Pele Mountain Files Updated Preliminary Economic Assessment for Eco Ridge Mine Project, Presenting a Pathway to Renewed Production of Critical Rare Earths and Uranium at Elliot Lake, Ontario

TORONTO, ONTARIO -- (Marketwire) -- 07/04/12 -- Pele Mountain Resources Inc. (TSX VENTURE: GEM)(OTCQX: GOLDF) ("Pele" or the "Company") today announced the filing of its updated NI 43-101 Preliminary Economic Assessment (the "PEA") on its Eco Ridge Mine Rare Earths and Uranium Project ("Eco Ridge" or the "Project"). The PEA was prepared by Roscoe Postle Associates Inc. ("RPA") and demonstrates that Eco Ridge has excellent potential to become a profitable producer of rare earth oxides ("REO") and uranium oxide ("U3O8").

Since publication of its previous PEA in July 2011, Pele has pursued opportunities for processing improvements at Eco Ridge. As reported in Pele's press release dated April 16, 2012, the updated PEA demonstrates that the predominant monazite rare earth mineralogy allows for excellent recovery with acid baking methods, improving recoveries by more than 10-fold for Light REO, by more than double for Heavy REO, and by nearly 30-percent for U3O8. The projected financial benefits from sharply higher rare earth recoveries far outweigh associated capital and operating cost increases and more conservative forecast commodity pricing.

Pele President and CEO Al Shefsky stated: "Our updated PEA demonstrates that Pele is a clear leader in the ongoing race to develop new sources of critical rare earths outside of China. As development timelines continue to slip at several well-known REO projects, we believe that the competitive advantages of Eco Ridge are increasingly apparent and attractive. We are pleased to publish our updated PEA and anticipate completing our updated Project Description during the current quarter in preparation for commencement of the licencing process."

Eco Ridge has competitive advantages that may enable its development ahead of other REO projects, including:

--  Its location in Elliot Lake, a proven mining camp with outstanding
    regional infrastructure including roads, railway, power, natural gas,
    airport, and deep-water ports. Elliot Lake has produced more than 300-
    million pounds of U3O8 and is the only Canadian mining camp to have
    achieved commercial REO production.
--  Pele's world-class development team, led by Roger Payne P. Eng., former
    General Manager for Rio Algom, and includes RPA, SNC-Lavalin Inc., SENES
    Consultants Limited, and Golder Associates Ltd., which have extensive
    experience with licensing, operating and decommissioning mines in Elliot
    Lake.
--  A pending update to its Project Description, and a potential target for
    a licence to construct the mine in 2015. Eco Ridge has no known
    environmental liabilities and enjoys enthusiastic local support.
--  Its status as one of the few North American REO deposits with a positive
    NI 43-101 compliant PEA.
--  Two-thirds of projected Project revenue is from REO; nearly 80-percent
    of REO revenue is from Heavy REO plus Nd2O3 with significant
    diversification from U3O8.
--  Well-understood monazite rare earth mineralogy and metallurgy, allowing
    for excellent recovery with acid baking methods.

Operational highlights of the updated PEA include:

--  9,000-tonne per day operation with life-of-mine production of 97.2-
    million lbs. of total REO (in the form of a mixed rare earth carbonate
    concentrate) and 27.5-million pounds of U3O8 over an 11-year mine life;
--  Production of a strategically significant combination of rare earths
    forecast to remain in supply deficit, with 85-percent of Project revenue
    from Heavy REO, neodymium oxide (Nd2O3) and U3O8.
--  Life-of-mine production includes 14.2-million lbs. of Nd2O3, 882,000
    lbs. of dysprosium oxide (Dy2O3), 4.1-million lbs. of yttrium oxide
    (Y2O3) and significant quantities of terbium and europium oxides,
    providing a vital source of Critical REO outside China.
--  Light REO recoveries average 89-percent, Heavy REO recoveries average
    78-percent, and U3O8 recovery averages 90-percent;
--  Accelerated capital payback with initial mining within a higher-grade
    channel; Year 1 production is expected to exceed average life-of-mine
    grades by approximately 40-percent.
--  Increased mineral resources include recently drilled lateral extensions
    of the Main Conglomerate Bed ("MCB") and new Hanging Wall Zone ("HWZ").

Financial highlights of the updated PEA include (all terms in US$):

--  For an 11-year mine life, Cumulative total gross revenue of $5.90-
    billion; Cumulative operating cash flow of $2.83-billion; Cumulative
    pre-tax cash flow of $2.16-billion;
--  NPV of $1.02-billion (at a 10-percent discount rate); IRR of 50-percent;
--  Start up capital expenditures of $563-million (includes contingency of
    $108-million);
--  $535-million of processing fees included for separation of rare earth
    concentrates into individual oxides;
--  REO basket price of $78 per kg for individual oxides net of separation
    costs and U3O8 price of $70 per pound are far more conservative than
    price forecasts in 2011 PEA;
--  67-percent of Project revenue from REO; Nearly 80-percent of REO revenue
    from Heavy REO plus Nd2O3.
--  Operating unit cost of $71.33 per tonne or $13.09 per kg ($5.94 per lb)
    Total REO, net of U3O8 credits.
--  Before-tax payback period of 1.5 years from commencement of commercial
    production.

The economic analysis is based, in part, on Inferred Resources, and is preliminary in nature. Inferred Resources are considered too geologically speculative to have mining and economic considerations applied to them and to be categorized as Mineral Reserves. There is no certainty that economic forecasts on which this Preliminary Economic Assessment is based will be realized.

An extended mine life sensitivity analysis demonstrates the economic potential of a longer mine life at Eco Ridge. RPA examined the effect of extending the mine life with the inclusion an additional 50 million tonnes of production material from the MCB. At a 9000 tonne per day production rate, the mine life is extended to 25 years and the resulting Project NPV is C$1.7 billion (at a 10% discount rate) and the IRR is 51-percent. At a 12,000 tonne per day production rate, the mine life is extended to 20 years, the NPV is C$2.1 billion (at a 10% discount rate) and the IRR is 53%.

For additional details regarding the updated PEA, please see Pele's press release dated April 16, 2012. To view or download the entire PEA, please visit Pele's website at www.pelemountain.com.

Pele is committed to the pursuit of sustainable development in Elliot Lake and seeks to provide long-term benefits to local communities. The Pele Board, management team, and staff offer their deepest condolences and unwavering support to the people of Elliot Lake as the community recovers from the recent Algo Centre Mall tragedy.

The technical and economic information relating to the PEA contained 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. This press release has been reviewed and approved by Roger Payne P. Eng., Pele's Executive Vice President and a 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 located in Elliot Lake, the only Canadian mining camp to have ever achieved commercial REO production. At one time, Elliot Lake supplied 35-percent of the world's yttrium. 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 U3O8. 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".

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