TORONTO, July 21, 2011 /CNW/ - Pele Mountain Resources Inc. (TSXV: GEM)( OTCQX: GOLDF) ("Pele" or the "Company") announced today that it has engaged Foundation Opportunities Inc. ("FOI") of Toronto, on a non-exclusive basis, to assist and advise Pele with its evaluation of strategic alternatives regarding its Ontario gold assets. Pele's gold assets, which are held in its wholly-owned subsidiary, Pele Gold Corporation ("Pele Gold"), include a 100-percent interest in the East & West Highland Gold projects, as well as a 49-percent interest in the Ardeen Gold project.
Pele's Preliminary Economic Assessment (the "PEA") of its Eco Ridge Mine Project ("Eco Ridge") demonstrates that it has the potential to become a profitable producer of rare earth oxides ("REO") and uranium oxide ("U3O8"). Pele is focused on transitioning into the feasibility and licensing stages as it advances Eco Ridge toward development and production. For more information on the PEA of Eco Ridge, please see Pele's press release dated July 5, 2011.
Pele President and CEO Al Shefsky stated, "As we advance Eco Ridge toward development, we believe that the time is right to begin a strategic process to separate Eco Ridge from Pele Gold. Our Highland gold properties have demonstrated great potential for the discovery of significant gold resources as well as near-term cash flow opportunities, but may not be providing full value to shareholders as we focus at Eco Ridge. With gold near its all-time highs and the resurgence of exploration and development on the Michipicoten Greenstone Belt ("MGB") and across the region, we believe that our shareholders could benefit from holding our considerable gold assets and Eco Ridge in separate vehicles."
Mr. Shefsky continued, "The relentless increase in the gold price over the last decade has presented new mining opportunities across Northern Ontario. While the important historical gold mines of the MGB were high-grade, narrow-vein, underground operations, at today's higher gold price, lower-grade, open-pit deposits are also becoming economically attractive. At the nearby Magino Mine, Prodigy Gold Inc. has reported an Indicated Resource of nearly two million ounces of gold within wide zones of lower grade mineralization at a past-producing underground mine. A recent Preliminary Economic Assessment of Magino indicates robust economics. In light of these developments and past exploration results, we believe that our Highland properties present a compelling investment opportunity."
Pele's Highland gold properties are located about 100 kilometres southeast of Hemlo along the MGB, home to several past producing gold mines including the Renabie Mine (more than one-million ounces produced) and where Richmont Mines Inc. is now operating the Island Gold Mine. The Highland properties have excellent geologic potential for the discovery of high-grade narrow-vein gold deposits similar to the Island Gold Mine and lower-grade high tonnage deposits similar to Magino. At East Highland, Pele has received updated engineering plans for the extraction of a high-grade, near-surface bulk sample at the 'A' zone and has discovered widespread stockwork quartz veining that includes visible gold at the Lone Ranger zone. Past drilling and sampling at West Highland has returned high-grade gold at numerous showings, including the Springbank, Farquhar, Talisker, and Bowmore zones near the southern contact of the Gutcher Lake Stock.
The Ardeen Gold Project is located along the Shebandowan Greenstone Belt west of Thunder Bay and includes Northern Ontario's first gold mine. Australian-based Coventry Resources Limited has notified Pele that it has completed its initial 51-percent earn-in at Ardeen and, as project operator, plans to resume exploration in 2011, seeking to increase its project interest to 75-percent and then forming a joint venture with Pele. Recent drilling by Coventry, primarily at the Fisher zone, returned high-grade assays of up to 11.6 metres of 27.0 grams per tonne (g/t) gold and 41.1 g/t silver. Coventry has reported that high-grade gold mineralization at the Fisher zone extends over a strike length exceeding 300 metres and remains open at depth. More than 12,000 metres of drilling at Ardeen by Pele in the 1990s also returned numerous high-grade gold intercepts.
About Pele
Pele Mountain Resources is focused on the sustainable development of its 100-percent owned Eco Ridge Mine Rare Earths and Uranium Project. Eco Ridge is one of very few North American Rare Earths deposits that has completed a NI 43-101 Preliminary Economic Assessment with robust economics and is located in Elliot Lake, the only Canadian mining camp to have ever achieved commercial REO production. With well-understood geology, excellent regional infrastructure, and strong local support, Eco Ridge is an ideal location for a safe, secure, and reliable long-term supply of REO and U3O8. Pele also holds interests in a portfolio of Northern Ontario gold properties at Highland and Ardeen. Pele's shares are listed on the TSX Venture Exchange under the symbol "GEM" and on the OTCQX under the symbol "GOLDF".
About Foundation Opportunities Inc.
Foundation Opportunities Inc. ("FOI") is a Toronto-based boutique merchant bank and corporate finance advisory firm. The firm is focused on working with small and medium-sized companies with rapid growth potential, specializing in assisting in mergers and acquisitions transactions, and strategic advisory services. FOI is a wholly owned subsidiary of Foundation Financial Holdings Corp. and the sister company of the Toronto-based boutique investment bank and exempt market dealer Foundation Markets Inc.("FMI")
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.