RE: News.A. Gem brings third auger to Kentucky mine
2010-01-28 09:25 ET - News Release
Mr. Charles Desjardins reports
NORTH AMERICAN GEM INC. MOBILIZES ITS THIRD AUGER TO THE NORTH AMERICAN GEM #1 MINE IN WHITLEY COUNTY, KENTUCKY
North American Gem Inc. has mobilized a third auger to increase mining production at the North American Gem No. 1 mine in Whitley county, Kentucky. The initial start of coal production for the North American Gem No. 1 mine was announced in Stockwatch on Nov. 23, 2009, and production from the second auger began Jan. 6, 2010.
Blue Star Energy Ltd., located in Hazard, Ky., has approved the quality of coal that it has received from NAG. As a result, the coal purchased by Blue Star will command full market price.
Blue Star Energy has agreed to purchase up to 15,000 clean tons of coal per month produced at the North American Gem No. 1 (as announced previously in Stockwatch on Oct. 21, 2009). Blue Star is a coal production and brokerage company that caters mostly to specialty industrial coal users but also supplies coal to various electricity generators in the Appalachian region since 1996.
The decision of North American Gem to acquire and develop this permitted coal lease was made with consideration of the situation regarding the mountain-top removal and valley fill issues under scrutiny by the U.S. Environmental Protection Agency. None of the leases currently held or being considered by NAG will be affected by this issue.
The method of mining to be used in the North American Gem No. 1 is known as contour mining. All of the mining permits currently being pursued by NAG have been mined prior to the enactment of the Surface Mine Control and Reclamation Act of 1977. This law requires that after any surface mining, the land must be restored to the approximate original contour unless otherwise specified in the permit application and approved by the Kentucky Department of Natural Resources (KDNR). When prelaw mining was done, the general practice was to mine along the contour of a slope to the maximum profitable ratio and leave the resulting high wall and a wide, flat bench where the material covering the coal was removed and then graded somewhat flat as opposed to restoring the original slope. NAG will at the very least return the mining permit locations to their current state, and in some instances return the mining permit location to a better environmental state due to the Surface Mine Control and Reclamation Act of 1977.
The North American Gem No. 1 mine is permitted for the use of augers to enter the coal seam from the exposed wall with minimal additional excavation and maximum cost-effectiveness. This type of mining dramatically reduces the amount of surface disturbance and allows for the recovery of any potential reserves that were previously believed not to be economically viable.
All of NAG's potential mining operations will incorporate sediment control methods that will keep ahead of the increased regulations and restrictions. Furthermore, in anticipation of increased regulations, NAG has, in all of its permitting applications, begun the sampling of receiving streams and groundwater wells using the most stringent and extensive sampling parameters. This will allow NAG to comply with the regulatory requirements and will also result in a much shorter and smoother permitting application process.
Dean Schafer is acting as operations manager of all the company's Kentucky coal leases and is currently implementing an overall mine plan.
Deborah Moses, PEng, PLS, REM, of Engineering Consulting Services Inc. (ECSI), is the qualified person for the company's coal operations in Kentucky and West Virginia.
We seek Safe Harbor.