VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 4, 2010) - NorthAmerican Gem Inc. (NAG) (TSX VENTURE:NAG) through its subsidiary, NorthAmerican Gem US, Inc. has commenced mining Blue Gem and Thermal (Jellicoseam) coal at the North American Gem #2 Mine (Mine permit number#861-0513) in Knox County, Kentucky. This is NAG's first opportunity tomine the highly marketable Blue Gem coal which commands a price as muchas 200% higher than high-quality Thermal coal and is typically thehighest priced grade of coal produced in the United States.
Kentucky Mine Partners LLC (KMP) is performing the mining operations atthe North American Gem #2 Mine. Initial production of the Blue Gem andThermal coal is planned for a combined production rate of approximately8,000 - 10,000 tons per month. The North American Gem #2 Mine will be asurface mining and augering operation. NAG has a buyer in place topurchase all of the coal produced from the North American Gem #2 Mine.Short term pricing of Thermal coal is tied to the NYMEX index (
https://www.eia.doe.gov/cneaf/coal/page/nymex/nymex_chart.pdf)
which closed August 3rd 2010 at $68.85 per net ton loaded into a bargeon the Big Sandy River in Kentucky at a quality of greater than 12,000BTU, less than 1% sulfur, and less than 13% ash which is the highestpricing for this quality of Thermal coal since October 2008. To comparefurther, the price of similar grade Central Appalachian coal was listedat $51.22 per net ton at the close on January 4th 2010 (
https://www.eia.doe.gov/cneaf/coal/page/nymex/nymex_report.html).
All of NAG's potential mining operations will incorporate sedimentcontrol methods that will keep ahead of the increased regulations andrestrictions. Furthermore, in anticipation of increased regulations, NAGhas, in all of its permitting applications, begun the sampling ofreceiving streams and groundwater wells utilizing the most stringent andextensive sampling parameters. This will allow NAG to comply with theregulatory requirements and will also result in a much shorter andsmoother permitting application process.
The North American Gem Processing Facility (Mine Permit #861-8012) willserve as the central operation and distribution point for coal producedby NAG's mining operations. The facility has equipment in place that iscapable of crushing, screening, and washing coal. This gives NorthAmerican Gem Inc. the added dimension to service a variety of customersby preparing coal to meet their specific requirements. North AmericanGem Inc. will also have the ability to purchase outside coal to producecustom blended products which will increase market potential.Specifically, plans are to service the industrial stoker markets,silicon metal producers, and electricity generators.
Mr. Dean Schafer is acting as general manager of all the Company'sKentucky coal leases and is currently implementing an overall mine plan.
Ms. Deborah Moses, PEng, PLS, REM, of Engineering Consulting ServicesInc. (ECSI) is the qualified person for the Company's coal operations inKentucky.
North American Gem Inc. (TSX VENTURE:NAG) is a junior resource companyin Western Canada. The company's major focus is expanding its coalmining operations at its flagship properties in Kentucky. In addition,the company has interests in coal, copper, molybdenum, and other basemetals in Canada.
On Behalf of the Board of Directors
NORTH AMERICAN GEM INC.
Charles Desjardins, President and Director
Cautionary note:
This report contains forward looking statements. Resource estimates,unless specifically noted, are considered speculative. Any and all otherresource or reserve estimates are historical in nature, and should notbe relied upon. The production rate and mine-life projections have beenmade without support of a feasibility study, there is no certainty theproposed operations will be economically viable. By their nature,forward looking statements involve risk and uncertainties because theyrelate to events and depend on factors that will or may occur in thefuture. Actual results may vary depending upon exploration activities,industry production, commodity demand and pricing, currency exchangerates, and, but not limited to, general economic factors. CautionaryNote to US investors: The U.S. Securities and Exchange Commissionspecifically prohibits the use of certain terms, such as "reserves"unless such figures are based upon actual production or formation testsand can be shown to be economically and legally producible underexisting economic and operating conditions.
"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."