The facility, which includes a coal preparation and rail loading facility, will increase coal capacity and overall efficiency through the addition of concrete loading ramps and a stacking conveyor to allow the coal circuit to run longer and without interruption.

NAG also performed significant electrical upgrades at the facility, which will crush, screen and wash coal before preparing it to the specific requirements of customers. NAG plans to purchase outside coal to provide custom blends for its ideal market of industrial stokers, silicon metal producers and electricity generators.

The North American Gem No. 1 auger mine, which the producer told Coal USA earlier this year was its “education run” of seven coal leases, is shipping coal daily and is on pace to sell 8000 tons per month with the ability to increase that further.

“NAG has steadily increased its production over time as the weather has slowly improved,” the company said.

“Currently there are two augers producing and the third auger is expected to be activated in approximately two weeks time.”

As for the balance of the leases NAG is developing, it will refer to them by their actual lease name until a successful mine permit is received. At that time, they will be named a North American Gem mine and numbered sequentially.

“This will avoid future confusion as certain permits may be approved out of order or the possibility of a new lease acquisition by NAG in an advanced stage of permitting,” the company pointed out.

Drilling at the Wynn Hollow lease, formally known as the No. 3 mine, was completed in December 2009 and NAG is awaiting assay results. In the meantime, the permitting process for the proposed mine will continue.

“The purpose of the [No. 3] drill program is to gain additional information on the Jellico and Blue Gem seams as well as provide a 43-101-compliant report on all of the coal seams known to exist on the Wynn Hollow lease,” the company said.

“The analysis of the data will also help NAG develop the most efficient mining plan as additional coal seams have been encountered through historical drilling of natural gas and oil wells at the Wynn Hollow location.”

The Blue Gem seam measured 1.5-2m in thickness and is believed to be a low-sulfur, high-Btu seam coal.

At NAG’s Swan Pond lease, formerly known as North American Gem No. 2, drilling is now underway. Once complete, the drillers will be mobilized to the new Granny Rose lease acquired last month.

“Granny Rose lease contains the highly profitable Blue Gem coal throughout the entire lease with an average seem thickness of 2 feet,” NAG said.

“It has been estimated that approximately 250 acres of the planned permit will be mined using surface mining techniques with an additional approximate 100 acres that is to be mined by highwall and/or auger mining methods.”

Permitting work by the company’s retained team of Deborah Moses from Engineering Consulting Services and William Grable is proceeding well, with one of the previously announced permits in its final phases and set to be approved in the near future. All of NAG’s future permits will be highwall operations producing 25,000t or more monthly, per property.

In total, the producer holds about 5000 acres of coal reserve leases in Knox and Whitley counties in Kentucky, and is actively developing seven for permits.

Based in Vancouver, North American Gem has a coal focus in Saskatchewan, Kentucky and West Virginia.