North American Gem

Filed SEDAR : Feb 25 2009

NORTH AMERICAN GEM INC. Amended and Restated MANAGEMENT DISCUSSION AND ANALYSIS

Six Months Ended June 30, 2008

OVERVIEW

This discussion covers the operations of North American Gem Inc. (“Company”) for the six months ended June 30, 2008. The following management discussion and analysis should be read in conjunction with the interim unaudited financial statements for the six months ended June 30, 2008 and the audited financial statements for the year ended December 31, 2007. These documents are for viewing on SEDAR at www.sedar.com. All dollar amounts included therein and in the following MD&A are in Canadian dollars.

This Amended and Restated MD&A was prepared on February 20, 2009.

DESCRIPTION OF BUSINESS

North American Gem Inc. is a mineral resource exploration company with its head office in Vancouver, British Columbia, Canada. The Company’s primary focus is on the acquisition, exploration and development of gold, copper, uranium and other precious/base metals. The Company is an exploration stage company and is yet to receive any revenue from its mineral exploration operations.

The Company’s shares are listed for trading on the TSX Venture Exchange under the trading symbol NAG.

OVERALL PERFORMANCE -MINERAL PROPERTY INTERESTS

Louise Lake, Smithers, British Columbia

By an option agreement dated December 14, 2004 and renegotiated on February 20, 2006, with Firestone Ventures Inc. (“Firestone”), the Company is entitled to acquire up to a 100% interest in eight mineral claims located in the Omineca Mining Division, British Columbia in which Firestone has an option to acquire a 100% interest under an Option Agreement dated December 20, 2003 with the original vendors.

In March 2008 the Company increased its landholdings at the Louise Lake property to 12,291 hectares from the original land position of 3,319 hectares, the cost of increased landholdings is permit cost. The property was expanded primarily to the north and northwest. The Louise Lake project is now contiguous with a property to the northwest held by Teck Cominco Limited.

SRK Consulting (Canada) Inc.’s National Instrument 43-101 report entitled "Independent Technical Report and Resource Estimate for the Louise Lake Property, Omenica Mining Division, British Columbia,” dated July 14, 2006 is available at www.northamericangem.com/srkll.pdf or www.sedar.com.

The Company completed a 2007 winter diamond drilling program at the Louise Lake project. A total of 21 holes for 6,277.6 metres (20,597 feet) of NQ-sized core were drilled. The drill program consisted largely of step-out holes focusing on identifying extensions of the Main zone, a tabular, east-to-west-striking, moderately north-dipping porphyry-style copper-molybdenum-gold-silver deposit. The program also included seven interior holes, focusing on upgrading of the deposit toward the indicated resource category. All sample analysis completed by ALS Chemex of North Vancouver, B.C., Canada. Results of this program have delineated the eastern and western limits of the Main zone overlying the Terminator, but have also indicated the Main zone extends to the north at depth, with increasing copper and gold grades, particularly in northeastern areas.

In January 2008 the Company commenced a diamond drill program being conducted by Britton Brothers Diamond Drilling of Smithers B.C. All sample analysis will be completed by ALS Chemex of North Vancouver, B.C. The drill program will consist of a minimum of 4,400 metres of NQ-sized core in approximately 11 to 13 holes, focusing on the northward extension of the Main zone, a tabular, north-dipping copper-gold-molybdenum-silver deposit. The deposit extends to a depth of about 270 metres, where it is abruptly truncated by a flat-lying thrust fault, called the "Terminator."

The program will include targeting of the interpreted portion of the deposit underlying the flat-lying Terminator fault northwest of the Main zone. Results from hole LL-07-15, collared northwest of the Main zone in 2007, revealed low-grade mineralization beneath the Terminator having a similar fabric and geochemical signature to the Main zone. This represents the first intercept of sub-Terminator mineralization to date, suggesting the

NORTH AMERICAN GEM INC. Amended and Restated MANAGEMENT DISCUSSION AND ANALYSIS

Six Months Ended June 30, 2008

underlying fixed portion of the deposit may occur farther northwest of the Main zone. The 2008 program will also target the northeastern portion of the Main zone near areas of higher-grade gold intercepts returned in 2007, including a 26.1-metre intercept grading 0.769 gram per tonne gold and 0.477 per cent copper (Company's news release dated May 10, 2007).

A total of 5,042.8 meters in 16 holes was completed at the end of February 2008, with the first results obtained from DDH LL-08-25, collared close to DDH LL-07-18B, where a value of 0.769 gpt gold with 0.48% copper was returned from a 26.1-metre intercept directly overlying the "Terminator" (News Release, May 9, 2007). DDH LL-08-25, collared roughly 40 meters southwest of Hole LL-07-18B, returned a 36.2-metre intercept grading 0.417% copper with 0.692 gpt gold, also directly overlying the "Terminator" fault. These similar gold grades and gold: copper ratios indicate an extension of the higher grade gold zone at depth.

