Updated Preliminary Economic Assessment on Schedule for Q1 2012 Delivery at Pele's Eco Ridge Mine Rare Earths and Uranium Project

TORONTO, ONTARIO -- (Marketwire) -- 01/31/12 -- Pele Mountain Resources Inc. (TSX VENTURE: GEM)(OTCQX: GOLDF) ('Pele' or the 'Company') today provided an update on its Eco Ridge Mine Rare Earths and Uranium Project ('Eco Ridge' or the 'Project') in Elliot Lake, Ontario. Pele reports significant progress toward the completion of its updated Preliminary Economic Assessment ('PEA'), which will feature an updated resource estimate and an all-new processing circuit designed to optimize the recovery of critical rare earth oxides ('REO').

Updated PEA

The updated PEA, being prepared by Roscoe Postle Associates ('RPA'), will include revised mining and processing plans along with updated operating and capital cost estimates in an all-new economic model. The new mining plan will include additional material from mineralized zones discovered in 2011. (See more details below.) The new processing plan features acid baking, a well-established process for extracting REO from monazite, the primary REO-bearing mineral at Eco Ridge.

As summarized in Pele's press release dated November 23, 2011, successful preliminary bench-scale testing has demonstrated an opportunity to significantly increase REO recovery compared to Pele's July 2011 PEA. Acid baking tests on pulps from drill core show the potential for mineral recovery improvements of up to 10-fold for Light REO such as neodymium oxide and more than double for Heavy REO such as dysprosium and yttrium oxides, as compared to the 2011 PEA which relied on heap leach and bioleach methods.

The new processing circuit includes crushing, grinding, and ore concentration prior to acid-baking. Preliminary bench-scale testing has demonstrated that more than 90-percent recovery of total REO can be concentrated into just 20-percent of the initial ore mass, a step that will lessen processing costs substantially by reducing the amount of material subjected to acid baking.

Updated Mineral Resource

Pele has completed its second phase core resampling program which increased the sampling range for 165 previously drilled holes from the base of the Main Conglomerate Bed ('MCB') into the Hanging Wall to approximately 25 metres. All assays have been received and are being compiled into an updated NI 43-101 mineral resource estimate, which will be announced together with the updated PEA.

As reported in Pele's press release dated October 13, 2011, the first phase resampling program showed that REO mineralization outside the MCB extends much farther than previously realized, with one resampled hole revealing more than 140 metres of continuous mineralization. Pele's 2011 PEA, as well as all NI 43-101 mineral resources reported at Eco Ridge to-date, are based solely on the average 2.7-metre thick MCB. The additional mineralization is expected to add considerable resources and may allow for scalability of future production rates or extended mine life.

Despite the wide zones of REO mineralization above the MCB, the proposed mining width at Eco Ridge is expected to increase only modestly in the updated PEA by including a small amount of Hanging Wall material, in addition to the MCB. This approach is intended to maintain a higher mining grade during the early development, allowing faster payback of capital costs while leaving existing permitting and mining plans largely intact.

Bulk Sample & Ongoing Metallurgical Testing

Pele recently completed the extraction of a 2,500-kilogram bulk sample using large diameter drilling at Eco Ridge. A portion of the sample is being used for ongoing bench-scale tests to optimize the crushing, grinding, ore concentration and acid baking processes. More than 2,000 kilograms of the sample have been securely stored for future pilot plant testing of the optimized process, scheduled for later this year.

The updated PEA will provide a roadmap for the Company as it transitions Eco Ridge into the feasibility and licensing stages. Eco Ridge has inherent competitive advantages that may enable its development ahead of other emerging REO development projects, including:

--  It is one of the only North American REO deposits with a positive NI 43-
    101 PEA.

--  Excellent progress toward improved recoveries and increased mineral
    resources from those reported in the 2011 PEA.

--  The presence of the most critical rare earth elements, including
    neodymium, dysprosium, and yttrium, and diversification with uranium.

--  The deposit outcrops at surface for more than four kilometres and dips
    at a shallow angle in a consistent, predictable manner over a vast area;
    geology, mineralogy, and metallurgy are well-understood.

--  Outstanding regional infrastructure is already in-place: roads, power,
    airport, and deep-water ports.

--  Enthusiastic local support for the project and a highly-qualified local
    work force.

--  Its location in a proven mining camp with more than 300-million pounds
    of historic uranium oxide ('U3O8') production and the only Canadian
    mining camp to achieve commercial REO production.

Extraordinary REO market developments over the last two years, sparked by China's reduction of export quotas, have resulted in sharply higher prices, inciting a rush to find and bring to production new sources outside of China. Eco Ridge is an ideal location for a safe, secure, and reliable long-term supply of REO and U3O8.

The technical 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 earths development, is focused on the sustainable development of its 100-percent owned Eco Ridge Mine Rare Earths and Uranium Project. Eco Ridge is one of the only North American rare earths deposits with a positive NI 43-101 Preliminary Economic Assessment and is located in Elliot Lake, the only Canadian mining camp to have ever achieved commercial REO production. 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 also holds interests in a portfolio of Northern Ontario gold properties at Highland and Ardeen. Pele's shares are listed on the TSX Venture Exchange under the symbol 'GEM' and on the OTCQX under the symbol 'GOLDF'.

1.  The PEA is preliminary in nature. It includes inferred mineral resources
    which are considered too speculative geologically to have the economic
    considerations applied to them that would enable them to be categorized
    as mineral reserves and there is no certainty that the preliminary
    economic assessment will be realized.

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