Molybdenum

[Arctec]

NORTH AMERICAN GEM INC.1788-650 West Georgia StreetVancouver, B.C. V6B 4N8Telephone [phone]Toll Free 1-866-683-5445Facsimile (604) [e-mail] North American Gem Inc.Potential Alternative Refining Processes, Markets Identified for Concentrate, Louise Lake Project December 5, 2006: North American Gem Inc. (TSX-V symbol: NAG) is pleased to announce that independently retained consultants and related experts in the field of base metal refining have identified numerous extraction techniques potentially employable as alternatives to standard smelting techniques for concentrate from North American Gem's Louise Lake deposit. This investigation was performed following results of a metallurgical study completed by G & T Metallurgical Services of Kamloops, British Columbia, Canada. North American Gem felt verification of the existence of potentially viable techniques was necessary for re-commencement of exploration on the Louise Lake copper-gold-molybdenum-silver deposit, due to challenges provided by arsenic grades of 11.4% in concentrate. The road-accessible Louise Lake property is located 35 kilometres west of Smithers, British Columbia, Canada, a full-service community with excellent access to highway, rail and electrical power infrastructure. One of the most promising extraction techniques is the "CESL" copper-gold extraction process, developed by Cominco Engineering Services Ltd. Advantages of this process include on-site processing, eliminating transportation charges, and modification of arsenic to environmentally stable ferric arsenate (CESL website, 2006). Acceptable feed ore minerals include chalcopyrite and enargite, the two copper minerals comprising almost all copper mineralization at Louise Lake, as determined by G & T Metallurgical Services. Another potential technique is the "BIOCOP" bioleaching process developed by BHP Billiton to treat ore containing chalcopyrite and enargite. The process has been shown to be effective, with high copper recoveries. A third potential treatment is "Total Pressure Oxidation", involving chemical oxidation of the concentrate. The residue fixes arsenic as an iron-arsenic precipitate. A fourth technique involves leaching of arsenic and antimony using high pH (strongly alkaline) solutions which can selectively remove arsenic and antimony. The cost of reagents for this particular process is very high; therefore viability will depend on metal value within the deposit. Various other copper leaching processes also exist, which deal with concentrates containing chalcopyrite that may also be amenable to extraction of copper from enargite. Viability of these will depend on rates of precious metal recoveries and quality of residues. At least two "standard" smelters may also be amenable to concentrate from Louise Lake, depending on volume submitted. The findings of these investigations indicate that extraction techniques for high-arsenic-bearing ores exist, together with acceptable disposability of arsenic. Economic viability will depend on costs of extraction and treatment, as well as typical mining, processing and shipping expenditures. North American Gem has now recommenced preparation of its planned 2007 diamond drilling program, consisting of approximately 6,000 metres consisting of approximately 20 holes. This program, to begin in early February, is designed to test potential strike extension of the deposit, as well as to upgrade current resource categories. The Main Zone hosts an unusual mineral assemblage, with copper occurring as a mixture of chalcopyrite and enargite, suggesting upper levels of a porphyry system. The 2004 and 2005 programs extended the known dimensions of the east-west striking, moderately north-dipping tabular Main Zone both to the west and east, as well as down-dip to the north. Year-2006 results indicate the Main Zone now has a minimum strike length of 950 meters, is up to 170 meters thick, and extends to a depth of 250 - 270 meters, where it is abruptly truncated by the flat-lying "Terminator" fault. In 2006 North American Gem commissioned G & T Metallurgical Services Ltd. of Kamloops, British Columbia, Canada, to conduct metallurgical testing of a 150-kg representative sample of Main Zone core. Excepting high arsenic levels, results were very positive, indicating that a copper concentrate containing 28.9% copper may be produced at a recovery of 85%. The concentrate contained payable levels of gold, at 17.9 g/t, at a recovery of 54%, as well as silver, at 364 g/t with a 44% recovery. The concentrate also contained 0.650% Mo at a recovery of 80%, potentially recoverable as a separate saleable product (see News Release dated November 16/06). The metallurgical study was done in response to positive results released in July, 2006 from the first NI 43-101 verifiable resource estimate on the property, done by SRK Consulting Canada Inc. and commissioned by North American Gem Inc. Results of this study are listed below: This News Release was reviewed and approved by Carl Schulze, BSc, PGeo, Qualified Person for the project, in accordance with regulations under National Instrument 43-101. All sample analysis was done by ALS Chemex of North Vancouver, British Columbia, Canada. The metallurgical study was done by G & T Metallurgical Services of Kamloops, British Columbia, Canada. Private PlacementThe Company has arranged a non-brokered private placement of up to 5,000,000 units at a price of $0.15 per unit for total proceeds of up to $750,000 subject to the approval of the TSX Venture Exchange. Up to 1,000,000 units will be issued as non flow-through units consisting of one common share and one full warrant. One full warrant will entitle the holder to purchase one additional common share of the Company at a price of $0.175 per share for the first year, and $0.20 per share in the second year. Up to 4,000,000 units will be issued as flow-through units consisting of one common share and one half (1/2) share purchase warrant, one full warrant will entitle the holder to purchase one additional common share of the Company at a price of $0.175 per share in the first year and $0.20 per share in the second year. The proceeds of the private placement will be used for exploration work on the Company's mineral properties and general working capital.