Hole LL-08-20, collared about 220 meters north-northwest of DDH LL-08-25, targeted the down-dip extension of the Main Zone west of the gold enrichment area. It intersected a 74.9-metre intercept of Main Zone-style mineralization, including a 5.5-metre intercept grading 0.350% copper with 0.85 gpt gold directly overlying the Terminator. Analytical results of all remaining holes are pending.

During the current period, the Company announced Holes LL-08-29 and LL-08-32, respectively, intersected Main-zone-style mineralization commencing directly beneath the Terminator and extending downhole to a second flat-lying fault very similar in fabric, interpreted to belong to the same tectonic event. Hole LL-08-29, collared somewhat west of hole LL-08-32, contains a 20-metre, subintercept grading 0.297 per cent copper (Cu), 121 parts per million (0.012 per cent) molybdenum (Mo), 0.342 gram per tonne gold (Au) and 1.7 g/t silver (Ag). In both holes, mineralization is abruptly truncated by the sub-Terminator fault.

The project is under the direction of Carl Schulze, BSc, PGeo, in accordance with the regulations of National Instrument 43-101.

Whiskey Gap, Alberta

In October 2005, the Company entered into a binding agreement to acquire the Whiskey Gap uranium property consisting of 44,000 acres located in southern Alberta. The Whiskey Gap property is underlain by a series of fluvial sandstones of Cretaceous age, thought to be analogous to sandstones in parts of Wyoming that host significant Roll front Uranium deposits.

The Company received the final report for the Whiskey Gap Sandstone Hosted Uranium Project. Anomalous Radioactivity was intersected in 31 of 37 drill holes during the Phase 1 & 2 drill programs.

The Phase 1 Exploration Program was designed to evaluate the area surrounding the water well in which the extremely high radon values were discovered (More than 5000 picocurries). 1342 meters of NQ drilling was conducted in a series of 12 holes. Anomalous radioactivity and Uranium values were encountered up to 136ppm U over a 30 centimeter interval accompanied by a thicker zone of heavy metal enrichment. Closely spaced grid drilling in the area showed that heavy metal and Uranium mineralization occurred as a remnant zone within a strongly oxidized fluvial system.

During Phase 2 of the program an additional 2663 meters of reverse circulation drilling, in 25 holes, was conducted to further test and to evaluate two additional areas on the Whiskey Gap property that showed anomalous radon response. The most encouraging result of Phase 2 occurred in DH 06-20. The Hole contained 3 stacked radioactive zones, 2 to 3 meters in thickness. The pyrite rich zones are more strongly reducing than those encountered in Phase 1 and contain anomalous Arsenic, Copper, Antimony, Selenium, and Molybdenum values.

In December 2007, the Company entered into an option agreement with Geo Minerals Ltd. Geo Minerals Ltd. can earn up to a 40-percent interest in the company's potential interest (North American Gem can earn up to an 80-per-cent interest in the Whiskey Gap project) should the project reach feasibility. This arrangement would therefore have North American Gem and Geo Minerals with an equal 40-per-cent earn-in on the Whiskey Gap project with International Ranger Corp. holding the remaining 20 per cent of the project's interest.

NORTH AMERICAN GEM INC. Amended and Restated MANAGEMENT DISCUSSION AND ANALYSIS

Six Months Ended June 30, 2008

In March 2008, the Company completed the drilling of five Reverse Circulation holes on the Whiskey Gap property.

Samples were collected from 2 of 5 reverse circulation holes in a recently discovered area that returned assay values as high as 160 ppb Uranium, 420 ppb Molybdenum and 140 ppb Arsenic in water samples as previously reported by the Alberta Geological Survey (AGS sample number 06USA017). The two locations the samples were collected from are approximately 50 meters apart. The samples were collected over a 2 meter interval from both holes, beginning at 45 meters below surface. The samples have been sent to the SRC in Saskatoon for analysis.

The project is under the direction of Glenn S. Hartley PGeol., who is the qualified person for the project in accordance with the regulations of National Instruments 43-101.

Bonny Fault, Alberta

In April 2005, the Company announced it had signed a letter of intent to purchase two mineral permits collectively labeled as the Bonny Fault property encompassing approximately 184 square kilometers.

In August 2006, the Company commenced an extensive airborne geophysical survey on its Bonny Fault Property, Northeastern Alberta. Terraquest Surveys of Markham, Ontario was contracted to fly approximately 2,700 line kilometers of geophysical survey, 100km southeast of Fort Smith. The property was strategically staked to extensions of geological structures that appear to have a direct influence over placement of the showings, which had previously been documented and reported on by the Alberta Geological Survey in the early 1990’s. Three unique styles of mineralization have been identified on the Bonny Fault property based on a direct result of ground-based investigations and interpretations of historic data in various Alberta Geological Survey publications.

