SOURCE: Pele Mountain Resources Inc.

March 03, 2006 11:49 ET

Pele Mountain Acquires Extension of Historic Murphy Gold Mine

TORONTO -- (MARKET WIRE) -- March 3, 2006 -- Pele Mountain Resources (TSX-V: GEM) ("Pele" or the "Company") announced today that Pele Gold Corporation ("Pele Gold"), a wholly owned subsidiary of the Company, has entered into a mineral exploration license agreement with an arm's length land owner (the "License Agreement") expanding its Highland Gold Project near Wawa, Ontario by 58 square kilometers (the "Licensed Area").

The Licensed Area includes the westward extension of the high-grade gold zones of the historic Murphy Gold Mine where more than 20,000 metres of core has been drilled to date. Pele's Springbank and Talisker gold zones, where a third phase drill program is underway, are located less than two kilometres to the southwest of these high-grade gold zones, within the same deformation zone as the Murphy Gold Mine and several other past producing gold mines in the area.

Pele President Al Shefsky stated, "The acquisition of the high-grade gold zones, which extend from the Murphy Gold Mine, adds substantial value to our Highland Gold Project and continues Pele's decade-long systematic acquisition campaign within this prolific gold camp. Highland's numerous gold zones are reaching a critical mass that present opportunities which are enhanced by the presence of existing infrastructure in the area, including nearby milling facilities, and gold prices which are trading near 25 year highs. We plan to continue exploring and developing this outstanding gold project aggressively throughout 2006."

The gold-bearing shear zones of the Murphy Gold Mine occur within the Goudreau-Lochalsh Deformation Zone where it engulfs the eastern contact of the Gutcher Lake Stock in Abotossaway Township. The Licensed Area includes the western extension of the Main Vein and the entire North Vein of the Murphy Gold Mine.

Exploration work reported by Orequest Consultants Ltd. ("Orequest") in 1989, including 51 holes totaling 11,758.5 metres drilled to the west of the No.1 shaft, suggests that the portion of the Main Vein tested within Pele's Licensed Area has a strike of approximately 200 metres and an average true width of approximately 2.0 metres, to a depth of approximately 300 metres. The average gold grade of drill intersections reported by Orequest in this part of the Main Vein was 0.33 ounces gold per ton (oz/ton). Orequest also reported that the North Vein has a strike of approximately 100 metres, an average true width of 1.0 to 1.5 metres to a depth of approximately 250 metres. The average gold grade of intersections reported on the north vein was 0.16 oz/ton gold. Both veins are open at depth and along strike to the west. Additional drilling on both the Main Vein and the North Vein will be required to determine their resource potential in compliance with National Instrument 43-101.

In order to facilitate its acquisition of interests in the Licensed Area pursuant to the License Agreement, Pele Gold concurrently entered into a separate Memorandum of Agreement with the former licensees of a portion of the Licensed Area pursuant to which the former licensees agreed to terminate their interest in the Licensed Area (the "Termination"). Subject to regulatory acceptance of required filings, the terms of the Memorandum of Agreement include total cash payments by Pele of $51,000 and the issuance of a total of 270,000 common shares of Pele at an attributed value of $ 0.355 per share to be paid and issued to the former licensees over a 4-year period, in accordance with the schedule below as consideration for the Termination:

             ------------------------------------------------------
                    Date                 Cash                Shares
             ------------------------------------------------------
             On signing agreement       $6,000               30,000
             ------------------------------------------------------
              January 15, 2007         $10,000               80,000
             ------------------------------------------------------
              January 15, 2008         $15,000               80,000
             ------------------------------------------------------
              January 15, 2009         $20,000               80,000
             ------------------------------------------------------
                    Total              $51,000              270,000
             ------------------------------------------------------
The License Agreement gives Pele the exclusive right to explore for minerals within the Licensed Area and to bring the Licensed Area to lease and into commercial production. Pele must pay the landowner an annual license fee of $500 per square kilometre per year during the first 5-year term and $600 per square kilometre per year during the second 5-year term. Pele must also incur a total of $2,000 of exploration expenditures per square kilometre per year during the first 5-year term and $2,500 per square kilometre per year during the second 5-year term. The Licensed Area is also subject to a royalty of 3-percent on minerals produced from the Licensed Area.

This press release has been reviewed and approved by Dr. Edward Walker, P.Geo., an independent consultant and Qualified Person pursuant to National Instrument 43-101.

Pele Mountain Resources is focused on mineral exploration within the established mining camps of northern Ontario. Pele has acquired and developed a diverse portfolio of diamond, gold, base metal, and uranium properties, which provide exposure and leverage both to discovery and to the increased global demand for natural resources. Pele is active on five project fronts, including diamond exploration at Festival and Alliance funded by partners Goldcorp and Trigon Exploration Canada, gold and base metal exploration at Ardeen funded by partners Maple Minerals Corp and East-West Resource Corporation, and in-house exploration at its Highland Gold and Sudbury Offset properties. Pele stock trades on the TSX Venture Exchange under the symbol "GEM."

For further information please contact Al Shefsky, President, at (416) 368-7224, or visit the Pele website at www.pelemountain.com.

Common Shares Outstanding: 52,402,215

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.

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