North American Gem Inc. Announces Execution of Lease to Operate Coal Preparation and Rail Loading Facility in Knox County, Kentu
October 22 2009 - 9:30AM
Marketwired
North American Gem Inc. (NAG) (TSX-V: 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 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, < 1% sulphur and 12,800
Btu.
The North American Gem #1 Mine operation will establish North
American Gem Inc. as a coal producer with the ability to enter into
supply contracts. The supply contracts established by production
from the North American Gem #1 Mine Permit are expected to be
expanded upon as the Company increases operations in the area. The
performance and capabilities of production from the North American
Gem #1 Mine Permit will determine the point at which further
production from additional leases is commenced.
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
Saskatchewan, West Virginia, and Kentucky. 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. 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. 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.
Contact: 430 - 609 Granville Street Vancouver, BC, Canada V7Y
1G5 Phone 604-683-5445 Facsimile 604-687-9631
info@northamericangem.com www.northamericangem.com TSX-Venture:
NAG
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