Based on the Universal Transverse Mercator system using the South American 1956 (SAM56) base, the concessions lie within 700,000 and 705,000 East and 9,300,000 and 9,306,000 North.

Concessions are granted by the Ministry of Energy and Mining (MEM), for the right to explore and exploit minerals within its area. The concessions that comprise the Granja Nueva Project Area are 100% owned by Granja De Oro Inversiones Mineras, S.A.C. (Granja De Oro). Title to the concessions was transferd via an Agreement of Mining Rights Transfer to Granja de Oro, from Vena Peru, S.A. a subsidiary of Vena Resources, Inc. (Vena Resources) (Trading Symbol – TSX – VEM) on December 14th, 2011. That agreement was registered in Public Deed, in Lima, Peru on January 4, 2012. Submission of the registered agreement to the Public Registry is pending as of the time of this writing (January 5, 2012).

Granja de Oro is the 99.9% owned Peruvian subsidiary of Vena Resources. There are presently no royalty burdens on future production from the concessions, nor will any future royalties, back – in – rights, etc., be associated with production from the concessions, once Granja de Oro is acquired by Granja Gold, Inc. (Granja Gold).

Cambior, Inc acquired the Granja Nueva Prospect by staking in 1999 – 2000. The Granja Nueva Prospect (called the Casquin Prospect by Cambior) was selected as the best of three prospects in the district that were delineated by a regional reconnaissance program.

Between 2000 and 2003, Cambior mapped the prospect; and collected 1083 geochemical samples. In addition to this geological characterization work, total field magnetics, IP and Resistivity geophysical surveys were conducted over much of the concession area. Cambior’s active work on the prospect culminated in a 10 hole core drilling program in 2003. Cambior’s drilling did not discover economic mineral- ization based on 2003 metals prices. Consequently, there are no defined resources or reserves at the prospect. Cambior’s total expenditures on the Casquin Project were in the US$ 1,000,000 range.

6 Cambior subsequently dropped their Casquin concessions by 2007. Vena Resources purchased Cambior’s data package for US$ 30,000 in 2008.

Vena acquired the Casquin I, Colpar I and the Pena Negra I concessions by staking in 2007. In 2009, the Colpar XX was also acquired by staking. All registration fees for the concessions are current.

Vena’s geologists have conducted two exploration campaigns at the prospect, since acquiring the concessions. The first which took place in 2007, was a month long mapping and sampling effort. This resulted in the collection of 365 additional rock chip samples and six BLEG sediment samples from the prospect. The samples were assayed for Au, Ag, Cu and six other pathfinder elements. In addition PIMA analyses were performed on 307 rock chip samples. PIMA analysis is a mineral identification analysis that focuses on hydrothermal alteration minerals.

The second Vena campaign occurred in 2011; this was a three day site visit by Vena’s Chief Geologist. A total of fourteen rock chip samples were collected during the visit. The total number of rock chip samples in the data package for the prospect now numbered at 1264, with PIMA analyses for 307 samples.

Vena then began to re-study the geology of the prospect, focusing on the alteration patterns present at outcrop. Since the prospect now had 307 PIMA analyses, which had definitive mineral identification, Vena was able to acquire a better understanding of the hydrothermal alteration patterns than Cambior had been able to do.

Vena’s efforts culminated in a re-interpretation of the geologic origin of an important physiographic feature at the prospect. A ~ one km diameter circular depression is found on the Colpar XX and Colpar I concessions. Cambior’s geologists interpreted this feature as having been formed by a maar; a shallow seated explosive volcanic process. Vena’s geologists’ reinterpreted this feature as a summit caldera; a deep seated explosive volcanic process. High sulfidation epithermal mineral deposits are more commonly associated with calderas than they are with maars (especially in the Peruvian ).

Henkle and Associates was contracted to prepare a National Instrument 43 – 101 compliant report on the Granja Nueva Prospect. William R Henkle, Jr., P Geol, is the QP for the report. In mid – November, 2011, Mr. Henkle attempted to visit the prospect but was unable to access it due to seasonal weather conditions. Mr. Henkle did visit Vena’s core storage facility in Trujillo and spent two days examining cores from the Cambior drilling program. He also selected 20 increments of core for both geochemical analysis and Terra Spec analysis (Very similar to PIMA analysis).

7 At Vena’s Lima office, and at Henkle and Associates office in the US, Mr. Henkle reviewed the entire data package of the prospect. This included:

 Regional and property scale geologic maps  Geochemical analyses for the 1264 samples collected at the prospect  Geophysical survey results  Geologic report review

On the basis of the work described above, Henkle and Associates concludes that Vena’s re-interpretation of the economic geologic potential of the prospect is sound and that a viable High Sulfidation Epithermal Gold target exists at the prospect.

It is concluded that the Granja Nueva Prospect is a property of merit, and a work program which consists of 1800 meters of drilling costing US$ 900,000 is proposed for the 2012 exploration season. Details of the budget are seen below:

Table 1 Granja Nueva Project Planned Work Program Activity Rate (US$/m) Unit (m) Cost (US$) Diamond drilling 200 1800 360,000 Salaries 170,000 Camp 44,000 Transport 56,000 Road Access 40,000 Permits, Social 40,000 Geochemistry 24,000 Terraspec analysis 30,000 Trenching 10,000 Assaying 44,000 Sub-total 818,000 Contingency 10% 82,000 TOTAL 900,000 TABLE 1 – Granja Nueva Project Planned Work Program

8 2.0 Introduction and Terms of Reference

2.1 Purpose of the Report This report was prepared for Granja de Oro Inversiones S.A.C. (Granja de Oro), a 99.9% Peruvianian subsidiary of Vena Resources Inc. (Vena Resources) (Trading Symbol – TSX – VEM). It is anticipated that Granja Gold, Inc. (Granja Gold) will acquire 99.9% of the shares of Granja de Oro in connection with Granja gold’s intention to apply for a listing on the TSX Venture Exchange (TSXV). This transaction will be discussed in more detail in Section 4.2 of this report.

