Pele Mountain Resources Inc.
TSX VENTURE : GEM

Pele Mountain Resources Inc.

October 06, 2010 18:07 ET

Pele Mountain Announces Final Closing of Private Placement Offering

TORONTO, ONTARIO--(Marketwire - Oct. 6, 2010) - Pele Mountain Resources Inc. (TSX VENTURE:GEM) ("Pele" or the "Company") is pleased to announce that it has closed the final tranche of a non-brokered private placement offering (the "Offering") comprised of 2,250,000 units (the "Units") at a price of $0.16 each for aggregate gross proceeds of $360,000, with each Unit consisting of one common share and one common share purchase warrant (a "Warrant"), and 4,600,000 flow-through units (the "FT Units") at a purchase price of $0.18 per FT Unit for aggregate gross proceeds of $828,000, with each FT Unit consisting of one common share and one-half of one common share purchase warrant (a "FT Warrant"). Each Warrant is exercisable to acquire one common share of Pele at $0.25 until October 6, 2012, and each FT Warrant is exercisable to acquire one common share of Pele at $0.25 until April 6, 2012. 

Together with the closing of the first tranche on September 30, 2010 and the second tranche on October 1, 2010, Pele has issued an aggregate of 5,581,700 Units resulting in total gross proceeds to Pele of $893,072 from the sale of Units under the Offering and has issued an aggregate of 15,957,264 FT Units resulting in total gross proceeds to Pele of $2,872,308 from the sale of FT Units under the Offering. M Partners Inc. raised $2,485,748 for the Company in connection with the Offering.

In connection with the Offering, the Company paid eligible persons (the "Finders") a cash fee of 7% of the gross proceeds raised through each Finder under the Offering and also issued compensation warrants equal to 7% of the total number of Units (the "Compensation Warrants") or FT Units (the "FT Compensation Warrants") issued through each Finder under the Offering. Each Compensation Warrant entitles the holder upon exercise to acquire one common share of Pele at $0.16 until October 6, 2012 and each FT Compensation Warrant entitles the holder upon exercise to acquire one common share of Pele at $0.18 until April 6, 2012. On closing, the Company paid $76,440 in cash fees to the Finders and issued 115,500 Compensation Warrants and 322,000 FT Compensation Warrants to the Finders.

The securities issued pursuant to the Offering will all be subject to a four (4) month statutory hold period commencing from the date of issuance. The Offering is subject to TSX Venture Exchange acceptance of requisite regulatory filings.

All proceeds raised from the sale of FT Units will be used by Pele to finance qualified Canadian exploration and development expenditures on its Canadian resource properties and all proceeds raised from the sale of Units will be used by Pele to finance exploration and development activities and for general working capital purposes.

About Pele

Pele Mountain Resources is focused 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".

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: 123,522,572

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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