Pele Mountain Resources Inc.

Pele Mountain Resources Inc.
Trigon Exploration Canada Ltd.

January 19, 2005 07:54 ET

Pele Mountain and Trigon Sign Option Agreement on James Bay Lowlands


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: PELE MOUNTAIN RESOURCES INC.

TSX VENTURE SYMBOL: GEM

AND TRIGON EXPLORATION CANADA LTD.

TSX VENTURE SYMBOL: TEL

JANUARY 19, 2005 - 07:54 ET

Pele Mountain and Trigon Sign Option Agreement on
James Bay Lowlands

TORONTO, ONTARIO--(CCNMatthews - Jan. 19, 2005) - Pele Mountain
Resources (TSX VENTURE:GEM) ("Pele" or the "Company") and Trigon
Exploration Canada Ltd. ("Trigon") (TSX VENTURE:TEL) announced today
that they have signed an Option Agreement pursuant to which Trigon may
earn up to a 60-percent interest in two of Pele's James Bay Lowlands
projects, the Alliance Project ("Alliance") and the Attawapiskat River
Project ("Attawapiskat").

Highlights of the Agreement include:

- Trigon will be the operator of both projects during the option period.

- Trigon may earn a 50-percent interest in both projects by spending a
total of $1,500,000 by April 30, 2006.

- Trigon may increase its interest in both projects to 60-percent by
spending an additional $1,500,000 by April 30, 2008.

- Trigon is required to make an additional $250,000 cash payment to Pele
by January 17, 2006 to keep its Attawapiskat option in good standing.

- Trigon will drill a minimum of 5 targets at Alliance and 1 target at
Attawapiskat by June 1, 2005.

- Trigon and Pele will work together within defined "areas of interest"
surrounding Alliance and Attawapiskat.

- Upon exercise of the option by Trigon, a joint venture will be formed
and each party will thereafter contribute its share of the costs
according to its participating interest.

- Upon commencement of commercial production from either Alliance or
Attawapiskat, each party will receive its share of diamonds produced in
kind according to its participating interest.

Al Shefsky, President and CEO of Pele stated, "We are very excited to be
working with the diamond exploration professionals at Trigon. We believe
that their proven capability and experience as members of the discovery
team at the Ekati diamond mine adds tremendous value to our James Bay
Lowlands portfolio and greatly enhances our prospects for
diamond-bearing kimberlite discovery in the region. Our Agreement with
Trigon supports and advances Pele's initiatives as a leader in the
search for economic diamond deposits in northern Ontario."

Dr. George Poling, President and CEO of Trigon stated, "We are very
pleased to enter into the Ontario option agreement with Pele and look
forward to a productive program of exploration and development. The
Superior Craton in the James Bay Lowlands is an area with proven
potential for hosting economic diamond deposits. We believe that
geophysics is a primary exploration tool in the Lowlands and geophysics
is one of the core competencies of Trigon."

Trigon is a Canadian diamond exploration company active in some of the
most promising areas of the Canadian North including the Northwest
Territories, Nunavut, and now, Ontario's James Bay Lowlands. Trigon has
a proven exploration team whose strong technical skills contributed to
the discovery of the first 50 kimberlite pipes at the Ekati Diamond
Mine. Field programs at both Alliance and Attawapiskat will be
supervised by Raymond Ashley, P.Geoph., Senior Vice-President of
Exploration at Trigon.

Trigon has launched exploration programs at Alliance and Attawapiskat
that are expected to continue through the winter. Trigon has acquired
on-site and immediately-available operating assets from Pele in order to
expedite the commencement of fieldwork, including work camps, fuel and
other miscellaneous supplies, and access to a hydraulic drill and
related equipment. Trigon paid Pele $250,000 on January 18, 2005 for the
purchase of the operating assets.

Most known diamond deposits are located on cratons and the world's
largest, the Superior Craton, covers most of northern Ontario, including
the James Bay Lowlands. The Superior Craton is one of only two cratons
in Canada with the proven potential to host economic diamond
concentrations, yet it remains largely unexplored. Both Alliance and
Attawapiskat lie on the Superior Craton.

Pele's Alliance Project is located southwest of the Attawapiskat
cluster, near the transition of the James Bay Lowlands and the Canadian
Shield. Pele has staked and recorded more than 30 targets within the
Alliance "area of interest" that covers the 6,000,000-acre area of the
Fort Hope Airborne Survey, flown on behalf of the Ontario Geological
Survey.

Pele's Attawapiskat River Project comprises the largest wholly-owned
claim group within a 30-kilometre radius of the Victor Diamond Project,
where De Beers is developing Ontario's first commercial diamond mine.
Pele's Attawapiskat claims cover the extension of an important structure
along which most of the Attawapiskat cluster kimberlites occur and tie
on to claim blocks hosting several known diamond-bearing kimberlite
pipes. The Attawapiskat "area of interest" includes Pele's Attawapiskat
claims as well as a 10-kilometer area surrounding those claims.

This press release has been reviewed and approved by Dr. Edward Walker,
P.Geo., a Qualified Person and independent consultant for Pele, and
Raymond Ashley, P.Geoph., a Qualified Person, and officer and director
of Trigon.

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, Trigon-funded diamond programs in the James Bay
Lowlands, and an in-house program at Highland Gold. Pele trades on the
TSX Venture Exchange under the symbol "GEM".

Trigon Exploration Canada Ltd. is a generative diamond exploration
company that brings together recognized technical skills, extensive
knowledge of Canadian diamond geology and innovative exploration
techniques in the pursuit of new diamond discoveries. Trigon's existing
exploration projects are strategically located in promising diamond
exploration areas in Canada. After many years of successfully
collaborating on diamond exploration projects, Trigon's experienced and
proven management team acquired selective properties and formed the
company in 2002. The exploration team, whose strong technical skills
contributed to the discovery of more than 50 kimberlite pipes in NWT for
Dia Met Minerals, recently developed and expanded the Trigon property
portfolio and is focused on repeating its success.

The TSX Venture Exchange has not reviewed and does not accept
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. None of the Company's properties have
any known ore body of economic or commercial value.

Common Shares Outstanding: 46,484,237

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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Pele Mountain Resources
    Al Shefsky
    President
    (416) 368-7224
    www.pelemountain.com
    or
    Trigon Exploration Canada Ltd.
    Sidney Himmel
    Chairman of the Board
    (250) 317-3624
    www.trigonexploration.com