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Gold/Mining/Energy : Pele Mountain -- Ignore unavailable to you. Want to Upgrade?


To: rdww who wrote (236)5/3/2004 10:34:50 PM
From: rdww  Read Replies (1) | Respond to of 241
 
Pele Mountain Announces Exploration Update

TORONTO, ONTARIO--(CCNMatthews - May 3, 2004) - Pele Mountain
Resources Inc. (TSX Venture:GEM) ("Pele" or the "Company")
announces its plans for its 2004 field exploration programs and
an update on the current status of its exploration properties in
northern Ontario. Pele has successfully established a diversified
portfolio of mineral properties with potential to host economic
deposits of diamonds, gold and nickel. As spring break-up
conditions advance and field exploration crews begin to deploy to
Pele projects later this week, the Company is looking forward to
an active and exciting 2004 field season.

Strong market fundamentals for diamonds and precious and base
metals has presented a positive environment for Pele to create
its diversified portfolio of properties that include each of
these important mineral groups. In the second half of 2003, Pele
acquired its Timmins Property that includes the potential for
nickel deposits and re-activated exploration programs on its Wawa
and Ardeen Gold properties. Pele's Festival Diamond Property,
Attawapiskat River Diamond Project, and Turtle Pond Diamond
Property provide exposure to the market's growing interest in
Canadian diamonds. During the last 6 months, Pele has
successfully advanced exploration on each of its diamond, gold
and nickel properties respectively and the Company remains
focused on enhancing long term value through increased
exploration and development of these properties.

Pele has successfully completed three drill programs and received
diamond results for 258 tonnes of rock processed by De Beers
during the first few months of 2004. Pele has also developed high
potential drill ready targets at all five of its exploration
projects in northern Ontario. The 2004 exploration field season
will begin with prospecting for possible bulk sample site
locations for diamonds within the Festival Property and for gold
within the Wawa Gold Property. The Company is in a strong
position to advance an active field season with approximately
$1,500,000 in cash and is pursuing new strategic relationships to
expand and intensify exploration opportunities while minimizing
the cost and risk to Pele.

Festival Diamond Property

Following a limited review of the Festival Property during the
past nine months since the Option and Joint Venture Agreement was
signed, De Beers has advised Pele that due to a global
rebalancing of priorities, it "does not intend to make the 2004
Share Subscription or the 2004 Expenditures under the Agreement."
Accordingly, the Option and Joint Venture Agreement entered into
on July 31, 2003 between Pele and De Beers is at an end without
De Beers earning an interest in the Festival Property. Al
Shefsky, President and CEO of Pele stated, "It is unfortunate
that De Beers' rebalancing of global priorities has resulted in
what Pele believes is a premature decision that does not reflect
the potential of the diamond deposits of the Festival Property.
Although Pele is disappointed by De Beers' decision, we remain
optimistic and firmly committed to demonstrating the potential of
this diamond property".

De Beers provided a report entitled "Review of the economic
potential of the Festival Property" which concluded that De Beers
globally is not interested in the deposit type found to date
within the Festival Property. The macro diamond grades of the
diamond deposits sampled and modelled by De Beers suggest a grade
of 10 carats per hundred tonnes or less at a cut-off of 1.5 mm.
De Beers confirmed that the diamond deposits on the Festival
Property sampled a peridotitic mantle within the diamond
stability field at depths of at least 250 km and are hosted
within volcanic rocks that were deposited on the surface
approximately 2.7 billion years ago.

De Beers initiated field operations in August 2003 after signing
the Option and Joint Venture Agreement in July of 2003. They
completed a geophysical survey of the entire Festival Property,
however, De Beers focused its diamond sampling efforts at the
previously discovered Moet, Mumm and Genesis diamond occurrences
as outlined by exploration work completed by Pele. These diamond
occurrences appear to be distal to the paleosurface that includes
the 5 km corridor that hosts the most "primary" diamond-bearing
volcanic rocks as outlined by exploration work completed by Pele.


The diamond-bearing rocks of the Festival Property have physical
characteristics that distinguish them from kimberlites. A routine
audit of 10% of the DMS tailings from the Genesis-2 bulk sample,
one of four recently processed bulk samples by De Beers returned
a number of diamonds larger than 1mm that were not recovered
during the initial DMS processing of the sample. The remaining
audit samples returned no diamonds. De Beers has advised Pele
that it intends to re-process all of the DMS tailings from bulk
sample Genesis-2 at its DMS processing facility in Grande
Prairie, Alberta before the end of May 2004.

In recognizing the challenges and opportunities relating to the
physical characteristics of the diamond deposits within the
Festival Property, Pele previously designed and field-tested a
low cost, environmentally friendly magnetic separation flowchart
that successfully recovered diamonds and proved cost effective.
Pele is again acquiring a high power magnetic separator to test
the "primary" diamond deposits within the 5 km corridor between
the Cristal diamond occurrence and the Veuve Clicquot diamond
occurrence.

As previously reported in Pele's press releases, diamond
exploration completed by Pele and De Beers has identified a
"primary" suite of diamond-bearing rocks which is expected to
host the relatively highest diamond grades within the property,
most of which has not been tested to date.

Future exploration work will focus on determining the most
prospective occurrences within the 5 km stratigraphic horizon
that hosts the "primary" suite of diamond-bearing rocks. These
locations will be sampled to prioritize them for follow-up bulk
sampling. This work will commence before the end of this week.