This report is prepared for Granja de Oro to qualify its Granja Nueva project as an exploration project of merit. This report provides an independent assessment of the economic geologic potential of the concessions which comprise the project area.

This report is authored by William R. Henkle. Jr.,Principal Geologist of Henkle and Associates. Mr. Henkle is President/Chief Geologist of Henkle and Associates, Inc., an independent geologic consulting firm. The author is grateful for the assistance of Sr. Wilmer Montes, C.I.P. 106598, Vena Resources’ Chief Exploration Geologist. The assistance and insight of Sr. Montes, was instrumental in allowing the author to quickly attain an understanding of the more subtle points of the geology of the Granja Nueva prospect.

2.2 Terminology All technical terms of reference such as “resources”, “reserves” or “mineralization”, used in this report conform to standards of practice published by the Canadian Institute of Mining and Metallurgy. All geological terms used are in standard use within the geological consulting profession in Canada and the US. It is emphasized that there is insufficient information upon which to determine resources or reserves for these concessions and nothing in this report should be construed to suggest or imply otherwise. Unless otherwise stated all units are metric and all coordinates are Universal Transverse Mercator (UTM) with a SAM 56 base.

2.3 Sources of Information The results shown in this report are based on numerous sources of data provided both by the Vena Resources, and its predecessor in title to the concessions, Cambior, Inc. These include the logs and accompanying assay reports, of 10 exploration drill

9 holes from a drilling program (completed by Cambior in 2003), as well as geologic maps, numerous rock and soils geochemical assays, etc. which cover the Project Area.

Of the 1448 geochemical analyses of surface samples provided by Vena Resources, 198 soils and 885 rock chip samples were collected by Cambior geologists and 365 rock chip samples were collected by Vena Resources’ geology department. Section 27.0, References, lists the data sources used in this report that were not generated by Vena Resources.

2.4 Extent of Field and Office Involvement Mr. Henkle, accompanied by Sr. Montes, unsuccessfully attempted to visit the concessions between November 10 and November 17, 2011. Unfortunately, the property was inaccessible, due to the early onset of the summer rainy season in this portion of the Peruvian Andes. The Campesinos that live in the villages near the prospect normally are more than willing to rent horses and provide drovers and other day laborers to Vena Resources, for exploration expeditions. However, due to muddy, slippery conditions on the cliff side trails; the local Campesinos refused to rent their horses for the proposed site visit. The Campesinos feared that the horses would slip off of the trails and tumble to their deaths. This will be discussed in more detail in Section 5.0 of the report.

Sr. Montes was able to visit the prospect between October 20 and 22, 2011, prior to the early onset of the rainy season. During his visit, he collected 14 additional rock chip samples, but more importantly, he was able to geologically map in detail some of the areas of the prospect that had only been mapped on a reconnaissance basis by earlier workers. His mapping is very important in that it allowed for a re- interpretation of the geology of the prospect, and delineation of several previously untested drill targets. This also will be discussed in more detail in Section 9.0 of the report.

Since it was physically impossible to visit the prospect, Mr. Henkle and Sr. Montes visited Vena Resources’ core storage facility in the city of Trujillo, Peru. Split core from the 10 drill holes (2108 meters) drilled by Cambior in 2003 is stored there. While at the core storage facility, they were able to personally inspect the lithologic and mineralogic features of the various rock units which both outcrop on and underlie the prospect. They also selected 20 individual core samples for check assaying, and for determination of alteration mineral assemblages by Terra Spec analysis. This will be discussed in more detail in Section 8.2 of the report.

10 In addition to the above, Mr. Henkle spent four days at Vena’s Lima office with Sr. Montes, reviewing all data on the prospect which is in Vena Resources’ files and it’s company library.

The writer was unable to personally inspect the prospect, prior to preparation of this report, due to seasonal weather conditions. Consequently, as per OSCC Publication # (2011) 34 OSCB 7060, Part 6.2, Subsection 2(6) and Subsection 3, Vena Resources has agreed to as soon as practical, engage the writer to return to and visit the prospect. In addition, a modified technical report will be filed shortly thereafter. The next visit to the project area is scheduled for May – June, 2011, after the onset of the dry season.

11 3.0 Reliance on Other Experts Henkle and Associates has prepared this report strictly in the role of an independent qualified person and our staff was not consulted as to the design of the data collection and analysis program. Although we did not witness the program execution, at no time did we suspect the withholding of information. Henkle and Associates is of the opinion that the data is sufficient and reasonable for an assessment of the project at this stage of exploration. None of the information provided has been specified as being confidential and not to be disclosed in this report. This report is based on the information provided by Vena Resources, both verbal and documented, on the writer’s personal evaluation at the Trujillo core storage facility and in the field and on Henkle and Associate’s knowledge of the mine development industry in Peru. Our project staff has relied on and assumed the accuracy and fair representation of all technical information provided by Vena Resources including geological notes, surface maps, geophysical data etc. These reports will be listed in Section 27.0 of the report – References.

