Pele is focused on developing its 100-percent owned Eco Ridge Mine, an underground uranium mine and processing facility near Elliot Lake in Northern Ontario. In October 2007, Pele received a positive Scoping Study which outlined a NI 43-101 compliant resource of 6.4 million pounds of "indicated" U₃O₈ (5.68 million tonnes grading 0.051-percent U₃O₈) and 36.1 million pounds of "inferred" U₃O₈ (37.26 million tonnes grading 0.044-percent U₃O₈) and which provided the basis for an economically-viable, environmentally-compliant uranium mining and processing operation.¹

In September 2008, Pele commenced the permitting process at Eco Ridge by filing a Project Description with the Canadian Nuclear Safety Commission and the Federal Government's Major Project Management Office. The document details Pele's approach to sustainable development. The mining, processing, and waste management plans make innovative use of proven technologies to build a modern, state-of-the-science facility, significantly more advanced and environmentally-friendly than historic operations in the Elliot Lake camp.

The underground mine will be developed by ramps from surface, using trackless development and longhole slashing to leave more than 60-percent of the broken ore underground within designed containments for bioleaching. Underground bioleaching was used extensively for commercial uranium production in the Elliot Lake camp during the 1980s and 1990s.

The balance of development material (less than 40-percent) will be trucked to surface and deposited on a heap leach facility ("HLF"). The leach cells will be designed to fully contain the leach solutions and to allow for progressive decommissioning. The HLF will be operated, decommissioned, and reclaimed using methods successfully employed at other modern mine sites around the world. No tailings pond will be required at Eco Ridge.

Environmental impact will also be minimized by relying on underground and surface bioleaching and through a processing operation that recycles leachate in a closed circuit until it is piped to the uranium recovery facility where it will be clarified and processed in a solvent extraction circuit. The uranium will then be extracted in a stripping circuit, and then washed, dried, and packed into drums for shipment. Preliminary analysis of this design indicates that the Eco Ridge Mine can be operated in a manner that generates no liquid effluent requiring treatment.

Several important milestones were achieved at Eco Ridge during the past year, including:

• Submission of a Project Description to regulatory authorities. More than 15,000 metres of diamond drilling to upgrade U₃O₈ resources.
  
• Alternative tailings disposal studies, leading to an innovative closed circuit processing plan. Geotechnical and hydrogeological testing of proposed heap leach pad site and processing plant site.
  
• Preliminary leach pad design and plantsite design by SNC-Lavalin.
  
• Metallurgical testing on a 200-kilogram sample.
  
• Detailed variographic analysis of the Main Conglomerate Bed.
  
• A scoping level hydrogeology study of the proposed mining area.
  
• Aquatic and terrestrial environmental assessments.
  
• Continuing productive dialogue and communication with First Nations and the City of Elliot Lake.

Ongoing studies, led by SRK Consulting in collaboration with SNC-Lavalin, will optimize mining, processing, and waste management methods for inclusion in a Pre-Feasibility Study at Eco Ridge. In response to difficult market conditions, particularly a declining uranium price trend and the ongoing crises in the credit and equity markets, project timelines regarding the Pre-Feasibility Study and certain components of the permitting process will be delayed.

With its excellent regional infrastructure, well-understood geology, and politically-stable and mining-friendly jurisdiction, Elliot Lake is an ideal location for the development of a long-term uranium supply. More than 300 million pounds of U₃O₈ were mined from similar deposits near Elliot Lake by Rio Algom and Denison Mines from 1956 to 1996.

¹The Scoping Study is preliminary in nature and includes both indicated and inferred mineral resources. Inferred mineral resources are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the preliminary assessment will be realized.