Attawapiskat River Property

Pele's Attawapiskat River Project comprises the largest group of
mining claims owned by any company within a 30 kilometre radius
of the Victor Kimberlite Project, where De Beers is developing
the first commercial diamond mine in Ontario. Pele's mining
claims cover the extension of an important structure along which
most of the kimberlites in the Attawapiskat cluster occur and tie
on to claim blocks hosting several known diamond bearing
kimberlite pipes. Pele has recovered diamond indicator minerals
from its claims and has identified additional drill targets in
high resolution ground magnetic surveys that are ready to be
drill tested.

A sharp increase in diamond exploration activity in the area has
recently generated several new kimberlite discoveries which
demonstrate the potential for additional kimberlites in the area.
Three new kimberlites were drilled during the past few weeks by
the Spider/KWG Joint Venture on a property that ties on to Pele's
Property and Metalex Ventures Ltd. announced last week that it
too has discovered kimberlite in the area. Pele is currently
reviewing the data acquired during the past 6 months of the
project and assessing a number of opportunities for adding long
term value through expanded diamond exploration in the James Bay
Lowlands.

Pele Gold Corporation

Late in 2003 Pele transferred both of its gold projects to a
wholly owned subsidiary called Pele Gold Corporation ("Pele
Gold") in order to highlight both the Company's diamond and gold
projects and to provide additional flexibility to facilitate
future opportunities to enhance shareholder value.

Ardeen Gold Mine Project

Pele Gold's 100% owned Ardeen Gold Mine Project is located 110
kms west of Thunder Bay, just south of the Trans-Canada Highway.
The Ardeen was northern Ontario's first gold mine, and produced
30,000 ounces of gold and 175,000 ounces of silver during
operations in the early 1930's. Pele has completed more than
12,000 meters of diamond drilling on the property and has
outlined gold mineralization in a number of zones in close
proximity to the mine's existing 3 compartment shaft, which was
sunk to the 1200 foot level. In 2003 the Company commissioned a
compilation study of available data for its Ardeen Gold Mine
Project in preparation for future exploration programs. This
effort has been very productive in identifying areas with
potential to host significant additional gold resources. The
southern portion of the Ardeen Gold Mine Project hosts geology
which is similar to the adjacent property to the east where a
2,000,000 ounce gold resource has been reported. Exploration
activity on an adjacent property to the west of the Ardeen Gold
Mine Project has led to important new gold discoveries and the
participation of a major gold producing company in that project.
Pele Gold is currently assessing a number of opportunities for
adding long term value through renewed and expanded gold
exploration at its Ardeen Gold Mine Project.

Wawa Gold Project

Pele Gold's 100 % owned Wawa Gold Project covers approximately 14
kilometers of the Goudreau Localsh Deformation Zone and is
strategically located within an area that has hosted several
former producing gold mines. Infrastructure in the area is
excellent with road and rail access, electric power, a qualified
work force and modern gold mills located in close proximity to
Pele Gold's Wawa Property. Pele acquired the Wawa Gold Project in
1996, and in 1999, successfully recovered 1600 ounces of gold
from a 10,000 tonne surface sample mined at the Markes Zone. This
sample successfully demonstrated the possibility of conducting
advanced exploration that provided important information about a
particular gold bearing zone while generating positive cash flow
in the process.

The increase in the price of gold over the past year prompted the
Company to re-activate a new phase of gold exploration at its
Wawa Gold Project beginning with an expansion of exploration into
the under explored eastern half of the Wawa Property. A
mechanical stripping campaign during March 2004 uncovered a well
mineralized shear zone to the east and west of two samples
collected in 1999 that returned 23.8 grams gold per tonne from a
mineralized quartz vein and 0.2 grams gold per tonne from
adjacent wall rock respectively. The new zone was named the
Golden Eagle Zone. The initial phase drill program to test the
near surface gold potential of the newly uncovered Golden Eagle
Zone was completed in April 2004. Gold assays from the seven
drill holes returned anomalous gold values up to 0.4 grams gold
per tonne from the sampled drill core.

Timmins Nickel Property

An initial drilling phase within the Timmins property
demonstrated that the stratigraphy that hosts the adjacent
Texmont Nickel Mine deposit continues onto Pele's property.
Assays from the initial drill core intersected massive, net
textured and disseminated sulphides and these assayed up to 0.22%
nickel and 4.5 grams gold per tonne. Limited follow-up sampling
of 30 samples from a previously unsampled section of core
however, returned no significant gold assays. The original
horizontal-loop electromagnetic survey identified a sulphide
related conductor that extends more than 1.6 kms from the Texmont
Nickel Mine property boundary onto Pele's ground. This survey has
been extended since the initial drilling phase was completed and
additional drill targets have been identified adjacent to and
along strike of the original conductors drilled. Pele believes
the potential for nickel-bearing sulphides within the property
remains high and is currently assessing its opportunities for
increasing long term value by expanding nickel exploration on the
property.

Pele is a Canadian mining exploration and development company and
a leader in the search for economic diamond and gold deposits in
Northern Ontario. This press release has been reviewed and
approved by Dr. Edward Walker P. Geo., of PetroLogic Inc., an
independent consultant and Qualified Person.

The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.

Some of the statements contained in this release are
forward-looking statements, such as estimates and statements that
describe the Company's future plans, objectives or goals,
including words to the effect that the Company 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.
None of the Company's properties have any known ore body of
economic or commercial value.

Common Shares Outstanding: 43,571,014

-30-

FOR FURTHER INFORMATION PLEASE CONTACT:
Pele Mountain Resources Inc.
Al Shefsky
President
(416) 368-7224
www.pelemountain.com