Exploration was focused on three mineralization styles within the property:

Uranium – Molybdenum zoned associated with shearing at granite-metasediment contacts.

Gold, silver and nickel zones along metasediment / metavolcanic shear contacts.

Massive hematite breccia-hosted uranium, gold, iron, and REEs, in a setting that may be analogous to the Australian Olympic Dam style of mineralization.

Initial inspection of the data indicates several areas of strong total count and Uranium channel response, additionally one area of intense magnetic response was also identified.

The possible sources of such an intense magnetic response could include a medium to large Kimberlite body or the iron rich core and breccia zone of an IOCG (iron oxide copper-gold) system.

IOCG deposits are a recently defined class of metallic mineral deposit notable for their large size and appealing grades. IOCG deposits are diverse and cover a wide range of characteristics and metal contents. They are typically distinguished by the association of copper-gold sulphide mineralization with large concentrations of iron oxide mineral, mainly magnetite and hematite. IOCG’s may also be enriched in silver, cobalt, bismuth, rare earth elements and, less commonly, uranium.

In order to understand better the magnetic and radiometric survey data, the Company engaged Mr. Jeremy Brett Msc. P.Geo.

In October 2006, the Company announced it had mobilized a field crew to perform reconnaissance sampling of the intensely Magnetic feature outlined by the Terraquest Aeromagnetic Survey. Initial inspection on the ground confirms the presence of massive magnetite float. This supports the conclusion that the anomaly could be produced by an IOCG type system, as opposed to a Kimberlite body.

A comprehensive geological model for the formation of IOCG deposits has only begun to evolve over the past 10 years, after sufficient examples were documented and described and common featured identified, IOCG deposits are now recognized as a diverse family of deposits that can form in rocks of virtually any age, from late Archean to early Tertiary.

NORTH AMERICAN GEM INC. Amended and Restated MANAGEMENT DISCUSSION AND ANALYSIS

Six Months Ended June 30, 2008

IOCG deposits are typically localized along subsidiary structures related to major, crustal-scale fault systems and are associated with zones of brecciation of host rocks.

Geophysics is an important exploration tool since the large volumes of iron oxide mineralization usually impart a distinct magnetic and/of gravity signature to the mineralized zone.

In October 2006, the Company announced it had expanded its 100% owned Bonny Fault property by approximately 22,750 acres bringing the total acreage to approximated 140,000 acres. A combination of historical government data and recently completed airborne survey data combined with the findings of the October 2006 ground crew has motivated the Company to expand the existing Bonny Fault property to the East along strike of the main Bonny Fault. This addition to the property covers land with Precambrian Shield geology similar to the existing land package (see news release dated April 5, 2005). In addition to the well-documented Precambrian assemblage of granites and mylonite shear zone, a large glacially derived sand flat covers a significant area of this new permit. This sand flat masks the underlying geology and shares many similarities to other areas north of the Athabasca Basin that contain drill proven outliers of Athabasca sandstones.

The Northwest portion of this new exploration permit has an area of anomalously high uranium channel radiometric signature. This signature was detected during the recently completed airborne survey of the existing property at the ends of several flight lines.

To date 275 uranium anomalies have been identified of various quality and associations with both foliation-parallel and major crosscutting structures/faults. Approximately the top 10 per cent will be categorized as high-priority targets, characterized by the highest uranium responses. These targets will include 10 targets which are located on or near the Bonny fault or subparallel faults, which are major northwest-trending faults that crosscut the local foliated rocks and may have been conduits for uranium-bearing fluids from the now eroded Athabasca sandstones which once overlay the area.

During the 2007 summer ground reconnaissance follow-up and prospecting, a total of 130 rock samples were taken, 12 of which assayed 0.1 per cent uranium oxide (U3O8) or greater to a high 2.28 per cent U3O8. Uranium mineralization was confirmed at Cherry Lake and Spider Lake, with several samples assaying greater than 0.1 per cent U3O8 to a high of 0.177 per cent U3O8 found at Cherry Lake. The highest assay for molybdenum was 0.19 per cent with the same sample assaying 0.152 per cent U3O8 found in the Cherry Lake area. All samples were assayed at the SRC Geoanalytical Laboratory in Saskatoon, Sask.

The fieldwork was carried out under the supervision of Jody Dahrouge, PGeo, a qualified person under National Instrument 43-101.

Western Basin, Alberta

On July 20, 2005 the Company announced it had been granted four Alberta mineral permits by Alberta Energy encompassing approximately 36,608 hectares. Capital acquisitions costs include the cost of staking the claims totaling $3,125.

