Pele Mountain Announces Discovery of Continuous Rare Earths Mineralization over 140-Metre True Thickness at Eco Ridge

TORONTO, Oct. 13, 2011 /PRNewswire/ - Pele Mountain Resources Inc. (TSX Venture: GEM; OTCQX: GOLDF) ("Pele" or the "Company") today announced initial results from its core resampling program at its Eco Ridge Mine Rare Earths and Uranium Project ("Eco Ridge" or the "Project") in Elliot Lake, Ontario.

Pele has discovered that rare earth oxide ("REO") mineralization outside the Main Conglomerate Bed ("MCB") extends much farther than previously realized, with one drill hole revealing more than 140 metres of continuous mineralization.  Pele has also learned that Total REO grades maintain elevated levels well into the MCB Hanging Wall, averaging more than 750 grams per tonne (g/t) (1 g/t = 1 ppm) over more than 20 metres as measured from the base of the MCB, through the MCB, and into the MCB Hanging Wall.

Pele's recently announced NI 43-101 Preliminary Economic Assessment ("PEA") for Eco Ridge is based solely on mineralization from within the MCB, which averages 2.7 metres in thickness.  All NI 43-101 mineral resources reported at Eco Ridge to-date are also from within the MCB.  The recent discovery of significant REO mineralization in core from the MCB Hanging Wall prompted Pele to launch a staged program to expand the sampling range of recent and historic drill core with an objective of increasing the size of the Eco Ridge deposit.

Pele President and CEO Al Shefsky stated, "This is a remarkable discovery.  The expansion of rare earths mineralization, by up to several multiples, presents the potential for a significantly larger operation at Eco Ridge.  In view of the increasing importance of critical REO, Pele is advancing new work initiatives with particular focus on optimizing REO production. Along with our recent successful lateral expansion of the deposit through step-out drilling and our ongoing testing into increased REO recoveries from monazite using an acid-baking process, we are rapidly advancing studies on opportunities to improve our already robust PEA."

Results of the first-stage, 14-hole, expanded sampling program reveal the following:

• Sampling the MCB only (the historical standard practice) yielded an average of 1805 g/t Total REO over 2.75 metres across the 14 holes.  As expected, this is consistent with the average grade and thickness of the Indicated Resources at Eco Ridge of 1640 g/t Total REO over 2.70 metres.
  
  
• Sampling from the base of the MCB, through the MCB, and into the Hanging Wall averaged 964 g/t (over a true thickness of 11.1 metres, an increase in Total REO content of 140 percent compared to the MCB alone.
  
  
• Sampling from the base of the MCB into the Hanging Wall averaged 766 g/t of Total REO over a true thickness of 21.6 metres, an increase in Total REO content of 260 percent compared to the MCB alone.
  
  
• Two of the 14 holes were sampled more extensively.  Hole PM-144 returned 297 g/t Total REO over 85.43 metres (MCB plus MCB Hanging Wall).  Hole PM-195 returned 373 g/t Total REO over 125.27 metres (MCB plus MCB Hanging Wall) and 361 g/t over 140 metres including the sampling both below and above the MCB. Click here for total REO results for hole PM-195.
  
  
• The relative distribution of Individual REO within the Total REO in the MCB Hanging Wall remains similar to the relative distribution of the Individual REO in the MCB, suggesting that monazite is the primary REO mineral throughout the entire mineralized zone.  Please see Pele's press release dated July 5, 2011 for details on Individual REO distribution within the MCB.
  
  
• Every sample from every hole contained REO mineralization.  The expanded sampling intervals in all 14 holes ended in REO mineralization.

Click here for complete results of the first stage, 14-hole expanded sampling program including individual rare earth oxide grades.

The objective of Pele's expanded core sampling program is to evaluate the extent of vertical REO mineralization at Eco Ridge. Core sampling in the Elliot Lake camp has historically been designed for optimizing U₃O₈ mineralization and not REO mineralization.  Accordingly, Pele's program is systematically testing considerable wall rock above and below the MCB to determine the extent of the REO mineralization for the first time.  As reported with the Eco Ridge PEA, Roscoe Postle Associates ("RPA") regards the expansion of mineral resources as a potential opportunity to improve project economics at Eco Ridge.

Pele's Eco Ridge PEA, prepared by RPA, and based solely on the mineralization within the MCB, demonstrates

Pele's potential to become a profitable producer of REO and U₃O₈. Based on the PEA, the most important REO by value at Eco Ridge are Nd₂O₃, Dy₂O₃ and Y₂O₃. The PEA base case forecasts cumulative production of 10.7-million pounds of Total REO and 24.9-million pounds of U₃O₈ over a 15-year mine life with pre-tax cash flow of US$1.28-billion, a positive NPV of $644-million (at a 7.5% discount rate), and an IRR of 45-percent.¹ Among emerging Canadian REO developers, Pele's forecast operating costs at Eco Ridge are, by far, the lowest at just $46 per tonne. For more details on the PEA, see Pele's press release dated September 7, 2011.