Based on the results of the environmental evaluation work required to obtain the necessary drilling permits for Cambior’s 2003 campaign, Henkle and Associates believes there are no significant environmental liabilities attached to the property at this exploration stage.

Henkle and Associates is aware that Granja de Oro owns the concessions in good standing and that Granja de Oro has obtained an independent, legal opinion as to the prior ownership of the concessions and their registration with the Peruvian Ministry of Energy and Mines (Public Registry).

Based on what has been observed of the drilling and analytical work, Henkle and Associates is satisfied that the exploration programs conducted at all of Granja de Oro’s prospects to-date have followed CIMM best practices for the evaluation of mineral occurrences.

12 4.0 Property Description and Location

4.1 Description and Location The Granja Nueva Project Area, composed of four contiguous mining concessions, is located in the country of Peru on the west coast of South America. With respect to internal government administration, Peru is divided into 24 Departments which are each further subdivided into provinces and districts. The project area under study is located in the Department of Cajamarca in the province of Chota, and the district of Querocoto as shown on Figure 1. This figure shows a map of the country of Peru, the location of the Department of Cajamarca and the location of the Project Area. The La Granga Nueva Project Area is comprised of 3,300 contiguous hectares of mining concessions as shown on Figure 2. This Plate shows the location of Granja de Oro’s concessions within the Project Area with respect to neighbouring concessions, as well as concession ownership. A listing of the individual concessions is shown in Table 2. Based on the Universal Transverse Mercator system using the South American 1956 (SAM56) base, the concessions lie within 700,000 E and 705,000 E and 9,300,000 N and 9,306,000 N. All registration fees for the concessions are current.

Concessions are granted by the Ministry of Energy and Mining (MEM), for exploration, exploitation, beneficiation, auxiliary services and transportation. A mining concession grants its holder the right to explore and exploit minerals within its area and the key characteristics include:

• Concessions are exclusive, freely transferable and mortgageable; • Location is based on a UTM grid system of minimum 100ha to maximum 1000ha. • Granted on a first-come, first served basis; • Indefinite term but with restrictions and an objective based criteria; • Single annual fee payable. Fee structure based on scale of operations and duration of ownership; and, • Access to the property must be negotiated with surface land owners.

13 FIGURE 1 – Location & Access, Granja Nueva Project A work program and expenditure schedule has to be presented in year 7 of the life of the Mining Concession to the MEM and penalties are incurred for under expenditure. By year 12 of the life of the Mining Concession, it is expected that exploitation should be ongoing, if this is not the case then justification has be presented to the MEM and an extension of 6 years may be conferred. The annual fees payable by Granja de Oro to the MEM are currently standing at US$3/ha.

Henkle and Associates has restricted our review of the Mineral Rights held by Granja de Oro to checking the individual license boundaries on plans to those depicted on the Mining Concessions. No legal review of the validity of the process Granja de Oro went through to obtain the Mining Concessions has been undertaken.

14

Table 2 La Granja Nueva Project Concession Name, Registration Date & Block Coordinates DATE PUBLIC NOTICE RECORDED CLAIM NAME AREA(ha) CODE DATE FILE DEPT. REGIS OWNERSHIP DATE MINING ENTRY REGISTRY CASQUIN I 800.00 10055807 03/01/2007 CAJAMARCA 14/02/2007 09/07/2009 11124035 Granja de Oro COLPAR I 800.00 10055907 03/01/2007 CAJAMARCA 14/02/2007 09/07/2009 11123107 Granja de Oro COLPAR XX 700.00 10127209 04/05/2009 CAJAMARCA 09/10/2009 07/02/2010 11136222 Granja de Oro PEÑA 1000.00 10056007 03/01/2007 CAJAMARCA 14/02/2007 09/07/2009 11123106 Granja de Oro NEGRA I

UTMA PSAD 56 - ZONE 17S CLAIM NAME (m) North (m)East CASQUIN I 9304000.00 704000.00 9302000.00 704000.00 9302000.00 700000.00 9304000.00 700000.00 COLPAR I 9306000.00 704000.00 9304000.00 704000.00 9304000.00 700000.00 9306000.00 700000.00 COLPAR XX 9306000.00 700000.00 9302000.00 700000.00 9302000.00 699000.00 9303000.00 699000.00 9303000.00 698000.00 9306000.00 698000.00 PEÑA NEGRA 9302000.00 705000.00 9300000.00 705000.00 9300000.00 700000.00 9302000.00 700000.00 TABLE -2 – Mining Concession Details

4.2 Ownership and Burdens

The concessions that comprise the Granja Nueva Project Area are 100 % owned by Granja De Oro. Title to the concessions was transferd via an Agreement of Mining Rights Transfer to Granja de Oro, from Vena Peru, S.A. a subsidiary of Vena Resources on December 14th, 2011. That agreement was registered in Public Deed, in Lima, Peru on January 4, 2012. Submission of the registered agreement to the Public Registry is pending as of the time of this writing (January 5, 2012).

15 Granja de Oro is the 99.99% owned Peruvian subsidiary of Vena Resources. There are presently no royalty burdens on future production from the concessions, nor will any future royalties, back – in – rights, etc., be associated with the project, once Granja de Oro is acquiredby Granja Gold, as anticipated.

Peru’s new mining law went into effect on Sept. 29, 2011. Mining companies will now pay taxes based on their operating profits; from 1% to 12%, vs. the old law which was from 1% to 3% of sales. In addition, there will be a windfall profits tax ranging from 2% to 8.4% of a mine’s net profits. The effect of these new taxes on future production from the Granja de Oro’s concessions is at present unknown.