In October 2006 the Company commenced an extensive airborne geophysical survey on its Western Basin property, Northeastern Alberta. Terraquest Surveys of Markham, Ontario has been contracted to fly the geophysical survey. The Western Basin property has four mineral permits totaling 92,000 acres which encompasses 25 sq. km. of mapped “Athabasca Basin Geology” and confirmed outliers of the Athabasca Group Sandstones. Similar geology hosts many of the high-grade uranium deposits found in the Athabasca uranium district, such as Rabbit Lake, Key Lake and Maurice Bay. The Maurice Bay uranium deposit is located within the northwest margin of the Athabasca Basin, approximately 5 km from the Western Basin property. It has 600 tonnes contained uranium at a grade of 0.5% U3O8. The Maurice Bay deposit includes structurally controlled mineralization within altered basement rocks and Athabasca unconformity-style uranium mineralization.

Alberta Geological Survey Bulletin No. 55, details the presence and alterations of a saprolite rock unit on the North American Gem Inc. property. This saprolite unit is preserved immediately beneath the unconformity by the overlying Athabasca Sandstone Group. Two extensive fault systems cross cut the property in a west

NORTH AMERICAN GEM INC. Amended and Restated MANAGEMENT DISCUSSION AND ANALYSIS

Six Months Ended June 30, 2008

northwest/east-southeast direction. These faults run directly under portions of the property’s Athabasca Group Sandstones and appear to continue past the Saskatchewan border to the Maurice Bay Deposit area. Similar fault systems are perceived to play a role in uranium mineralization in other parts of the basin including Maurice Bay.

Historically, uranium exploration programs in the Athabasca Basin have been hampered by the high cost associated with deep (+300m) drilling programs needed to reach and test the targeted Athabasca unconformity. Alberta Geological Survey Bulletin No. 55, documents several holes, which map the Athabasca Unconformity on the Western Basin property between 10 m and 95 m from surface.

A 2007 summer exploration program has been completed that targeted the zones of historic, high-grade, surface uranium mineralization. Thirteen rock samples were taken over a small area of the property. Samples returned anomalous concentrations of uranium with an assay high of 118 parts per million uranium. Due to the constraints of float plane access, mainly determined by lake size, only a small portion of the property was prospected. Several historic showings remain to be collected and sampled.

The fieldwork was carried out under the supervision of Jody Dahrouge, PGeo, a qualified person under National Instrument 43-101.

Charles Lake Property, Alberta

In June 2007 the Company acquired the Charles Lake property, totalling approximately 46,000 acres located along Charles Lake shear zone, northeastern Alberta, just north of the Athabasca basin.

One of the areas of interest for uranium exploration within the Charles Lake area is located along the Charles Lake shear zone. The area comprises foliated granitoids, basement gneisses, mylonitic rocks and high-grade metasediments (Godfrey, 1966), known as the Charles Lake granitoid belt. The Charles Lake shear zone generally strikes north-south, following the alignment of the basement gneisses that run along the north shoreline of Lake Athabasca. This shear zone parallels the major fault features of the region, which also trend north-south. These basement gneisses, running along the shear zone, are flanked on both sides by the granitoids. The basement gneisses span more than 30 kilometres east to Andrew Lake, with the area between being highly faulted.

The project is under the direction of Glenn S. Hartley, P.Geol, who is the qualified person for the project in accordance with the regulations of National Instrument 43-101.

Mosquito Gulch, Yellowknife

In January 2007, the Company entered into a purchase agreement to acquire a 100% interest in the Mosquito Gulch Property located in the Nonacho basin approximately 300 km southeast of Yellowknife. The property consists of one mineral claim encompassing approximately 2,500 acres.

The Mosquito Gulch showing is at the head of a radioactive boulder train that extends to the southwest. The showing extends more than 500 metres with varying widths of 20 metres to 50 metres and was outlined to a depth of 200 metres. The property has undergone drilling and trenching in the late 1970s and early 1980s by Uranerz Exploration and Mining Ltd. Uranium-bearing minerals associated with the Mosquito Gulch showing include pitchblende and allanite. The uranium is found as pitchblende in narrow fracture fillings and small veinlets in quartz stockworks. The mineralization is confined to a zone of cataclasite and mylonite basement rock.

In 1980, Uranerz completed metallurgical tests on rock samples collected at the Mosquito Gulch. Studies included mineralogy, petrography and geochronology were undertaken and bulk samples were shown to be amenable to radiometric ore sorting.

The project is under the direction of Mike Magrum, PEng, in accordance with the regulations of National Instrument 43-101.

NORTH AMERICAN GEM INC. Amended and Restated MANAGEMENT DISCUSSION AND ANALYSIS

Six Months Ended June 30, 2008

Ranger Lake, Ontario

In May 2007, the Company entered into a purchase agreement to acquire a 100% interest in the Ranger Lake uranium claims located in the Sault Ste. Marie Mining district of Ontario approximately 60 miles northwest of Elliott Lake uranium mines. The property consists of approximately 19,000 acres.

