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:
Table 1 Mineral Resources -
January 24, 2011
|
Pele Mountain Resources Inc. - Eco Ridge
Project
|
|
|
|
|
Classification
|
Tonnes
('000s)
|
U3O8
(%)
|
U3O8
('000 lbs)
|
Indicated
|
14,312
|
0.048
|
15,182
|
Inferred
|
33,121
|
0.043
|
31,444
|
Notes:
1. CIM
definitions were followed for Mineral Resources.
2. Mineral
Resources are estimated at a cut-off grade of 0.028% U3O8.
3. Mineral
Resources are estimated using an average long-term uranium price of
US$60 per lb, and a C$:US$ exchange rate of 0.95:1.00.
4. A
minimum mining thickness of 1.8 metres was used.
|
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.