VENA RESOURCES INC.

PRELIMINARY METALLURGICAL TESTING

OF Cu-Au ORE FROM
AZULCOCHA PROSPECT, PERU
 Prepared for:

Vena Resources Inc.

Av. Jose Pardo No. 601
of. 1302 - Miraflores
Lima, Peru

May 17, 2007

By: Approved By:

________________ _______________
Deepak Malhotra Dr. Deepak Malhotra
President President

________________
Ed Bentzen
Senior Project Manager
 TABLE OF CONTENTS

Page

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

RESULTS AND DISCUSSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

SAMPLE PREPARATION AND CHARACTERIZATION . . . . . . . . . . . . . . . . . . 3
BOND’S BALL MILL WORK INDEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
GRIND STUDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
FLOTATION TESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
TWO-STAGE LEACHING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
COPPER LEACH AND FLOTATION GOLD . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

CONCEPTUAL PROCESS FLOWSHEET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

APPENDICES
Appendix A: Head Analyses
Appendix B: Bond’s Ball Mill Work Index Data
Appendix C: Flotation Test Data
Appendix D: Two-Stage Leach Test Data
Appendix E: Copper Leach and Flotation of Gold Test Data
 INTRODUCTION

Resource Development Inc., (RDi) undertook a metallurgical scoping study for the
Azulcocha Cu-Au deposit located in Peru for Vena Resources Inc.at the request of Ing.
Jesús Vilca M, Genrente de Operaciones and Mr. Juan M. Vegarra, Chairman and CEO
of Vena Resources Inc.

The scope of the test program was provided in a proposal dated December 4, 2006 by RDi.
RDi received ± 50 kg of the representative ore from Peru in February 2007.

This report discusses the test procedures and results obtained in the present scoping
metallurgical study.

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 EXECUTIVE SUMMARY

Resource Development Inc., (RDi) has completed the scoping study on the copper-gold ore
from the Azucocha Prospect, Peru for Vena Resources Inc. Grinding, flotation and
leaching studies were undertaken on one composite sample provided to RDi. The
highlights of the study indicate the following:

• The composite sample assayed 3.64 g/t Au,19.34 g/t Ag and 4.23% CuTotal.

• Approximately 73% of the copper was acid soluble.

• Bond’s ball mill work index was determined to be 10.45.

• Simple reagent suite consisting of potassium amyl xanthate, Aeropromotor 3477 and
methyl isobutyl carbonal (MIBC) floated ± 80% of gold and silver in the concentrate.
The concentrate weight was 3.85%.

• Copper recovery was very poor even with sulfidization in the flotation process. The
maximum copper recovery achieved in the flotation process was 13%. We
postulated that copper may be present as silicate in the ore. Mineralogical study to
determine the copper minerals in the ore is recommended.

• Two stage leaching process consisting of first acid leaching for copper extraction
followed by cyanide leaching was successful in recovering ± 60% of copper and
87% of gold.

• Gold and silver minerals were also successfully floated from acid leach residue with
75% of gold and 80% of silver recovery.

Based on these results, RDi has developed a conceptual process flowsheet for the ore from
Azulcocha deposit. It consists of floating gold and silver into a concentrate which can be
cyanide leached for extraction of gold and silver. The flotation tailings will be acid leached
for copper extraction. Additional testing would be needed to generate data for pre-
feasibility study.

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 RESULTS AND DISCUSSION

RDi received ± 50 kg of representative sample from the client for the present scoping
metallurgical study. RDi prepared the samples and performed Bond’s Ball Mill Work Index,
flotation tests and leaching tests. The test procedures and results are discussed in the
following sections.

SAMPLE PREPARATION AND CHARACTERIZATION

The sample was throughly blended and crushed to nominal 6 mesh. Following crushing,
the sample was again blended and split into 1-kg charges using a twenty way rotary splitter.
The charges were bagged and stored for testwork.

A 1-kg charge was pulverized to 100% passing 150 mesh and submitted for chemical and
x-ray floueresence analyses. Gold and silver analyses were obtained using one-assay-ton
fire assay procedure. Copper was analyzed for total copper, acid soluble copper and
cyanide soluble copper in order to determine the proportions of oxide, secondary and
primary copper present in the sample.

The analytical data are given in Appendix A and the results are summarized in Tables 1
and 2. The results indicate the following:

• The sample assayed 3.64 g/t Au, 19.34 g/t Ag and 4.23% CuTotal.

• The sample also assayed 2.66% CuAcid Sol. and 2.08% CuCN Sol. This indicates that
73% of the copper is oxide copper in the sample.

• The sample contained trace amounts of other sulfide-bearing minerals (i.e., 5900
ppm Pb and 1500 ppm Zn).

• XRF analyses indicate that the ore is relatively soft since it contains only 26.8%
SiO2. The major non-sulfide bearing minerals was reported as Fe2O3 (56.3%).

