Pele Mountain Announces Total Rare Earth Oxide Resources of 52-Million Pounds Indicated Plus 96-Million Pounds Inferred

TORONTO, February 24, 2011 /PRNewswire/ --

    
    Symbol: GEM
    Listing: TSX Venture Exchange
    Common Shares Outstanding: 132,463,74

Pele Mountain Resources Inc. (TSX Venture: GEM) ("Pele" or the "Company") today announced the completion of a NI 43-101 Resource Estimate ( the "Resource Estimate") which for the first time includes both uranium oxide and rare earth oxides ("REO") at its Eco Ridge Mine Uranium and Rare Earths Project in Elliot Lake, Ontario. Eco Ridge is owned 100-percent by First Canadian Uranium, a wholly owned subsidiary of Pele. The Resource Estimate was prepared by Roscoe Postle Associates ("RPA").

The Resource Estimate includes 51.9-million pounds of "Indicated" total rare earth oxides ("TREO") plus an additional 96.3-million pounds of "Inferred" TREO. These resources are in addition to 15.2-million pounds of Indicated uranium oxide ("U3O8") plus an additional 31.4-million pounds of Inferred U3O8, which was announced in Pele's press release dated January 24, 2011.

Pele President and CEO Al Shefsky stated, "Our new REO resource is exciting because it provides a potentially significant source of by-product revenue at Eco Ridge and it places Pele on a short list of emerging North American rare earth developers. Our next priority at Eco Ridge is the completion of an updated NI 43-101 Preliminary Assessment ("PA"), which is expected in the second quarter of 2011. The PA will feature a detailed economic model based on combined revenues from U3O8 and REO and will include significant mining, processing, and waste management design enhancements achieved since our initial 2007 Scoping Study. We believe Eco Ridge contains an important future source of U3O8 and REO and we are determined to rapidly advance its development."

Recent extraordinary REO market developments, sparked by China's reduction of export quotas, have resulted in sharply higher prices, inciting a rush to find and bring to production new sources outside of China. Eco Ridge has inherent competitive advantages that may assist its development ahead of other projects, such as:

    
    - It is located within a proven mining camp with historic production
      exceeding 300 million pounds of U3O8. Elliot Lake is the only mining 
      camp in Canada to achieve commercial production of REO.

    - It contains the full range of naturally occurring REO, including the
      highly valued "heavy" REO. The Elliot Lake camp was one of the most 
      important sources of heavy REO in North America.

    - The project has the potential to be a primary uranium mine that would
      produce REO as by-products, and would not be wholly dependent on the 
      volatile REO market.

    - The mining and processing method to recover uranium at Eco Ridge will
      also recover REO into the leach solutions, at no extra cost.

    - It has well-understood geology and lies within a mining-friendly 
      jurisdiction. The project enjoys strong local support and is an ideal
      location for a safe, secure, reliable long-term supply of uranium and 
      REO.

Roscoe Postle Associates reports the following Resource Estimate at Eco Ridge:

    
            Table 1 Mineral Resources - February 23, 2011
        Pele Mountain Resources Inc. - Eco Ridge Mine Project
 
    Classification Tonnes   U3O8    U3O8     TREO5       TREO
                   ('000s)  (%)  ('000 lbs)   (%)     ('000 lbs)
      Indicated    14,312  0.048   15,182    0.164      51,859
       Inferred    33,121  0.043   31,444    0.132      96,352
 

Notes:

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 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 U3O8 and TREO 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.

Resource estimates for individual REO are available on Pele's website at http://www.pelemountain.com/pdfs/Table2_RareEarthOxides.pdf

The resource wireframe at Eco Ridge 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 estimates 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 TREO as a "potential mineral deposit". Although there is no historical REO data in this area, RPA expects that REO grades would be similar to other portions of the deposit. The deposit also remains open beyond the drilled areas with potential for significant expansion. The potential quantity and grade of the potential mineral deposit are 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.

The technical information relating to the NI 43-101 resource estimate in this press release has been reviewed and approved by Roscoe Postle Associates. The balance of this press release has been reviewed and approved by Fergus Kerr, P.Eng., Vice President of Uranium Operations for Pele and a qualified person under NI 43-101.

About Pele

Pele Mountain Resources is focused on the sustainable development of its Eco Ridge Mine Uranium and Rare Earths project, located in Elliot Lake, Ontario. Pele's expert team of technical personnel, advisors, and consultants is working to optimize mining, processing, and waste management techniques at Eco Ridge. With well-understood geology, excellent regional infrastructure, and strong local support, Eco Ridge provides an ideal location for a safe, secure, and reliable long-term supply of uranium oxide and REO. Pele's shares are listed on the TSX Venture Exchange under the symbol "GEM".

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.

For further information:

Please contact Al Shefsky, President, at +1(800)315-7353, or visit the Pele website at http://www.pelemountain.com.

(GEM.)

SOURCE Pele Mountain Resources Inc.