Pele Mountain Resources Inc.
TSX VENTURE : GEM

Pele Mountain Resources Inc.

September 13, 2010 09:01 ET

Pele Mountain to Add Rare Earth Elements Resource Estimate in New NI 43-101 Report at Eco Ridge Mine

Surging Rare Earth Elements Markets Spark New Opportunities

TORONTO, ONTARIO--(Marketwire - Sept. 13, 2010) - Pele Mountain Resources Inc. (TSX VENTURE:GEM) ("Pele" or the "Company") announced today that it has retained Scott Wilson Roscoe Postle Associates ("Scott Wilson RPA") to provide an updated NI 43-101 mineral resource estimate that will include both uranium and rare earth elements ("REE") at Pele's Eco Ridge Mine project at Elliot Lake in Northern Ontario. The new resource estimate is expected to be completed by year-end. Eco Ridge is owned 100-percent by First Canadian Uranium Inc., a wholly owned subsidiary of Pele.

Recent REE market developments have resulted in sharply higher prices for several of the rare earth elements, which are found at Eco Ridge in significant quantities. Led by its renowned Rare Metals Advisor, Dr. William Bird, Pele is pursuing opportunities for REE by-products at Eco Ridge.

Regarding REE market developments, Dr. Bird commented, "China, which produces about 97-percent of the worldwide supply of REE, has recently reduced its REE export quotas by up to 70-percent. These new export restrictions have sparked a rush to find and bring to production new sources of REE outside of China. In view of the fact that the Elliot Lake deposits are a well-understood REE occurrence, have produced REE commercially in the past and have great infrastructure already in place, they are capable of producing again relatively quickly."

As reported in Pele's press release dated October 7, 2009, REE mineralization at Eco Ridge is significant and relatively consistent. All 30 drill holes that Pele has analyzed for REE to-date have contained significant REE, which occur in conjunction with uranium oxide in the vast Main Conglomerate Bed. Testing on Pele's drill core at SGS Canada Inc. indicates potential recoveries of approximately 64-percent of combined Yttrium and heavy REE. Elliot Lake is one of very few mining camps in North America with a history of successful commercial production of REE and, during the late 20th Century, was a global producer of Yttrium and heavy rare earth elements as by-products of uranium production.

Overall total rare earth oxide ("TREO") content from each of the 30 analyzed drill holes is included in the table below, as originally reported in Pele's press release dated October 7, 2009.

Table 1 - Drill Results, Main Conglomerate Bed

Drill Hole From (m) Length (m) Est. True Width (m) TREO (%) TREO (g/tonne)
PM-01 203.32 3.43 3.43 0.169 1692
PM-02 279.70 2.38 2.06 0.025 249
PM-03 135.00 3.14 3.14 0.183 1828
PM-04 84.71 2.29 2.22 0.216 2159
PM-05 91.05 2.78 2.61 0.216 2159
PM-06 99.60 2.90 2.35 0.254 2540
PM-07 129.70 4.91 2.95 0.270 2699
PM-08 186.30 6.20 2.42 0.322 3221
PM-10 85.72 2.28 2.09 0.227 2268
PM-11 94.44 2.94 2.49 0.149 1488
PM-12 116.46 4.31 2.87 0.272 2722
PM-13 93.39 3.11 2.54 0.233 2331
PM-14 83.44 2.61 2.41 0.252 2522
PM-15 79.35 3.00 2.91 0.244 2440
PM-16 78.00 2.50 2.42 0.202 2018
PM-17 90.00 3.48 2.69 0.196 1960
PM-18 85.27 2.46 2.08 0.220 2200
PM-19 103.20 2.20 2.18 0.194 1941
PM-20 113.30 2.48 2.45 0.164 1642
PM-21 121.45 2.24 2.20 0.184 1842
PM-22 185.14 2.57 2.53 0.149 1488
PM-63 81.97 85.00 2.70 0.176 1757
PM-74 211.80 214.58 2.69 0.149 1493
PM-100 299.28 302.10 2.72 0.194 1940
PM-101 303.83 307.00 3.08 0.178 1784
PM-108 335.33 337.92 2.50 0.197 1971
PM-161 165.10 168.10 2.99 0.158 1579
PM-173 33.53 36.32 2.62 0.194 1940
PM-177 38.97 42.00 2.85 0.249 2487
PM-183 33.17 36.20 2.85 0.169 1689

The following statement and tables are excerpted from Section 16 of Scott Wilson RPA's Technical Report: "Overall leach extraction of heavy rare earths (terbium, dysprosium, erbium, holmium, thulium, ytterbium and lutetium) plus yttrium, in all leach tests averaged 64%."