Table 1. Head Analyses of Vena Resources Sample

Element Assay
1 2 Average
Au, g/t 3.50 3.77 3.64
Ag, g/t 15.36 23.31 19.34
CuTotal, % 4.30 4.16 4.23
CuAcid Sol., % 2.67 2.65 2.66
CuCNSol, % 2.08 2.09 2.08

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 Table 2. X-ray Fluorescence Analyses of the Cu-Au Sample
Element Assay, % Element Assay, ppm
Na2O 0.13 V <100
MgO 0.17 Cr <100
Al2O3 7.92 Co <100
SiO2 26.8 Ni <100
P2O5 0.13 W <100
S 1.22 Cu 61,000
Cl <0.02 Zn 1500
K2O 0.67 As <100
CaO 0.27 Sn <300
TiO2 0.18 Pb 5900
MnO 1.49 Mo <100
Fe2O3 56.3 Sr 543
BaO 5.38 U <100
Th <200
Nb <100
Zr <100
Rb <100
Y 110

BOND’S BALL MILL WORK INDEX

Bond’s ball mill work index was determined at 100 mesh. The test data are given in
Appendix B. The work index was determined to be 10.45.

GRIND STUDIES

A series of grind test with 1-kg charges were performed in a laboratory rod mill at 50%
solids to establish the grind time-grind size relationship. Laboratory rod mill simulates a ball
mill-cyclone circuit in actual operation. The ore was ground for known time and the ground
pulp was wet screened on 400 mesh and the two fractions were filtered and dried. The
coarse fraction was dry screened and the size distribution for the ground product was
determined.

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The test data are given in Appendix C and the results are summarized in Table 3. The
grind time for 80% passing 150 mesh was determined to be 9 minutes.

Table 3. Grind Time Versus Grind Size Data

Grind Time, min P80, microns
5 165
10 91
15 75
20 66

FLOTATION TESTS

A series of flotation tests were undertaken to evaluate different collectors (potassium amyl
xanthate and Aeropromotor 3477) and sulfidization of the oxide copper minerals on the
recovery of gold, silver and copper in the rougher flotation concentrates. The primary grind
was kept the same in all tests (P80=150 mesh) and three timed concentrates of 3 minutes
each were collected.

The test data are given in Appendix C and the results are summarized in Table 4. The test
results indicate the following:

• Potassium amyl xanthate (PAX) and MIBC recovered 77.2% of gold, 40.3% of silver
and 5.7% of copper in a concentrate with nine minutes of flotation time. The weight
recovery was 4.25%. The concentrate assayed 75.80 g/t Au, 91.11 g/t Ag and
5.03% Cu (Test No. 1).

• Addition of Aeropromotor 3477 as a supplementary collector to PAX enhance the

gold and silver recovery and grade in the concentrate. The concentrate recovered
78.8% of gold, 83.3% of silver but only 5% of copper in 3.85% of the weight. The
concentrate assayed 102.14 g/t Au, 110.27 g/t Ag and 5.04% Cu (Test No. 2).

• Addition of 519 g/t of Na2S.9H2O to the mill to sulfidize the oxide minerals did
enhance gold recovery to 82.5% in 5.73% of the weight. The copper recovery
(7.6%) did not improve significantly (Test No. 3).

• The higher additions of Na2S.9H2O to the mill were determined to gold recovery but
slightly improved copper recovery and concentrate copper grade (Tests 4 and 5).
However, the copper recovery was still low at ± 13%.

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 Table 4. Flotation Test Results
Test Process Concentrate Recovery% Concentrate Grade Tailings Grade Cal. Feed Assay
No. Conditions (9 min) (9 min)

Wt. Au Ag Cu g/t Au g/t Ag % Cu g/t Au g/t Ag % Cu g/t Au g/t Ag % Cu

1. P80=150 mesh 4.25 77.2 40.3 5.7 75.80 91.11 5.03 1.0 6.0 3.68 4.18 9.61 3.74
PAX: 104 g/t
MIBC: 42 g/t

2. P80=150 mesh 3.85 78.8 83.8 5.0 102.14 110.27 5.04 1.10 <1.71 3.84 4.99 5.06 3.89
AP3477: 78 g/t
PAX: 78 g/t
MIBC: 21 g/t

3. P80=150 mesh 5.73 82.5 42.8 7.6 68.98 86.10 5.20 0.89 7.01 3.82 4.79 11.54 3.90
Na2S: 519 g/t
AP3477: 78 g/t
PAX: 78 g/t
MIBC: 31 g/t

4. P80=150 mesh 5.75 43.6 83.6 13.2 50.09 76.56 8.71 4.0 <1.71 3.48 6.61 5.27 3.80
Na2S: 3160 g/t
AP3477: 78 g/t
PAX: 78 g/t
MIBC: 32 g/t

5. P80=150 mesh 6.08 63.1 41.4 13.3 35.94 56.10 8.40 1.23 4.99 3.50 3.46 8.25 3.83
Na2S: 4704 g/t
AP3477: 78 g/t
PAX: 78 g/t
MIBC: 31 g/t

These results indicate that the gold and silver minerals can be floated into a
concentrate with good upgrading. However, copper minerals present may be
silicates and will not sulfidize and therefore cannot be floated.

