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Pele Mountain Engages Advisor for Strategic Process to Separate Gold Assets from Eco Ridge Mine Rare Earths and Uranium Project

July 21, 2011

Symbol: GEM
Listing: TSX Venture Exchange
Common Shares Outstanding: 133,938,746

TORONTO, July 21, 2011 /PRNewswire/ – Pele Mountain Resources Inc. (TSXV: GEM)( OTCQX: GOLDF) (“Pele” or the “Company“) announced today that it has engaged Foundation Opportunities Inc. (“FOI“) of Toronto, on a non-exclusive basis, to assist and advise Pele with
its evaluation of strategic alternatives regarding its Ontario gold
assets. Pele’s gold assets, which are held in its wholly-owned
subsidiary, Pele Gold Corporation (“Pele Gold“), include a 100-percent interest in the East & West Highland Gold
projects, as well as a 49-percent interest in the Ardeen Gold project.

Pele’s Preliminary Economic Assessment (the “PEA“) of its Eco Ridge Mine Project (“Eco Ridge“) demonstrates that it has the potential to become a profitable
producer of rare earth oxides (“REO“) and uranium oxide (“U(3)O(8)“).  Pele is focused on transitioning into the feasibility and licensing
stages as it advances Eco Ridge toward development and production.  For
more information on the PEA of Eco Ridge, please see Pele’s press release dated July 5, 2011.

Pele President and CEO Al Shefsky stated, “As we advance Eco Ridge
toward development, we believe that the time is right to begin a
strategic process to separate Eco Ridge from Pele Gold. Our Highland
gold properties have demonstrated great potential for the discovery of
significant gold resources as well as near-term cash flow
opportunities, but may not be providing full value to shareholders as
we focus at Eco Ridge. With gold near its all-time highs and the
resurgence of exploration and development on the Michipicoten
Greenstone Belt (“MGB“) and across the region, we believe that our shareholders could benefit
from holding our considerable gold assets and Eco Ridge in separate
vehicles.”

Mr. Shefsky continued, “The relentless increase in the gold price over
the last decade has presented new mining opportunities across Northern
Ontario.  While the important historical gold mines of the MGB were
high-grade, narrow-vein, underground operations, at today’s higher gold
price, lower-grade, open-pit deposits are also becoming economically
attractive.  At the nearby Magino Mine, Prodigy Gold Inc. has reported
an Indicated Resource of nearly two million ounces of gold within wide
zones of lower grade mineralization at a past-producing underground
mine. A recent Preliminary Economic Assessment of Magino indicates
robust economics. In light of these developments and past exploration
results, we believe that our Highland properties present a compelling
investment opportunity.”

Pele’s Highland gold properties are located about 100 kilometres
southeast of Hemlo along the MGB, home to several past producing gold
mines including the Renabie Mine (more than one-million ounces
produced) and where Richmont Mines Inc. is now operating the Island
Gold Mine. The Highland properties have excellent geologic potential
for the discovery of high-grade narrow-vein gold deposits similar to
the Island Gold Mine and lower-grade high tonnage deposits similar to
Magino. At East Highland, Pele has received updated engineering plans
for the extraction of a high-grade, near-surface bulk sample at the ‘A’
zone and has discovered widespread stockwork quartz veining that includes visible gold at the Lone Ranger
zone.  Past drilling and sampling at West Highland has returned
high-grade gold at numerous showings, including the Springbank,
Farquhar, Talisker, and Bowmore zones near the southern contact of the
Gutcher Lake Stock.

The Ardeen Gold Project is located along the Shebandowan Greenstone Belt
west of Thunder Bay and includes Northern Ontario’s first gold
mine. Australian-based Coventry Resources Limited has notified Pele
that it has completed its initial 51-percent earn-in at Ardeen and, as
project operator, plans to resume exploration in 2011, seeking to
increase its project interest to 75-percent and then forming a joint
venture with Pele. Recent drilling by Coventry, primarily at the Fisher
zone, returned high-grade assays of up to 11.6 metres of 27.0 grams per
tonne (g/t) gold and 41.1 g/t silver.  Coventry has reported that
high-grade gold mineralization at the Fisher zone extends over a strike
length exceeding 300 metres and remains open at depth.  More than
12,000 metres of drilling at Ardeen by Pele in the 1990s also returned
numerous high-grade gold intercepts.

About Pele
Pele Mountain Resources 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
completed 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, 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”.

About Foundation Opportunities Inc.
Foundation Opportunities Inc. (“FOI“) is a Toronto-based boutique merchant bank and corporate finance
advisory firm. The firm is focused on working with small and
medium-sized companies with rapid growth potential, specializing in
assisting in mergers and acquisitions transactions, and strategic
advisory services. FOI is a wholly owned subsidiary of Foundation
Financial Holdings Corp. and the sister company of the Toronto-based
boutique investment bank and exempt market dealer Foundation Markets
Inc.(“FMI”)

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.


Source: newswire



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