Pele Mountain Resources Inc.

Pele Mountain Resources Inc.

January 05, 2005 08:00 ET

Pele Mountain Announces Positive Developments at Festival Diamond Project




JANUARY 5, 2005 - 08:00 ET

Pele Mountain Announces Positive Developments at
Festival Diamond Project

TORONTO, ONTARIO--(CCNMatthews - Jan. 5, 2005) - Pele Mountain Resources
Inc. (TSX VENTURE:GEM) ("Pele" or the "Company") announced today several
positive developments at its Festival Diamond Project ("Festival").
Highlights include:

- Goldcorp will continue to fund exploration in 2005.
- Interim sampling results are positive and confirm the
exploration model.
- Partial results from Sample CS-04-032 have
returned 260 diamonds from 8 kilograms.
- Follow-up channel sampling is underway at key locations.
- Planning is under way for follow-up drilling at
high priority targets.

Pele controls a 100-percent interest in the mineral rights at Festival,
a 101-square kilometer patented land package along the Trans Canada
Highway just north of Wawa in northern Ontario. Previous bulk sampling
has confirmed the presence of commercial size and gem quality diamonds
at Festival while surface exposure at its many diamond occurrences
suggests the potential for significant near-surface tonnage.

In concluding the 2004 field season, a total of 132 channel samples from
12 different occurrences totaling over 2,300 kilograms were extracted
from volcanogenic mass flow units overlying an interpreted paleosurface.
The paleosurface is considered to be the primary diamond exploration
target at Festival and appears repeatedly within a specific
stratigraphic horizon over a 20 square-kilometer area in the southwest
corner of the property. Continuous successions of intermittently
outcropping mass flow units exhibit apparent thicknesses ranging from
less than 5 meters to more than 300 metres along a strike length that
exceeds one kilometer. Channel samples were collected across the mass
flow units at the different occurrences to isolate the most favorable
diamond depositional environment.

Interim results from 8-kilogram portions taken from 108 out of the 132
collected samples have yielded from zero to more than 30 diamonds per
kilogram, including some of the best diamond size distributions yet seen
at Festival. Diamonds have thus far been recovered from ten of the
twelve sampled occurrences. Preliminary assessment of the initial data
suggests that diamond sorting occurred within individual mass flow units
as well as across the succession of mass flow units upward from the
paleosurface. The basal sequence of mass flow units directly above the
paleosurface has been identified as the most favorable diamond
depositional environment on the property. Diamond results will be
reported by sieve size upon the completion of the processing.

Dr. Edward Walker, P.Geo., and a field crew are currently at Festival
collecting additional samples from the location which has thus far
returned the most encouraging results. A total of at least 200 kilograms
of additional rock will be collected and processed in order to obtain a
larger population of diamonds for size distribution modeling purposes.
Processing of the original 132 collected samples is continuing and
larger follow-up samples will likewise be extracted and processed from
other occurrences that also provide favorable results. Following the
completion of processing next month, Pele will conduct a drill program
at high priority targets to assess the thickness and extent of the most
promising diamond-bearing units.

The Festival samples are being processed for diamond extraction by
caustic digestion at the Saskatchewan Research Council, an independent,
ISO 17025 accredited commercial laboratory.

Pele Mountain Resources is a Canadian mineral exploration company and a
leader in the search for economic diamond and gold deposits in northern
Ontario. Pele is actively exploring on four project fronts, including
Goldcorp-funded programs at Pele's Ardeen Gold Mine Project and Festival
Diamond Project along with in-house programs at Highland Gold and James
Bay Lowlands. Pele trades on the TSX Venture Exchange under the symbol

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. None of the Company's properties have
any known ore body of economic or commercial value.


Contact Information

    Pele Mountain Resources Inc.
    Al Shefsky
    (416) 368-7224
    The TSX Venture Exchange has not reviewed and does not accept
    responsibility for the adequacy or accuracy of this release.