Mining Has Commenced At The North American Gem #2 Mine 

VANCOUVER, BC - North American Gem Inc. has commenced mining Blue Gem and Thermal (Jellico seam) coal at the North American Gem #2 Mine in Knox County, Kentucky. This is NAG's first opportunity to mine the highly marketable Blue Gem coal which commands a price as much as 200% higher than high-quality Thermal coal and is typically the highest priced grade of coal produced in the United States.

Kentucky Mine Partners LLC (KMP) is performing the mining operations at the North American Gem #2 Mine. Initial production of the Blue Gem and Thermal coal is planned for a combined production rate of approximately 8,000 - 10,000 tons per month. The North American Gem #2 Mine will be a surface mining and augering operation. NAG has a buyer in place to purchase all of the coal produced from the North American Gem #2 Mine.

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.

The North American Gem Processing Facility (Mine Permit #861-8012) 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.

The company's address is P.O. Box 10325, 430 - 609 Granville Street, Vancouver, BC V7Y 1G5, 604.683.5445, fax: 604.687.9631, email: [email protected].