Pele Mountain Resources Inc.
TSX VENTURE : GEM

Pele Mountain Resources Inc.

September 30, 2005 16:04 ET

Pele Mountain Completes Flow-Through Private Placement and Common Share Private Placement

TORONTO, ONTARIO--(CCNMatthews - Sept. 30, 2005) - Pele Mountain Resources (TSX VENTURE:GEM) ("Pele" or the "Company") is pleased to announce that it has completed, subject to regulatory approval, a private placement to eleven (11) arm's length subscribers of a total of 1,800,000 flow-through units in the capital of Pele (each a "Flow-Through Unit") at a purchase price of $0.25 per Flow-Through Unit for gross proceeds of $450,000 (the "Flow-Through Offering"). Each Flow-Through Unit is comprised of one (1) flow-through common share (each a "Flow-Through Share") and one-half (1/2) non-transferable Series R purchase warrant (each a "Series R Warrant"), where each whole Series R Warrant is exercisable until September 30, 2006 to purchase one (1) additional common share of Pele at a purchase price of $0.30 per share. The securities underlying the Flow-Through Units, including the Flow-Through Shares and Series R Warrants issued under the Flow-Through Offering and the common shares of Pele issuable upon due exercise, if any, of the Series R Warrants, will all be subject to a 4 month statutory hold expiring on January 31, 2006. The completion of the Flow-Through Offering remains subject to regulatory acceptance of applicable filings.

All proceeds raised under this Flow-Through Offering will be used by Pele to finance qualified Canadian exploration and development expenditures on its Canadian resource properties. All costs associated with the Offering will be paid by the Corporation from its general funds. Subject to and pending regulatory approval, a finder's fee of $28,700 representing seven percent of $410,000 of the gross proceeds raised in the Flow-Through Offering will be paid by Pele from its general funds to four (4) arm's length parties upon regulatory acceptance of the filing of this Flow-Through Offering.

Pele is also pleased to announce that it has completed, subject to regulatory approval, a second private placement to seven (7) arm's length subscribers of a total of 1,527,978 common share units in the capital of Pele (each a "Common Share Unit") at a purchase price of $0.20 per Common Share Unit for gross proceeds of $305,595.60 (the "Common Share Offering"). Each Common Share Unit is comprised of one (1) common share (each a "Common Share") and one-half (1/2) non-transferable Series S purchase warrant (each a "Series S Warrant"), where each whole Series S Warrant is exercisable until September 30, 2006 to purchase one (1) additional common share of Pele at a purchase price of $0.25 per share. The securities underlying the Common Share Units, including the Common Shares and Series S Warrants issued under the Common Offering and the common shares of Pele issuable upon due exercise, if any, of the Series S Warrants, will all be subject to a 4 month statutory hold expiring on January 31, 2006. The completion of the Common Share Offering remains subject to regulatory acceptance of applicable filings.

All costs associated with the Offering will be paid by the Corporation from its general funds. Subject to and pending regulatory approval, a finder's fee of $19,250 representing seven percent of $275,000 of the gross proceeds raised in the Common Share Offering will be paid by Pele from its general funds to three (3) arm's length parties upon regulatory acceptance of the filing of this Common Share Offering.

Pele Mountain Resources is an exploration play on the abundant mineral wealth 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 six project fronts, including diamond exploration at Festival, Alliance and Attawapiskat River 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".

Currently, Pele has 50,072,215 common shares issued and outstanding, which total includes the issuance of 1,800,000 Flow-Through Shares and 1,527,978 Common Shares referred to above.

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: 50,072,215

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information