Pele Mountain Resources Inc.

Pele Mountain Resources Inc.

January 16, 2007 14:19 ET

Pele Mountain Reports NI 43-101 Mineral Resource of 33 Million Pounds Uranium Oxide at Elliot Lake

TORONTO, ONTARIO--(CCNMatthews - Jan. 16, 2007) - Pele Mountain Resources Inc. (TSX VENTURE:GEM) ("Pele" or the "Company") announced today that it has received and filed on SEDAR a NI 43-101 compliant Technical Report (the "Report") on its Elliot Lake uranium project (the "Project") in northern Ontario, authored by Scott Wilson Roscoe Postle Associates Inc. ("Scott Wilson RPA"), dated January 15, 2007. Highlights of the Report include:

- A mineral resource estimate of 30.05 million tonnes grading 0.050-percent uranium oxide (U3O8), or 1.0 pound per short ton, for a total inferred resource containing 33.05-million pounds U3O8 (based on a cut-off grade(1) of 0.03-percent U3O8 and a minimum mining width of 2.44 metres, or 8 feet). The mineral resource estimate is based on a database of 70 drill holes in the Main Conglomerate Bed. Drill hole spacing was variable, mostly in the order of 100 m to 400 m. The resource estimate used a nearest neighbour block model method, equivalent to a polygonal method.

- Very good potential to increase the mineral resources in drill-tested extensions of the Main Conglomerate Bed that could contain a potential mineral deposit of 25 to 30 million tonnes at grades ranging from 0.04% U3O8 to 0.05% U3O8.(2)

- Additional resource potential in the mineralized Basal and Upper conglomerate beds and in the lower-grade hanging wall of the Main Conglomerate Bed.

Scott Wilson RPA has included in the Report recommendations for a two-stage program to advance the Project through a preliminary feasibility study.

- The first stage includes an economic analysis of the potential viability of mineral resources (a preliminary assessment) and calls for additional data compilation, mapping, drilling, metallurgical and leach testing, and resource modeling, along with early-stage studies of permitting requirements and of mine development and processing options. Estimated costs of the first-stage program are $830,000.

- Upon the successful completion of the first stage, a preliminary feasibility study will be undertaken as a comprehensive study of the viability of mineral resources. Estimated costs of the second-stage program are $4.5-million.

Scott Wilson RPA has also included in the Report recommendations to pursue additional opportunities to increase project revenue and decrease costs for a potential uranium mining and processing operation. These four key opportunities involve assessments of:

- The technical and economic viability of recovering Rare Earth Oxides and the production of marketable products.

- The mining and underground leaching of the lower grade mineralization in the hanging wall of the Main Conglomerate Bed.

- The viability of using surface heap leaching as an alternative to conventional milling.

- The potential to mine higher grade, near-surface portions of the deposit early in the project life.

Pele President and CEO Al Shefsky stated, "This Report transforms Pele Mountain Resources. It has advanced our Elliot Lake project to the evaluation stage, outlining an inferred mineral resource with an in-situ value well in excess of C$2.5-billion and very good potential for expansion. Our shareholders now own a 100-percent interest in a vast resource of uranium oxide at a time when global demand is surging at an unprecedented rate. We are committed to advancing the Project systematically according to the roadmap provided in the Scott Wilson RPA Report. A drill crew and technical personnel have been mobilized to the Project to begin implementation of its recommendations."

Please see Pele's website at, or to view the Report.

This press release has been reviewed and approved by Robert MacGregor, P.Eng., an independent Qualified Person with 14 years experience working in the Elliot Lake area during its time as an active uranium mining camp. Any disclosure in this press release pertaining to the Report has been reviewed and approved by Lawrence B. Cochrane, Ph.D., P. Eng. and William E. Roscoe, Ph.D, P. Eng., the authors of the Scott Wilson RPA Report, each being a "Qualified Person" under NI 43-101.

About Pele Mountain Resources

Pele Mountain Resources is focused on the advancement of its 100-percent owned Elliot Lake uranium project in northern Ontario. The Elliot Lake project hosts a NI 43-101 compliant mineral resource of 33 million pounds of U3O8 with very good potential to increase the mineral resources on the property, according to a Technical Report authored by Scott Wilson Roscoe Postle Associates Inc.

The Elliot Lake mining camp was once known as "the uranium capital of the world" and has produced more than 270 million pounds of U3O8 from stratigraphically-bound deposits that demonstrate remarkable consistency over extensive areas. The uranium market is currently experiencing a strong upward price trend due to uncertain supply and increasing global demand.

Pele also holds a diverse portfolio of gold, diamond, and base metal projects located across northern Ontario, including the Highland project where drilling has outlined several high-grade, narrow-vein gold zones within an historic mining camp. Through project generation and mineral discovery, Pele provides shareholders with exposure and leverage to the increasing global demand for natural resources. Pele stock trades on the TSX Venture Exchange under the symbol "GEM".

1. Assumptions used in determining cut off grade include:

(i) operating costs of about of about US$65 per recovered pound of U3O8.

(ii) market price of US$70 per pound U3O8,

(iii) recoveries based on historical recoveries for the Elliot Lake camp.

2. The potential quantity and grade of the potential mineral deposit identified in the Report 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.

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.

Common Shares Outstanding: 65,724,360

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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