North American Gem Inc.
TSX VENTURE : NAG

North American Gem Inc.

August 18, 2005 17:32 ET

North American Gem Inc. Signs Letter of Intent with Strathmore ...

North American Gem Inc. Signs Letter of Intent with Strathmore Minerals Corp.; Attention: Business/Financial Editor VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Aug. 18, 2005) - VANCOUVER, British Columbia, Aug. 18, 2005 (PRIMEZONE) -- , North American Gem Inc. (TSX-V NAG:) (the "Company") and Strathmore Minerals Corp. (TSX-V:STM) ("Strathmore") are pleased to report that they have signed a letter of intent whereby the Company may earn a 50 percent interest in Strathmore's Duddridge Lake and Hall Lake Uranium projects.

The Hall Lake project encompasses about 400,000 acres along the south-central part of the Athabasca Basin in northern Saskatchewan. The Athabasca basin hosts several major uranium deposits, including the uniformity type deposits at Cigar Lake and McArthur River. These deposits are two of the highest-grade uranium deposits in the world. Production from the Athabasca Basin accounts for more than 30 percent of the world's annual supply of Uranium.

The Hall Lake project is underlain at depth by rocks of the Western Granulite Domain and much of the project area is estimated to have a depth to the basement unconformity of less than 600 metres. A previous electromagnetic interpretation flown by Questor Surveys Ltd. in 1979 suggests un-altered basement at depths ranging between 300 and 800 metres at the western margin of the property (assessment report 74F15-0008). The southeastern margin of the property is on trend with the Virgin River Shear Zone, where Formation Capitol Corp. (News release, 02/07/05) reported 13.86% U3O8 over 2.5 metres.

Initial exploration anticipated for the fall of 2005, includes a MEGATEM airborne geophysical survey. It is expected that the MEGATEM survey will identify conductive zones, geologic structures and other features commonly associated with unconformity style uranium deposits within the Athabasca Basin. This is the first survey of its kind to be conducted at the Hall Lake Property.

The Duddridge Lake property encompasses approximately 24,700 acres and is located about 100 km northwest of LaRonge, Saskatchewan.

Based upon available drill hole information, independent consulting geologist Stuart Fraser, M.Sc., P.Geol., and who is a qualified person under NI 43-101, estimated an inferred mineral resource of 215,016 tonnes with an average grade of 2.14 lbs/tonne U3O8 for the Duddridge Lake Property. A number of historical resource estimates have previously been documented for the property.

The Duddridge Lake Property lies within the eastern part of the Wollaston Domain, and is hosted by metasedimentary rocks of the Wollaston Supergroup. The deposit is considered a clastic-sediment hosted uranium-copper deposit. Uranium mineralization occurs in two white quartzite lenses within a 6.4 to 26.8 m thick, carbonaceous meta-arkose. Mineralization consists predominately of pitchblende or uraninite occurring as thin seams, bands and disseminations along bedding planes; tyuyamunite and cobalt bloom (erythrite) along some fractures; and to a lesser extent chalcopyrite, bornite, malachite, pyrite, annabergite and arsenides.

Previous exploration was conducted by a number of companies, including Noranda Exploration Company from 1974 to about 1994. Exploration including combined airborne magnetic and radiometric surveys, rock and soil geochemistry and diamond drilling, outlined a uraniferous boulder train along the west side of Duddridge Lake, which extends over an area of about 100 by 1600 m. Within the boulder train, typical analysis ranged from 0.1 to 0.2% U3O8, with some exceptional values of up to 9.8% U3O8, 1.6% Cu, 0.2 oz/ton Au, and 7.0 oz/ton Ag. More than 30 drill holes were completed at the property over an approximately 1463 m strike length on the west side of Duddridge Lake. In addition several drill holes were completed at other locations throughout the property. Significant prior drill results include (Steward, 1975):



 -----------------------------------------------
 Hole       From     To     Length    Grade
 Number     (m)     (m)      (m)   (lb/ton U3O8)
 -----------------------------------------------
 D-1-75    97.23   101.28    4.05      3.52
 D-5-75    91.04    94.21    3.17      1.24
 D-8-75    55.75    64.77    9.02      2.88
 D-11-75   61.26    68.51    7.25      2.44

(Although believed to be accurate, historical estimates should not be relied upon.)

To earn its 50 percent interest in the Duddridge Lake Project, the Company must make an initial cash payment of $150,000 to Strathmore. The Company must advance $250,000 for property exploration cost before April 30, 2006 and an additional $450,000 before April 30, 2007. Upon completion of the second year expenditures, the companies will form a joint venture to continue the exploration of the project. Strathmore may buyback a 1 per cent interest in the project by issuing 25,000 shares to the Company.

To earn its 50 percent interest in the Hall Lake Project, the Company must make an initial cash payment of $150,000 to Strathmore. The Company must advance $400,000 for property exploration cost before October 15, 2005 and an additional $600,000 before September 15, 2006. Upon completion of the second year expenditures, the companies will form a joint venture to continue the exploration of the project. Strathmore may buyback a 1 per cent interest in the project by issuing 25,000 shares to the Company.

Strathmore has agreed to participate in a non-brokered private placement in the Company for a total 1.5 million shares at $0.20 per share, with a share purchase warrant exercisable at $0.30 in the first year and at $0.35 in the second year.

A finder's fee will be payable in accordance with TSX Venture Exchange policies. The final agreement is subject to TSX Venture approval.

About North American Gem Inc. North American Gem Inc. (TZX-V:NAG) is a junior exploration Company based in Western Canada. The Company's primary goal is to explore for Copper, Gold, Molybdenum, Uranium and other Base metals. The Company is actively pursuing several opportunities, including the Company's Louise Lake Copper-Gold-Molybdenum Property located in British Columbia, Canada and its Uranium and Multi-mineral target Properties, the Del Bonita, the Western Basin, and the Bonny Fault, all located in Alberta, Canada. For additional information please contact North American Gem Inc.



 On Behalf of the Board of Directors
 NORTH AMERICAN GEM INC.
 "Charles Desjardins"
 Charles Desjardins
 President and Director

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


CONTACT:  North American Gem
          Mark Luchinski
          Phone: 604-683-5445
          Toll Free: 1-866-683-5445
          Email: info@northamericangem.com
/ IN: MINING