These uranium claims were staked as a result of favourable radiometric anomalies in conjunction with a series of anomalous lake sediment samples. The lake sediment samples were collected as part of a national geochemical reconnaissance uranium program released in 1978. The data were released prior to establishment of current standards under NI 43-101 and have not been substantiated by North American Gem, and, therefore, should not be relied upon.

The project is under the direction of Garry Clark, PGeo, in accordance with the regulations of National Instrument 43-101.

Adamas Property, Saskatchewan

During the current period, on May 14, 2008 the Company signed an agreement with Adamas Minerals Corp. (Adamas) of Prince Alberta, Saskatchewan to grant North American Gem Inc. exclusive rights to coal, oil shale's and or all hydrocarbon discoveries on a land package on which coal permit applications have been submitted for, West of Hudson Bay, Saskatchewan.

In 2007, Adamas was exploring a magnetic anomaly thought to be a kimberlite target in proximity to the most recent discovery by Goldsource Mines Inc. (TSX-V symbol: GXS) (Goldsource), in western Saskatchewan which has been recently shown to have a major potential for regional coal deposits.

During this exploration program Adamas discovered a coal seam in the Cretaceous rock (Mannville Group Rocks) sequence containing coal similar to Goldsource. This 4 meter intercept was rush assay to Loring Laboratory out of Calgary, Alberta. This is same Laboratory that Goldsource had used and was chosen to maintain assay continuity. Upon the arrival of the sample, it was evident that the coal had suffered some oxidization and degradation due to exposure while remaining out in the core boxes uncovered and exposed to the elements. Coal is considered to be extremely sensitive to oxidization while compared to other commodities that require no special handling during drilling or storage while in the core boxes. Despite the likelihood of some grade loss, the samples graded Sub-bituminous A (NI 43-101 compliant) quality over 4 meters. This is encouraging as the coal would have likely deteriorated to some degree and suggests that the sample may be of better quality in an unoxidized state.

Adamas has collected proprietary aeromagnetics data for the area of interest that has been made available to North American Gem Inc. to be used to further evaluate the area for coal deposits and other minerals that may be found therein. Historical data and reports suggest that coal is present to the north edge of the Cretaceous rock sequence along the shores of Wapawekka Lake to the north of the Adamas discovery and the reports further suggests that the Wapawekka out crop is likely associated with a larger deposit to the south. The Adamas intercept is directly south of Wapawekka Lake along the low lying basin adjacent to the south east of the Narrow Hills Uplands.

The Company is currently awaiting its Coal Prospecting Permit approval for the Adamas Property which would allow exploration to commence.

Coal Permit Applications, Saskatchewan

During the current period, the Company has submitted 786 coal permit applications encompassing approximately 1,491,010.56 acres in proximity to the recent Goldsource Mines Inc. (TSX-V symbol: GXS) discovery, in east-central Saskatchewan.

NORTH AMERICAN GEM INC. Amended and Restated MANAGEMENT DISCUSSION AND ANALYSIS

Six Months Ended June 30, 2008

SELECTED ANNUAL INFORMATION

RESULTS OF OPERATIONS

The net loss for the six months ended June 30, 2008 was $619,759 (2007 -$474,718). The major components of the Company’s net loss for the six months ended June 30, 2008 were business development $92,983 (2007 -$33,560), consulting $47,556 (2007 -$13,500), investor communications $40,665 (2007 -$61,578), management fees $85,000 (2007 -$30,000), office and miscellaneous $24,794 (2007 -$24,241) professional fees $39,465 (2007 -$52,253), rent $21,292 (2007 – $10,600), salaries and benefits $107,438 (2007 -$Nil) stock based compensation $134,312 (2007 – $210,719) and transfer agent and filing fees $28,588 (2007 -$32,267) . The Company recognizes an expense for stock options granted to eligible participants in its stock option plan as determined by the Black-Scholes option pricing model.

Business development expenses of $92,983 consist of expenses relating to the promotion of the Company, increasing investor and shareholder awareness of the Company and its projects. Business development expenses consist of expenses relating to attending and securing a presence at trade shows, travel relating to promoting the Company and its projects and investigating new and potential projects for the Company. Business development expenses also include meals and entertainment expenses relating to the promotion of the Company and its various projects. There is a increase in business development expenses over the previous period and this relates to managements decision to increase its efforts to promote the Company and its projects in order to increase shareholder value. The largest portion of business development expenses for the period was related to advertising costs of $47,784 targeted at creating more investor and shareholder awareness, travel and accommodation expenses of $15,523 related to maintaining the current projects, investigating new projects and promoting the Company and lastly meals and entertainment expenses of $17,617.

