SOURCE: North American Gem Inc.

North American Gem Inc.

October 02, 2009 18:35 ET

North American Gem Inc. Not Affected by Recent Environmental Protection Agency (EPA) Announcement

VANCOUVER, BC--(Marketwire - October 2, 2009) - North American Gem Inc. (TSX-V: NAG) (NAG) would like to add clarification to the recent announcement made by the Environmental Protection Agency (EPA) on September 30th, 2009. The EPA's announcement targets the practice of "mountaintop removal" which is not the type of permitting that North American Gem is seeking.

The decision of North American Gem to acquire and develop certain coal leases in Kentucky was made with consideration of the situation regarding the "mountaintop removal" and "valley fill" issues under scrutiny by the US Environmental Protection Agency. None of the leases currently held or being considered by NAG will be affected by this issue.

The method of potential mining to be used by NAG is known as contour mining. This type of mining is done on properties that were previously mined prior to the enactment of the Surface Mine Control and Reclamation and control act of 1977. This law requires that after any surface mining, the land must be restored to approximate original contour unless otherwise specified in the permit application and approved by the Kentucky Department of Natural Resources (KDNR). When "pre-law" mining was done, the general practice was to mine along the contour of a slope to the maximum profitable ratio and leave the resulting highwall and a wide, flat bench where the material covering the coal was removed and then graded somewhat flat as opposed to restoring the original slope.

NAG intends to use augers and highwall miners to enter the coal seam from the exposed wall with minimal additional excavation and maximum cost effectiveness. This type of mining dramatically reduces the amount of surface disturbance and allows for the recovery of any potential reserves that were previously believed not to be economically viable.

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 much shorter and smoother permitting application process.

Production Expected in October 2009 on North American Gem #1 Mine

Production is expected to begin October 2009 on the leases known as the North American Gem #1 Mine Permit located in Whitley County, Kentucky.

NAG plans to have the coal from the Jellico seam extracted from the North American Gem #1 Mine, of Kentucky State Mining Permit #918-0396, to be the first coal to run through the Cobra Tippling Production Plant (See NAG September 15th, 2009 release). 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.

Mr. Dean Schafer will be acting as operations manager of all the Company's Kentucky coal leases and is currently implementing an overall mine plan.

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

North American Gem Inc. (TSX-V: 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"

Charles Desjardins
President and Director

"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."

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. 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.

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