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, Sept. 7, 2011 /CNW/ -- 

Trading Symbol:      TSX Venture : GEM
                     OTCQX :   GOLDF

Shares Outstanding:  133,938,746

TORONTO, Sept. 7, 2011 /CNW/ - Pele Mountain Resources Inc. (TSX
Venture: GEM) (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 REO( )and
        24.9-million pounds of U(3)O(8) 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 U(3)O(8) is greater than operating costs for both
        U(3)O(8) and REO combined. Therefore REO operating costs are
        zero net of U(3)O(8).
    --  Operating costs of $16 per pound U(3)O(8), 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
        mineral( )recoveries 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 U(3)O(8), compared to US$85 per lb U(3)O(8)).  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 U(3)O(8 )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 U(3)O(8) 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 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 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 U(3)O(8).  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.

To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/September2011/07/c8932.html

please contact Al Shefsky, President, at (800) 315-7353, or visit the Pele website at www.pelemountain.com