Acquire Near Production High Grade Coal
Sep 23, 2009 14:03 ET
North American Gem Inc. Completes Definitive Agreement to Acquire Near Production High Grade Coal Low Sulfur Property in Kentucky
VANCOUVER, BC--(Marketwire - September 23, 2009) - North American Gem Inc. (TSX-V: NAG) (NAG) is pleased to announce completion of a Definitive Agreement to acquire a near production coal mining leases located in Knox County, Kentucky.
Mining permit application # 861-0502 is in review with the Department of Natural Resources (the "DNR") offices in Frankfort, Kentucky and is expected for approval within 75-90 days. It is a surface mining permit application for the mining of 220 acres of the Jellico coal seam. The coal leases also cover the Blue Gem coal seam which is in process of being permitted as well and is expected to be ready for mining early in 2010. The mining permit was submitted in the name of American Blue Gem and Steam Coal, LLC and will be known as the North American Gem Mine #2. The production rate and mine-life projections have been made without support of a feasibility study, there is no certainty the proposed operations will be economically viable.
As a result of the successful negotiation to acquire the North American Gem Mine #1, the decision was made to add acreage to mining permit application # 861-0502 and will result in an overall increase in size of the mining project.
Laboratory analysis in 2009 of the Blue Gem seam were very encouraging showing 3% ash, 0.65% sulfur and a range of 14,200 - 15,200 btu. The Jellico seam averages 6.5% ash, 1% sulfur and a range of 12,500 - 13,200 btu. Prospecting by representatives of North American Gem on the project area showed an average seam height of 71 cm in the Blue Gem Seam and over 106 cm in the Jellico Seam.
Blue Gem Coal is a high carbon, low ash, low fusion and low grind (very hard) coal that is found only in a small area along the border of Tennessee and Kentucky in the Cumberland Mountains.
Blue Gem Coal is one of three coal seams in the world that are best suited for production of silicon metals. The other two are found in West Virginia and Columbia, South America. Of the three, the Blue Gem is the most sought after. For this reason, it is not only consumed in the U.S., but also exported extensively to Canada, Norway, Iceland, India, France, South Africa and Egypt.
With the ever increasing demand for silicon metals and silicon products, mineable reserves are becoming increasingly more valuable. Historically, Blue Gem coal can bring an FOB mine price that is as much as 100% higher than high quality steam coal and is typically the highest priced of any grade of coal produced in the U.S.
Production Expected in October 2009 on North American Gem #1 Mine
Production is expected to begin October 2009 on the leases known as the North American Gem #1 Mine Permit located in Whitley County, Kentucky.
North American Gem Inc. plans to have the coal from the Jellico seam extracted from the North American Gem #1 Mine, of Kentucky State Mining Permit #918-0396, to be the first coal to run through the newly acquired Cobra Tippling Production Plant. The production rate and mine-life projections have been made without support of a feasibility study, there is no certainty the proposed operations will be economically viable.
Mr. Dean Schafer will be acting as operations manager of all the Company's Kentucky coal leases and is currently implementing an overall mine plan.
Mike Magrum, PEng, a qualified person under National Instrument 43-101, has approved the technical content of this news release.
North American Gem Inc. (TSX-V: NAG) is a Junior Exploration Company based in Western Canada. The Company's primary goal is to explore for Coal in North America, currently the focus is in Kentucky, Saskatchewan, and West Virginia. In addition to Coal exploration, the Company also has interests in Uranium, Copper, Gold, Molybdenum and other base metals in Canada.
On Behalf of the Board of DirectorsNORTH AMERICAN GEM INC."Charles Desjardins"Charles DesjardinsPresident and Director
"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."
Cautionary note:
This report contains forward-looking statements. Resource estimates, unless specifically noted, are considered speculative. Any and all other resource or reserve estimates are historical in nature, and should not be relied upon. By their nature, forward-looking statements involve risk and uncertainties because they relate to events and depend on factors that will or may occur in the future. Actual results may vary depending upon exploration activities, industry production, commodity demand and pricing, currency exchange rates, and, but not limited to, general economic factors. Cautionary Note to US investors: The U.S. Securities and Exchange Commission specifically prohibits the use of certain terms, such as "reserves" unless such figures are based upon actual production or formation tests and can be shown to be economically and legally producible under existing economic and operating conditions.