Pele Mountain Drilling Expands Eco Ridge Deposit Northward, Demonstrates Significant Rare Earth Mineralization Outside of Main Conglomerate Bed
TORONTO, Sept. 12, 2011 /CNW/ --
Trading Symbol: TSX Venture : GEM
OTCQX : GOLDF
Shares Outstanding: 133,938,746
TORONTO, Sept. 12, 2011 /CNW/ - Pele Mountain Resources Inc. (TSXV: GEM) (OTCQX: GOLDF) ('Pele' or the 'Company') today announced results from the recent 7,000-metre drill program at
its Eco Ridge Mine Rare Earths and Uranium Project ('Eco Ridge' or the 'Project') in Elliot Lake, Ontario.
Core from 23 intercepts of the Main Conglomerate Bed ('MCB') (of 24 holes drilled) from June to July 2011 returned results typical
of the Eco Ridge deposit, averaging 0.142-percent rare earth oxides ('REO') and 0.040-percent uranium oxide ('U(3)O(8)') over an estimated true thickness of 3.16 metres. The 2011 drill
program included four step-out holes, each more than 200 metres
down-dip of the existing resource, revealing that the deposit continues
to the north into a previously untested area. The program also
included 20 infill holes drilled within the existing resource in order
to upgrade Inferred resources to Indicated resources. The program
again demonstrated the remarkable consistency of the MCB over vast
areas. The Eco Ridge MCB, hosted by the quartzitic Ryan Member, is a
shallow dipping reef that has now been successfully drill-tested across
an east-west strike length of more than 5 kilometres and a north-south
dip extension of 2 kilometres.
The table below summarizes the MCB intercepts from Pele's 2011 drill
program at Eco Ridge. To view complete assay results, please click
here http://www.pelemountain.com/pdfs/DrillResultsAugust2011.pdf
Core Estimated Total U(3)O
Hole From Length True REO (8)
ID (m) (m) Width (m) (%) (%)
PM190 450.60 5.13 4.36 0.022 0.042
PM191 247.20 4.30 3.54 0.163 0.035
PM192 238.72 3.96 3.39 0.156 0.042
PM193b 563.74 3.19 3.10 0.186 0.057
PM194 235.17 3.11 2.67 0.192 0.048
PM195 310.88 3.27 3.23 0.168 0.047
PM197 339.92 4.24 3.44 0.155 0.045
PM198 627.17 3.41 3.40 0.151 0.052
PM199 160.86 2.48 2.39 0.215 0.040
PM200 180.60 4.12 3.83 0.019 0.035
PM201 164.70 3.14 3.06 0.157 0.037
PM202 217.76 3.29 2.81 0.152 0.040
PM203 432.52 3.03 2.59 0.129 0.028
PM204 214.05 4.14 3.84 0.127 0.030
PM205 174.55 3.89 3.73 0.137 0.028
PM206 289.84 2.96 2.90 0.125 0.042
PM207 172.49 3.44 3.42 0.151 0.032
PM208 286.07 3.21 2.99 0.150 0.051
PM209 165.98 3.20 3.13 0.165 0.035
PM210 122.69 2.67 2.62 0.147 0.028
PM211 235.83 4.02 3.11 0.138 0.044
PM212 118.24 2.92 2.85 0.174 0.044
PM213 141.00 2.47 2.16 0.204 0.048
Notes:
1. Light rare earth oxide (LREO) includes La(2)O(3), CeO(2), Pr(6)O
(11), Nd(2)O(3), Sm(2)O(3)
2. Heavy rare earth oxide (HREO) includes Eu(2)O(3), Gd(2)O(3), Tb
(4)O(7), Dy(2)O(3), Ho(2)O(3), Er(2)O(3), Tm(2)O(3), Yb(2)O(3),
and Lu(2)O(3). Y(2)O(3) and Sc(2)O(3) are also included in HREO
3. Total rare earth oxides include LREO and HREO.
The drill program also demonstrated the presence of widespread rare
earth mineralization outside the MCB. All mineral resources reported
at Eco Ridge to-date are from within the MCB only. The presence of
wide zones of REO mineralization outside of the MCB has the potential
to substantially increase mineral resources and positively impact
project economics at Eco Ridge.
