Pele Mountain Drilling Expands Eco Ridge Deposit Northward, Demonstrates Significant Rare Earth Mineralization Outside of Main Conglomerate Bed

TORONTO, Sept. 12, 2011 /PRNewswire/ - Pele Mountain Resources Inc. (TSXV: GEM) (OTCQX: GOLDF) ("Pele" or the "Company") today announced results from the recent 7,000-metre drill program at its Eco Ridge Mine Rare Earths and Uranium Project ("Eco Ridge" or the "Project") in Elliot Lake, Ontario.

Core from 23 intercepts of the Main Conglomerate Bed ("MCB") (of 24 holes drilled) from June to July 2011 returned results typical of the Eco Ridge deposit, averaging 0.142-percent rare earth oxides ("REO") and 0.040-percent uranium oxide ("U₃O₈") over an estimated true thickness of 3.16 metres.  The 2011 drill program included four step-out holes, each more than 200 metres down-dip of the existing resource, revealing that the deposit continues to the north into a previously untested area.  The program also included 20 infill holes drilled within the existing resource in order to upgrade Inferred resources to Indicated resources.  The program again demonstrated the remarkable consistency of the MCB over vast areas.  The Eco Ridge MCB, hosted by the quartzitic Ryan Member, is a shallow dipping reef that has now been successfully drill-tested across an east-west strike length of more than 5 kilometres and a north-south dip extension of 2 kilometres.

The table below summarizes the MCB intercepts from Pele's 2011 drill program at Eco Ridge.  To view complete assay results, please click here http://www.pelemountain.com/pdfs/DrillResultsAugust2011.pdf

Notes:

1. Light rare earth oxide (LREO) includes La₂O₃, CeO₂, Pr₆O₁₁, Nd₂O₃, Sm₂O₃
2. Heavy rare earth oxide (HREO) includes Eu₂O₃, Gd₂O₃, Tb₄O₇, Dy₂O₃, Ho₂O₃, Er₂O₃, Tm₂O₃, Yb₂O₃, and Lu₂O₃. Y₂O₃ and Sc₂O₃ are also included in HREO
3. Total rare earth oxides include LREO and HREO.

The drill program also demonstrated the presence of widespread rare earth mineralization outside the MCB.  All mineral resources reported at Eco Ridge to-date are from within the MCB only.  The presence of wide zones of REO mineralization outside of the MCB has the potential to substantially increase mineral resources and positively impact project economics at Eco Ridge.

Pele President and CEO Al Shefsky stated, "For five years, we have worked to unlock the REO potential at Eco Ridge.  Given the production history of Elliot Lake, where REO were produced as by-products of primary uranium mines, our approach until recently has been to follow this precedent.  However, with the repricing of REO and the prospect for long-term shortages of certain critical REO, we are taking a fresh look at Eco Ridge and its potential as a primary REO mine.  Results from our recent drill program suggest that there is excellent potential to demonstrate additional REO content in areas we have already drilled, possibly improving upon the already promising economic forecast presented in our Prelimary Economic Assessment.  We have securely stored all of the more than 37 kilometres of our previously-drilled core and have assembled an experienced technical team, including RPA, to implement this program.  We are very excited about our expanded core sampling program at Eco Ridge."

Core sampling outside of the MCB was not comprehensive because sampling limits have historically been determined by focusing on optimizing the U₃O₈ mineralization, not REO mineralization.  In view of the increasing importance of rare earths, and the fact that there is more than 3 times as much REO as U₃O₈ at Eco Ridge, Pele is assessing changes to this legacy practice.

Comparisons that follow are relative to the average grade and thickness of the Indicated Resources at Eco Ridge ("Ind-MCB") as estimated by Roscoe Postle Associates ("RPA").  The Ind-MCB is 0.164-percent Total REO and 0.048-percent U₃O₈ over a 2.7 metre true thickness.

Drill core from the hanging wall above the MCB returned assays ranging from 0.056-percent Total REO (34-percent of Ind-MCB grade) over a 0.45 metre true thickness (Hole PM191) to 0.096-percent Total REO (59-percent of Ind-MCB grade) over a 10.04 metre true thickness (Hole PM193).  Overall, the hanging wall samples averaged nearly 50-percent of Ind-MCB grades for Total REO and more than 20-percent of Ind-MCB grade for U₃O₈ with all samples ending in mineralization.  Limited sampling of drill core taken directly below the Ryan Member demonstrates REO presence within Basement meta volcanics at similar grades over sampled widths of less than 1 metre, with all sampling ending in mineralization.

These results clearly demonstrate the presence of significant REO mineralization outside of the MCB and have prompted Pele to launch a staged program designed to expand the sampling range of recent and historic Pele drill core.  The program has begun with expanded sampling on 14 holes from across the deposit including the MCB hanging wall from Hole PM07-14 from Pele's 2007 drilling at Eco Ridge.

Assays from Drill Hole PM07-14 (from 2007)

* reported previously

For Hole PM07-14, the sampled portion of the MCB hanging wall averaged approximately 49-percent of Ind-MCB grades for REO and approximately 21-percent of Ind-MCB grades for U₃O₈ over a total thickness 5 times wider than the Ind-MCB, representing a substantial increase in total mineralization.

The objective of Pele's expanded core sampling program is to evaluate the vertical extent of REO mineralization at Eco Ridge.  Core sampling in the Elliot Lake camp has historically been designed for testing the limits of the U₃O₈ mineralization and not REO mineralization.  Accordingly, the program now underway will systematically test 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 Preliminary Economic Assessment¹ ("PEA"), RPA regards the expansion of mineral resources as a potential opportunity to improve project economics at Eco Ridge.

Based on oxide price and recovery assumptions detailed in the PEA, forecast revenue at Eco Ridge now consists of 61-percent from U₃O₈ and 39-percent from REO.  Approximately 59-percent of the REO revenue component is forecast from just three REO: dysprosium ("Dy₂O₃"), neodymium ("Nd₂O₃"), and yttrium ("Y₂O₃").  Drill results for U₃O₈ and these "big three" REO are reported in the table below.

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 U₃O_8.  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 aspiring Canadian REO producers, Pele's forecast operating costs at Eco Ridge are, by far, the lowest at just $46 per tonne.  For more details on the PEA, please see Pele's press release dated September 7, 2011.

The Resource Wireframe at Eco Ridge currently contains 14.3-million tonnes of Indicated resources plus 33.1-million tonnes of Inferred resources. The deposit extends to the north and east, beyond the Resource Wireframe boundaries.  Based on historical wide-spaced drilling and extrapolation of the resource area, RPA has estimated that these extensions could contain an additional 30 to 50 million tonnes grading from 0.03 to 0.05-percent U₃O₈ and 0.12 to 0.18-percent Total REO as a target for further exploration².  The step-out holes reported today were drilled to the north of the Resource Wireframe and outside of the boundaries of the target area.

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, a leader in Canadian rare earth development, 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.
   
   
2. The potential quantity and grade of the target area is conceptual in nature and there has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the targets being delineated as a mineral resource.

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.

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