North American Gem Inc. Acquires Additional Near Production Blue Gem Coal Leases in Kentucky

October 13, 2009: North American Gem Inc. (TSX-V symbol: NAG) (NAG) is pleased to announce the acquisition of additional coal leases from Lonesome Pine Leasing LLC, totalling over 4,700 acres located in Knox County, Kentucky. There will be 2 mining permits immediately pursued within this newly acquired land package, and they will be known as North American Gem Mine Permit #3 and North American Gem Mine Permit #4. Both Mine Permits have the potential to be ready for production by the end of 2009. NAG is actively working on moving the permitting process forward, through the services of Mr. Robert Taylor, P.Eng, who is on retainer for the purpose of permitting and reserve evaluation.

All of the Kentucky leases acquired by NAG and the Cobra Tippling Production Plant are within a 20 mile radius of the area being target for development by NAG. The Cobra Tippling Production Plant, which will serve as the hub for coal processing, blending and shipping of coal mined at NAG's current and planned mining operations on the Kentucky properties.

Prospecting results for the Blue Gem seam from the newly acquired leases showed analyses typical of the Blue Gem seam mined extensively in the area. They typically averaged <3% ash, <0.75% sulfur and a btu content >14,200. The Jellico seam averages <10% ash, approximately 1% sulfur and a btu content of > 12,500. In addition to the Blue Gem seam, the leases also contain the Moss, Dean, Jellico, and Fireclay seams, which are all considered high quality steam coals from Kentucky.

Blue Gem Coal is a high carbon, low ash, low fusion and low grind (very hard) coal that is found only in a small area along the border of Tennessee and Kentucky in the Cumberland Mountains. The coal seam runs in thickness from 48-71 cm.

Blue Gem Coal is one of three coal seams in the world that are best suited for production of silicon metals. The other two are found in West Virginia and Columbia, South America. Of the three, the Blue Gem Coal seam is the most sought after. For this reason, it is not only consumed in the U.S., but also exported extensively to Canada, Norway, Iceland, India, France, South Africa and even Egypt.

With the ever increasing demand for silicon metals and silicon products, Blue Gem Coal mineable reserves are becoming increasingly more valuable. Historically, Blue Gem Coal can bring an FOB mine price that is as much as 100% higher than high quality steam coal and is typically the highest priced of any grade of coal produced in the U.S.

Production Expected in October 2009 on North American Gem #1 Mine
Production is expected to begin October 2009 (See NAG October 7th 2009 release) 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, under 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 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 symbol: 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