North American Gem Inc. Finalizes Acquisition of Fully Operational Blue Gem Coal Mine in Kentucky
March 31 2010 - 10:50AM
Marketwired
North American Gem Inc. (NAG) (TSX VENTURE: NAG) is pleased to
announce the signing of a definitive agreement to acquire a fully
operational surface coal mine with both minable Blue Gem and
Jellico coal seams, which will now be referred to as North American
Gem #2 Mine located in Knox County, Kentucky. NAG has recently
completed drilling at the recently acquired mine site and was
pleased with the quality and the estimated tonnage of Blue Gem coal
at the mine site.
North American Gem #2 Mine will produce from both the Blue Gem
coal seam and the Jellico coal seam simultaneously once the permit
is officially transferred from the current operator. The coal
produced at the Gem #2 Mine location will be treated at the North
American Tipple Facility. NAG is also expecting to have another
fully permitted mine site on the Swan Pond leases (formerly
referred to as North American Gem #2 Mine) in the near future as
well.
"Our goal of becoming a producer of the highly sought after Blue
Gem coal has been reached with the activation of the fully
permitted North American Gem #2 Mine in the state of Kentucky,"
stated Charles Desjardins, President of North American Gem Inc.
"The North American Gem #2 Mine will allow the Company to start
building relationships with Blue Gem coal buyers, before our larger
Blue Gem leases come on line and production begins."
The permit transfer is an administrative process that can
typically be accomplished in less than 4 weeks. Upon completion of
the transfer, the mine will immediately resume production at a rate
of 8-10,000 tons per month with the capability of doubling that
production rate should favorable market conditions warrant. The
North American Gem #2 Mine will be a surface mining and augering
operation.
Operation Updates from Kentucky
Production continues at North American Gem #1 Mine with
shipments of coal being sent to market daily. At the current rate
of production NAG is currently on pace to produce and sell
approximately 8,000 tons of coal per month with the ability to
further increase production. NAG has steadily increased its
production over time as the weather has slowly improved. Currently
there are two augers producing and the third auger is expected to
be activated in approximately two weeks time.
Management at NAG has decided to refer to its Kentucky claims by
the actual lease name until the individual leases are granted a
successful mining permit at which point the lease will be named as
a North American Gem Mine in sequential order. This will avoid
future confusion as certain permits may be approved out of order or
the possibility of a new lease acquisition by NAG in an advanced
stage of permitting.
NAG has completed the drilling previously announced on December
8th 2009 on its Wynn 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 wells at the Wynn Hollow location,
will help NAG develop the most efficient mining plan. In particular
one coal seam, below the Blue Gem seam, has been measured in
thickness from 1.5-2 metres and is believed to be low sulfur, high
btu seam.
NAG has now commenced drilling on the Swan Pond lease (formerly
referred to as North American Gem #2 Mine) and once complete will
immediately mobilize the drillers to the recently acquired Granny
Rose lease (Refer to NAG February 2nd 2010 release). The Granny
Rose lease contains the readily marketable Blue Gem coal throughout
the entire lease with an average seem thickness of 2 feet. It has
been estimated that approximately 250 acres of the planned permit
will be mined using surface mining techniques with an additional
approximate 100 acres that is to be mined by highwall and/or auger
mining methods.
The permitting process being managed by Ms. Deborah Moses of
Engineering Consulting Services Inc. and Mr. William Grable is
proceeding well. One of the previously announced mining permits is
currently in the final stage of the process and is expected to be
approved in the near future. Currently all future mining permits
have been designated to be highwall mining operations, which could
allow production to be at least 25,000 tons per property per
month.
The North American Tipple Facility will serve as the central
operation and distribution point for coal produced by NAG's mining
operations. The facility has equipment in place that is capable of
crushing, screening, and washing coal. This gives North American
Gem Inc. the added dimension to service a variety of customers by
preparing coal to meet their specific requirements. North American
Gem Inc. will also have the ability to purchase outside coal to
produce custom blended products which will increase market
potential. Specifically, plans are to service the industrial stoker
markets, silicon metal producers, and electricity generators.
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 utilizing 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.
Mr. Dean Schafer is acting as operations manager of all the
Company's Kentucky 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 in Kentucky and West Virginia.
North American Gem Inc. (TSX VENTURE: 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 Directors
NORTH AMERICAN GEM INC.
Charles Desjardins, President and Director
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. 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. 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.
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.
Contacts: North American Gem Inc. Charles Desjardins President
and Director 604-683-5445 604-687-9631 (FAX)
info@northamericangem.com www.northamericangem.com
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