Pele Mountain Resources Inc.

Pele Mountain Resources Inc.

May 25, 2012 09:00 ET

Pele Mountain Closes Final Part of Highland Project Sale

TORONTO, ONTARIO--(Marketwire - May 25, 2012) - Pele Mountain Resources Inc. (TSX VENTURE:GEM)(OTCQX:GOLDF) ("Pele" or the "Company") announced today that it has closed the second of two previously announced agreements relating to the sale of its Highland Gold project ("Highland" or the "Highland Project").

Prodigy Gold Inc. (TSX VENTURE:PDG) ("Prodigy") through its wholly-owned subsidiary, Golden Goose Resources Inc. ("Golden Goose"), has acquired from Pele's wholly-owned subsidiary, Pele Gold Inc. ("Pele Gold"), the Licensed Area at Highland for cash consideration of $25,000. The closing of this second sales agreement also released $100,000 that was held in escrow from the closing of the first sales agreement relating to the balance of the properties comprising the Highland Project (see Pele's press release dated May 15, 2012). Pele has now received the total cash consideration of $1,800,000 from the closing of both agreements relating to the sale of its Highland Project.

As previously disclosed, in addition to the purchase price, Pele Gold has retained a net smelter return royalty ("NSR") in respect of certain areas of the Highland Project ranging from 1.0 to 1.5-percent, subject to Golden Goose's right to acquire between 0.5 and 1.0-percent of that NSR upon payment to Pele Gold of $1-million in the aggregate, reducing Pele Gold's remaining NSR over various portions of the Highland Project to a range between 0.5 to 1.0-percent. Golden Goose has assumed all royalty and other obligations under existing agreements and arrangements affecting the Highland Gold Project arising from and after the closing date.

About Pele

Pele Mountain Resources, a leader in Canadian rare earth development, is focused on the sustainable development of its 100-percent owned Eco Ridge Mine Rare Earths and Uranium Project. Eco Ridge is located in Elliot Lake, the only Canadian mining camp to have ever achieved commercial REO production. With well-understood geology, mineralogy, and metallurgy, excellent regional infrastructure, and strong local support, Eco Ridge is an ideal location for the development of a safe, secure, and reliable long-term supply of critical rare earths and uranium. Pele has also entered into an agreement to purchase the Simon Rare Earth Claims in Mountain Pass, California. Pele's shares are listed on the TSX Venture Exchange under the symbol "GEM" and on the OTCQX under the symbol "GOLDF".

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.

Shares Outstanding: 148,951,246

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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