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 said.

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 uranium.

Pele Mountain Resources Inc. likewise said it has also entered into a purchase agreement for the Simon Rare Earth Claims in Mountain Pass, California.