VANCOUVER, BC, Nov. 23, 2009 (Marketwire) --

VANCOUVER, BC -- (Marketwire) -- 11/23/09 -- North American Gem Inc. (NAG) (TSX-V: NAG) is pleased to announce the start of coal production for the North American Gem #1 Mine in Whitley County, Kentucky.

As of Friday, November 20, the roads and required sedimentation control ponds have been constructed and are approved. The first "mine face" has been completed on North American Gem #1 Mine and the first auger has been moved into position and is currently mining. Preparation of the second "mine face" site has also commenced where the second auger will mine. By contract, the second auger must be in production within 10 working days of the beginning of production by the first auger.

Blue Star Energy LTD. (Blue Star) located in Hazard, Kentucky has agreed to purchase up to 15,000 clean tons of coal per month produced at the North American Gem Mine #1, Whitley County, Kentucky (as announced previously on October 21nd, 2009). 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 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. 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.

"This is a major step in the development of North American Gem Inc. as the identity of the Company has now evolved from explorer to producer," stated Charles Desjardins, President of North American Gem Inc. "The Company has assembled a premiere team to oversee our mining operations and our planned aggressive expansion of coal production as successful permitting of North American Gem Mine #2 is anticipated shortly. North American Gem Inc. will continue to apply for mining permits and plans to become the operator of multiple mines operating in, but not exclusive to, the State of Kentucky during 2010."

The decision of North American Gem to acquire and develop this permitted coal lease 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 mining to be used in the NAG Mine #1 is known as contour mining. All of the mining permits currently being pursued by North American Gem Inc. have been mined prior to the enactment of the Surface Mine Control and Reclamation act of 1977. This law requires that after any surface mining, the land must be restored to the 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. North American Gem Inc. will at the very least return the mining permit locations to their current state, and in some instances return the mining permit location to a better environmental state due to the Surface Mine Control and Reclamation act of 1977.

The North American Gem #1 Mine is permitted for the use of augers 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, North American Gem Inc. 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 a much shorter and smoother permitting application process.

North American Gem Inc. plans to have any coal requiring processing from the North American Gem #1 Mine, to be the first coal to run through the North American Tipple Facility which is located centrally to the area being developed by NAG (as announced previously on October 28th, 2009). Most of the coal produced, based on laboratory and exploration data gathered during the evaluation period is expected to be of high enough quality to ship directly to the buyer.

Mr. Dean Schafer is 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