Coal mining operations to commence at North American Gem #2

April 8, 2010

Source: North American Gem Inc.

North American Gem Inc. (NAG) has reached an agreement to enter into a partnership with Kentucky Mine Partners LLC, for the mining of NAG's surface mining operations at North American Gem #2 Mine and any newly permitted mines henceforth in the state of Kentucky. KMP has begun mobilizing mining equipment to the newly acquired North American Gem #2 Mine, in Knox County, Kentucky so that immediately upon completion of the permit transfer to NAG the mining equipment and infrastructure will be in place to begin production immediately.

The signing of a definitive agreement to acquire the fully operational surface coal mine (North American Gem #2 Mine) with both minable Blue Gem and Jellico coal seams was announced March 31st 2010. Drilling at the recently acquired mine site has been completed and NAG was pleased with the quality and the estimated tonnage of 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.

The permit transfer is an administrative process that can typically be accomplished in approximately 3 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.

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