North American Gem Inc.
TSX VENTURE : NAG

North American Gem Inc.

January 18, 2007 16:03 ET

North American Gem Inc. Acquires the Mosquito Gulch Uranium Property

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Jan. 18, 2007) - North American Gem Inc. (TSX VENTURE:NAG) has entered into a purchase agreement with Kalac Holdings Ltd. and New Mark Ltd. to acquire a 100-per-cent interest in the Mosquito Gulch Property located in the Nonacho basin approximately 300 km southeast of Yellowknife. The property consists of one mineral claim which encompasses an area of approximately 2,500 acres with a massive pitchblende showing.

The Mosquito Gulch showing is at the head of a radioactive boulder train that extends to the southwest. The showing extends more than 500 meters with varying widths of 20 to 50 meters and was outlined to a depth of 200 meters. The property has undergone drilling and trenching in the late 1970's and early 1980's by Uranerz Exploration and Mining Limited. This work included the following encouraging results:



Boulder Train Samples
Up to 0.886% U3O8

Trenching Results
0.017% U3O8 over 9.7 meters
0.04% U3O8 over 3 meters

Partial Drilling Results
0.54% U3O8 over 2.3 meters
0.356% U3O8 over 7.3 meters
0.1% U3O8 over 27 meters
(This data was released prior to establishment of current standards under
National Instrument 43-101, has not been substantiated by North American
Gem Inc., and should not be relied upon.)


Uranium-bearing minerals associated with the Mosquito Gulch showing include pitchblende and allanite. The uranium is found as pitchblende in narrow fracture fillings and small veinlets in quartz stockworks. The mineralization is confined to a zone of cataclasite and mylonite basement rock.

In 1980, Uranerz completed metallurgical tests on rock samples collected at the Mosquito Gulch. Studies included mineralogy, petrography and geochronology were undertaken and bulk samples were shown to be amenable to radiometric ore sorting.

The Nonacho Group is a conformable sequence of continental sediments consisting of conglomerates, lithic-sandstones and shale, which have been deposited in an intracratonic, fault-controlled basin. Basement rocks are mainly early Aphebian to Archean granites and gneisses including numerous mylonite or cataclasite zones. Diabase dykes represent the last Precambrian events.

The terms of the purchase agreement for a 100-per-cent interest in the property require the company to make cash payment of $100,000 and to issue two million shares to the vendors. The property is subject to a 2-per-cent net smelter return royalty. The company has the right to reduce the royalty to 1 per cent by paying $1-million. This acquisition is subject to exchange approval.

A finder's fee, in the maximum amount permitted under the policies of the TSX Venture Exchange, is payable.

North American Gem Inc. will continue to focus on its uranium claims, in particular on the Bonny Fault Property and the Western Basin Property.

Bonny Fault

Mr. Jeremy Brett, Msc., P.Geo, senior Geophysical consultant for MPH Consulting of Toronto, is currently compiling a detailed interpretation of the new and historical magnetic and radiometric survey data from the Bonny Fault property. The report will be completed in the near future.

Grab samples from the Bonny Fault area have yielded up to 3.29 and 3.93 percent U3O8. Mineralization in this area was first mentioned by Godfrey (1958) but never received much attention during the several phases of exploration linked to the increased interest in uranium in the early and late 1970's. Godfrey (1958) reported high assays from three grab samples taken over the radioactive zone, this zone is now known to be the West Arm of Andrew Lake: these assays are listed below:



Sample No. U3O8 % Mo %
JG-58-44-1A 1.03 0.69
JG-58-44-1B 3.93 1.03
JG-58-44-1C 3.29 1.40
- Figures in this chart were produced prior to NI 43-101.


Western Basin

Also the Company would like to announce that the Western Basin airborne survey will be completed shortly by Terraquest Ltd. Historically, uranium exploration programs in the Athabasca Basin have been hampered by the high cost associated with deep (+300 m) drilling programs needed to reach and test the targeted Athabasca unconformity. Alberta Geological Survey Bulletin No. 55, documents several holes, which map the Athabasca Unconformity on the Western Basin property between 10 m and 95 m from surface.

The Western Basin property has four mineral permits totaling 92,000 acres which encompasses 25 sq. km of mapped "Athabasca Basin Geology" and confirmed outliers of the Athabasca Group Sandstones. Similar geology hosts many of the high-grade uranium deposits found in the Athabasca uranium district, such as Rabbit Lake, Key Lake and Maurice Bay.

The Maurice Bay uranium deposit is located within the northwest margin of the Athabasca Basin, approximately 5 km from the Western Basin property. It has 600 tonnes contained uranium at a grade of 0.5% U3O8. The Maurice Bay deposit includes structurally controlled mineralization within altered basement rocks and Athabasca unconformity-style uranium mineralization.

Mike Magrum, P.Eng., a qualified person under National Instrument 43-101, has approved the technical content of this news release.

Stock Options

The Company would also like to announce that pursuant to its stock option plan, the Company has granted incentive stock options to its directors, officers, consultants, and employees to purchase in the total of 700,000 common shares in the capital stock of the company, subject to regulatory approval, exercisable for a period of two years, at a price of $0.14 cents per share. These options are subject to a four-month hold period.

About North American Gem Inc. 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 Uranium, Molybdenum, Gold, Copper and other base metals. The Company is actively pursuing several opportunities, including the Louise Lake copper-gold-molybdenum-silver deposit and Mt. Ogden molybdenum property, both located in British Columbia, Canada. The Company is also pursuing its uranium projects, consisting of the Whiskey Gap, Del Bonita, Western Basin, and Bonny Fault projects, all located in Alberta, Canada. In addition the Company is also pursuing its Mosquito Gulch uranium property located in the North West Territories.

On Behalf of the Board of Directors

NORTH AMERICAN GEM INC.

Charles Desjardins, President and Director

Statements in this press release other than purely historical information, historical estimates should not be relied upon, including statements relating to the Company's future plans and objectives or expected results, are forward-looking statements. News release contains certain "Forward-Looking Statements" within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended. Forward-looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in the Company's business, including risks inherent in resource exploration and development. As a result, actual results may vary materially from those described in the forward-looking statements.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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