With regard to REE recovery, Dr. Bird stated, "This means that up to 64-percent of these valuable heavy REE, which occur with the uranium at Eco Ridge, are available in the uranium leach solutions, at no extra mining or milling costs. Chemical extraction of the REE from the uranium leach solutions at Elliot Lake has been commercially successful in the past. Pele is assessing extraction and recovery opportunities for REE by-products, along with an assessment of their potential contribution toward project economics for inclusion in future Eco Ridge Mine economic modeling purposes."

Table 2 – Rare Earth Extraction

Heavy
REE + Y
Sample 6 Sample 7 Sample 8
  Grade
(g/t)
Extraction
(%)
Grade
(g/t)
Extraction
(%)
Grade
(g/t)
Extraction
(%)
Eu 2 28.5 1.6 20.1 2.1 17.6
Gd 38 28.8 30 19.2 39 17.2
Yb 5.4 93.1 3.8 73.4 4.9 71.0
Dy 18 76.7 13 59.3 17 53.5
Er 7.8 82.2 5.5 63.8 6.9 61.3
Ho 3 77.5 2.1 61.9 2.6 61.6
Lu 0.7 85.7 <0.6 N/A 0.6 71.0
Tb 4 55.3 3.1 39.9 3.9 36.7
Tm 0.9 92.5 <0.8 N/A 0.8 71.6
Y 81 62.5 61 50.2 80 39.7
             
             
Light REE Sample 6 Sample 7 Sample 8
  Grade
(g/t)
Extraction
(%)
Grade
(g/t)
Extraction
(%)
Grade
(g/t)
Extraction
(%)
Ce 790 5.5 670 4.1 840 4.0
La 420 4.3 360 3.4 460 3.2
Nd 270 8.4 220 5.7 280 5.4
Pr 80 7.4 67 5.1 87 4.7
Sm 46 19.7 33 13.9 48 11.3

Pele's flagship property is its 100-percent owned Eco Ridge Mine Uranium and REE project, near Elliot Lake in Northern Ontario. In October 2007, Pele received a positive Scoping Study which outlined a NI 43-101 compliant resource of 6.4 million pounds of "indicated" U3O(5.68 million tonnes grading 0.051-percent U3O8) and 36.1 million pounds of "inferred" U3O8 (37.26 million tonnes grading 0.044-percent U3O8) and which at the time provided the basis for an economically-viable, environmentally-compliant uranium mining and processing operation.(1)  In 2008, Pele commenced the permitting process by filing a Project Description with the Federal Government's Office of Major Projects Management and the Canadian Nuclear Safety Commission. The document details Pele's approach to sustainable development at Eco Ridge. 

This press release has been reviewed and approved by Dr. William H. Bird, P.Geo., an independent qualified person under NI 43-101 and founding member of Pele's Rare Metals Advisory Board.

About Pele

Pele Mountain Resources is intensifying its efforts and focus on the sustainable development of its Eco Ridge Mine Uranium and Rare Earth Elements ("REE") project, located in the Elliot Lake mining camp of Northern 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 and REE. Additionally, Pele has, or is actively seeking, qualified strategic partners to advance its other high-potential exploration projects, including high-grade gold properties at Highland and Ardeen. Pele's shares are listed on the TSX Venture Exchange under the symbol "GEM".

  (1) The Scoping Study is preliminary in nature and includes both indicated and inferred mineral resources. Inferred mineral resources are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the preliminary assessment will be realized.

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.

Common Shares Outstanding: 101,843,608

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.

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