Granja Gold, is a new company focused on gold exploration and development in northern Peru. It is anticipated that Granja Gold, will apply for listings on the TSXV as well as the venture segment of the Lima Stock Exchange in the first quarter of 2012.

It is expected that Granja Gold will acquire 99.99% of the shareholdings of Granja de Oro from Vena Resources. Granja de Oro owns three early stage exploration projects in northern Peru (Granja Nueva, JR-24 and Masma). The transaction, among other terms, provides for Granja Gold to issue 10 million shares to Vena Resources in consideration for its interest in Granja de Oro and for an additional 6.3 million performance earn-in shares to be issued to Vena Resources based on certain criteria being achieved in respect of measured or indicated resources included in a future NI 43-101 report.

Granja Gold, using Urban Select as a finder, intends to complete a non-brokered $2,000,000 private placement consisting of 20 million common shares of Granja Gold (or subscription receipts convertible into common shares) at a price of $0.10 per security. The proceeds of this private placement will be used to cover ongoing expenses of Granja Gold for the next 12 months and for TSXV listing qualification.

This transaction is expected to close no later than February 28, 2012 and is subject to a number of conditions, including, as a preliminary step, completion by Urban Select of a corporate reorganization, completion of financing and a satisfactory due diligence review. To date, Vena Resources has expended approximately US$ 200,000 acquiring and exploring the concessions.

4.3 Land Tenure The issue of land tenure is of increasing significance in Peru particularly as the national cadastral system for agricultural land ownership is not always accurate.

16 Peruvian law does not vest surface rights with mineral rights and any proposed development requires the developer to: a) purchase the surface rights or b) negotiate an appropriate agreement with the surface rights owners to have access to the property.

Several Pueblos (villages) are located near to, and have surface rights that overlie the concessions. Vena Resources has not had signed formal agreements with the local communities in the past. Since nobody lives on the property, the work to date has been conducted under verbal agreements with the communities. Any future serious work program on the property will require solicitation of access rights from the local communities.

As of November, 2011, Vena Resources’ relations with the communities in the area that are the surface owners of the concessions have been cordial. Vena Resources rents horses from and hires select members of the community to act as drovers for the horse and mule pack trains which accompany the exploration expeditions, and as laborers.

4.4 Environmental Considerations Cambior’s 2003 drilling was conducted under the authorization of the Ministry of Energy and Mines (MEM). Issuance of the drill permit required a baseline study of the water/ soil/ air and sound quality in the work area. The writer assumes, that since the permit was granted and the drilling took place, that there are no major environmental problems present at the prospect.

The planned drilling campaign for 2012, recommended in Section 26.0 of this report will require additional drill permits from MEM. Work will begin on the permitting process, as soon as Granja Gold has acquired the shares of Granja de Oro.

4.5 Civil Unrest In early November of 2011, during the field work for this report, several large anti- mining protests were underway in Peru. Major coincident protests were underway against Newmont / Buenaventura’s Minas Conga Project in Cajamarca Department (Northern Peru), the Antamina Joint Venture’s mine in Ancash Department (Central Peru) and against informal mining in Apurimac Department (Southern Peru). All of these protests turned intermittently violent; clashes with the National Police occurred

17 at all of them. Property destruction, road blockades, protester and police injuries, and some protester deaths even took place.

On November 17th , 2011, Peru’s newly elected President Humala held a press conference, at which he said that large mining projects such as Minas Conga were essential to Peru’s economy, and that projects such as these would not only be allowed to proceed, but they would be protected by the government. At the same time, President Humala said, that additional conditions regarding environmental protection and economic development would be imposed on large projects such as Minas Conga and Antimina.

In late November- early December, 2011, Newmont Mining announced a temporary suspension of the Minas Conga Project, due to the civil unrest in the project vicinity. Shortly thereafter, President Humala declared a state of emergency in the Cajamarca City – Minas Conga region of Peru. At the time of this writing (early December, 2011), the army is helping the Peruvian National Police keep order in the affected area.

The Granja Nueva Prospect is located within the Department of Cajamarca, as is the Minas Conga Project. However, it is important for the reader to recognize, that Granja Nueva is physically situated ~110 km NW of the Minas Conga Project. There are no direct road or other transportation connections between the two project areas, nor are there many socioeconomic similarities between the local peoples affected by the two projects.

The Granja Nueva Prospect is isolated both physically and socioeconomically from the Minas Conga Project; to date, the civil unrest related to Minas Conga has not affected the Granja Nueva Project. Vena Resources maintains good relations with the various communities in the greater project area.

18

FIGURE 2 – Regional Claims Map, Granja Nueva Project

19 5.0 Accessibility, Climate, Local Resources, Infrastructure and Physiography

5.1 Accessibility The Granja Nueva Prospect is located in the Western Cordillera physiographic province, approximately 1000 kilometers by road and trail, northeast of Lima and about 278 kilometers by road and trail north northeast of the city of Chiclayo. Access to the property is either by air (Lima – Chiclayo – 1.5 hours – then by road – 8 hours), or by the Pan – American Highway an asphalted road (Lima – Chiclayo – 9.0 hours); then by asphalted and gravel road (Chiclayo – Querocota – 7.0 hours); then by 4 x 4 vehicle to the community of Pariamarca (Querocota – Pariamarca – 35 km – 1 hour).

