Pele Mountain Resources Inc.
TSX VENTURE : GEM

Pele Mountain Resources Inc.

September 28, 2010 08:47 ET

Pele Mountain Projects Up to 218,000 Kilograms of Recoverable Rare Earth Oxides Annually, in Addition to 826,000 Pounds of U3O8 at Eco Ridge Mine

Pele Mountain Reports Heavy Rare Earth Oxides Plus Yttrium Comprise 50% of Total Rare Earth Oxides Recoverable at Eco Ridge Mine

TORONTO, ONTARIO--(Marketwire - Sept. 28, 2010) - Pele Mountain Resources Inc. (TSX VENTURE:GEM) ("Pele" or the "Company") today announced projections that, based on the production rate used in Pele's October 2007 NI 43-101 Scoping Study (the "Scoping Study") by Scott Wilson Roscoe Postle Associates ("Scott Wilson RPA"), Eco Ridge leach solutions could contain up to 218,000 kilograms of recoverable total Rare Earth Oxides ("TREO") annually, in addition to 826,000 pounds of uranium oxide. These projections are based on the Scoping Study and on rare earth oxide ("REO") assays from 30 widely spaced drill holes and the results of leach tests performed at SGS Canada Inc. Fifty percent of this TREO would be heavy rare earth oxides ("HREO") plus Yttrium. The Eco Ridge Mine project is 100-percent owned by First Canadian Uranium Inc., a wholly owned subsidiary of Pele.

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

Regarding REO market developments, Dr. Bird commented, "China, which produces about 97-percent of the worldwide supply of REO, has recently reduced its REO export quotas by up to 70-percent. These new export restrictions have sparked a rush to find and bring to production new sources of REO outside of China. The Elliot Lake uranium deposits, such as Pele's Eco Ridge Mine project, are ideally positioned to supply significant REO to the western world. They are well-understood deposits that have produced REO commercially in the recent past. They are in a politically stable and mining-friendly area of Ontario and much of the infrastructure is in place to very quickly produce again."

Dr. Bird continued, "Pele's Eco Ridge Mine deposit contains the full range of REO, including the highly valued 'heavy' REO. With heavy REO plus Yttrium comprising about 50 percent of the TREO recoverable, Eco Ridge could produce a desirable mix of REO and it represents a large potential future source of these strategically critical metals."

Pele's 100-percent owned Eco Ridge Mine project contains a NI 43-101 resource in the main conglomerate bed ("MCB") of 6.4 million pounds of "indicated" U3O8 (5.68 million tonnes grading 0.051-percent U3O8) and 36.1 million pounds of "inferred" U3O8 (37.26 tonnes grading 0.044-percent U3O8) as reported in Pele's Scoping Study. Based on historical wide-spaced drilling, Scott Wilson RPA estimated that Pele's mining claims outside of the Company's present NI 43-101 resource area could contain an additional 35 to 40 million tonnes grading from 0.04 to 0.05-percent as a potential mineral deposit.1  The deposit also remains open down dip from the drilled areas where there is considerable room for expansion of the deposit. Pele announced on September 13, 2010, that it has retained Scott Wilson RPA to provide an updated NI 43-101 mineral resource estimate that will include both uranium and rare earth elements ("REE") by the end of 2010.

All 30 drill holes that Pele has analyzed for REO to-date have contained significant REO. A total of 29 of the 30 analyzed holes were drilled over an area 2 kilometres across strike and 1 kilometre down dip within the area of the defined NI 43-101 uranium resources. The outlying hole was located north of the classified resources and intersected the down-dip continuation of both uranium and REO mineralization beyond the resource area. Assays for each individual REO are contained in the chart available at http://www.pelemountain.com/pdfs/092710_REOtable.pdf.

HREO plus Yttrium have demonstrated good recoverability in leach testing on Pele's drill core at SGS Canada Inc. The following statement and tables are excerpted from Section 16 of the Scoping Study, "Overall leach extraction of heavy rare earths (terbium, dysprosium, erbium, holmium, thulium, ytterbium and lutetium) plus yttrium, in all leach tests averaged 64%." http://www.pelemountain.com/pdfs/Table2_RareEarthExtraction.pdf

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."

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 focused on the sustainable development of its flagship 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 potential quantity and grade is conceptual in nature. There has been insufficient exploration to define a mineral resource. It is uncertain if further exploration will result in the discovery of a mineral resource.

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.

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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