North American Gem Inc. Announces LOI to Lease and Operate Coal Preparation and Rail Loading Facility in Knox County, Kentucky
September 15 2009 - 10:29AM
Marketwired
North American Gem Inc. (TSX-V: NAG) (NAG) is pleased to announce
the execution of a Letter of Intent (LOI) to enter into an open
ended lease with Safeco, Inc. of Corbin, Kentucky, to operate a
coal preparation and rail loading facility in Knox County,
Kentucky. The 19 acre facility is known in the area as the Cobra
Facility (Cobra Tippling Production Plant) and is permitted by
Safeco, Inc. under KDNR permit # 861-8012.
The Cobra Facility is located centrally to the area being
developed by North American Gem Inc. and will serve as the central
operation and distribution point. The facility has equipment in
place that is capable of crushing, screening, and washing coal.
This will give NAG the ability to service a variety of customers by
preparing coal to meet specific requirements and will also give NAG
the ability to purchase outside coal and produce custom blended
products for increased market potential. Specifically, plans are to
service the industrial stoker markets, silicon metals producers,
and electricity generators.
The facility is serviced by the CSX railroad and currently has
enough rail capacity to accommodate the loading of unit trains (110
railcars) which will allow for more favourable rates from the
railroad.
North American Gem Inc. plans to have the coal from the Jellico
seam extracted from the North American Gem #1 Mine (formerly
referred to as "Bays Hollow" in the September 9th release), of
Kentucky State Mining Permit #918-0396, to be the first coal to run
through the newly acquired Cobra Facility.
The North American Gem #1 Mine Permit is for the extraction of
coal, using auger/highwall mining methods, in the Jellico coal seam
which averages a thickness of 91cm (3ft). The permit is complete
and ready for transfer pending the 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
North American Gem #1 Mine Permit is expected to last 12-18
months.
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
USD$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 USD$6.00-$8.00/net ton
higher than prices quoted earlier in the summer.
The North American Gem #1 Mine operation has the potential to
establish North American Gem Inc. as a coal producer with the
ability to enter into supply contracts. The supply contracts
established by production from the North American Gem #1 Mine
Permit are expected to be expanded upon as the Company increases
operations in the area. The performance and capabilities of
production from the North American Gem #1 Mine Permit will
determine the point at which further production from additional
leases is commenced. 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.
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
Saskatchewan, West Virginia, and Kentucky. 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 Directors
NORTH AMERICAN GEM INC.
"Charles Desjardins"
Charles Desjardins
President 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.
Contact: North American Gem Inc. 430 - 609 Granville Street
Vancouver, BC, Canada V7Y 1G5 Phone 604-683-5445 // Facsimile
604-687-9631 info@northamericangem.com www.northamericangem.com
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