TWO-STAGE LEACHING

The objective of this test was to determine if two stage leaching process could extract
reasonable amounts of copper and gold.

The ore was ground to 80% passing 150 mesh and the ground slurry was transferred to a
bottle and the pulp density adjusted to 40% solids. Sulfuric acid was added till the pH of
the slurry was 2.0. The bottle was placed on a set of rolls and rolled for a total of 48 hours.
The pH of the slurry was determined at 4, 24 and 48 hours and adjusted back to pH 2 if
required. Samples were collected at 4, 24 and 48 hours and assayed for copper. At 48
hours, the slurry was filtered, repulped, refiltered and washed.

The wet leach residues was then subjected to cyanide leach at 40% solids and pH 11 for
48 hours. Again, pH and free cyanide were determined at 4 and 24 hours and adjusted to
11 and 1 g/L, respectively. After 48 hours, the solution was measured to determine pH,
free cyanide and gold content. The slurry was filtered, washed and dried. After drying, a

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representative sample of the solid was pulverized and analyzed for gold, silver and copper.

The test data are given in Appendix D and the results are summarized in Table 5. The test
results indicate the following:

• Approximately 59% of the copper was extracted by acid leaching. The acid
consumption was reasonable.

• Following the copper oxide leaching, cyanide leaching extracted 87.1% of the gold
and 6.9% of the copper. The cyanide consumption was relatively high.

Table 5. Summary of Two-Stage Leach Results

Acid Leach
Grind, P80 mesh 150
Extraction % Cu (48 hrs) 59
Acid Consumption, kg/t 40.5
Cyanide Leach
Extraction % (48 hrs)
Au 87.1
Cu 6.9
Cyanide Consumption, kg/t 3.601
Lime Consumption, kg/t 13.904

COPPER LEACH AND FLOTATION OF GOLD

The objective of this test was to determine if one could float gold and silver from the copper
leach residue.

The ore was ground to 80% passing 150 mesh and subject to 48 hours of leaching with
sulfuric acid. The test conditions were identical to those discussed for copper leaching in
the previous section. Following the acid leach, the residue was washed and the pH
adjusted to 8 with lime. The same reagent scheme developed for flotation of sulfides,
namely, PAX and MIBC were used for flotation of gold and silver. The test data are given
in Appendix E and the results are summarized in Table 6. The test data indicate the
following:

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• Gold and silver can be floated from the leach residue. The recoveries of gold and
silver in the rougher concentrate were 75.3% and 80.1%, respectively. The
concentrate assayed 106.86 g/t Au, 90.38 g/t Ag and 3.03% Cu.

• The acid leach extracted 57.7% of the copper.

These results indicate that it is possible to float gold and silver minerals from the
feed or the acid leach residue.

Table 6. Copper leaching and Flotation of Gold and Silver from Leach Residue
Parameter
Grind, P80 mesh 150
Cu Extraction % (48 hrs) 57.7
Flotation Feed
% Cu 1.734
g/t Au 5.22
g/t Ag 4.15
Rougher Concentrate
Recovery % Wt. 3.68
Au 75.3
Ag 80.1
Cu 6.4
Rougher Concentrate
Grade, g/t Au 106.86
g/t Ag 90.38
% Cu 3.03

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 CONCEPTUAL PROCESS FLOWSHEET

The scoping tests indicate that gold and silver minerals can be floated into a rougher
concentrate with ± 80% recovery at a reasonably good concentrate grade. The weight-
recovery was ± 4%. The copper minerals did not float even after sulfidization. Hence, one
can postulate that copper minerals could potentially be silicates. We recommend that
mineralogical study be undertaken to determine the copper minerals in the deposit.

Two stage leaching test where copper minerals were first leached with sulfuric acid
followed by cyanide leaching of gold and silver also provided good results. However, the
disadvantage of this approach is that one would need a lot of lime to neutralize the acid
leach residue before cyanide leach.

Figure 1 show the conceptual process flowsheet which RDi recommends for the Azulcocha
deposit. The ore would be ground and gold and silver minerals will be floated in a small
amount of material (i.e., ± 4% weight). This concentrate can be cyanide leached to recover
gold and silver. The flotation tailings will be acid leached and the pregnant solution
recycled till the copper concentration reaches 3 to 5 g/l. Then a bleed of the CCD overflow
can be sent to the electrowinning circuit.

Additional testing will be required to develop the design data for the pre-feasibility study.

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 ORE

GRIND

ROUGHER
FLOTATION Au/Ag CONCENTRATE

ACID CYANIDE BARREN

LEACH LEACH SOLUTION

BARREN
SOLUTION
CCD
COUNTER
MERRILL
CURRENT
CROWE
DECANTATION

RESIDUE Au/Ag
ELECTROWINNING
RESIDUE RESIDUE
CIRCUIT

Cu

FIGURE 1.
CONCEPTUAL PROCESS FLOWSHEET FOR THE AZULCOCHA DEPOSIT

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