M3 will work one shift six days a week, with plans to ramp up to two shifts six days a week.
All coal produced at North American Gem No. 2 is being sold under M3 contracts.
The Vancouver-based junior announced late last month that it had selected M3 to operate the No. 2 mine as well as its fully permitted No. 3 highwall operation, which is set to commence production early this year.
Last September, NAG filed state applications for exploration permits at five of its Kentucky properties – the Swan Pond (NAG No. 3), Gilliam Hill South and Arkle Hollow leases as well as the No. 2 and No. 3 mines.
The Gilliam Hill South lease is located just south of NAG No. 2 and encompasses 500 acres. At that time, NAG said it was known to contain Blue Gem, Jellico, Dean and Moss coal seams, with Dean and Moss historically proven to be low sulfur and high quality, ideal for utility markets.
Arkle Hollow is less than 1 kilometer south of Gilliam Hill South and is on about 562 acres. It was known at that point to contain the same coal seams as its northern neighbor, and both properties are situated within 3km of the North American Gem processing facility.
North American Gem commenced sales and shipping of coal from the No. 2 surface and auger operation in Knox County in August.
The company plans to service the industrial stoker markets, silicon metal producers and electricity generators with its output.
The highest-priced coal grade in the US, Blue Gem coal’s value is about 200% higher than high-quality steam coal.