Access from Pariamarca to the currently defined main exploration target areas of the concessions is by either horse, on foot or by 4 wheel all terrain vehicle (dry weather only). It takes about 6 hours to access the exploration target areas by horse, over a 20 km long complex set of narrow, steep cliff side trails. Access is dangerous during wet weather, as horses or all terrain vehicles may slip on the muddy trail and tumble over the edge of the cliff. Table 3 shows the above information in tabular format.

As was mentioned in Section 4.5, to date, the local people living on and around the concessions have not refused access to Vena Resources’ geologists during the two previous exploration expeditions.

Table 3 La Granja Nueva Project Distances: Lima to Granja Nueva Project From To Distance Bearing Via Time Elev. m ASL Lima Chiclayo 770 km NNW Highway 9 hrs. 30 Chiclayo Querocoto 223 km NE Highway & gravel 7 hrs. 2870 Querocoto Pariamarca 35 km NW Gravel 1 hrs. 2030 Pariamarca Project Area 20 km NW By Horse 6 hrs. 3500

TABLE 3 – Physical Access Details – Granja Nueva Prospect

5.2 Climate

Peru has a very large diversity of climates which is caused by the combination of tropical latitude, presence of very high mountain ranges, rugged topography variations and the presence of two ocean currents (Humboldt and El Niño) along its coast. The

20 Andes mountains, according to the Koppen climate classification, observe a cool-to- cold climate with summers that are rainy and with winters that are very dry.

The Andes Mountains shelter the largest variety of climates in the country. The climate at the prospect is moist to wet. Rainfall, though never actually measured at the prospect probably varies from 1,000 to 1,500 mm (39.4 to 59.1 in) per year. The rainy season starts in October and ends in April, the rainiest months are January through March. Travel is often affected negatively during the rainy season.

According to Wikipedia, temperature variations in the Peruvian mountains at elevations between 2,500 and 3,500 meters (8,202 and 11,483 ft) vary from 0 to 12 °C (32 to 53.6 °F) in the night and from 15 to 25 °C (59 to 77 °F) during the day. The maximum temperature is often steady throughout the year, the low varying due to the presence of clouds in the rainy season, which help keeping to some extent the daytime heat during the night. In the absence of clouds, nights are much colder.

Precipitation varies in different scales and has a marked seasonality. September is the start of the rainy season, but it peaks between January and March. Strong insolation characterizes the May–August period; very dry conditions and cold nights and mornings, which is almost the exact reverse, in terms of insolation, to the coast climate.

Rainfall is also larger over mountain ranges than over valley floors, since most of the rainfall occurs in the form of afternoon convective thunderstorms. These can be accompanied by frequent cloud to ground lightning, strong winds and damaging hail, especially during the onset of the rainy season and over higher elevations.

The summer rainy season is an annual event which lasts about 6 months (September – April), in the northern Peruvian Andes. Even though it is an annual event, the rainy season varies in intensity between La Nina years and El Nino years. “La Niña" and "El Niño" are the extreme phases of the oceanic-atmospheric phenomenon known as "El Niño-Southern Oscillation" (ENSO), which takes place in the equatorial region of the Pacific Ocean every two to seven years, affecting many regions around the world to varying degrees. La Niña is characterised by an atypical cooling of the surface waters of the ocean and an increase in the winds blowing east to west at the equator. The better known El Niño is the opposite: warmer surface waters and weaker winds.

In South America, La Niña tends to provoke intense rains in Colombia, , the high plains and mountains, of Bolivia and Peru and northwestern Argentina, and drought in Uruguay, southern Brazil, northeastern Argentina and central Chile (Wikipedia, 2011). At the time of this writing (November, 2011), La Nina conditions

21 are in effect globally. The result of this with respect to the Granja Nueva prospect is that the prospect is inaccessible during the 2011 rainy season.

5.3 Local Resources Other than its mineral potential which has not been developed to date, the Project Area has abundant forested areas. These are found on the slopes of the quebradas (ravines) which drain it. Grass lands, suitable for grazing llamas, sheep and goats are found at the higher elevations of the prospect.

There is no subsistence farming presently taking place on the concessions that make up the prospect. Farming for potatoes, yucca, etc. does take place at similar elevations in the region surrounding the prospect however.

5.4 Infrastructure Other than a network of horse trails, there is no developed infrastructure to speak of in the Project Area. The nearest gravel road is about 6 km distant at the community of Tucto.

Due to the large amounts of rainfall received each year in the rainy season, the Project Area has abundant water resources which can support either drilling or mine development. Several large quebradas which support perennial streams drain the concessions. There is ample room available to construct mine site facilities such as tailings ponds, heap leach pads, etc. should an economic mineral occurrence be discovered by future drilling operations. Construction of an adequate future road network to service any future mining project will be a major capital expense however.

5.5 Physiography The Project Area is located in the center of the Western Cordillera physiographic province of Peru. Elevations within the concessions and the surrounding area range between ~ 2200 m to 3800 m. The topography of the prospect can be characterized as a high land with rolling hills, deeply incised by five eastward flowing active streams.

The quebradas formed by the streams have steep sides and elevation differences between the stream beds and the edges of the plateau range between 500 m to 1000 m

The northern part of the Project area is drained by Quebradas Casquin and Cucho, which flow into the Rio Misahuanga, near the caserio of Cucho at an elevation of ~ 2000m. Quebradas Honda, Cuchuro, Huambo and the west to east flowing Rio Paltic, flow across the southern part of the Project Area and flow into Rio Chongoyapito. Both Rio Misahuanga and Rio Chongoyapito eventually flow into the Pacific Ocean.

