January 10, 2011: North American Gem Inc. (NAG) (TSX-V symbol: NAG) reports that M3 Energy Resources, LLC (M3) has commenced production on North American Gem #2 Mine. M3 will be working one shift six days per week and are a planning to go to two shifts per day during the same six day work week. All of the coal produced at North American Gem #2 Mine will be sold to fill contracts under M3.

Mr. Dean Schafer is acting as operations manager, for NAG, on all of NAG's Kentucky coal leases and is currently implementing an overall mine plan.

M3 Energy Resources, LLC has a management team with a proven track record in coal mining, engineering, finance and business management. M3's current operations are in Central Appalachia where they control vast low sulfur, high BTU coal reserves with decades of mining life remaining. M3 is a large operation capable of managing several projects simultaneously; currently M3 is operating Highwall Miners, Surface Mines, Underground Mines, and a Preparation Plant with fine coal circuit and loadout facilities. Utilizing state-of-the-art equipment and advanced mining techniques maximizes the efficiency of their mining operations at the same time that it helps increase the level of safety.

For additional information on M3 Energy Resources, LLC please visit their website at: http://www.3mcoal.com/.

North American Gem Inc. (TSX-V symbol: NAG) is a junior resource company in Western Canada. The company's major focus is expanding its coal mining operations at its flagship properties in Kentucky. In addition, the company has interests in coal, copper, 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