North American Gem Inc. Responds to Lawsuit issued by Kentucky Mining Partners LLC (KMP)

   North American Gem Inc. (NAG) (TSX VENTURE: NAG) through its subsidiary, North American Gem US, Inc. (NAG US) has responded to a lawsuit by Kentucky Mining Partners, LLC (KMP) issued on March 17th 2011 in the Eastern District of Kentucky, United States District Court (Federal Court). KMP was hired by NAG US as a contingent laborer to mine the Jamieson property in Kentucky. NAG US representatives' closely monitored KMP's weekly performance and the resultant coal quality. Since the Federal Court is a limited jurisdiction court, the trial judge, Judge Van Tatenhove, has requested a full response to whether the court even has jurisdiction of the case. A ruling should be issued by May 1, 2011.

KMP mined approximately 2,400 tons of coal during their time as operator on the Jamieson mine. The relationship between KMP and NAG US was announced to the market April 8th 2010. NAG US chose to discontinue the relationship with KMP after coal purchasers refused the last 1,000 tons of mined coal. KMP felt that their quality of work was standard and that they unjustly enriched NAG US and that NAG US unfairly ended the joint venture relationship.

KMP is claiming damages between seventy five thousand dollars and fifteen million dollars. NAG is vigorously defending this claim from KMP. Firstly, KMP has targeted the wrong party since NAG (US) was the entity which contracted with KMP and not the Canadian based NAG. Secondly, the misrepresented claims are unfounded in light of NAG US's openness and cooperative work during KMP's due diligence period. KMP's claims of a joint venture agreement with NAG US will be defeated by KMP's actions and KMP's request for a new independent contractor agreement. Several counterclaims will be filed if the suit is not summarily dismissed. The counterclaims would be based on KMP's negligent mining operations and KMP's tortious interference with NAG's (US) business relationships.

North American Gem Inc. (TSX VENTURE: 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, President and Director

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 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."

Contacts: North American Gem Inc. Charles Desjardins President and Director 604-683-5445 604-687-9631 (FAX) [e-mail] www.northamericangem.com