January 24, 2011 - Toronto - Pele Mountain Resources Inc. (TSX Venture: GEM) ("Pele" or the "Company") today announced a major increase in Indicated uranium oxide resources as part of an updated NI 43-101 Resource Estimate ("Resource Estimate") at its Eco Ridge Mine uranium and rare earth elements ("REE") project near Elliot Lake in Northern Ontario.  The Resource Estimate supersedes the previous estimate contained in the 2007 Preliminary Assessment authored by Scott Wilson Roscoe Postle Associates ("Scott Wilson RPA").  Pele is focused on the sustainable development of Eco Ridge, which is owned 100-percent by First Canadian Uranium, a wholly owned subsidiary of Pele.

 

Pele President and CEO Al Shefsky stated, "We are very excited about the significant upgrade of our resources at Eco Ridge. We have retained Scott Wilson RPA to provide an updated Preliminary Assessment ("PA") which is expected in the second quarter of 2011.  The PA will feature a detailed economic model based on combined revenues from uranium oxide ("U₃O₈") and rare earth oxides ("REO") and will include mining, processing, and waste management design enhancements achieved since the initial 2007 Scoping Study.  The PA will also include a schedule of activities to advance the project through the feasibility and licensing stages.  We believe Pele's Eco Ridge Mine project contains an important future source of uranium and rare earth elements and we are determined to rapidly advance its development."

 

The Resource Wireframe ("Resource Wireframe"), which contains both Indicated and Inferred U₃O₈ resources within the near surface portion of the Main Conglomerate Bed ("MCB"), increased in size from the previous resource estimate.  The Indicated U₃O₈ resource has more than doubled to 15.2-million pounds (14.3-million tonnes at 0.048-percent U₃O₈) with an additional Inferred U₃O₈ resource of 31.4-million pounds (33.1-million tonnes at 0.043-percent U₃O₈). 

 

Scott Wilson RPA is continuing to evaluate 1537 REO assays (each containing up to 17 elements) from 123 holes, the last of which were received earlier this month. Within the Resource Wireframe, every drill hole analysed has contained significant total rare earth oxides ("TREO") and the average grade of all of the samples is 3.7 pounds per tonne.  Average grades for each individual REO are available on Pele's website at www.pelemountain.com/pdfs/RPAT2012411.pdf   The REO resource estimate will be announced when it is available.

 

Scott Wilson RPA reports the following mineral resources at Eco Ridge:

 

 

Pele's Eco Ridge Mine deposit also extends down plunge and to the east beyond the boundaries of the Resource Wireframe. Based on historical wide-spaced drilling, Scott Wilson RPA estimates that these areas could contain an additional 30 to 50 million tonnes grading from 0.03 to 0.05 percent U₃O₈ as a potential mineral deposit.¹  There is no historical data on rare earths in this area, however, Scott Wilson RPA expects that rare earths grades would be similar to other portions of the deposit - from 3 to 4 pounds per tonne TREO. The deposit also remains open beyond the drilled areas with potential for significant expansion.

 

Recent extraordinary REE market developments, sparked by China's reduction of export quotas, have resulted in sharply higher prices, inciting a rush to find and bring to production new sources outside of China.  Eco Ridge has competitive advantages that may assist its development ahead of other projects.  Elliot Lake is the only mining camp in Canada to have achieved commercial production of REO and was the most important source of heavy REO in North America.  From 1956 to 1996, Rio Algom and Denison Mines produced more than 300 million pounds of U₃O₈, along with significant quantities of Yttrium and REO, from Elliot Lake deposits similar to Eco Ridge.  As a primary uranium mine that would produce REO as by-products, Eco Ridge is not wholly dependent on the volatile REO market.  Furthermore, the REO would go into solution without addition mining or processing costs. With competitive advantages, outstanding regional infrastructure, well-understood geology and strong local support for the project, Eco Ridge provides an ideal location for a safe, secure, and reliable long-term supply of Uranium and REE.

 

The technical information relating to the Resource Estimate, rare earth samples, and potential mineral deposit in this press release has been reviewed and approved by Tudorel Ciuculescu, P.Geo of Scott Wilson RPA, an independent Qualified Person under NI 43-101.  The balance of this press release has been reviewed and approved by Fergus Kerr, P.Eng., Vice President of Uranium Operations for Pele and a qualified person under NI 43-101.

 

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 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. Pele's shares are listed on the TSX Venture Exchange under the symbol "GEM".

 

For further information please contact Al Shefsky, President, at (800) 315-7353, or visit the Pele website at www.pelemountain.com.

 

1.        The potential quantity and grade of the potential mineral deposit are conceptual in nature and there has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the targets being delineated as a mineral resource.

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.  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.