Major Rare Earth Resources Confirmed at Pele Mountains Eco Ridge Mine Project: Updated Economic Model to Include Revenue from Rare Earths for the First Time

On February 24, Pele Mountain Resources announced NI 43-101 resources of 51.9-million pounds of “Indicated” total rare earth oxides (“TREO”) plus 96.3-million pounds of “Inferred” TREO. The TREO resources are in addition to 15.2-million pounds of “Indicated” uranium oxide (“U3O8″) plus 31.4-million pounds of “Inferred” U3O8, which was announced in Pele’s press release of January 24, 2011. Pele President and CEO Al Shefsky stated, “Our new rare earth resource is exciting because it provides a potentially significant source of by-product revenue at Eco Ridge and it places Pele on a short list of emerging North American rare earth developers.”

Further reductions in export volume by China are again resulting in higher prices for rare earth elements. CNBC reported yesterday that China’s exports of rare earth metals burst through the $100,000-per-tonne mark for the first time in February, up almost nine-fold from last year, while the volume of trade remains below historical averages. Money in Metals believes this news bodes well for Pele Mountain Resources

Pele’s Eco Ridge Mine project is located in Elliot Lake, Ontario, which is the only mining camp in Canada that successfully achieved commercial production of rare earth oxides (“REO”) in the past. Additionally:

* Eco Ridge contains the full range of naturally occurring REO, including the highly valued “heavy” REO. Elliot Lake was one of the most important sources of heavy REO in North America. * The project has the potential to be a primary uranium mine that would produce REO as by-products, and would not be wholly dependent on the volatile REO market. * The mining and processing method to recover uranium at Eco Ridge will also recover REO into the leach solutions, at no extra cost.

* Eco Ridge has well-understood geology and lies within a politically stable and mining-friendly jurisdiction.

Resource estimates for individual REO are available on Pele’s website at www.pelemountain.com/pdfs/Table2_RareEarthOxides.pdf

Pele Mountain’s expert team of technical personnel, advisors, and consultants is working to optimize mining, processing, and waste management techniques at Eco Ridge and an updated Preliminary Assessment is expected in the second quarter of 2011. The Preliminary Assessment will feature a detailed economic model based on combined revenues from both U3O8 and rare earth oxides for the first time and will include design enhancements achieved since Pele’s initial Scoping Study in 2007. With globally significant uranium and rare earth resources, excellent regional infrastructure, and strong local support, Eco Ridge provides an ideal location for a safe, secure, and reliable long-term supply of these critical metals.