22 6.0 History The earliest known mining activity at the prospect is found on the Pena Negra concession. A narrow quartz vein outcrops at river level in the southern part of the Project Area. Spanish era underground workings explore the vein for a distance of ~ 28m. There is no evidence of production.

6.1 Recent Ownership History Cambior, Inc acquired the Granja Nueva Prospect in 1999 – 2000. The prospect was acquired by staking, after an intense regional grassroots reconnaissance program which covered the Inkawassa District of Cajamarca Department. The Granja Nueva Prospect (called the Casquin Prospect by Cambior) was selected as the best of three prospects in the district, that were delineated by Cambior’s regional reconnaissance program (Meldrum, 2001).

Between 2000 and 2003, Cambior geologically mapped the prospect; in the course of that work, 1083 geochemical samples were collected and geochemically analyzed. In addition to this geological charterization work, total field magnetics, IP and Resistivity geophysical surveys were conducted over much of the concession area. Cambior’s active work on the prospect culminated in a 10 hole core drilling program in 2003. The results of Cambior’s work will be discussed in greater detail in Sections7.0, 8.0 and 9.0 of this report.

Vena Resources acquired the Colpar I, Casquin I and Pena Negra I concessions in 2007, by staking, after Cambior dropped their concessions. In 2007, Vena’s subsidiary Inca Gold explored these three concessions as well as the Colpar XX concession (called the Jessica 57 by Cambior) under an option to acquire agreement. Cambior later dropped the Jessica 57 concession and Vena re-staked it as the Colpar XX. While all of this was going on, Cambior was bought by IAMGOLD and Vena purchased the property data from IAMGOLD for US$ 30,000, Vena also acquired the drill core in that transaction. Since 2007, the Granja Nueva prospect has been one of the Vena Resources group of companies inventory properties.

6.2 Historical Resources and Reserves The Granja Nueva Prospect is classified as an advanced grass roots exploration prospect. There are no historical estimates of resources or reserves.

6.3 Production To the best of the writer’s knowledge, there has been no past production at the prospect.

23 7.0 Geological Setting and Mineralization 7.1 Regional Geology The Granja Nueva prospect is located in the north central portion of the Western Cordillera of Peru, a region underlain by thick Tertiary volcanics which unconformably overlie Mesozoic marine sediments (Fig 3 and Fig 4). Tertiary Rocks – The unit which outcrops at the surface of the prospect is the Porculla Volcanics, of Oligocene – Miocene age (5 – 35 my). The Porculla Volcanics (mainly dacites and andesites) form the upper unit of the Calipuy Group, a widespread Tertiary volcanic unit in Peru. The Porculla is thought to be about 400 m thick in the Project Area. The Porculla disconformably overlies the Llama Volcanics of Eocene – Paleocene age (35 – 65 my). The Llama Volcanics (mainly dacites with minor andesites) form the lower unit of the Calipuy Group. The Llama is thought to be about 1200 m thick in the Project Area. Mesozoic Rocks – Mesozoic age rocks do not outcrop on the prospect, but are found in outcrop within 2 km of the boundaries of the prospect both to the NE and SE of the prospect. Most likely, they are found deep in the subsurface beneath the prospect. The Lower Cretaceous age (110 – 145 my) Goyllarisquizga Group is found in outcrop about 2 km to the SW of the southern boundary of the prospect. The Goyllarisquizga is composed primarily of sandstones and orthoquartzites with minor siltstones and coal measures. It is thought to be about 300 m thick in the Project Area. The Upper Jurassic age (+ 145my) Oyotun Volcanics are found in outcrop about 2 km east of the NE boundary of the prospect. The Oyotun Volcanics are composed mainly of andesites, dacites, breccias and pryoclastics. The Oyotun Volcanics are thought to be about 500 m thick in the Project Area. Intrusive Rocks - The La Granja Quartz Porphyry outcrops at Rio Tinto’s La Granja Porphyry Copper Deposit, about 4 km to the SE of the prospect. The outcrop area of the Quartz Porphyry at La Granja is about 5 square km. Tonalite/Granodiorite outcrops in five large (+ 20 square km) areas 4 – 10 km to the E and N of the prospect. Both of these igneous units intrude the Porculla Volcanics, so they are younger than 35 million years in age. The La Granja Porphyry has been age dated at 13.8 my (Noble

24 and McKee, 1999). The Tonalite/Granodiorite has not been age dated, but it is probably older than the La Granja Quartz Porphyry. Post Porculla age hypabyssal rhyodacite and rhyolites intrude the main volcanic units of the prospect; these will be discussed in greater detail in Section 7.2 of the report. Structural Geology – The Pena Blanca Fault, a major NW striking thrust fault is found about 20 km NE of the prospect. The Pena Blanca Fault, separates a very large area of outcropping Mesozoic and older sediments, on the NE side of the fault from the Tertiary Volcanic Plateau found on the SW side of the fault. Interior to the volcanic plateau, fault bound inliers (20 – 50 square km in size) of Mesozoic sediments are found in outcrop. Only the most obvious of the faults that bound the sedimentary inliers are mapped on regional geologic maps. The La Granja Fault, an ENE striking normal fault is found 4 km to the SE of the prospect. The La Granja Fault forms the NW boundary of the LaGranja Porphyry.

