Pele Mountain Closes Highland Project Sale Agreement; Will Focus on Eco Ridge Mine Rare Earths and Uranium Project

TORONTO, ONTARIO -- (Marketwire) -- 05/15/12 -- Pele Mountain Resources Inc. (TSX VENTURE: GEM)(OTCQX: GOLDF) ("Pele" or the "Company") announced today that it has closed the first of two previously announced (April 17, 2012) agreements relating to the sale of its Highland Gold projects ("Highland" or the "Project") to a wholly-owned subsidiary of Prodigy Gold Inc. (TSX VENTURE: PDG) ("Prodigy") for cash totalling $1.775-million and a net smelter return ("NSR") royalty on certain portions of the Project.

Pele President and CEO Al Shefsky stated, "Our updated Preliminary Economic Assessment for Eco Ridge demonstrates that Pele is one of the clear leaders in the ongoing race to develop new sources of critical rare earths outside of China. We are currently preparing our updated Project Description, which is already well advanced, and is the lead document required to begin the licensing process. The divestiture of Highland will allow us to better focus our efforts on advancing development at Eco Ridge."

Prodigy and its wholly-owned subsidiary, Golden Goose Resources Inc. ("Golden Goose") have acquired from Pele's wholly-owned subsidiary, Pele Gold Inc. ("Pele Gold"), certain Crown leases and patented and unpatented mining claims comprising the vast majority of Pele's Highland Gold projects located in the district of Sault St. Marie, Ontario at a total purchase price of $1,775,000, of which $100,000 has been placed in escrow pending the closing of the second sale agreement for the Licensed Area at Highland, which is expected to close later this month, for a cash consideration of $25,000.

In addition to the purchase price, Pele Gold has retained a net smelter return royalty ("NSR") in respect of certain areas of the Highland Project ranging from 1.0 to 1.5-percent, subject to Golden Goose's right to acquire between 0.5 and 1.0-percent of that NSR upon payment to Pele Gold of $1-million in the aggregate, reducing Pele Gold's remaining NSR over various portions of the Highland Gold Project to a range between 0.5 to 1.0-percent. Golden Goose has assumed all royalty and other obligations under existing agreements and arrangements affecting the Highland Gold projects arising from and after the closing date.

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 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 the development of a safe, secure, and reliable long-term supply of critical rare earths and uranium. Pele has also entered into an agreement to purchase the Simon Rare Earth Claims in Mountain Pass, California. Pele's shares are listed on the TSX Venture Exchange under the symbol "GEM" and on the OTCQX under the symbol "GOLDF".

For further information please visit the Pele website at www.pelemountain.com.

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.

Shares Outstanding: 148,951,246

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.

Contacts:

Pele Mountain Resources Inc.

Al Shefsky

President

(800) 315-7353
www.pelemountain.com