In February 2011, RPA reported an updated NI 43-101 mineral resource estimate for Eco Ridge, as shown in the table below.  This resource estimate includes mineralization from the average 2.7-metre thick MCB only and was calculated prior to the recent drill program, which successfully expanded the deposit to the north.

Notes to Table 1:

1. CIM definitions were followed for Mineral Resources.
2. The Qualified Person for this Mineral Resource estimate is Tudorel Ciuculescu, P.Geo.
3. Mineral Resources are estimated at a cut-off grade of 0.028% U₃O₈.
4. Mineral Resources are estimated using an average long-term uranium price of US$60 per lb, and a C$:US$ exchange rate of 0.95:1.00.
5. Total Rare Earth Oxides include of La₂O₃, CeO₂, Pr₆O₁₁, Nd₂O₃, Sm₂O_3, Eu₂O₃, Gd₂O₃, Tb₄O₇, Dy₂O₃, Ho₂O₃, Er₂O₃, Tm₂O₃, Yb₂O₃, and Lu₂O₃. Y₂O₃ and Sc₂O₃ are also included in TREO.
6. The resource wireframe at Eco Ridge contains both Indicated and Inferred U₃O₈ and REO resources within the near surface portion of the Main Conglomerate Bed.
7. The U₃O₈ resource estimate is based on a total of 237 drill holes. These comprise 152 recent drill holes drilled by Pele Mountain between 2006 and 2009, and 85 historic drill holes drilled between 1954 and 1974.
8. The REO resource estimate is based on a total of 123 recent drill holes. 21 out of the 123 drill holes have not been assayed for Tm and Lu, and five other drill holes have not been assayed for Sc.
9. In the Inferred category, there are nine drill holes that have REE assays. Four drill holes out of these nine have not been analyzed for Tm and Lu.

Drill core samples were analyzed at Activation Laboratories Ltd., an independent and ISO 17025 accredited laboratory. The Company performs routine Quality Assurance and Quality Control procedures on laboratory assay results.

The technical information contained in this press release has been reviewed and approved by Tudorel Ciuculescu, P.Geo of RPA, an independent Qualified Person under NI 43-101.

About Pele
Pele Mountain Resources, the leading developer in Canada's first rare earths mining camp, is focused on the sustainable development of its 100-percent owned Eco Ridge Mine Rare Earths and Uranium Project. Eco Ridge is one of very few North American rare earths deposits that has a NI 43-101 Preliminary Economic Assessment with robust economics and is located in Elliot Lake, the only Canadian mining camp to have ever achieved commercial REO production. With well-understood geology, mineralogy, and metallurgy, excellent regional infrastructure, and strong local support, Eco Ridge is an ideal location for a safe, secure, and reliable long-term supply of REO and U₃O₈. Pele also holds interests in a portfolio of Northern Ontario gold properties at Highland and Ardeen. Pele's shares are listed on the TSX Venture Exchange under the symbol "GEM" and on the OTCQX under the symbol "GOLDF".

1. The PEA is preliminary in nature. It includes inferred mineral resources which are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves and there is no certainty that the preliminary economic assessment will be realized.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.  Some of the statements contained in this release are forward-looking statements, such as estimates and statements that describe Pele's future plans, objectives or goals, including words to the effect that Pele or management expects a stated condition or result to occur. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements. The economic viability of the 43-101 mineral resource at Pele's Elliot Lake Project has not yet been demonstrated by a preliminary feasibility study.

SOURCE Pele Mountain Resources Inc.

Video with caption: "Pele Mountain President discusses New Rare Earth discovery at Eco Ridge Mine Project.". Video available at: http://stream1.newswire.ca/cgi-bin/playback.cgi?file=20111013_C3826_VIDEO_EN_4460.mp4&posterurl=http://photos.newswire.ca/images/20111013_C3826_PHOTO_EN_4460.jpg&clientName=Pele%20Mountain%20Resources%20Inc%2E&caption=Pele%20Mountain%20President%20discusses%20New%20Rare%20Earth%20discovery%20at%20Eco%20Ridge%20Mine%20Project%2E&title=PELE%20MOUNTAIN%20RESOURCES%20INC%2E%20%2D%20Pele%20Mountain%20Announces%20Discovery