Pele Mountain Enters Agreement to Sell Highland Gold Projects; Will Focus on Eco Ridge Mine Rare Earths and Uranium Project

TORONTO, ONTARIO -- (Marketwire) -- 04/17/12 -- Pele Mountain Resources Inc. (TSX VENTURE: GEM)(OTCQX: GOLDF) ("Pele" or the "Company") announced today that it has entered into a binding agreement to sell its Highland Gold projects ("Highland" or the "Project") to a wholly-owned subsidiary of Prodigy Gold Inc. (TSX VENTURE: PDG) ("Prodigy") for cash totalling $1.8-million and a net smelter return ("NSR") royalty on certain portions of the Project.

Pele President and CEO Al Shefsky stated, "Our updated Preliminary Economic Assessment for Eco Ridge demonstrates that Pele is one of the clear leaders in the ongoing race to develop new sources of critical rare earths outside of China. The divestiture of Highland will allow Pele to better focus its efforts on advancing development at our Eco Ridge Mine Rare Earths and Uranium Project. Prodigy is well positioned to add value at Highland and to maximize Pele's ongoing interests in potential future production through our continuing royalties on the Project. We wish Prodigy every success in its efforts to develop the Magino Gold Mine and the surrounding area including Highland."

A purchase and sale Agreement was entered into with Prodigy and its wholly-owned subsidiary, Golden Goose Resources Inc. ("Golden Goose"), pursuant to which Golden Goose will acquire from Pele's wholly-owned subsidiary, Pele Gold Inc. ("Pele Gold"), certain Crown leases and patented and unpatented mining claims comprising Pele's Highland Gold projects located in the district of Sault St. Marie, Ontario at a total purchase price of $1,775,000. In a separate but related agreement among the same parties, Golden Goose will also acquire from Pele Gold for a purchase price of $25,000 its interest in a license agreement between Pele Gold and 3011651 Nova Scotia Limited, trading as Cedar Falls Forest Resources, pursuant to which Cedar Falls Forest Resources has licensed certain rights to Pele Gold in respect of lands situated in the Township of Abotossaway, District of Algoma, Ontario.

The purchase price under both agreements is payable by Golden Goose in cash and completion of the purchase and sale transactions remain subject to standard closing conditions for transactions of this nature, including obtaining all necessary third party and governmental consents and approvals. In addition to the purchase price, Pele Gold will retain a net smelter return royalty ("NSR") in respect of certain areas of the Highland Gold Project ranging from 1.0 to 1.5-percent, subject to Golden Goose's right to acquire between 0.5 and 1.0-percent of that NSR upon payment to Pele Gold of $1-million in the aggregate, reducing Pele Gold's remaining NSR over various portions of the Highland Gold Project to a range between 0.5 to 1.0-percent. Golden Goose will also assume all royalty and other obligations under existing agreements and arrangements affecting the Highland Gold projects arising from and after the closing date.

The parties are hopeful of satisfying the closing conditions and completing the purchase and sale transaction within the next 45 days, but have provided for an outside closing date of October 31, 2012 in the event that closing conditions such as obtaining third party and governmental consents and approvals take longer than expected to satisfy.

About Pele

Pele Mountain Resources, a leader in Canadian rare earth development, is focused on the sustainable development of its 100-percent owned Eco Ridge Mine Rare Earths and Uranium Project. Eco Ridge is located in Elliot Lake, the only Canadian mining camp to have ever achieved commercial rare earth production. With well-understood geology, mineralogy, and metallurgy, excellent regional infrastructure, and strong local support, Eco Ridge is an ideal location for the development of a safe, secure, and reliable long-term supply of critical rare earths and uranium. Pele has also entered into an agreement to purchase the Simon Rare Earth Claims in Mountain Pass, California. Pele's shares are listed on the TSX Venture Exchange under the symbol "GEM" and on the OTCQX under the symbol "GOLDF".

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