VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 27, 2012) - North American Gem Inc. (NAG) (TSX VENTURE:NAG.V - News) reports that it has executed an Asset Purchase Agreement with Keener Ridge Coals Inc. ("KRC") of West Virginia. Under the Agreement, the Company will transfer to KRC its interests in certain coal leases and mining permits located in Kentucky. KRC will assume the immediate obligations and liabilities associated with the permits and leases. For all coal sold under Permit 861-0519 (Swan Pond), the Company will receive an override royalty of $1.50 per ton, but only after KRC has recouped the amount of funds it had to spend to address the immediate obligations and liabilities associated with the permits and leases being transferred.
Under the Agreement, KRC is also obligated to satisfy any claims made by Kentucky Mining Partners LLC ("KMP") against North American Gem. The Company had reported in previous disclosure documents that KMP had filed a lawsuit on March 17th 2011 in the Eastern District of Kentucky, United States District Court (Federal Court). As a result of this Agreement, the Company no longer has any direct mining operations in Kentucky.
The Company further reports that it has executed a Mutual Release and Termination Agreement with certain landholders regarding various coal leases within West Virginia. Under the Agreement, the Company will no longer have any obligations or hold any interests in coal leases located within West Virginia.
The Company also reports that Hunter Dickinson Group ("HDG") has elected not to proceed with earning its initial ownership interest of 50% in the Joint Venture Agreement on the Louise Lake property previously executed between HDG and NAG. The Company believes the Louise Lake project still maintains inherent value especially in more robust commodity markets.
North American Gem Inc. (TSX VENTURE:NAG.V - News) is a Junior Exploration Company based in Western Canada. The Company has interests in Copper, Gold, Silver, Molybdenum and other base metals in Canada.
On Behalf of the Board of Directors
NORTH AMERICAN GEM INC.
Charles Desjardins, President and Director
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.
"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."