Pele President and CEO Al Shefsky stated, 'For five years, we have
worked to unlock the REO potential at Eco Ridge. Given the production
history of Elliot Lake, where REO were produced as by-products of
primary uranium mines, our approach until recently has been to follow
this precedent. However, with the repricing of REO and the prospect
for long-term shortages of certain critical REO, we are taking a fresh
look at Eco Ridge and its potential as a primary REO mine. Results
from our recent drill program suggest that there is excellent potential
to demonstrate additional REO content in areas we have already drilled,
possibly improving upon the already promising economic forecast
presented in our Prelimary Economic Assessment. We have securely
stored all of the more than 37 kilometres of our previously-drilled
core and have assembled an experienced technical team, including RPA,
to implement this program. We are very excited about our expanded core
sampling program at Eco Ridge.'
Core sampling outside of the MCB was not comprehensive because sampling
limits have historically been determined by focusing on optimizing the
U(3)O(8) mineralization, not REO mineralization. In view of the increasing
importance of rare earths, and the fact that there is more than 3 times
as much REO as U(3)O(8) at Eco Ridge, Pele is assessing changes to this legacy practice.
Comparisons that follow are relative to the average grade and thickness
of the Indicated Resources at Eco Ridge ('Ind-MCB') as estimated by Roscoe Postle Associates ('RPA'). The Ind-MCB is 0.164-percent Total REO and 0.048-percent U(3)O(8) over a 2.7 metre true thickness.
Drill core from the hanging wall above the MCB returned assays ranging
from 0.056-percent Total REO (34-percent of Ind-MCB grade) over a 0.45
metre true thickness (Hole PM191) to 0.096-percent Total REO
(59-percent of Ind-MCB grade) over a 10.04 metre true thickness (Hole
PM193). Overall, the hanging wall samples averaged nearly 50-percent
of Ind-MCB grades for Total REO and more than 20-percent of Ind-MCB
grade for U(3)O(8) with all samples ending in mineralization. Limited sampling of drill
core taken directly below the Ryan Member demonstrates REO presence
within Basement meta volcanics at similar grades over sampled widths of
less than 1 metre, with all sampling ending in mineralization.
These results clearly demonstrate the presence of significant REO
mineralization outside of the MCB and have prompted Pele to launch a
staged program designed to expand the sampling range of recent and
historic Pele drill core. The program has begun with expanded sampling
on 14 holes from across the deposit including the MCB hanging wall from
Hole PM07-14 from Pele's 2007 drilling at Eco Ridge.
Assays from Drill Hole PM07-14 (from 2007)
_____________________________________________________________________
| Layer | From | True Width | Total REO | U(3)O(8)( )( )|
| | (m) | (m) | (%) | (%) |
|__________________|________|____________|___________|________________|
| MCB Hanging Wall | 70.93 | 10.48 | 0.080 | 0.010 |
|__________________|________|____________|___________|________________|
| MCB* | 82.48 | 3.24 | 0.223 | 0.056 |
|__________________|________|____________|___________|________________|
| Combined Total | 70.93 | 13.72 | 0.114 | 0.021 |
|__________________|________|____________|___________|________________|
* reported previously
For Hole PM07-14, the sampled portion of the MCB hanging wall averaged
approximately 49-percent of Ind-MCB grades for REO and approximately
21-percent of Ind-MCB grades for U(3)O(8) over a total thickness 5 times wider than the Ind-MCB, representing a
substantial increase in total mineralization.
The objective of Pele's expanded core sampling program is to evaluate
the vertical extent of REO mineralization at Eco Ridge. Core sampling
in the Elliot Lake camp has historically been designed for testing the
limits of the U(3)O(8) mineralization and not REO mineralization. Accordingly, the program
now underway will systematically test considerable wall rock above and
below the MCB to determine the extent of the REO mineralization for the
first time. As reported with the Eco Ridge Preliminary Economic
Assessment(1) ('PEA'), RPA regards the expansion of mineral resources as a potential
opportunity to improve project economics at Eco Ridge.
