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

TORONTO, ONTARIO--(Marketwire - April 17, 2012) - 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.