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Pele Mountain releases resource estimate at Elliot Lake


2007-01-16 14:42 ET - News Release

Mr. Al Shefsky reports

PELE MOUNTAIN REPORTS NI 43-101 MINERAL RESOURCE OF 33 MILLION POUNDS URANIUM OXIDE AT ELLIOT LAKE

Pele Mountain Resources Inc. has received and filed on SEDAR a National Instrument 43-101-compliant technical report on its Elliot Lake uranium project in Northern Ontario, authored by Scott Wilson Roscoe Postle Associates (Scott Wilson RPA), dated Jan. 15, 2007. Highlights of the report include:


a mineral resource estimate of 30.05 million tonnes grading 0.05 per cent uranium oxide (U3O8), or one pound per short ton, for a total inferred resource containing 33.05 million pounds U3O8 (based on a cut-off grade(1) of 0.03 per cent U3O8 and a minimum mining width of 2.44 metres, or eight feet). The mineral resource estimate is based on a database of 70 drill holes in the Main conglomerate bed. Drill hole spacing was variable, mostly in the order of 100 metres to 400 metres. The resource estimate used a nearest neighbour block model method, equivalent to a polygonal method;
very good potential to increase the mineral resources in drill-tested extensions of the main conglomerate bed that could contain a potential mineral deposit of 25 million to 30 million tonnes at grades ranging from 0.04 per cent U3O8 to 0.05 per cent U3O8(2); and
additional resource potential in the mineralized Basal and Upper conglomerate beds and in the lower-grade hangingwall of the Main conglomerate bed.

Scott Wilson RPA has included in the report recommendations for a two-stage program to advance the project through a preliminary feasibility study:


The first stage includes an economic analysis of the potential viability of mineral resources (a preliminary assessment) and calls for additional data compilation, mapping, drilling, metallurgical and leach testing, and resource modelling, along with early stage studies of permitting requirements and of mine development and processing options. Estimated costs of the first-stage program are $830,000.
Upon the successful completion of the first stage, a preliminary feasibility study will be undertaken as a comprehensive study of the viability of mineral resources. Estimated costs of the second-stage program are $4.5-million.

Scott Wilson RPA has also included in the report recommendations to pursue additional opportunities to increase project revenue and decrease costs for a potential uranium mining and processing operation. These four key opportunities involve assessments of:


the technical and economic viability of recovering rare earth oxides and the production of marketable products;
the mining and underground leaching of the lower-grade mineralization in the hangingwall of the Main conglomerate bed;
the viability of using surface heap leaching as an alternative to conventional milling; and
the potential to mine higher-grade, near-surface portions of the deposit early in the project life.

Pele president and chief executive officer Al Shefsky stated: "This report transforms Pele Mountain Resources. It has advanced our Elliot Lake project to the evaluation stage, outlining an inferred mineral resource with an in situ value well in excess of $2.5-billion and very good potential for expansion. Our shareholders now own a 100-per-cent interest in a vast resource of uranium oxide at a time when global demand is surging at an unprecedented rate. We are committed to advancing the project systematically according to the road map provided in the Scott Wilson RPA report. A drill crew and technical personnel have been mobilized to the project to begin implementation of its recommendations."

Please visit Pele Mountain's website or SEDAR to view the report.

This press release has been reviewed and approved by Robert MacGregor, PEng, an independent qualified person with 14 years experience working in the Elliot Lake area during its time as an active uranium mining camp. Any disclosure in this press release pertaining to the report has been reviewed and approved by Lawrence B. Cochrane, PhD, PEng, and William E. Roscoe, PhD, PEng, the authors of the Scott Wilson RPA report, each being a "qualified person" under National Instrument 43-101.

We seek Safe Harbor.