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Canada Business News and Press Releases
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(EMAILWIRE.COM, October 22, 2009 ) North American Gem Inc. (NAG) (TSX-V symbol: NAG) is pleased to announce the execution of the operating agreement 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 locally 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 distribution point. The facility has equipment in place that is capable of crushing, screening, and washing coal. Control and operation of the facility greatly enhances the ability of NAG to efficiently manage coal inventory and quality control for all of its mining interests in the area.
North American Gem Inc. now has the ability to service a variety of customers by not only preparing coal to meet specific requirements but also the ability to purchase outside coal for producing custom blended products for increased market potential. Specifically, plans are to service the industrial stoker markets, silicon metal producers, and electricity generators.
The Cobra Facility will be 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. Plans have already been made to obtain materials to upgrade the rail spur for even more cost effective and efficient operations.
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 still on the estimated time schedule for the commencement of production. The augering and excavation are in the process of being moved on to the site to begin work immediately. Engle Hollow Mining, the contract operator has secured an agreement to move a second auger to the site to establish 2 simultaneous working areas.
As previously announced, Blue Star Energy LTD. (Blue Star) intends to purchase up to 15,000 clean tons of coal per month produced at the North American Gem Mine #1, Whitley County, Kentucky. Blue Star is a coal production and brokerage company that caters mostly to specialty industrial coal users but also supplies coal to various electricity generators in the Appalachian region since 1996.
Blue Star, located in Hazard, Kentucky has completed its analysis of the Jellico coal seam at the North American Gem Mine #1 and now expects delivery of coal immediately upon the commencement of production, which is still on schedule to begin within the week.
The coal sample taken by Blue Star from the North American Gem Mine #1 resulted in analysis of 8% ash,
North American Gem Inc.
Charles Desjardins
604.683.5445
info@northamericangem.com 
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