Consulting expenses of $47,556 consist of expenses of $17,500 paid to a director of the Company as discussed as discussed under the heading “Related Party Transactions” and of general consulting expenses as the Company uses the services of skilled individuals to evaluate and provide information and general management on current and prospective projects. These general consulting expenses cannot be directly attributed to any particular project and have therefore been expensed as general consulting. Consulting expenses increased from the previous period as management increased its efforts to investigate, manage and administer new and existing projects.

Investor communications expenses of $40,665 related to the Company using the newswire services to disseminate new releases on behalf the Company and to outsourced services used to create more shareholder and potential investor awareness about the Company and its projects. The decrease in investor communications services from the same period last year relate to management’s decision to increase the use of more advertising and business development to create investor awareness and increase shareholder value as opposed to using the outsourced services as in the previous period last fiscal year.

Salaries and benefits of $107,438 relate to expenses paid for administration and support. The increase in salaries and benefits expenses from the previous period last year is attributed to increased activity for the Company with its projects and the administration of such projects and a need for more administration and support for the operational activities of the Company.

NORTH AMERICAN GEM INC. Amended and Restated MANAGEMENT DISCUSSION AND ANALYSIS

Six Months Ended June 30, 2008

For the six months ended June 30, 2008, general and administrative expenses totaled $496,901 (2007 -$263,999) reflecting an increase of approximately $232,902. The general and administrative expenses reflect the normal corporate business cycle and are commensurate with the Company’s operations in the current period. Any significant increase/decrease in costs relate to the Company’s additional efforts to provide greater administrative support to management’s ongoing efforts to seek new properties, monitor exploration expenditures, and increase shareholder value.

The Company does not forecast any significant changes to its administrative cash-based expenditures in the next fiscal year. However, should the Company not receive sufficient funding to support its proposed future activities; it will review all future expenditures and take appropriate action.

SUMMARY OF QUARTERLY FINANCIAL RESULTS

Three months ended

Fluctuations in the Company’s expenditures reflect the seasonal variations of exploration and the ability of the Company to raise capital for its projects.

Variations in losses occur during quarters where stock-based compensation was recorded, higher professional fees were incurred or payables associated with the previous business were written-off. Also as the Company attends to more projects, administrative expenses also increase to support the operation of these projects.

Variations between the quarter ended June 30, 2008 and March 31, 2008 occurred due to increased activity to support projects, as the management increased promotion and advertising activity to promote the Company to current and prospective shareholders. Salaries and benefits expenses increased to support the increasing operational activities of the Company, general consulting expenses also increased to support prospective project evaluation and manage current projects.

Variations between the quarter ended March 31, 2008 and December 31, 2007 can be largely attributed to increased project and evaluation activity for the Company and as management increased expenditures on creating investor and shareholder awareness. Salaries and benefits for administration and support staff increased to support the increased activities of the Company and business development expenses increased to support the Company’s tradeshow activity promoting the activities and projects of the Company. Lastly the Company recorded stock based compensation during the quarters ended March 31, 2008 and June 30, 2008, whereas no stock based compensation was recognized for the quarter ended December 31, 2007.

Variations for the quarter ended December 31, 2007 and September 30, 2007 can be largely attributable to increased accounting and audit fees related to the yearend audit for the Company, to increased management fees and increased investor communications activity for the quarter ended December 31, 2007.

NORTH AMERICAN GEM INC. Amended and Restated MANAGEMENT DISCUSSION AND ANALYSIS

Six Months Ended June 30, 2008

LIQUIDITY AND SOLVENCY

The Company did not have any revenues during the period and continues to depend on its ability to procure sufficient funding through share offerings, debt, and financial support from related parties, to support current and future expenditures.

At June 30, 2008, the Company had working capital of $1,658,306 (June 30, 2007 -$922,974) and a cumulative deficit of $5,344,182 (June 30, 2007 -$4,905,571). The cash component of working capital at June 30, 2008 was $1,742,362 (June 30, 2007 -$805,139).

OFF-BALANCE SHEET ARRANGEMENTS

The Company has no off-balance sheet arrangements.

RELATED PARTY TRANSACTIONS

The Company has an agreement whereby it will pay one half of the expenses incurred in shared office space for the duration of its tenancy to a company related through common directors. In addition, the Company has agreed to pay for any services subcontracted to this company.

During the six months ended June 30, 2008 the Company had $47,479 due to related parties. The Company shares office and administrative costs with other companies with common directors. The amount of $47,479 due to a related party is cumulative intercompany amounts relating to occupancy and administration costs being shares amongst companies. Consulting and management fees are paid to directors and officers of the Company to compensate for the management and administration function provided to the Company.

Prepaid expenses of $7,546 owed from a director were subsequently repaid after period end.

