Pele Mountain Resources Inc., a Toronto-based mining firm,
announced on Tuesday it has entered into a binding agreement to
sell its Highland Gold projects to a wholly-owned subsidiary of
Prodigy Gold Inc. for $1.8-million.
Pele Mountain Resources Inc. opted to sell its Highland Gold
projects to concentrate on its Eco Ridge Mine rare
earths and uranium project.
"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," Al Shefsky, president and CEO of Pele Mountain
Resources Inc., said in a statement.
Golden Goose Resources Inc., the wholly-owned subsidiary of
Prodigy, apart from the purchase and sale agreement it
entered with Pele Mountain Resources Inc., will also acquire from
Pele Gold for $25,000 its interest in a license agreement between
Pele Gold and Cedar Falls Forest Resources.
Cedar Falls Forest Resources holds licensed certain rights to
Pele Gold in the lands located in the township of Abotossaway,
district of Algoma, Ontario.
With the sale, Pele Mountain Resources Inc. gears it focus on
the sustainable development of its 100 per cent owned Eco Ridge
Mine Rare Earths and Uranium Project.
"Our updated Preliminary Economic Assessment (PEA) for the Eco
Ridge Mine Rare Earths and Uranium Project demonstrates that Pele
is one of the clear leaders in the ongoing race to develop new
sources of critical rare earths outside of China," Mr Shefsky
An updated PEA on the Eco Ridge Mine Rare Earths and Uranium
Project gave off a $2.16-billion pre-tax cash flow, a
$1.02-billion net present value at 10 per cent and a 50 per cent
internal rate of return, turning the project an "excellent
potential to become a profitable producer of rare earths and
uranium oxide," the company said.
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
Pele Mountain Resources Inc. likewise said it has also entered
into a purchase agreement for the Simon Rare Earth Claims in
Mountain Pass, California.