Pele Mountain Files Preliminary Economic Assessment for Eco Ridge, Providing Road Map to Sustainable Development of Low-Cost Rare Earths and Uranium Production at Elliot Lake, Ontario

Toronto (ots/PRNewswire) -

Trading Symbol: TSX Venture : GEM
OTCQX : GOLDF
Shares Outstanding: 133,938,746

Pele Mountain Resources Inc. (OTCQX: GOLDF) ("Pele" or the
"Company") today announced the filing of its recently announced NI
43-101 Preliminary Economic Assessment (the "PEA") on its Eco Ridge
Mine Rare Earths and Uranium Project ("Eco Ridge" or the "Project")
on SEDAR. The PEA was prepared by Roscoe Postle Associates ("RPA").

Highlights of the PEA, some of which have changed marginally
since Pele's July 5, 2011 press release, include:

- Ramp up to 9,000-tonne per day operation with life-of-mine
production of 10.7-million pounds of Total REOand 24.9-million pounds of
U3O8 over a 15-year mine life.
- Cumulative operating cash flow of US$1.73-billion; Cumulative
pre-tax cash flow of US$1.28-billion.
- Positive NPV of $644-million (at a 7.5% discount rate); IRR of
45-percent.
- Operating cash costs of $46 per tonne, the lowest among aspiring
Canadian REO producers;
- Revenue from U3O8 is greater than operating costs for both U3O8
and REO combined. Therefore REO operating costs are zero net of U3O8.
- Operating costs of $16 per pound U3O8, net of REO credits;
- Start-up capital cost of $219-million; Sustaining capital cost
of $227-million.
- A Project Permitting Schedule providing an outline of planned
activities.
- Opportunities to improve project economics including improved
mineralrecoveries and increased resources.

RPA also noted, "At current prices, Project economics are very
similar to the base case. While rare earths prices are higher (the
current price average is $425 per kg, compared to $342 per kg in the
base case), uranium prices are lower (current long-term contract
price is US$68 per lb U3O8, compared to US$85 per lb U3O8). The
undiscounted pre-tax cash flow for the current price scenario totals
C$1,178 million over the mine life ... The IRR is 42% and the net
present value (NPV) is C$583 million at a 7.5% discount rate."

Note: The PEA is preliminary in nature. It includes inferred
mineral resources which are considered too speculative geologically
to have the economic considerations applied to them that would enable
them to be categorized as mineral reserves and there is no certainty
that the preliminary economic assessment will be realized.

In view of the increasing importance of rare earths, and the fact
that there is more than three times as much REO as U3O8 at Eco Ridge,
Pele is advancing new work initiatives with particular focus on
optimizing REO production. Most of the new initiatives can be
categorized broadly as either seeking to increase REO resources or
improve REO recoveries.

Exploration in the Elliot Lake mining camp has historically
focused on testing the limits of the U3O8 mineralization and not REO
mineralization. Pele is now pursuing opportunities to increase
mineral resources, especially REO resources, including recent
step-out drilling to expand the deposit. Limited rare earth assay
data are available outside of the MCB intercepts drilled and assayed
by Pele Mountain from 2006 to 2011. The available data show that rare
earths mineralization continues above and below the main conglomerate
bed and Pele has launched a new expanded core sampling program to
determine the extent.

Although the PEA forecasts a robustly profitable operation at Eco
Ridge, the base case extraction and recovery methods envisioned are
forecast to achieve relatively modest recoveries of rare earths. Pele
is currently pursuing opportunities to improve extraction and
recovery of REO. Recent work investigating the use of an acid wash at
the conclusion of the bio-leaching cycle and acid bake of the mill
feed ore shows promising results.

The acid bake approach is well established for extracting REO
from monazite, the predominant REO-bearing mineral at Eco Ridge.
Preliminary test results show that the acid baking-leaching process
is an effective process to treat samples from Eco Ridge with
recoveries ranging from over 80 percent to over 90 percent recovery
of total REO. A sensitivity analysis in the PEA showed that if all
REO recoveries were set to 80 percent, this scenario increases REO
production from approximately 834,000 pounds per year to 4,300,000
pounds per year. Average NSR value would increase from C$93 per tonne
mined, to C$172 per tonne mined.

Pele is continuing to collect data to support the feasibility and
licensing process. The PEA includes a project permitting schedule
that provides an outline of planned activities. The Permitting
Schedule can be viewed on p. 20-6 of the PEA, or on Pele's website at
http://www.pelemountain.com/
[http://www.pelemountain.com/pdfs/ProjectPermittingSchedule.pdf ]
pdfs/ProjectPermittingSchedule.pdf
[http://www.pelemountain.com/pdfs/ProjectPermittingSchedule.pdf ]

Al Shefsky, President and CEO of Pele stated, "We are extremely
pleased with this PEA of our Eco Ridge Mine Project. The PEA confirms
our long-standing belief that Eco Ridge can be an important future
source of rare earths and uranium, perhaps most importantly as a
secure and reliable long-term source of critical rare earths outside
of China. Our project economics are robust and compelling and we are
executing next steps to rapidly advance development at Eco Ridge."

The Project has no known environmental liabilities and enjoys
strong local support. The Province of Ontario has recently granted
two renewable 21-year mining leases at Eco Ridge (the "Mining
Leases"), giving Pele the exclusive right to mine in the leased
areas. The Mining Leases also include surface rights except for an
area covered by surface patents owned by the City of Elliot Lake (the
"City"). The City has also granted Pele a renewable 21-year lease
with a conditional option to purchase the City's surface patents (the
"City Lease"). Both the Mining Leases and the City Lease allow for
siting of project infrastructure like mine portals and processing
facilities.

The technical and economic information relating to the PEA in
this press release has been reviewed and approved by Jason Cox,
P.Eng., Director of Mine Engineering for RPA, an independent
qualified person under NI 43-101. The PEA technical report can be
viewed on SEDAR and on the Pele website at
http://www.pelemountain.com.

About Pele

Pele Mountain Resources, a leader in Canadian rare earths
development, 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, mineralogy and metallurgy, 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".

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.

For further information:

please contact Al Shefsky, President, at +1-800-315-7353, or
visit the Pele website at http://www.pelemountain.com

ots Originaltext: Pele Mountain Resources Inc.
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