North American Gem Inc. Announces LOI to Acquire Additional Coal Leases in Kentucky That Host Blue Gem High Grade Coal

VANCOUVER, BC, Jun 29 (MARKET WIRE) --
North American Gem Inc. (TSX-V: NAG) (the "Company") is pleased to
announce a Letter of Intent ("LOI") to acquire additional coal leases
located in Knox County, Kentucky. The leases, referred to as the "ABGSC
Leases" (approximately 410 acres), are currently being permitted for
mining under permit #861-0502. The acquisition is subject to the
execution of a Definitive Agreement and any necessary regulatory
approvals.

The ABGSC Leases currently has a surface mining permit application in
process with the Department of Natural Resources (the "DNR") offices in
Frankfort, Kentucky and it is expected to be approved within 60-90 days.
The ABGSC Leases are contiguous with the recently announced Swan Pond and
Possum Hollow Leases and host a continuation of the Blue Gem and Jellico
seams. Analysis of the Blue Gem seam from the Swan Pond and Possum Hollow
Leases are very encouraging showing 3% ash, 0.65% sulfur and a range of
14,200 - 15,200 btu. The Jellico seam averages 6.5% ash, 1% sulfur and a
range of 12,500 - 13,200 btu (Previously announced in the May 13, 2009
release).

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,
throughout the region, runs in thickness from 48-71 cm.

The Blue Gem Coal seam 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, coal produced from this
seam is not only consumed in the U.S., but also exported extensively to
Canada, Norway, Iceland, India, France, South Africa and Egypt.

With the ever increasing demand for silicon metals and silicon products,
mineable Blue Gem coal resources are becoming increasingly more valuable.
Historically, Blue Gem coal can bring an FOB (Freight On Board) 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.

The principal terms set forth in the LOI include:

The Lessor grants to the Lessee the right to acquire an exclusive and
undivided leasehold interest in the ABGSC Leases, including coal mining
and extraction rights, from the Lessor, upon:

1. The Lessee making one time payments to the Lessor in the amount of:

a. $20,000 payment upon signature of the Letter of Intent;

b. $40,000 payment upon execution of the Definitive Agreement;

c. $40,000 upon technical acceptance of "the permit" by the Kentucky DNR.

2. The Lessee making tonnage production royalty payments to the Lessor in
the amount of 1% of the gross sale price (FOB Mine) on all coal mined and
extracted from the ABGSC Leases;

3. The Lessee making tonnage production override royalty payments to the
Lessor in the amount of $1.50/net ton on all coal mined and extracted from
the ABGSC Leases;

4. The Lessor shall be paid a recoupable minimum royalty payment of
$10,000 per month beginning January 2010 and not to exceed 36 months.
This payment can be credited against royalties when and if royalties from
mining activities commence and to such an extent as such royalties exceed
$10,000 per month paid to the Lessor.

5. The Lessor agrees to continue the permitting process for permit
#861-0502 at its own cost, except for bonding and acerage fees, prior to
final payment by the Lessee under 1c.

North American Gem shall have a due diligence period expiring in
forty-five (45) days after the execution of the LOI.

Mr. Dean Schafer will be acting as operations manager of all the Company's
Kentucky Leases and is currently implementing a mine plan.

Mike Magrum, PEng, a qualified person under National Instrument 43-101,
has approved the technical content of this news release.

Investors are invited to visit the NAG IR Hub at
http://www.agoracom.com/IR/NorthAmericanGem where they can post questions
and receive answers or review questions and answers already posted by
other investors. Alternatively, investors are able to e-mail all
questions and correspondence to NAG@agoracom.com where they can also
request to be added to the investor e-mail list to receive all future
press releases and updates in real time.

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. The
Company has advanced the Louise Lake Copper-Gold-Molybdenum-Silver
project, located in British Columbia and has produced a NI 43-101
compliant resource estimate (included in its NI 43-101 Technical Report
dated July 14, 2006 and updated February 6, 2009, as filed on SEDAR). The
Uranium projects include the Whiskey Gap and Western Basin in Alberta and
the Ranger Lake Uranium property in Ontario.

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. 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:
North American Gem Inc.
604-683-5445
info@northamericangem.com

Copyright 2009, Market Wire, All rights reserved.

-0-