Based on oxide price and recovery assumptions detailed in the PEA,
forecast revenue at Eco Ridge now consists of 61-percent from U(3)O(8) and 39-percent from REO. Approximately 59-percent of the REO revenue
component is forecast from just three REO: dysprosium ('Dy(2)O(3)'), neodymium ('Nd(2)O(3)'), and yttrium ('Y(2)O(3)'). Drill results for U(3)O(8) and these 'big three' REO are reported in the table below.
Dy Nd
Core Estimated (2)O (2)O Y(2)O
Hole From Length True (3) (3) (3)
ID (m) (m) Width (m) (g/t) (g/t) (g/t)
PM190 450.60 5.13 4.36 11 28 50
PM191 247.20 4.30 3.54 15 244 70
PM192 238.72 3.96 3.39 16 238 74
PM193b 563.74 3.19 3.10 21 264 87
PM194 235.17 3.11 2.67 19 265 93
PM195 310.88 3.27 3.23 17 230 81
PM197 339.92 4.24 3.44 15 215 69
PM198 627.17 3.41 3.40 16 216 74
PM199 160.86 2.48 2.39 18 308 87
PM200 180.60 4.12 3.83 9 26 51
PM201 164.70 3.14 3.06 16 226 74
PM202 217.76 3.29 2.81 15 224 74
PM203 432.52 3.03 2.59 12 191 55
PM204 214.05 4.14 3.84 13 185 62
PM205 174.55 3.89 3.73 13 201 60
PM206 289.84 2.96 2.90 14 182 61
PM207 172.49 3.44 3.42 15 220 67
PM208 286.07 3.21 2.99 17 217 74
PM209 165.98 3.20 3.13 16 242 70
PM210 122.69 2.67 2.62 14 207 63
PM211 235.83 4.02 3.11 14 196 63
PM212 118.24 2.92 2.85 18 241 81
PM213 141.00 2.47 2.16 22 284 98
Pele's Eco Ridge PEA, prepared by RPA, and based solely on the
mineralization within the MCB, demonstrates Pele's potential to become
a profitable producer of REO and U(3)O(8.) The PEA base case forecasts cumulative 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 with pre-tax cash flow of US$1.28-billion, a
positive NPV of $644-million (at a 7.5% discount rate), and an IRR of
45-percent.(1) Among aspiring Canadian REO producers, Pele's forecast operating costs
at Eco Ridge are, by far, the lowest at just $46 per tonne. For more
details on the PEA, please see Pele's press release dated September 7, 2011.
The Resource Wireframe at Eco Ridge currently contains 14.3-million
tonnes of Indicated resources plus 33.1-million tonnes of Inferred
resources. The deposit extends to the north and east, beyond the
Resource Wireframe boundaries. Based on historical wide-spaced
drilling and extrapolation of the resource area, RPA has estimated that
these extensions could contain an additional 30 to 50 million tonnes
grading from 0.03 to 0.05-percent U(3)O(8) and 0.12 to 0.18-percent Total REO as a target for further exploration(2). The step-out holes reported today were drilled to the north of the
Resource Wireframe and outside of the boundaries of the target area.
Drill core samples were analyzed at Activation Laboratories Ltd., an
independent and ISO 17025 accredited laboratory. The Company performs
routine Quality Assurance and Quality Control procedures on laboratory
assay results.
The technical information contained in this press release has been
reviewed and approved by Tudorel Ciuculescu, P.Geo of RPA, an
independent Qualified Person under NI 43-101.
About Pele
Pele Mountain Resources, a leader in Canadian rare earth 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 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'.
1. 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.
2. The potential quantity and grade of the target area is 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.
To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/September2011/12/c9993.html
Al Shefsky, President, at (800) 315-7353, or visit the Pele website at www.pelemountain.com