Last updated on April 17, 2014 at 9:41 EDT

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

October 13, 2011

    Trading Symbol:      TSX Venture : GEM                                

                         OTCQX :   GOLDF

    Shares Outstanding:  133,938,746


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

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 U(3)O(8) 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 U(3)O(8). Based on the PEA, the most important REO by value at Eco Ridge are Nd(2)O(3), Dy(2)O(3) and Y(2)O(3). The PEA base case forecasts cumulative production of 10.7-million
pounds of Total REO and 24.9-million pounds of U(3)O(8) 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.

                             Table 1  Mineral Resources

         Pele Mountain Resources Inc. - Eco Ridge Mine Project

                        Tonnes  U3O8      U3O8   TREO5    TREO

    Classification     ('000s)   (%)  ('000 lbs)  (%)  ('000lbs)

          Indicated     14,312  0.048    15,182  0.164   51,859

           Inferred     33,121  0.043    31,444  0.132   96,352

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,
         Sm2O3,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 U3O8and 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 U(3)O(8). 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

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

Source: PR Newswire