FIGURE 3 – Regional Geology

25 FIGURE 4 – Stratigraphic Column 7.2 Prospect Scale Geology Volcanic Units - Extrusive and Hypabyssal Rocks – Much of the prospect area is covered by either heavy forest or by well developed colluvial sediments. Outcrops are rare in these areas; thus complicating understanding of the geology. Detailed geologic mapping in areas of outcrop shows the widespread presence of rhoyolite and andesite flow rocks. In the NE sector of the Colpar XX and the west sector of the Colpar I concessions, a complex of small hills can be found. The hills are composed of rhyolites, capped with phreato-magmatic breccias. Phreato-magmatic breccias are formed by steam explosions caused when hypabyssal (shallow) intrusions heat ground water to steam. The morphology of the hill complex suggests that they were formed as volcanic domes (shallow intrusions of slightly younger rhyolite into the rhyolitic volcanic pile) (Photo 1 and Fig 5 and 6).

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PHOTO 1 – Rhyolite Dome with Phreato-magmatic Breccias

Structural Geology – Vena Resources’ geologists have mapped a network of 13 normal faults at the prospect (Fig 5). These faults mirror the strike of the regional scale faults (NE and NW strikes – orthogonal pattern) which are found several kilometers to the east of the prospect. These faults are of indeterminate displacement; they are minor in comparison with the regional scale faults discussed earlier. The SW – NE faults have been identified as transverse faults. The N 20 – 30 E faults have been identified as shear zones, most of which have been intruded by dikes of dacite porphyry.

27 FIGURE 5 – Local Geology On the Colpar XX and Colpar I concessions, the circular outcrop pattern of the volcanic domes found in this area, as well as minor topographic scarps have been interpreted as a small caldera rim (probably a Summit caldera), by the Vena Resources’ geologists.

28 The Llama Volcanics have been affected by Paleogene tectonism and are moderately folded. The unconformable and younger Porculla rocks are mostly unaffected by tectonism.

FIGURE 6 – Structures and Intrusives

29 7.3 Mineralization Lithic tuffs and volcanic breccias exhibit weak to moderate silicification and occasional stockwork veining. Iron oxides and limonite filling in the fractures in the stockworks suggest deposition of disseminated pyrite prior below the zone of weathering. Potential economic mineralization has been detected in four specific areas of the prospect; these are described below (Fig 7): 7.3.1 Pena Negra Zone – Old Spanish workings are found along this zone. The workings intercept a narrow quartz vein that strikes N 25E and dips 71 SE with a width of 0.15m, which was emplaced along a fault in epidotized andesite. The vein has been drifted on for a strike distance of 27m. Chalcopyrite, galena, sphalerite, galena and quartz have been identified as vein minerals; the wall rock is strongly silicified. Potential economic mineralization appears to be limited to the quartz vein, at least where sampled. The vein carries moderately anomalous values of Au, Ag, Cu Pb and Zn. 7.3.2 Casquin Zone – This is a heavily forested area with moderate argillic alteration intermittently exposed. Reconnaissance scale soils and stream sediment sampling has shown weak to moderate anomalies in Au, Ag, Cu, Pb and Zn for this part of the prospect. 7.3.3 Colpar I Zone – This zone is located in an area where numerous NW and NE trending structures intersect. Rhyolite flows intercalated with siliceous sinters that are chalcedonic and jasperoidal outcrop in stream valleys. In the SW part of the concession, there is a 200 m x 90 m area which is composed of a stockwork of oxidized veinlets. The stockwork zone is emplaced in moderately argillized rhyolite with isolated weak, vuggy silica and potassic alunite. This area of anomalous mineralization coincides with the location of the mapped caldera rim. 7.3.4 Colpar XX Zone- This zone is located in the NW portion of the concession for which it is named. Areas of siliceous sinter that are incipiently alunitized are abundant here along with a large Breccia outcrop (200 m x 20 m). Both the sinters and the breccias are moderately sericitized and are accompanied by the iron oxides of jarosite, goethite and hematite, indicating initial deposition of sulfide minerals. This interesting mineralization is also found in close proximity to the recently mapped caldera rim. Samples from the Colpar XX Zone are anomalous in Au, Ag, Mo, Cu, As and Sb, indicative of the upper levels of an epithermal system.

30 FIGURE 7 – Main Exploration Area Geology

31 8.0 Deposit Types During early stage exploration of a promising target, it is commonly difficult to determine just what type of mineral deposit (if indeed any), an exploration team is investigating. In fact, there are some types of mineral deposits (particularly buried ones), that have such obscure outcropping geologic indicators, that they are jokingly referred to as “best classified after being mined out”. While the Granja Nueva Prospect is not as difficult as that to classify, the reader should realize that it is an early stage exploration prospect, even though it has been surveyed in some detail in three distinct stages. The first time was by Cambior which geologically mapped the prospect, took 1083 surface samples, conducted a geophysical survey and drilled ten core holes at the prospect. A total of 54 (~ 5%), of Cambior’s surface rock chip samples returned greater than 0.1 ppm Au (0.0029 oz/ton) of these 54, only one returned greater than 1.0 ppm Au (0.029 oz/ton). The second survey was by Inca Gold (Vena subsidiary), which took 365 surface rock chip samples. Of this total, 33 samples (~ 9%) returned greater than 0.1ppm Au. The third survey which took place in October 2011 was by Vena Resources; 14 surface samples were collected. Of that total, three samples (~ 21%) returned values greater than 0.1 ppm; the highest value returned was 0.756 ppm (0.022 oz/ton). As a point of reference, the reader should realize that 0.05ppm (0.015 oz/ton) is the lower cutoff grade for many large open pit, bulk minable gold mines. Gold can be profitably mined at very low concentrations, provided there is sufficient tonnage available to amortize construction of a mine. The point of the above is twofold. First to demonstrate to the reader, that while potentially economic grade mineralized rock is present at the prospect, it is by no means certain that the exploration geologist will easily find it in outcrop. Second to point out to the reader that by reviewing the work of previous workers at a prospect, the geologist can increase the probability that he will find potentially economic mineralization both at the surface and at depth. One of the principal methods the geologist uses to aid in the search for mineralization is a careful analysis of the alteration minerals present in the outcropping rocks at the prospect. 8.1 Surface Alteration Patterns When hot hydrothermal fluids pass through masses of rock, such as during the formation of a mineral deposit, the chemistry and mineralogy of the rock units becomes altered. Certain alteration mineral suites are formed during the hydrothermal processes which are dependent on distance from the intrusion (the heat source) which acts as the engine which drives the fluids involved in the economic mineralization formation process.

