Set the record straight NAGBefore rumors start destroying the SP. You did state the mine life of #1 iss 12 to 18 mths WAS THAT A MISREPRSENTATION
Mr. Charles Desjardins reports
NORTH AMERICAN GEM INC. ANNOUNCES THE ACQUISITION OF PERMITTED LOW SULFUR COAL PROPERTY AND MINING AGREEMENT IN KENTUCKY
North American Gem Inc. has agreed to acquire two coal leases from Lonesome Pine Leasing LLC. The leases, known as the "Bay's Hollow" leases located in Whitley county, Kentucky, include a mining permit ready for production. Production is expected to begin in October, 2009.
The terms of the agreement require North American Gem to purchase Kentucky State Mining Permit #918-0396 from Buried Sunshine Transport, Inc. The permit will be transferred to Engle Hollow Mining, LLC which will mine the leases under contract for a price of $40.00/net ton loaded into trucks to be transported to market. North American Gem will have sole and exclusive rights to market the coal produced at the Bay's Hollow Mine.
The "Bay's Hollow" mining permit is for the extraction of coal, using auger/highwall mining methods, in the Jellico coal seam which averages a thickness of 91cm. The permit is complete and ready for transfer pending the immediate posting of a bond. Based on the thickness of the coal seam, auger mining can produce 4,000-6,000 net tons per month with an increase to +20,000 net tons per month if highwall mining techniques are commenced. Production from the Bay's Hollow permit is expected to last 12-18 months. The Company continues to explore in the area for expansion potential.
Laboratory analysis of samples taken from the proposed mining area on August 26, 2009 and analyzed by SGS North America, Inc. showed a range of 2.27-4.67% ash, 0.79-1.1% sulphur, and 13,656-13,996 btu.
Initial offers for the sale of the coal are for $58.00/net ton at < 10% ash, < average 1% sulphur, and > 12,500 btu for up to 30,000 net tons per month beginning immediately. This price is approximately $6.00-$8.00/net ton higher than prices quoted earlier in the summer.
The Bay's Hollow mining operation establishes North American Gem as a coal producer with the ability to enter into supply contracts. The supply contracts established by production from the Bay's Hollow mine are expected to be expanded upon as the Company increases operations in the area. The performance and capabilities of production from Bay's Hollow will determine the point at which further production from additional leases is commenced.
Mike Magrum, PEng, a qualified person under National Instrument 43-101, has approved the technical content of this news release.