Vena Resources Inc. has accepted an offer from Urban Select Capital Corporation, an investment group with offices in Hong Kong, China and Canada, to build a new company focused on gold exploration and development in northern Peru. It is anticipated that the new company, which is expected to be named Granja Gold Inc., will be formed in December, 2012, and will apply for listings on the TSX Venture Exchange as well as the venture segment of the Lima Stock Exchange in the first quarter of 2012.

Urban Select is global investment management, financial advisory and private equity firm focused on investing growth capital into private and public companies in a broad range of sectors including renewable energy, natural resources, chemicals, agriculture and consumer retail services. It is expected that, upon completion of the transaction, Granja Gold will acquire 100 per cent of the shareholding of Granja de Oro SAC, a Peruvian company 100 per cent controlled by Vena that 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 in consideration for its interest in Granja de Oro SAC and for an additional 6.3 million performance earn-in shares to be issued to Vena 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-million private placement consisting of 20 million common shares of Granja Gold Inc. (or subscription receipts convertible into common shares) at a price of 10 cents per security. The proceeds of this private placement will be used to cover continuing expenses of Granja Gold for the next 12 months and for TSX-V listing qualification.

This transaction is expected to close no later than Feb. 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.

Granja Nueva property

The 3,300-hectare Granja Nueva property is located in the Cajamarca department of northern Peru approximately 800 kilometres north of Lima. Elevations on the property range from 2,500 to 5,000 metres above sea level. The property is bordered to the southeast by Rio Tinto’s La Granja porphyry copper deposit and Candente’s Canariaco porphyry copper deposits are located approximately 25 km to the north.

The alteration is predominantly advanced argillic with the presence of potassic alunite, followed by lower temperature alteration minerals such as illite and smectite that are typical of high sulphidation and/or porphyry systems. According to the geochemical signature, the area is in the upper levels of an epithermal system. Various levels of silica saturation have been identified (high density rhyolites that have elevated colloidal silica content).

Ten drill holes totalling 2,108 metres were drilled by Cambior to test for gold and copper mineralization on the Jesica 57 concession. Old workings on the Pena Negra claim include evidence that the initial work dates from Spanish Colonial times. Mineralization mostly occurs in lithic tuffs and volcanic breccias that have been moderately silicified and argillitized and host stockwork veining consisting of oxides and limonite filling fractures.

JR-24 property

The JR-24 property covers a total of 1,400 hectares and is located approximately 80 kilometres northeast of Huaraz, in the department of Ancash, at elevations in the range of 4,200 to 4,800 metres above sea level. The geology is dominated by Tertiary volcanics of the Calipuy formation that overly folded Cretaceous sediments. These rocks have been intruded by a monzonite porphyry body and a series of dikes and stocks that are rhyolitic to dacitic in composition.

The property lies within the northern section of a caldera and the structural fabric is very complex with dominant faulting in a northwest-southeast direction. Silicification and argillization of the volcanics are widespread and the intrusives are commonly physically altered. Quartz vein, hydrothermal breccia and disseminated styles of mineralization occur on the property ranging in temperature from epithermal to mesothermal. Several samples from the vein structures have values of greater than eight grams per tonne gold. The veins range in widths from 50 centimetres to five metres but are generally poorly exposed along strike due to colluvial cover. There appears to be at least two phases of mineralization including one that is dominantly gold-copper (molybdenum) and the other being silver-lead-zinc.

The property is located in the Cordillera Negra approximately 45 kilometres northwest of Barrick Gold’s Pierina high sulphidation gold mine and approximately 16 kilometres north of Silver Standard’s San Luis low sulphidation gold-silver deposit. Showings having the characteristics of both mineralization models are present on JR-24 plus there are indications that there may be porphyry copper (Mo-Au) mineralization at depth.

Masma property

The Masma property is located in the district of Cachiche, province of Cajabamba, department of Cajamarca, at 770 kilometres to the northeast of the city of Lima. The elevation ranges from 3,390 to 4,150 metres above sea level. The area is underlain by Cretaceous sedimentary rocks including limestone and sandstone of the Carhuaz, Farrat, Inca, Chulec and Pariatambo formations. The Cretaceous sedimentary formations have been folded into a series of anticlines and synclines that were eroded prior to the deposition of Tertiary-age Calipuy volcanics that are predominantly pyroclastics. These rocks were then intruded and mineralized during the intrusion of subvolcanic dacite and andesite stocks.

Mineralization predominantly occurs near the contact between the Farrat sandstone and the overlying Calipuy tuff units in the form of stockwork quartz veinlets and highly silicified breccias. There are three very good models of epithermal gold-silver deposits in the immediate area: the Shahuindo high sulphidation deposit being drilled by Sulliden, the low sulphidation veins associated with a porphyry Cu-Mo deposit at Sayapullo that is being explored by Milpo and the Igor breccia/manto deposits being explored by Sienna Gold.

Source: Vena Resources Inc.