32 Geologists can recognize the alteration minerals and mineral suites at a prospect and can then map the alteration types. Once the alteration patterns are in a map format, a good geologist can then use the pattern of occurrence as a generalized guide to the location of potential economic mineralization. Many of the alteration minerals resulting from the mineralization process are clay minerals; these can be difficult to identify in the field. Laboratory analyses are often used to aid in classifying alteration mineral suites (particularly the clays). After the 2007 field campaign, Vena Resources analyzed the 365 surface rock samples collected by PIMA – SP analysis, to aid in understanding the alteration patterns at the prospect. PIMA analysis is a fairly new type of analysis that uses Short Wave Infra Red (SWIR) spectrometry to identify minerals. PIMA analysis is especially useful in identifying hydrothermal alteration minerals. Each alteration mineral group has diagnostic profiles and wavelength positions for respective adsorption features. PIMA analysis of the rock samples showed the presence of thirteen separate alteration minerals (Table 4). Four of these minerals (kaolinite, dickite, potassic alunite and pyrophilite) form only in acidic hydrothermal waters; they are diagnostic of high sulfidation epithermal environments. Kaolinite is a clay mineral that forms at medium temperatures (100 º – 200 º C), but only in acidic waters. Dickite is a clay mineral that forms at high temperatures (175º - 250º C) in acidic waters. Potassic Alunite is a sulfate mineral that forms in a wide range of temperatures, (50º - 350º C), but only in acidic waters. Pyrophilite is a silicate mineral that forms at high temperatures (250 º – 350 º C) in acidic waters. Volcanic hosted epithermal gold deposits are broadly classified either as high sulfidation or low sulfidation types. High sulfidation deposits in Peru are generally located above or slightly distal to a more deeply buried porphyry deposit (often buried too deep for economic exploitation). Low sulfidation deposits are usually found associated with fossil or active hot springs, 3 – 5 km or more distal to a buried intrusion. Low sulfidation deposits are characterized by mineralization occurring in open space veins and stock work vein systems; they usually do not have base metals associated with them. High sulfidation deposits are characterized by disseminated mineralization and replacement mineralization and are commonly associated with base metals, in particular, copper.

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MINERAL ALTERATION TEMP OF MINERAL REMARKS TYPE ASSOCIATION FORMATION Kaolin Advanced Argillic Medium to High High Sulfidation Dickite Advanced Argillic High High Sulfidation CLAYS Illite Argillic Low to Medium Sericite Sericitization High Common in Porphyries Smectite Argillic Low Potassic Alunite Alunitization Low to High High Sulfidation SULFATE Gypsum Potassic High Common in Porphyries Pyrophilite Advanced Argillic High High Sulfidation SILICATE Topaz Advanced Argillic High Silica Silicification Med to High Association with ore OXIDE Diaspore Advanced Argillic High HYDROXIDE Gibbsite Argillic Low CARBONATE Calcite Propylitization Low

TABLE 4 - Alteration Minerals Identified by PIMA Analysis The presence of four alteration minerals diagnostic of the high sulfidation environment, allows the writer to classify the Granja Nueva Prospect as a high sulfidation, epithermal gold prospect. Vena Resources’ geologists have mapped five different alteration assemblages at the prospect (Fig 8). A review of the Alteration Map shows the zoned nature of the system. Propylitization, the lowest grade alteration assemblage is found distal to the other higher grade alteration assemblages. Alunitization, Sericitization, Argilization and Silicification, which are higher grade alteration assemblages are found along the edges of the caldera rim, associated with the rhyolite domes. Higher temperature minerals associated with advanced alteration are found closest to the rhyolite intrusives, along the caldera rim.

34 FIGURE 8 – Alterations Map 8.2 Subsurface Alteration As part of the verification due dilligence for this report, the writer supervised the collection of 20 samples of split core from four diamond drill holes that were completed at the prospect by Cambior in 2003. The core was located at Vena Resources’ core storage facility in Trujillo. Zones of the core that had returned the highest gold and silver assay values were selected for re-sampling and check assaying. In addition to gold and silver, seven additional pathfinder elements were also assayed for. In addition to chemical assays, the 20 samples were spectroscopically examined for alteration mineralogy by Terra Spec analysis. Terra Spec analysis is very similar to PIMA analysis, except that it also uses a Very Near Infra Red (VNIR) light source as well as a Short Wave Infra Red (SWIR) light source for spectrometry analysis. By measuring light scattered off of and through a sample, VNIR and SWIR reflectance spectra can be used to quickly determine a material’s properties without altering the sample.

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