North American Gem Inc.Mobilizes Mining Equipment to North American Gem #2 Mine in Kentucky
Press ReleaseSource: North American Gem Inc.On Thursday April 8, 2010, 10:43 am
VANCOUVER, BRITISH COLUMBIA--(Marketwire -April 8, 2010) - North American Gem Inc. (NAG) (TSX VENTURE:NAG - News) has reached anagreement to enter into a partnership with Kentucky Mine Partners LLC(KMP), for the mining of NAG's surface mining operations at NorthAmerican Gem #2 Mine and any newly permitted mines henceforth in thestate of Kentucky. KMP has begun mobilizing mining equipment to thenewly acquired North American Gem #2 Mine, in Knox County, Kentucky sothat immediately upon completion of the permit transfer to NAG themining equipment and infrastructure will be in place to begin productionimmediately.
The signing of a definitive agreement toacquire the fully operational surface coal mine (North American Gem #2Mine) with both minable Blue Gem and Jellico coal seams was announcedMarch 31st 2010. Drilling at the recently acquired mine site has beencompleted and NAG was pleased with the quality and the estimated tonnageof coal at the mine site.
North American Gem #2 Mine will producefrom both the Blue Gem coal seam and the Jellico coal seamsimultaneously once the permit is officially transferred from thecurrent operator. The coal produced at the Gem #2 Mine location will betreated at the North American Tipple Facility.
The permit transferis an administrative process that can typically be accomplished inapproximately 3 weeks. Upon completion of the transfer, the mine willimmediately resume production at a rate of 8-10,000 tons per month withthe capability of doubling that production rate should favorable marketconditions warrant. The North American Gem #2 Mine will be a surfacemining and augering operation.
Operation Updates from Kentucky
Productioncontinues at North American Gem #1 Mine with shipments of coal beingsent to market daily. At the current rate of production NAG is currentlyon pace to produce and sell approximately 8,000 tons of coal per monthwith the ability to further increase production. NAG has steadilyincreased its production over time as the weather has slowly improved.Currently there are two augers producing and the third auger is expectedto be activated in approximately one week's time.
Management atNAG has decided to refer to its Kentucky claims by the actual lease nameuntil the individual leases are granted a successful mining permit atwhich point the lease will be named as a North American Gem Mine insequential order. This will avoid future confusion as certain permitsmay be approved out of order or the possibility of a new leaseacquisition by NAG in an advanced stage of permitting.
NAG hascompleted the drilling previously announced on December 8th 2009 on itsWynn Hollow lease (formerly referred to as North American Gem #3 Mine)and is now continuing the permitting process. The analysis of the data,combined with data from historical drilling of natural gas and oil wellsat the Wynn Hollow location, will help NAG develop the most efficientmining plan. In particular one coal seam, below the Blue Gem seam, hasbeen measured in thickness from 1.5-2 metres and is believed to be lowsulfur, high btu seam.
NAG has now commenced drilling on the SwanPond lease (formerly referred to as North American Gem #2 Mine) and oncecomplete will immediately mobilize the drillers to the recentlyacquired Granny Rose lease (Refer to NAG February 2nd 2010 release). TheGranny Rose lease contains the readily marketable Blue Gem coalthroughout the entire lease with an average seem thickness of 2 feet. Ithas been estimated that approximately 250 acres of the planned permitwill be mined using surface mining techniques with an additionalapproximate 100 acres that is to be mined by highwall and/or augermining methods.
The permitting process being managed by Ms.Deborah Moses of Engineering Consulting Services Inc. and Mr. WilliamGrable is proceeding well. One of the previously announced miningpermits is currently in the final stage of the process and is expectedto be approved in the near future. Currently all future mining permitshave been designated to be highwall mining operations, which could allowproduction to be at least 25,000 tons per property per month.
TheNorth American Tipple Facility will serve as the central operation anddistribution point for coal produced by NAG's mining operations. Thefacility has equipment in place that is capable of crushing, screening,and washing coal. This gives North American Gem Inc. the added dimensionto service a variety of customers by preparing coal to meet theirspecific requirements. North American Gem Inc. will also have theability to purchase outside coal to produce custom blended productswhich will increase market potential. Specifically, plans are to servicethe industrial stoker markets, silicon metal producers, and electricitygenerators.
All of NAG's potential mining operations willincorporate sediment control methods that will keep ahead of theincreased regulations and restrictions. Furthermore, in anticipation ofincreased regulations, NAG has, in all of its permitting applications,begun the sampling of receiving streams and groundwater wells utilizingthe most stringent and extensive sampling parameters. This will allowNAG to comply with the regulatory requirements and will also result in amuch shorter and smoother permitting application process.
Mr.Dean Schafer is acting as operations 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 Services Inc.(ECSI) is the qualified person for the Company's coal operations inKentucky and West Virginia.
North American Gem Inc. (TSX VENTURE:NAG - News) is a JuniorExploration Company based in Western Canada. The Company's primary goalis to explore for Coal in North America, currently the focus is inKentucky, Saskatchewan, and West Virginia. In addition to Coalexploration, the Company also has interests in Uranium, Copper, Gold,Molybdenum and other base metals in Canada.
On Behalf of the Boardof Directors
NORTH AMERICAN GEM INC.