All related party transactions were in the normal course of business and undertaken with the same terms and conditions as transactions with unrelated parties.

CHANGES IN ACCOUNTING POLICIES

The Company adopted new accounting standards as described below. These accounting policy changes were adopted on a prospective basis with no restatement of prior period financial statements. The new standards and accounting policy changes are as follows.

Section 1400, General Standards of Financial Statement Presentation

In June 2007, the CICA amended Section 1400 to include requirements to assess an entity’s ability to continue as a going concern and disclose any material uncertainties that cast doubt on its ability to continue as a going concern. The mandatory effective date is for annual and interim financial statements for years beginning on or after January 1, 2008. This new requirement was adopted by the Company effective January 1, 2008. The adoption of this section will not have an impact on the financial statements.

Section 1535, Capital Disclosures

In December 2006, the CICA issued Handbook section 1535 “Capital disclosures” which is effective for years beginning on or after October 1, 2007. The section specifies the disclosure of (i) an entity’s objectives, policies, and processes for managing capital; (ii)quantitative data about what the entity regards as capital;

(iii) whether the entity has complied with any capital requirements; and (iv) if it has not complied, the consequences of such non-compliance. This new section relates to disclosures and will not have an impact on the Company’s financial results.

NORTH AMERICAN GEM INC. Amended and Restated MANAGEMENT DISCUSSION AND ANALYSIS

Six Months Ended June 30, 2008

Section 3862, Financial Instruments Disclosures, Section 3863, Financial Instruments Presentation

These sections will replace Section 3861, Financial Instruments Disclosure and Presentation, revising and enhancing disclosure requirements while carrying forward its presentation requirements. These new Sections will place increased emphasis on disclosure about the nature and extent of risk arising from financial instruments and how the entity manages those risks. The mandatory effective date is for annual and interim financial statements for years beginning on or after October 1, 2007. The adoption of these new accounting standards does not materially impact the amounts reported in the Company’s financial statements and relate primarily to disclosure.

Transition to International Financial Reporting Standards

In 2006, Canada’s Accounting Standards Board (AcSB) ratified a strategic plan that will result in the convergence of Canadian GAAP, as used by public companies, with International Financial Reporting Standards over a transitional period. The AcSB has developed and published a detailed implementation plan, with a changeover date for fiscal years beginning on or after January 1, 2011. The Company is currently assessing the impact of the initiative on its financial statements.

FINANCIAL INSTRUMENTS

The Company’s financial instruments include cash and cash equivalents, amounts receivable, accounts payable and accrued liabilities, and amounts due from and to related parties. These amounts are short-term in nature and management has determined that the recorded carrying value approximates fair value. The Company does not use any derivative or hedging instruments.

OTHER MD&A REQUIREMENTS

Outstanding common shares

As of February 20, 2009, the total outstanding common shares of the Company were 107,778,259.

As of February 20, 2009, the total unexercised stock options outstanding were 9,103,500 and the total unexercised warrants outstanding were 4,622,969.

SHAREHOLDER RIGHTS PLAN

During the current period ended June 30, 2008, in May 2008 the Company announced that its Board of Directors has approved the adoption of a shareholder rights plan (the “Rights Plan”).

The Rights Plan is designed to ensure the fair and equal treatment of shareholders in connection with any takeover bid for outstanding common shares of the Company. The Rights Plan seeks to provide shareholders with adequate time to properly assess a take-over bid without undue pressure. It also provides the Board with adequate time to fully assess an unsolicited take-over bid, to allow competing bids to emerge, and, if applicable, to explore other alternatives to the take-over bid to maximize shareholder value. The Rights Plan is not intended to prevent or deter take-over bids that offer fair treatment and value to shareholders, but is designed to encourage offers that represent fair value to all shareholders.

The Rights Plan became effective as of May 21, 2008 but must be ratified by shareholders within six months in order to continue to be effective. The Rights Plan is also subject to approval by the TSX Venture Exchange. The Company is not adopting a Rights Plan in response to any proposal to acquire control of the Company.

SUBSEQUENT EVENTS

On July 4, 2008 pursuant to its stock option plan, the Company has granted incentive stock options to its directors, officers, consultants, and employees to purchase 2.5 million common shares in the capital stock of

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NORTH AMERICAN GEM INC. Amended and Restated MANAGEMENT DISCUSSION AND ANALYSIS

Six Months Ended June 30, 2008

the company, exercisable for a period of two years, at a price of $0.35 per share. These options are subject to a four-month hold period.

On July 14, 2008 the Company received First Priority “Comfort letters” for 1,387,863 acres (71 Townships) from Saskatchewan Energy and Resources. The Company is waiting on the status for another 8 Townships of Coal Prospecting Permit to be approved.

