Pele Mountain Receives Mining Leases at Its Eco Ridge Mine Rare Earths and Uranium Project

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Pele Mountain Receives Mining Leases at Its Eco Ridge Mine Rare Earths and Uranium Project
Newswire.ca - May 17, 2011

ORONTO, May 17 /CNW/ - Pele Mountain Resources Inc. (TSX Venture: GEM; OTCQX: GOLDF) ("Pele" or the "Company") announced today that the Province of Ontario has granted two mining leases (the "Mining Leases") to Pele's wholly owned subsidiary, First Canadian Uranium Inc., for its Eco Ridge Mine Rare Earths and Uranium Project. The Mining Leases give Pele the exclusive right to mine the Eco Ridge deposit and include surface rights that allow for siting of project infrastructure and processing facilities. The Mining Leases are for a period of 21 years (commencing on March 1, 2011) and are renewable.

Pele President and CEO Al Shefsky stated, "The receipt of our Mining Leases marks another important milestone on the path to development at Eco Ridge. We recently updated the project's NI 43-101 compliant resources with the inclusion of rare earth oxide ("REO") resources for the first time, along with a significant upgrade in uranium oxide ("U3O8") resources. We remain on schedule to deliver an updated NI 43-101 Preliminary Assessment ("PA") next month that will incorporate design enhancements achieved since the initial positive Scoping Study in 2007 and, for the first time, providing an economic model based on revenues from both REO and U3O8. The PA will also include a schedule of activities necessary to advance the project through the feasibility and licensing stages. We believe Eco Ridge contains an important future source of heavy REO and U3O8 and we are determined to rapidly advance its development."

The Eco Ridge Resource Estimate was prepared by Roscoe Postle Associates and can be viewed at: http://www.pelemountain.com/mineral-resources.php.

The Mining Leases cover an area of 3831 acres that includes substantially all of the Resource Wireframe. The Eco Ridge Mine project covers approximately 20,000 acres in total, including areas down dip from the Resource Wireframe where historic drilling has intersected the mineralized reef, indicating excellent potential to significantly expand REO and U3O8 resources. The total rent payable under the Mining Leases is $4,651.62 annually.

In addition to the Mining Leases granted from the Province of Ontario, As previously announced, Pele's subsidiary has also entered into a 21-year lease for surface patents on mining claims at Eco Ridge (the 'Surface Lease'), where mine portals and other mining and processing infrastructure may be located (see Pele's press dated July 27, 2009). The Surface Lease was granted in 2009 for surface patents held by the City of Elliot Lake and is indicative of Pele's excellent community relations and strong local support for its Eco Ridge Mine project.

Recent extraordinary REO 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 contains the full range of naturally occurring REO, including the highly valued "heavy" REO. The mining and processing method to recover uranium at Eco Ridge will also recover heavy REO (including scandium and yttrium) into the leach solutions at no extra cost. Eco Ridge is located within a proven mining camp at Elliot Lake, formerly known as "the uranium capital of the world" and an important source of heavy REO and yttrium.

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 deposits with NI 43-101 compliant REO resources and is located in Elliot Lake, the only Canadian mining camp to have ever achieved commercial REO production. An updated Preliminary Assessment is on schedule for expected delivery during the second quarter of 2011, incorporating design enhancements achieved since the initial positive Scoping Study in 2007 and, for the first time, providing a detailed economic model based on revenues from both REO and U3O8. 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".

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 (800) 315-7353, or visit the Pele website at www.pelemountain.com