Pele: Highland Overview

The Highland Project is located northeast of Wawa in northern Ontario, along the Goudreau-Localsh Deformation Zone (“GLDZ”), host to several past producing gold mines. Highland is 100-percent owned by Pele Gold Corporation, a wholly-owned subsidiary of the Company.

Following a systematic campaign to consolidate strategic mining claims and mineral rights within the historically-fragmented GLDZ, Pele now controls the largest group of mining claims within this prolific gold camp. Pele has drilled over 9,000 metres at Highland to date and successfully mined a 10,000-tonne bulk sample in 1999 that was transported approximately 100 kilometers to Hemlo for processing and gold recovery. With encouraging exploration results, nearby custom milling facilities, outstanding local infrastructure, and robust metals prices, Pele management believes that there is excellent potential for development of further revenue generating operations at Highland.

The 2006 summer field season has focused primarily within and along the contacts of the Gutcher Lake Stock (“GLS”), an important geological feature in the western Goudreau Lochalsh Deformation Zone (“GLDZ”). The ongoing program is pursuing the following objectives:

To delineate zones of high-grade gold mineralization near the southern contact of the GLS. (This area includes Farquhar, Bowmore, Springbank and Talisker occurrences; Murphy Mine extension.) To confirm significant gold-copper mineralization near the northern contact of the GLS. (This area includes W-8 zone, “B & C” zones and airborne geophysical anomalies “E”, “F” and “G”.) To outline the size and potential of the Talisker diamond occurrence. Surface sampling and drilling along the southern contact of the GLS has confirmed high-grade gold mineralization at multiple locations including the Farquhar, Springbank, Talisker, and Bowmore occurrences and the Murphy Gold Mine extension. Highlights of Pele’s previously reported drilling in the area are shown in the following table.

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Highlights of historic drilling at Farquhar and Murphy Gold Mine extension are reported in the following table.

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Highlights from historic sampling in underground adits at W-8 and B & C gold-copper zones are reported in the following table.

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Drill core from more than 30 holes testing gold and gold-copper occurrences is in the process of being sawed, logged, sampled and submitted for assay, including 19 from Farquhar, 5 from Talisker, 2 each from W-8, and “B & C”, and one each from anomalies “E”, “F”, and “G” identified by an airborne geophysical survey flown over the entire GLS earlier this year. Most of the recent holes were planned to test high-grade gold zones where the host rocks are amenable to processing at nearby milling facilities. Recent drilling at Farquhar has tested the mineralized zone below high-grade gold-bearing surface trenches at depths of up to 80 metres and along strike for over 300 metres. Drilling continues at Highland near the southern contact of the GLS.

Five HQ-size holes have been drilled at the Talisker diamond discovery, with the resulting 1,300 kilograms of core shipped to Saskatchewan Research Council where it is being processed by caustic digestion to recover diamonds larger than 425-micron square mesh sieve size. The occurrence has been drill-tested along a strike length of over 1,100 metres, to a depth of over 100 metres, and is open in all directions.