On August 18, 2008 pursuant to its stock option plan, the Company has granted incentive stock options to its directors, officers, consultants, and employees to purchase 500,000 common shares in the capital stock of the company, exercisable for a period of two years, at a price of $0.18 per share. These options are subject to a four-month hold period.

As this is an Amended and Restated MD&A as of February 20, 2009, events subsequent to the Company’s June 30, 2008 interim period, are disclosed in subsequent news releases and filings and information to September 30, 2008 and thereafter will be disclosed in the Company’s MD&A for the interim period ended September 30, 2008.

DISCLOSURE CONTROLS AND PROCEDURES

Disclosure Controls and Procedures:

Management has assessed the effectiveness of the Company’s disclosure controls and procedures used for the interim financial statements and MD&A as of the date of this MD&A. Management has concluded that the disclosure controls are effective in ensuring that all material information required to be filed has been made known to them in a timely manner. The required information was effectively recorded, processed, summarized and reported within the time period necessary to prepare the interim filings. The disclosure controls and procedures are effective in ensuring that information required to be disclosed pursuant to applicable securities laws are accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.

The Chief Executive Officer and Chief Financial Officer believe that the Company’s disclosure controls and procedures provide a reasonable level of assurance that they are effective, they do not expect that the disclosure controls and procedures will prevent all errors. A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

Internal Controls Over Financial Reporting:

Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with Canadian GAAP. Management has reviewed these controls and concluded that the design of internal controls over financial reporting is effective as of the date of this MD&A to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes.

RISKS AND UNCERTAINTIES

The Company is engaged in the exploration for and development of mineral deposits. These activities involve significant risks which careful evaluation, experience and knowledge may not, in some cases, eliminate. The commercial viability of any material deposit depends on many factors not all of which are within the control of management. Some of the factors that affect the financial viability of a given mineral deposit include its size, grade, proximity to infrastructure. Government regulation, taxes, royalties, land tenure, land use, environmental protection and reclamation and closure obligations, have an impact on the economic viability of a mineral deposit.

NORTH AMERICAN GEM INC. Amended and Restated MANAGEMENT DISCUSSION AND ANALYSIS

Six Months Ended June 30, 2008

The preparation of financial statements in conformity with Canadian GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts revenues and expenses during the reporting period. Actual results could differ from those estimates.

Annual losses are expected to continue until the Company has an interest in a mineral property that produces revenues. The Company’s ability to continue its operations and to realize assets at their carrying values is dependent upon the continued support of its shareholders, obtaining additional financing and generating revenues sufficient to cover its operating costs. The Company’s accompanying financial statements do not give effect to any adjustments which would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying financial statements.

Any forward-looking information in this MD&A is based on the conclusions of management. The Company cautions that due to risks and uncertainties, actual events may differ materially from current expectations. With respect to the company’s operations, actual events may differ from current expectations due to economic conditions, new opportunities, changing budget priorities of the company and other factors.

FORWARD LOOKING STATEMENTS

This MD&A may include certain "forward-looking statements" within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical facts, included in this MD&A that address activities, events or developments that the Corporation expects or anticipates will or may occur in the future, including such things as future business strategy, competitive strengths, goals, expansion and growth of the Company’s businesses, operations, plans and other such matters are forward-looking statements. When used in this MD&A, the words "estimate", "plan", "anticipate", "expect", ‘‘intend’’, "believe" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, risks related to joint venture operations, actual results of current exploration activities, changes in project parameters as plans continue to be refined, unavailability of financing, fluctuations in precious and/or base metals prices and other factors. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

OTHER MATTERS

Legal proceedings:

There are no ongoing legal proceedings of any kind initiated by the Company or by third parties against the Company.

Contingent liabilities:

At period’s end, management was unaware of any outstanding contingent liability relating to the Company’s activities.

OUTLOOK

The Company's primary focus for the foreseeable future will be on reviewing its financial position, continuing exploration activities on its mineral properties and financing new business ventures in the mineral resource industry.

NORTH AMERICAN GEM INC. Amended and Restated MANAGEMENT DISCUSSION AND ANALYSIS

Six Months Ended June 30, 2008

ADDITIONAL INFORMATION

Additional information related to the Company is available for view on SEDAR at www.sedar.com, on the Company’s website at www.northamericangem.com, or by requesting further information from the Company’s head office in Vancouver BC Canada.

Current Directors of the Company are as follows: Charles Desjardins, CEO Bruce Lock Egil Livgard

Board of Advisors: Mr. Adam Noel, P.Eng Mr. Alan A. Johnson, B.Sc., P. Geol

North American Gem Inc.

P.O. Box 10325430-609 Granville StreetVancouver, BCCanada V7Y 1G5Telephone: 604-683-5445Toll Free: 1-866-683-5445Facsimile: 604-687-9631

Website: www.northamericangem.com

E-mail: info@ northamericangem.com

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