Pele's development team at its 100-percent owned Eco Ridge Mine Rare Earths and Uranium Project is led by Pele's Executive Vice-President Roger Payne P. Eng. and includes Rare Metals Advisors Drs. Tony Mariano and William Bird along with several highly qualified consulting firms including Roscoe Postle Associates ("RPA"), SNC Lavalin, SENES Consultants Limited, and Golder Associates Ltd.  Pele is assembling a world-class technical team in preparation for mine development at Eco Ridge.

Pele began staking near Elliot Lake in 2005, when the uranium price was just $20 per pound.  The Elliot Lake mining camp produced more than 300-million pounds of uranium, along with significant quantities of rare earth oxides ("REO"), from the region's stratigraphically-bound conglomerate deposits between 1955 and 1996.  The Elliot Lake camp was once known as "the uranium capital of the world" and was the only mining camp in Canada that ever produced rare earth oxides commercially.

In 2007, RPA published a positive Scoping Study for the Project which provided the basis for an economically-viable, environmentally-compliant mining and processing operation.  Since 2007, Pele has pursued opportunities to improve project economics at Eco Ridge, culminating in the recent completion of an updated NI 43-101 Preliminary Economic Assessment ("PEA").  The PEA incorporated design enhancements achieved since 2007 and, for the first time, provided a robust economic model based on revenues from both REO and uranium oxide ("U₃O₈"). 

Sharp price increases in REO, caused by surging global demand and uncertain future supply, has led to new initiatives focused on transforming Eco Ridge from a uranium-focused to an REO-focused project.  Recently announced processing design improvements have resulted in sharply higher recoveries of critical REO in bench-scale testing, presenting opportunities to improve upon the PEA and place significantly greater emphasis on REO production than was envisioned previously. 

Pele is rapidly advancing work to realize these opportunities and, together with its technical team, has reached the following decisions, as reported in its press release dated November 23, 2011:

• The modified processing flow chart has been optimized for REO recovery and will include acid baking rather than the heap leach and bioleach methods proposed in the PEA. Acid-baking is a well-established process for extracting REO from monazite, the primary REO-bearing mineral at Eco Ridge, and can improve recoveries by up to 10-fold for Light REO such as neodymium oxide and more than double for Heavy REO such as dysprosium and yttrium oxides.
• The modified processing flow chart will also include crushing, grinding, and ore concentration using magnetic separation and floatation prior to acid-baking.  Bench-scale testing has demonstrated that more than 90-percent of total REO can be concentrated into just 20-percent of the initial ore mass.  Physically concentrating the ore will reduce acid baking costs substantially.
• The mining width may increase modestly beyond the average 2.7 metres used in the PEA by including material from the Hanging Wall in addition to the Main Conglomerate Bed ("MCB").  This approach will maintain a higher mining grade allowing faster payback of capital costs while leaving existing permitting and mining plans largely intact.
• An updated PEA, incorporating these modifications, is expected during Q1 2012.
• Given the success in optimizing the processing flow chart and the excellent recoveries established in the bench-scale tests to-date, Pele is preparing to conduct larger-scale bench testing and pilot plant operations during the first half of 2012.

Pele recently discovered that REO mineralization outside the MCB extends much farther than previously realized, with one resampled drill hole revealing more than 140 metres of continuous mineralization. Pele has commenced the second phase of its core resampling program which will increase the sampling range from the base of the MCB into the Hanging Wall to at least 25 metres for 165 previously drilled holes at Eco Ridge, and will be used to support an updated mineral resource calculation for the Project. The additional Hanging Wall mineralization is expected to add considerable resources and will allow for scalability of future production rates. Pele's recently announced PEA for Eco Ridge, as well as all of the NI 43-101 mineral resources reported at Eco Ridge to-date, are from within the MCB alone.

Estimated mineral recoveries shown in the table below for both the PEA Base Case and a "Recovery Upside Scenario" (as presented in the PEA) based on a relatively conservative assumption of 80-percent recovery with an acid baking process. These estimated recoveries are based on resources in the MCB only and do not account for mineralization contributions from the Hanging Wall or the down dip extension of the deposit discovered in the recent drill program.

Scoping-level studies are underway to estimate operating and capital costs based on significantly higher recovery rates achieved with acid-baking. These studies will be used to support a new economic model that will be announced in an updated PEA during the first quarter of 2012.

Pele continues 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 at www.pelemountain.com/pdfs/ProjectPermittingSchedule.pdf.

The Project has no known environmental liabilities and enjoys strong local support. The Province of Ontario has granted two renewable 21-year mining leases at Eco Ridge, 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 has also granted Pele a renewable 21-year lease with a conditional option to purchase the City's surface patents. Both the mining leases and the City lease allow for siting of project infrastructure like mine portals and processing facilities.

Pele places great value on community relations and has maintained friendly and productive dialogue with local First Nations and the City of Elliot Lake since the inception of the Eco Ridge Mine project. Pele is committed to sustainable development and seeks to provide long-term benefits to its shareholders and the communities in proximity to Eco Ridge.